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More Questions, No Answers About the Case of the Deadly Heparin - Some Congressmen Weigh In

In 2008, we started posting on how the "active pharmaceutical ingredient" of heparin made in China under apparently primitive conditions, contaminated accidentally or deliberately, was sold in the US bearing the label of a large American pharmaceutical company. Ultimately, many patients were sickened, or died. A summary of our posts on the topic, in smaller type, is below. - We have posted several times, recently <a href="http://hcrenewal.blogspot.com/2008/03/heparin-in-era-of-hogwash.html">here</a> and <a href="http://hcrenewal.blogspot.com/2008/03/fake-heparin-then-sick-and-dead.html">here</a>, about the tragic case of suddenly allergenic heparin. Although heparin, an intravenous biologic anti-coagulant, has been in use for over 70 years, serious allergic reactions to it had heretofore been rare. Starting late last year, hundreds of such reactions, and now 21 deaths were reported in the US after intravenous heparin infusions.All the heparin related to these events in the US was made by Baxter International. - We then learned that although the heparin carried the Baxter label, it was not really made by Baxter. The company had outsourced production of the active ingredient to a long, and ultimately mysterious supply chain. Baxter got the active ingredient from a US company, Scientific Protein Laboratories LLC, which in turn obtained it from a factory in China operated by Changzhou SPL, which in turn was owned by Scientific Protein Laboratories and by Changzhou Techpool Pharmaceutical Co. Changzhou SPL, in turn, got it from several consolidators or wholesalers, who in turn got it from numerous small, unidentified "workshops," which seemed to produce the product in often primitive and unsanitary conditions. None of the stops in the Chinese supply chain had apparently been inspected by the US Food and Drug Administration nor its Chinese counterpart. - Most recently, we found out that the Baxter International labelled heparin was contaminated with over-sulfated chondroitin sulfate, a substance not found in nature, but which mimics heparin according to the simple laboratory tests used in the Chinese facilities to check incoming heparin. (See post <a href="http://hcrenewal.blogspot.com/2008/03/fake-heparin-then-sick-and-dead.html">here</a>.) Further testing revealed that the contamination seemed to have taken place in China prior to the provision of the heparin to Changzhou SPL. (See post <a href="http://hcrenewal.blogspot.com/2008/03/who-was-responsible-for-purity-of.html">here</a>.) It is not clear whether Baxter International or Scientific Protein Laboratories had inspected most of the steps in the supply chain, or even knew what went on there. - The Baxter and Scientific Protein Laboratories CEOs did not seem aware of where they got the heparin on which the Baxter International label was eventually affixed. But one report in the New York Times alleged that Scientific Protein Laboratories would not pay enough for heparin to satisfy any sources other than the small "workshops." - Leaders of all organizations involved, Baxter International, Scientific Protein Laboratories, Changzhou SPL, the Chinese government, and the US Food and Drug Administration, and the US Congress assigned blame to each other, but none took individual or organizational responsibility. (See post <a href="http://hcrenewal.blogspot.com/2008/05/blaming-some-dude-for-contaminated.html">here</a>.) - Researchers (who turned out to have financial ties to a company which is developing an anti-coagulant drug that could compete with the heparin made by Baxter International) investigated the biological mechanisms by which the contamination of the heparin lead to adverse effects, but no one investigated further how the contamination occurred, or who was responsible.  (See post <a href="http://hcrenewal.blogspot.com/2009/08/who-investigated-case-of-deadly.html">here</a>.) - Hundreds of lawsuits against Baxter have now been filed, so far without resolution.  (See post <a href="http://hcrenewal.blogspot.com/2010/01/blog-post.html">here</a>.) - A recent government report which attracted little attention warned of the dangers of pharmaceutical ingredients made in China and subject to virtually no oversight. (See post <a href="http://hcrenewal.blogspot.com/2010/04/another-echo-of-case-of-deadly-heparin.html">here</a>.) Last week, minority (Republican) members of a committee of the US House of Representatives sent a letter to the Commissioner of the US Food and Drug Administration (FDA) raising a number of concerns of its investigation of contaminated heparin from China.  The letter was summarized in <a href="http://www.theheart.org/">http://www.theheart.org/</a> (<a href="http://www.theheart.org/article/1072875.do">here</a>), but so far has not been noticed by any main-stream media outlets.  The main concerns raised in the letter were: <blockquote>1. The FDA has not adequately followed up specific and credible information linking Chinese heparin firms to counterfeit heparin or contaminated heparin in several different supply chains. 2. The FDA inspected several Chinese heparin firms in 2008 and 2009 for regulatory compliance issues but did not conduct these inspections consistently and adequately for determining the source of the heparin contamination. 3. The FDA has not adequately followed up with the Chinese government about the heparin contamination-source investigation.</blockquote> Curiously, though, most of the letter detailed concerns about an FDA inspection of a company called Chongqing Imperial Bio-Chem Co, Ltd, which appears to be separate from any of the firms mentioned above which seemed to be involved with the heparin ultimately sold in the US under the Baxter label.  In fact, I have not seen to date any report on the contamination of that heparin, supposedly whose active ingredient Baxter obtained from  a US company, Scientific Protein Laboratories LLC, which in turn obtained it from a factory in China operated by Changzhou SPL, which in turn was owned by Scientific Protein Laboratories and by Changzhou Techpool Pharmaceutical Co. Changzhou SPL, in turn, got it from several consolidators or wholesalers, who in turn got it from numerous small, unidentified "workshops," which seemed to produce the product in often primitive and unsanitary conditions.  Nor have I seen any report on the responsibility of any of these parties for the purity and safety of the heparin.  In particular, given that the heparin was sold in containers with the Baxter International label, and hence given that the doctors, nurses and pharmacists involved in its administration likely thought that it was actually made by Baxter, I have not seen any further discussion of that company's responsibility to provide a pure, safe, unadulterated product to its US patients.  And all this still begs the question that most of the coverage of the deadly heparin also begged. Are American pharmaceutical companies so besotted with the need for cost-savings that they are willing to buy active pharmaceutical ingredients with unknown provenance overseas as if they were a pig in a poke? If so, why do we allow company leadership to potentially sacrifice quality, and sell adulterated drugs just to enrich their bottom lines (and their executives' salaries)? As a postscript, a <a href="http://dealbook.blogs.nytimes.com/2010/04/30/bringing-home-the-bacon-tripe-based-drug-hits-gold/">report</a> last week in a New York Times blog reminds us of the monetary stakes here: <blockquote>A drug harvested from pigs’ intestines has made a low-profile Chinese couple the nation’s wealthiest overnight. Husband and wife Li Li and Li Tan’s Shenzhen Hepalink Pharmaceutical sold 10 percent of its shares this week in an I.P.O. that values their stake at about $6.2 billion, The Financial Times reported. The I.P.O. also earned Goldman Sachs a near 200-fold profit on its original $5 million investment. According to the newspaper, analysts say Hepalink’s high valuation is a result of the company being the only one in China that is accredited by the U.S. Food and Drug Administration [presumably after the above case of the deadly heparin] to export the 'active pharmaceutical ingredient' heparin after it has been harvested.</blockquote> This amount of money sloshing around suggests that the reason this case remains so persistently <a href="http://hcrenewal.blogspot.com/search/label/anechoic%20effect">anechoic</a> is fear of offending those who have been getting very rich from the products of pigs' intestines. I hope that more investigators with intestinal fortitude step in to investigate the out-sourcing of drug production to dubious suppliers before more patients are poisoned.

More Questions, No Answers About the Case of the Deadly Heparin - Some Congressmen Weigh In

In 2008, we started posting on how the "active pharmaceutical ingredient" of heparin made in China under apparently primitive cond...

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David Blumenthal on health IT safety: nothing to see here, move along

At "<a href="http://hcrenewal.blogspot.com/2010/02/fda-on-health-it-adverse-consequences.html">FDA on Health IT Adverse Consequences: 44 Reported Injuries And 6 Deaths In Two Years, Probably Just Tip of Iceberg</a>" I wrote about a meeting of the HIT Policy Committee, Adoption/Certification Workgroup on February 25, 2010. The topic was "HIT safety." The agenda, presenters and presentations are available <a href="http://healthit.hhs.gov/portal/server.pt?open=512&objID=1473&&PageID=17117&mode=2&in_hi_userid=11673&cached=true">at this link</a>. At this meeting FDA testimony was given by Jeffrey Shuren, Director of FDA’s Center for Devices and Radiological Health. Dr. Shuren noted several categories of health IT-induced adverse consequences known by FDA. This information was striking. He wrote: <blockquote>... In the past two years, we have received 260 reports of HIT-related malfunctions with the potential for patient harm – including 44 reported injuries and 6 reported deaths. Because these reports are purely voluntary, they may represent only the tip of the iceberg in terms of the HIT-related problems that exist.</blockquote> Well, there's absolutely nothing to worry about, according to the Office of the National Coordinator and Dr. David Blumenthal. Nothing to see here. Move on. Blumenthal has just reportedly stated that: <blockquote><a href="http://www.massdevice.com/news/blumenthal-evidence-adverse-events-with-emrs-anecdotal-and-fragmented">http://www.massdevice.com/news/blumenthal-evidence-adverse-events-with-emrs-anecdotal-and-fragmented</a> ... [Blumenthal's] department is confident that its mission remains unchanged in trying to push all healthcare establishments to adopt EMRs as a standard practice. "The [ONC] committee [investigating FDA reports of HIT endangement] said that nothing it had found would give them any pause that a policy of introducing EMR's could impede patient safety," he said.</blockquote> I ask a simple question: <ul><li>Are these the words to be reasonably expected from an academic physician/scientist?</li></ul> Perhaps I'm a bit behind these postmodern times, but I once believed the perhaps now old-fashioned and obsolete view that a scientist would not base a conclusion of medical safety in national dissemination of drug, device, or whatever on some analysis of anecdotal data, whether 'preliminary' or final. Due to reasons such as the lack of knowledge of FDA as a place to report HIT problems, as well as fear by clinicians in reporting HIT problems at all, the cited FDA data (260 HIT-related adverse events over two years, including 44 reported injuries and six deaths) is most certainly anecdotal and incomplete, and potentially (per FDA's Jeff Shuren, MD, JD) the "tip of the iceberg." I would not take the FDA data to be anything but a possible red flag, not a source of truth, one way or the other. For example, the scant reports of health IT bugs and defects -- many of which admittedly could cause medical error -- in another database, MAUDE, voluntarily submitted by just a tiny fraction of the HIT vendors, should give a scientist pause. They are a sentinel. (See my Oct. 2009 post "<a href="http://hcrenewal.blogspot.com/2009/10/out-policy-is-to-always-have-unabashed.html">Our Policy Is To Always Have Unabashed Faith In The Computer ... Except When It Screws Up, And Then It's The Doctor's Fault</a>" for several MAUDE database examples). <blockquote> (Feb. 2011 addendum - see my more recent post about MAUDE health IT defects reports <a href="http://hcrenewal.blogspot.com/2011/01/maude-and-hit-risk-mother-mary-what-in.html">at this link</a>.) </blockquote>Obviously, the unreported, unrecognized (and therefore uncorrected) bugs and defects have the same potential. Those MAUDE reports alone should provide an impetus to call for full, rigorous, scientific, uncensored investigations on HIT safety, not make pronouncements on safety to a national audience. Proof by lack of evidence is not what I was taught in medical school. Blumenthal appears to be speaking not as a scientist, but as a marketer and (of course) politician. This is quite disappointing. However, as the man said, nothing to see here, move along. By the way, I am assuming the "analysis" will be open to public scrutiny. -- SS

David Blumenthal on health IT safety: nothing to see here, move along

At " FDA on Health IT Adverse Consequences: 44 Reported Injuries And 6 Deaths In Two Years, Probably Just Tip of Iceberg " I wrote...

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Board Member Blows Whistle on Health Insurance Company's Accounting

We previously posted about some of the travails of for-profit health insurance company/ managed care organization Wellcare.  In August, 2009, we <a href="http://hcrenewal.blogspot.com/2009/08/wellcare-did-not-contest-that-its.html">posted</a> about Wellcare's "admission" that it had made numerous questionable campaign contributions.  In May, 2009 we <a href="http://hcrenewal.blogspot.com/2009/05/wellcare-settles-accepts-deferred.html">posted</a> about WellCare's submission to a deferred prosecution agreemeent based on charges that it defrauded state programs by inflating its expenses. In 2007, we <a href="http://hcrenewal.blogspot.com/2007/11/health-plans-programs-cancelled-for.html">posted</a> about how the state of Connecticut stopped WellCare from running a plan for poor children after the company refused to reveal what it was paying physicians, and why it was failing to pay for particular services. So WellCare has been cited for three different kinds of unethical behavior in 2007-09. Here's a <a href="http://online.wsj.com/article/SB10001424052748704388304575202260647832760.html">story</a> about Wellcare with a new twist in the Wall Street Journal: <blockquote>A prominent director at WellCare Health Plans Inc. resigned Wednesday and raised questions about accounting practices at the Medicare and Medicaid company. Regina Herzlinger, the head of the board's audit committee and a professor of business administration at Harvard Business School, said internal audits found WellCare overbilled the Illinois Medicaid program by $1 million in 2009 and potentially overcharged states for almost $500,000 worth of maternity care. Additionally, the Tampa, Fla., company ran afoul of Georgia's requirements that it account for each patient visit for which it paid providers, resulting in a $610,000 fine, she said. Ms. Herzlinger said those problems, which the company corrected last year and this year after an internal auditor discovered them, are evidence of weak accounting practices. Ms. Herzlinger said she had hoped to provide oversight, as chairwoman of the audit committee, but that the board didn't renominate her for re-election at this year's annual meeting of shareholders. Ms. Herzlinger alleges that the board forced her out for asking questions about accounting problems and corporate-governance practices.</blockquote> Wellcare offered the response one might expect: <blockquote>WellCare said good corporate-governance practices require it to bring in new board members periodically to provide a fresh perspective. The company said the accounting errors Ms. Herzlinger identified were relatively small and the company's own internal controls identified them, indicating that its processes are working well. The company said the board chose not to renominate Ms. Herzlinger. 'At any company, you are always going to have these kinds of immaterial amounts pop up,' said Thomas Tran, WellCare's chief financial officer, who added that it is important to 'address them and document them and learn from them to change your processes.'</blockquote> That might have been more convincing were Wellcare not to have the track-record discussed above. Every now and then we have discussed cases of whistle-blowers from within health care organizations, but I cannot remember another instance in which the whistle-blower was on the board of directors.  In our post of August, 2009, we noted Prof Herzlinger's position on the Wellcare board, and urged her, as a main stream health policy expert, "to acknowledge that health care leadership may be unaccountable, opaque, dishonest, and sometimes flagrantly corrupt."  We also urged her to "pay a bit more attention to the mischief being committed by those who answer to her."  From this new story, it looked like she did just that, and hopefully made a contribution to more transparent and honest governance of health care organizations.  Good for her! It is time for the often well-paid and not over-worked members of the board of directors of health care corporations to take some responsibility for the actions of the corporations over which they are supposed to exercise stewardship.

Board Member Blows Whistle on Health Insurance Company's Accounting

We previously posted about some of the travails of for-profit health insurance company/ managed care organization Wellcare. In August, 2009...

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Sunday Settlement and Guilty Plea Roundup

Here we go again.  AstraZeneca / Seroquel We have posted frequently about allegations of devious marketing techniques used by AstraZeneca to promote its blockbuster atypical anti-psychotic drug Seroquel (quetiapine.)  See our posts <a href="http://hcrenewal.blogspot.com/2009/02/buried-data-smoke-and-mirrors-job-and.html">here</a>, <a href="http://hcrenewal.blogspot.com/2009/03/blogscan-over-selling-of-seroquel.html">here</a>, <a href="http://hcrenewal.blogspot.com/2009/05/more-documents-about-selling-of.html">here</a>, <a href="http://hcrenewal.blogspot.com/2009/10/more-on-misleading-promotion-of.html">here</a>, and <a href="http://hcrenewal.blogspot.com/2009/10/nemeroff-seroquel-and-accme.html">here</a>.  Now, as <a href="http://www.nytimes.com/2010/04/28/business/28drug.html">reported</a> by the New York Times, it is time for AZ to settle with the US government. <blockquote>AstraZeneca has completed a deal to pay $520 million to settle federal investigations into marketing practices for its blockbuster schizophrenia drug, Seroquel, the Attorney General, Eric Holder, said at a news conference Tuesday afternoon. 'AstraZeneca paid kickbacks to doctors as part of an illegal scheme to market drugs for unapproved uses,' Kathleen Sebelius, secretary of health and human services, said at the event in Washington. She said the company promoted drugs for unapproved uses by children, the elderly, veterans and prisoners. AstraZeneca agreed to sign a corporate integrity agreement with the federal government over its marketing of Seroquel for unapproved uses, but will not face criminal charges, company and federal officials said. The company, based in London, has been accused of misleading doctors and patients by playing up favorable research and not adequately disclosing studies that show Seroquel increases the risk of diabetes. </blockquote> Of course, an AZ spokesperson had a different take on it. <blockquote>Glenn Engelmann, AstraZeneca’s U.S. general counsel, released a statement saying the company denies the allegations but settled the investigation with the payment. 'It is in the best interest of AstraZeneca to resolve these matters and to move forward with our business of discovering and developing important, life-changing medicines — while avoiding the delay, uncertainty, and expense of protracted litigation,' Mr. Engelmann said. </blockquote> Johnson and Johnson / Topamax On the other hand, the issue of how Johnson and Johnson marketed Topamax (topiramate), a drug approved for treating seizures, is a new one for Health Care Renewal.  Here is the story, <a href="http://www.businessweek.com/news/2010-04-29/j-j-to-pay-81-million-end-federal-cases-on-topamax-update2-.html">via Bloomberg</a>. <blockquote>Two units of Johnson & Johnson will pay more than $81 million to resolve criminal and civil claims over illegal promotion of the epilepsy drug Topamax, the U.S. Justice Department said. Ortho-McNeil Pharmaceutical LLC agreed to plead guilty to a misdemeanor and pay a $6.14 million criminal fine for misbranding the drug, the government said. Ortho-McNeil-Janssen Pharmaceuticals also will pay $75.37 million to resolve civil allegations that it illegally marketed Topamax and caused false claims to be submitted to government health programs. While the Food and Drug Administration approved Topamax for the treatment of partial onset seizures, Ortho-McNeil Pharmaceutical promoted the drug for unapproved psychiatric uses, the government said. The company hired physicians through its 'Doctor-for-a-Day' program to join sales representatives in visiting doctors and to speak to colleagues about unapproved uses and doses, according to the government.</blockquote> In this case, the company admitted wrong-doing as part of the specific plea agreement. <blockquote>Under the plea agreement, Ortho-McNeil Pharmaceutical will admit that from 2001 to 2003 it promoted Topamax 'for certain uses not approved' by the FDA, according to a statement by Ortho-McNeil-Janssen. The company 'voluntarily discontinued the program at issue before receiving the government’s first subpoena in the investigation,' according to the statement. Ortho-McNeil-Janssen also will sign a five-year corporate integrity agreement with the U.S. Health and Human Services Department. </blockquote> Summary Once more, with feeling ....  We have discussed a series of <a href="http://hcrenewal.blogspot.com/search/label/legal%20settlements">legal settlements</a> and <a href="http://hcrenewal.blogspot.com/search/label/crime">criminal convictions</a> and guilty pleas resolving cases of alleged wrong-doing by health care organizations. Almost none included any penalties for people who authorized, directed or implemented the bad behavior. None of the financial penalties were so big as to be more than another cost of doing business for the organizations involved. Corporate entities, but very rarely people have pleaded guilty or been convicted (almost always of misdemeanors), Some of the cases included gimmicks, like a subsidiary constructed only to plead guilty, that otherwise seemed to lessen accountability. If we truly want health care that is accessible, of high quality, at a fair price, and more importantly, if we want health care that is honest and focused on patients, we need to provide health care leaders with clear, rational incentives in these directions, and make them fully accountable for their actions, and the courses of their organizations under their leadership. ADDENDUM (2 May,2010) - See also <a href="http://brodyhooked.blogspot.com/2010/04/cost-of-doing-business-same-song-83rd.html">comments </a>on the Hooked: Ethics, Medicine, and Pharma blog by Dr Howard Brody on the AZ settlement.

Sunday Settlement and Guilty Plea Roundup

Here we go again. AstraZeneca / Seroquel We have posted frequently about allegations of devious marketing techniques used by AstraZeneca to...

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Investigations, Indictments and Guilty Pleas at Famous US Teaching Hospitals

Some of the US most prestigious academic medical centers have been receiving unusual scrutiny lately. Mount Sinai Medical Center and New York - Presbyterian Hospital. As <a href="http://online.wsj.com/article/SB10001424052748704464704575208374268651564.html">reported</a> first by the Wall Street Journal, <blockquote>Federal prosecutors are investigating allegations that bid rigging and fraud at Mount Sinai Medical Center and New York-Presbyterian Hospital resulted in the hospitals awarding contracts worth tens of millions of dollars to outside contractors. Purchasing officials at the hospitals, two of the city's largest and most prestigious, are alleged to have gotten more than a million dollars in payments from companies that were then given lucrative contracts to perform work such as re-insulating pipes and removing asbestos, according to documents filed in the Southern District of New York. Nine contractors are involved in the case. So far, eight people and three companies supplying the hospitals have pleaded guilty to charges including bid-rigging, mail fraud and tax fraud. Three more people have been indicted on similar charges. The Federal Bureau of Investigation and Internal Revenue Service have been investigating and the Justice Department's Antitrust Division is prosecuting the allegations in the case.</blockquote> Some relevant specifics: <blockquote>The most recent indictment, handed up by a federal grand jury April 6, involved the alleged awarding of more than $195,000 in maintenance and insulation contracts. Mario Perciavalle, associate director of plant services at Mount Sinai, is accused of taking at least $20,500 in cash from a Long Island City company in 2004 and 2005 in exchange for the company, unnamed in documents, winning the deals. Prosecutors also are pursuing a case involving a former official at New York-Presbyterian, Salvatore Scotto-DiVetta, a supervisor at the hospital's Facilities Operations department. He pleaded guilty in March to rigging bids for re-insulation contracts, the Department of Justice said.</blockquote> The next day, the Journal <a href="http://online.wsj.com/article/SB10001424052748704471204575210560835140390.html">reported</a>: <blockquote>Two New York-Presbyterian Hospital officials and two contractors who did business with the prestigious hospital were indicted on fraud charges Tuesday in the latest cases stemming from a federal investigation into bid-rigging and fraud. The indictment alleges that the hospital officials—Santo Saglimbeni of Armonk, N.Y., and Emilio Figueroa, whose hometown wasn't given—received payments and gifts in exchange for awarding contracts to certain companies. </blockquote> And already the box score for this investigation increased: <blockquote>As a result of the investigation, a total of five hospital employees, 10 people outside the hospitals and six companies have either pleaded guilty or face charges.</blockquote> The comments by hospital officials had a familiar ring to anyone who has been following the hearings in Washington on the global financial collapse. From the first article: <blockquote>A Mount Sinai spokesman said the hospital notified the Justice Department 'about the possibility of impropriety immediately after it was identified in an internal audit' and is cooperating with the investigation. The spokesman said the hospital dismissed the employee under investigation and instituted tougher contracting systems.</blockquote> From the second: <blockquote>New York-Presbyterian was an 'unknowing victim of these alleged crimes,' a hospital spokeswoman said. She also said that the staffers named in the indictment no longer work at the hospital, and it is cooperating with the investigation.</blockquote> Partners Healthcare System <a href="http://www.boston.com/business/healthcare/articles/2010/04/29/justice_department_launches_antitrust_review_of_partners_healthcare/">Just out</a> today in the Boston Globe: <blockquote>The US Department of Justice has opened a civil investigation into possible anticompetitive behavior by Partners HealthCare System Inc., the region’s most powerful hospital and physician network. In a letter sent to Partners and the state’s three largest health insurers on April 19, investigators from the Justice Department’s antitrust division demanded documents relating to Partners’ 'contracting and other practices in health care markets in Eastern Massachusetts.' The letter, obtained by the Globe, said the probe sought to determine whether the practices violated the Sherman Antitrust Act, which bars companies from using their market power to limit trade or artificially raise prices. </blockquote> The background is: <blockquote>Boston-based Partners has been under growing scrutiny because of its market power and ability to draw high prices from insurers. The company employs about 5,500 physicians and operates a half dozen smaller hospitals, in addition to their prestigious Harvard-affiliated Boston teaching hospitals, Mass. General and the Brigham. Earlier this year, Attorney General Martha Coakley issued a report documenting that Massachusetts insurance companies pay some hospitals and doctors, including those in the Partners network, twice as much money as others for essentially the same patient care. The report pointed to the market clout of the best-paid providers as a main driver of the state’s spiraling health care costs. A 2008 Globe Spotlight Team series focused on the Boston market found that hospitals such as Mass. General and the Brigham typically are paid 15 to 60 percent more for essentially the same work as other hospitals. Soon after that series, Coakley launched her investigation into whether Partners and Blue Cross-Blue Shield, the state’s largest health insurer, may have illegally colluded to increase the price of health insurance statewide over the last decade, according to several legal and government sources.</blockquote> And again, the official response had a familiarly evasive ring: <blockquote>Partners spokesman Rich Copp yesterday noted that the hospital network already has supplied similar information to investigators from the state attorney general’s office, which launched its own review of Partners’ contracting practices last year. He noted in Partners’ defense that it vies with other providers in the area’s 'highly competitive' health care market. 'The Department of Justice has requested the same information that we have provided to the attorney general’s office,' said Copp. 'We will continue to cooperate with both government agencies during this ongoing analysis of health care in Massachusetts.'</blockquote> Summary So there it is.  Multiple indictments for and guilty pleas to charges of bid-rigging and fraud at two New York academic medical centers, and state collusion and federal anti-trust investigations of a Massachusetts hospital system.  The issues involve four of the most prestigious teaching hospitals in the US. Of course, not all the indictments may result in convictions, and the investigations may not result in charges.  But this involves some institutions that at one time would have appeared beyond reproach.  The lack of clear denials from the inevitable official spokespeople, and attempts to deny responsibility for the actions of employees elsewhere identified as "officials" do not provide much reassurance. Of course, readers of Health Care Renewal would have known that questions could be raised about leadership and governance of these once-revered institutions.  Questions could be raised about the incentives implied by the <a href="http://hcrenewal.blogspot.com/2009/12/98-million-dollar-man.html">huge compensation</a> given to the top hired executives at New York - Presbyterian, awarded by a <a href="http://hcrenewal.blogspot.com/2009/12/with-leaders-like-these.html">board of trustees</a> that includes some of the leaders of the more prominent failed finance corporations involved in the global financial collapse.  <a href="http://hcrenewal.blogspot.com/2009/01/to-whom-did-scorpions-in-bottle-owe.html">Questions</a> could be raised about the dominant presence of finance leaders and possibly <a href="http://hcrenewal.blogspot.com/2009/06/mans-best-hospital-run-by-boss-of-mecc.html">conflicted</a> individuals on the Partners board, and apparent interlocks among Partners leadership and the leadership of the largest health insurer in Massachusetts, which was willing to <a href="http://hcrenewal.blogspot.com/2009/01/scorpions-in-bottle-shook-hands-secret.html">pay that system so much.</a> Maybe, instead of <a href="http://hcrenewal.blogspot.com/2010/04/pondering-leadership.html">lecturing</a> the more lowly among us about our responsibilities to improve health care, the leaders of our previously most august health care institutions need to introspect more about their own responsibility to address the metastasis of "greed and incompetence" in health care from the financial sector.

Investigations, Indictments and Guilty Pleas at Famous US Teaching Hospitals

Some of the US most prestigious academic medical centers have been receiving unusual scrutiny lately. Mount Sinai Medical Center and New Yor...

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Judge Rejects Prosecutors' Lenient Settlement of the Case of the Hidden Defibrillator Defects

We <a href="http://hcrenewal.blogspot.com/2010/04/explaining-health-care-executives.html">just discussed</a> the proposed settlement of a case in which the Guidant subsidiary of Boston Scientific was alleged to have withheld information about defects in its implantable cardiac defibrillators that were associated with six patient deaths (see next most recent post <a href="http://hcrenewal.blogspot.com/2010/04/who-guards-guardians-case-of-boston.html">here</a> with more complete summary).  The devices were manufactured in 2000-02, and the issue first became public in 2005.  The proposed settlement included a seemingly large fine for the company.  Now the New York Times has <a href="http://www.nytimes.com/2010/04/28/health/28device.html">reported</a> that the presiding judge has rejected the settlement as too lenient. <blockquote>A federal judge in Minnesota on Tuesday rejected a plea agreement between the federal government and the Guidant Corporation, saying that the deal did not hold the company sufficiently accountable for an episode in which it sold potentially flawed heart defibrillators. The ruling was a setback for the Justice Department, which had characterized the agreement as a demonstration of its get-tough approach to corporate crime. The deal called on Guidant to plead guilty to two misdemeanors and pay a $296 million fine, described as the largest by a medical device company. But in his opinion, the judge, Donovan W. Frank of United States District Court said the provisions of the agreement were 'not in the best interest of justice and do not serve the public’s interest because they do not adequately address Guidant’s history and the criminal conduct at issue.'</blockquote> The story brought several peculiar aspects of the settlement to light. - The settlement seemed to ignore the most egregious misconduct alleged: <blockquote>Recently, prosecutors charged in court papers that Guidant had knowingly sold potentially flawed defibrillators. But that issue was not addressed in the plea agreement. Instead, the company agreed to plead guilty to two misdemeanor charges that related to the completeness and accuracy of its filings with the Food and Drug Administration.</blockquote> - It was not really the Guidant subsidiary that was going to plead guilty, but a new entity apparently constructed solely to "take the rap." <blockquote>The company created to enter Guidant’s plea, Guidant LLC, existed only on paper. In his ruling, Judge Frank took direct aim at that argument, suggesting it contradicted the Justice Department’s own public statements about the case. He noted that a department news release said Guidant’s plea deal was 'about accountability.' Judge Frank wrote, 'The interests of justice are not served by allowing a company to avoid probation simply by changing their corporate form.' </blockquote> So, the judge demanded that at least the company be put on probation, and possibly be required to do some good works: <blockquote>Judge Frank said that prosecutors should have sought probation for Guidant and its parent, Boston Scientific. Probation would have required the companies to take certain steps, like helping to rebuild public confidence in the safety of heart devices, in addition to paying a fine. The judge also outlined other provisions that might be suitable in a new plea deal, including charitable activities by Guidant to improve heart device safety and improve medical care among minority patients. Daniel R. Margolis, a lawyer in New York who works on medical product cases, said that probation is effectively a way for a court to maintain some control over a company’s activities after it pays a financial penalty. </blockquote> However, the judge felt he could not require prosecution of the actual people who authorized, directed, or implemented the misbehavior at issue. <blockquote>After a hearing this month, several doctors and patients wrote to Judge Frank urging him to reject the deal and arguing that former Guidant executives should be criminally charged in the case. But Judge Frank noted in his ruling that it was up to prosecutors, not a court, to decide who should be prosecuted. </blockquote> We have discussed a series of <a href="http://hcrenewal.blogspot.com/search/label/legal%20settlements">settlements</a> and <a href="http://hcrenewal.blogspot.com/search/label/crime">convictions</a> resolving cases of alleged wrong-doing by health care organizations.  Almost none included any penalties for people who authorized, directed or implemented the bad behavior.  None of the financial penalties were so big as to be more than another cost of doing business for the organizations involved.  Some of the cases included gimmicks, like a subsidiary constructed only to plead guilty, that otherwise seemed to lessen accountability.  Despite the US Justice Department's assertion of a new "get-tough" approach, this new settlement did not seem like any more of a deterrent to bad behavior than the parade of settlements that cam before, that is, until Judge Frank acted.  We applaud the judge for trying to hold at least one large health care organization accountable for its misdeeds.  However, I again suggest that to truly reform health care, we need rigorous regulation of health care organizations that has the power to deter unethical behavior that may risk patients' health.

Judge Rejects Prosecutors' Lenient Settlement of the Case of the Hidden Defibrillator Defects

We just discussed the proposed settlement of a case in which the Guidant subsidiary of Boston Scientific was alleged to have withheld infor...

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Pondering Leadership

This blog often talks about the failure of leaders in health care. The <a href="http://hbr.org/archive-toc/BR1004">April, 2010, issue</a> of Harvard Business Review boasts an entire "Spotlight" Section on this subject. Perhaps the two most interesting articles in this section, both by big names--<a href="http://www.hsph.harvard.edu/faculty/atul-gawande/">Atul Gawande</a> and <a href="http://www.hsph.harvard.edu/faculty/thomas-lee/">Tom Lee</a>--among today's medical chattering classes, are entitled, respectively, "Health care needs a new kind of hero," and "Turning doctors into leaders." The first, an interview, first touts the good doctor's vaunted emphasis on <a href="http://www.usatoday.com/news/health/2010-01-27-checklist27_st_N.htm">checklists</a>, then goes on to plead for improved training in team-play: "we don't train physicians how to lead teams or be team members." The second, by Dr. Lee, is more substantive. The network president of Boston's Partners Healthcare System and CEO of Partners Community HealthCare, formed quite a while back by Brigham and Women's and MGH joining forces, Lee makes a longer version of the same argument which boils down, essentially to, "docs need to learn to play nice." He <a href="http://hbr.org/2010/04/turning-doctors-into-leaders/ar/1">starts</a> with the plea we've heard so often before, it sounds like elevator music: <blockquote>The problem with health care is people like me—doctors (mostly men) in our fifties and beyond, who learned medicine when it was more art and less finance. We were taught to go to the hospital before dawn, stay until our patients were stable, focus on the needs of each patient before us, and not worry about costs. We were taught to review every test result with our own eyes—to depend on no one. The only way to ensure quality was to adopt high personal standards for ourselves and then meet them. Now, at many health care institutions and practices, we are in charge. And that’s a problem, because health care today needs a fundamentally different approach—and a new breed of leaders.</blockquote>Seems unexceptionable, as far as it goes. Maybe I'm just a crank who preceded Dr. Lee at his alma mater by, oh, say, a decade or so, but I'm feeling just a wee bit brassed off at hearing, yet again, <a href="http://macleans.files.wordpress.com/2009/04/pogo-enemy-21.jpg?w=512&h=294">Pogo</a>'s same tired old "we have met the enemy and he is us" plaint. Here it is, from Dr. Lee himself: <blockquote>The usual suspects have surprisingly small roles. Greed and incompetence surely exist, but economists agree that they don’t account for double-digit annual cost increases on their own. </blockquote>Oh really? So let me see here, what we really need is more folks like Tom Lee, folks who are willing to apply "Tough Medicine" and understand that "Performance Matters." A whiff of the self-serving here. Being "tough" here means being a good measurement wonk, holding doctors to "results" standards. While one could never wholly disagree with this sentiment, or conviction, or whatever it is, what's missing is the big picture. For starters, the problem of executives with purely technocratic solutions. Which is partly why, in this observer's humble view, we continue to have this "anechoic effect." That's the one critics of the larger defects in the health care system don't just get drowned out by technocratic Pogo-talk. They really aren't much heard at all. The defects include rotten information technology, corrupt hospital and insurance leaders, and insurance companies cocky enough to crow, eleven days after <a href="http://docs.house.gov/rules/hr4872/111_hr4872_amndsub.pdf">HR 4872</a>, and now <a href="http://http//www.healthreform.gov/newsroom/children_preexisting.html">quoting </a>Secretary Sebelius, they're "allowed to insure a child, but exclude treatments for that child’s pre-existing condition." Why don't the self-professed next-gen leaders ever talk about this stuff? A recent New York Times op-ed <a href="http://www.nytimes.com/2010/04/19/opinion/19mon4.html?pagewanted=print">piece</a> suggested one answer. I read it and slapped my forehead, "of caws!" Adam Cohen, the author, is describing why the Cassandras--hey, there are a few of those in this blog, eh wot?--don't get heard. Why they disappear into the anechoic chamber. In this case, on the topic of the 2008-2009 meltdown in the broader economy. <blockquote>Incompetence often plays a role. So does ideology: one reason [Federal Reserve governor Edward] Gramlich, a Democratic nominee, was ignored was that his warnings clashed with the antiregulatory convictions of the Bush administration. In other cases, to borrow Al Gore’s phrase, an “inconvenient truth” imposes burdens that people don’t want or threatens powerful interests. </blockquote>Cassandras warning about the Catholic Church's abuses, about Bernie Madoff, about 9-11: you can find 'em all. But Cohen's is not a rant. It's a reasoned explanation of why warnings don't get listened to. So here are a couple warnings. Neither Tom Lee-style technocratic "let's pull up our socks" answers, nor HR 4872, get anywhere near solving the problems that continue to plague this country's bloated health care system. Primary care continues to <a href="http://www.annals.org/content/150/4/272.full">circle the drain</a>. Health care leaders continue to line their own pockets, basically betting against the system's ability to sustain this percentage of the GDP [this blog, passim]. I guess it's just the old dance. Leaders in lofty positions in Harvard organizations learn to measure their words and advance their own "be like me" agendas, while the Cassandras sit out there in the blogosphere and thump their chests. But wouldn't it be grand if just occasionally, the Tom Lees of the world grew some cojones and really stood up to those who're milking our system for everything it's worth? Or are they too busy <a href="http://hcrenewal.blogspot.com/search/label/Partners%20Healthcare">managing </a>their own conflicts of interest and sweetheart <a href="http://www.boston.com/business/healthcare/articles/2010/04/29/justice_department_launches_antitrust_review_of_partners_healthcare?mode=PF">deals</a>?

Pondering Leadership

This blog often talks about the failure of leaders in health care. The April, 2010, issue of Harvard Business Review boasts an entire ...

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