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When a Key Opinion Leader Questions the Hand That Fed Him: from "Master Teacher to Someone Who Didn't Know What He Was Doing"

We just <a href="http://hcrenewal.blogspot.com/2010/06/deferred-prosecution-agreements-end-so.html">posted an update</a> on the ongoing cozy relationship with medical device companies, in particular, those that make prosthetic hip and knee joints, and some orthopedic surgeons.  Some surgeons, including many prominent academic leaders and practitioners, have been paid huge amounts, and have often failed to make more than the most minimal disclosure to their patients, or to the audiences of their talks or the readers of their ostensibly scholarly articles.  Deferred prosecution agreements with device companies shed light on these payments, but did not curtail them.  Yet the surgeons and the companies who paid them defended the payments as legitimate consulting agreements, and royalties for worthy innovations.  Now the New York Times has <a href="http://www.nytimes.com/2010/06/20/business/20knee.html">reported </a>on a dispute between a well-paid consultant and an artificial joint manufacturer that provides new insights into these financial relationships. To summarize, <blockquote>IT was a long, fruitful medical marriage that is fast becoming an angry public divorce, one that offers a rare look at a clash between a top-shelf consultant and his corporate patron over patient safety. For years, Dr. Richard A. Berger designed surgical tools and artificial joints for Zimmer Holdings, trained hundreds of doctors to use its products and talked it up wherever he went. In return, Zimmer, an orthopedic implant maker, helped enrich Dr. Berger, portraying him as a master surgeon and paying him more than $8 million over a decade. Those days are gone. Dr. Berger started complaining to Zimmer a while back that one of its artificial-knee models was failing prematurely, and he went public recently with a study that he says proves it. Zimmer told him that the problem was not the artificial knee, but his technique, and pointed to data overseas indicating that the knee was safe. Last year, Zimmer did not give Dr. Berger a new contract. The company says it routinely rotates consultants. 'I trained hundreds of doctors for them and made them tens of millions,' Dr. Berger said in interview here, in which he also lambasted Zimmer executives as dissembling, out-of-touch bureaucrats. 'So was this just a coincidence? Maybe it was. Maybe it wasn’t.' </blockquote> In more detail, here is how Dr Berger's relationship with Zimmer began: <blockquote>The surgeon, a tall, balding man with a boyish manner, was finishing his fellowship at the Rush University Medical Center in Chicago at the time, one of the country’s top centers for joint replacement. The center has had long ties to Zimmer, whose headquarters is about two hours away, in Warsaw, Ind., and the young surgeon quickly came to the company’s attention. 'Rich has a very clever set of hands, and because of that he is enabled with the ability to innovate surgical techniques,' said Roy Crowninshield, who was Zimmer’s chief scientific officer. Dr. Berger’s skills matched Zimmer’s marketing strategy. To distinguish itself from competitors, the device maker had started promoting minimally invasive surgery, a technique that uses smaller incisions than traditional surgery. Zimmer trained doctors in the procedure, using its device. Soon, Dr. Berger, who was then pioneering a type of small-incision surgery that allowed patients to leave the hospital on the day of surgery, became a linchpin of Zimmer’s efforts. In 2002, he was prominently featured in a press release about Zimmer’s plans to build a training facility for minimally invasive surgery. 'We are clearly excited about Dr. Berger’s data,' J. Raymond Elliott, the company’s chairman and chief executive at the time, stated in the release. Over the next few years, the physician estimates, he helped train hundreds of surgeons on Zimmer’s behalf.</blockquote> And in more detail, here is how things went wrong:  <blockquote>As he tells it, his relationship with Zimmer frayed over a version of a widely used Zimmer knee, known as the NexGen. The model at issue, called the NexGen CR-Flex, is designed to provide a greater range of motion than the standard NexGen. Most surgeons implant an artificial knee using a cement-like adhesive to bond the thigh bone to the portion of the device that bends. But some specialists, like Dr. Berger, try to avoid adhesives because the cement can break down and cause device failure. So Zimmer also sells an uncemented version of the CR-Flex that relies instead on the bone naturally fusing with the implant. Dr. Berger says that he gave the device, which is supposed to last about 15 years, to about 125 patients in 2005, the first full year he used it. But by early 2006, some X-rays showed lines where the implant met the thigh bone, an indication that the device was loose and had not fused completely. Patients could walk, but they were reporting pain, apparently a result of the loose joint. He says he soon brought the problem to the attention of Zimmer officials, including the company’s new top scientist, Cheryl R. Blanchard. Zimmer executives pointed to the success of the NexGen, but the company did not have separate test data on the uncemented flexible model because the F.D.A. had not required the company to study it in patients before selling it. Later, as more patients complained about the device and Dr. Berger had to replace some of them, he spoke to Ms. Blanchard again, he said. This time, he said, she and other Zimmer officials suggested that his technique was the problem because no other surgeon had complained. 'Suddenly, I went from someone who was their master teacher to someone who didn’t know what he was doing,' he said. BY 2007, Dr. Berger, although still a Zimmer consultant, had stopped using the device and had learned, he said, that several other surgeons had also experienced problems with it. But unlike Dr. Dorr, the physician who sent out the alert about Zimmer, Dr. Berger said he initially had hoped to avoid a public showdown with the company. So he followed a more traditional route by performing a study with another Rush surgeon, Dr. Craig J. Della Valle, who was also having to replace the Zimmer knee. Dr. Berger and Dr. Della Valle first presented their study at a medical meeting last fall and again this year at a national meeting of the American Association of Orthopedic Surgeons. They found that the uncemented Zimmer knee failed early in about 9 percent of some 100 patients studied. Also, the knee exhibited signs of looseness in about half of all patients and has since been replaced in some of them, Dr. Berger said. But Zimmer was unswayed. In a filing with the Securities and Exchange Commission, Zimmer made note of the study but also pointed to the knee’s very positive results in a large database of orthopedic patients in Australia. Officials there confirmed the low failure rate. The company also said that the cement-free CR Flex accounted for only a small fraction — about 2 percent — of its overall knee sales. </blockquote> The most striking lesson of this case is that Dr Berger was only valued as a consultant as long as his work completely followed the marketing party line.  As soon as he questioned the company's product, or the executives who were promoting it, he became "someone who didn't know what he was doing."  Of course, a truly valued consultant should be respected, if not sought for honest advice, whether or not it fit  preconceived notions or marketing strategies.  Thus, how Dr Berger was finally treated suggested he really was hired to market product.  "Consultant" was just a pretty title..  We  (and many others) have discussed (e.g., <a href="http://hcrenewal.blogspot.com/2008/06/key-opinion-leaders-were-sales-people.html">here</a>) how pharmaceutical, biotechnology, and device companies cultivate "<a href="http://hcrenewal.blogspot.com/search/label/key%20opinion%20leaders">key opinion leaders</a>" who really are nothing more than salespeople with fancy academic titles or well-known practices.  The case of Dr Berger suggests that apparently distinguished academics and practitioners hired as "consultants" by such companies ought to be regarded as salespeople until proven otherwise.  Physicians who are wooed by company marketers to take on such consulting roles, often with praise for their ability to "innovate," "excite," or become a "master teacher," may want to consider whether those flattering them merely want to hire another high-profile part-time salesperson.  They may further may want to think about how they would look should this relationship be revealed for what it really is.  If something goes wrong, they should think about what it would be like to deal with "dissembling, out-of-touch bureaucrats."  Sometimes there is a price to pay for taking all that money. I hope that Dr Berger will consider donating the $8 million he made to the cause of more honest teaching and research about orthopedic devices.  Meanwhile, patients and physicians should be extremely skeptical about the pronouncements of paid consultants and key opinion leaders who work for corporations marketing health care goods and services.  We all should demand at least that those paid by such vested interests reveal such financial arrangements in detail if they expect us to listen to their spiels, take their advice, and particularly be subject to their decisions.

When a Key Opinion Leader Questions the Hand That Fed Him: from "Master Teacher to Someone Who Didn't Know What He Was Doing"

We just posted an update on the ongoing cozy relationship with medical device companies, in particular, those that make prosthetic hip and ...

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Deferred Prosecution Agreements End, So Let the Payments Grow

Starting in 2007, we posted (<a href="http://hcrenewal.blogspot.com/2007/11/orthopedic-device-makers-reveal.html">here</a>, <a href="http://hcrenewal.blogspot.com/2007/11/few-answers-and-many-more-questions.html">here</a>, <a href="http://hcrenewal.blogspot.com/2007/11/one-more-payment-to-academic-health.html">here</a>, <a href="http://hcrenewal.blogspot.com/2008/03/stories-about-device-manufacturers.html">here</a> and <a href="http://hcrenewal.blogspot.com/2008/06/more-multi-million-dollar-orthopods.html">here</a>) about the payments, often huge, that five manufacturers of prosthetic joints (<a href="http://www.biomet.com/">Biomet</a>, DePuy Orthopaedics (a unit of <a href="http://www.jnj.com/">Johnson & Johnson</a>), Stryker Orthopedics,a unit of <a href="http://www.stryker.com/">Stryker Inc</a>, <a href="http://www.zimmer.com/">Zimmer Holdings</a>, and <a href="http://www.smith-nephew.com/">Smith & Nephew</a>) revealed they made to orthopedic surgeons and various academic and other organizations. These revelations were the results of deferred prosecution agreements made in 2007 between four of the companies and the US Department of Justice after the latter charged Biomet, DePuy, Zimmer, and Smith and Nephew with giving surgeons kickbacks, disguised as consulting fees, to promote their products.  Stryker entered into a voluntary compliance agreement (see post <a href="http://hcrenewal.blogspot.com/2007/11/orthopedic-device-makers-reveal.html">here</a>).  We also <a href="http://hcrenewal.blogspot.com/2007/11/aaos-responds-to-disclosure-of-payments.html">noted</a> that some of the leadership of the major orthopedic societies have received substantial amounts from these companies, as <a href="http://hcrenewal.blogspot.com/2007/11/aaos-patient-discussion-guide-regarding.html">have the societies themselves</a>. A <a href="http://hcrenewal.blogspot.com/2008/06/more-multi-million-dollar-orthopods.html">2008 post </a>on this subject noted the minimal disclosure some of the surgeons receiving these huge payments made when writing scholarly articles on related topics. Now in 2010, Bloomberg News <a href="http://www.businessweek.com/news/2010-06-11/new-hips-gone-awry-expose-u-s-kickbacks-in-doctors-conflicts.html">reported</a> on the results, such as they were, of these ballyhooed agreements: <blockquote>The government declared last year that it had overhauled the financial relationships between surgeons and the biggest makers of knees and hips, saying the threat of criminal prosecution for 'kickbacks' had forced them to slash payments to physicians. Results of the crackdown were 'truly extraordinary,' said Christopher Christie, a former U.S. attorney for New Jersey who is now governor, in testimony to Congress in June 2009. It was too good to be true. Compensation ended up being higher after the September 2007 deferred prosecution agreement because payments were postponed, according to data compiled by Bloomberg and interviews with seven surgeons. 'It’s back to business as usual' says Charles D. Rosen, president of the Association for Medical Ethics, who is a spine surgeon in Irvine, California. 'Nothing will change until someone goes to jail. It’s a big game.'</blockquote> Apparently, while during the course of the agreements the companies decreased payments to surgeons, they made up for it later: <blockquote>Prosecutors in the New Jersey U.S. Attorney’s Office, which headed the case, reported a 'satisfactory completion' in March 2009 of the probe of Biomet Corp., Johnson & Johnson’s DePuy unit, Smith & Nephew PLC, Zimmer Holdings Inc. and Stryker Corp. Payments in 2008 fell to $105 million from $272 million the year before, the Justice Department lawyers said. The companies increased doctor compensation for 2008 to about $300 million, according to the data compiled by Bloomberg from reports posted on the device makers’ websites. Fees for 2008 were delivered in 2009, the surgeons say. Payment delays were 'a common happenstance,' says Teresa Ford, a Seattle attorney who represents 150 doctors who have consulting or royalty agreements with orthopedic device makers. “None of them had significant changes in their relationships.”</blockquote> Also, <blockquote>A month after the government closed its case, Zimmer CEO David Dvorak told analysts on a conference call that the action didn’t result in a 'material change' to what it pays surgeons.</blockquote> Attempts by Bloomberg reporters to find out more did not reveal much: <blockquote>Since the agreement, payments to surgeons have been appropriate and for legitimate purposes, according to spokespeople for the five companies. Wright says on its website that it adheres to industry ethical standards in its dealings with consultants. As for 2008 fees that weren’t delivered until 2009, three of the companies say they froze payments while monitors were reviewing contracts with surgeons to ensure they were proper. Spokesmen for Stryker and Smith & Nephew declined to comment. Three of the court-appointed monitors say they’re barred from talking about the details of their work. The two others, including former U.S. Attorney General John Ashcroft, didn’t return telephone calls. The department declined to release reports the monitors filed.</blockquote> We have <a href="http://hcrenewal.blogspot.com/search/label/legal%20settlements">repeated</a> often (e.g.,<a href="http://hcrenewal.blogspot.com/2010/06/attempt-to-hold-health-care-leaders.html"> here</a>) the argument that limiting punishments of health care organizations for wrong-doing to corporate fines and deferred prosecution agreements has not deterred further wrong-doing.  Most of the cases which we have discussed involved pharmaceutical and biotechnology companies, and sometimes health insurers.  It seems that the argument also applies to device manufacturers.  To underline the lack of a deterrence effect, others payments by other device companies to other surgeons have also recently come to light. In 2008, we <a href="http://hcrenewal.blogspot.com/2008/09/more-lucrative-payments-to-orthopedic.html">discussed</a> payments made by Medtronic revealed in various court filings. Medtronic just started voluntarily revealing more information. For example, as <a href="http://stlouis.bizjournals.com/stlouis/stories/2010/06/14/story4.html">reported</a> by the St. Louis Business Journal, Dr Larry Lenke helped Medtronic develop a spinal surgery system, so <blockquote>In the first three months of 2010, Lenke earned $832,000 in royalties from Medtronic, putting him on track to top $3 million in royalties this year. Lenke received between .5 percent and 1 percent of sales of the system in royalties. 'The royalties are very small, but the sales are large,' he said. Lenke is cho-chief of adult and pediatric spinal, scoliosis and reconstructive surgery and the Jerome J. Gliden professor of orthopedic surgery at the Washington University School of Medicine, the director of spinal surgery at Shriners Hospital for Children, and a spine consultant to the St. Louis Rams and Blues. </blockquote>Like the surgeons we <a href="http://hcrenewal.blogspot.com/2008/06/more-multi-million-dollar-orthopods.html">discussed in 2008</a>, neither Dr Lenke nor Washington University seemed to make an effort to reveal his multi-million dollar relationship with Medtronic. Dr Lenke's <a href="http://www.ortho.wustl.edu/FindaPhysician/Spine/lenkel/bio.aspx">official web-page </a>at Washington University does not reveal financial ties to, much less multi-million dollar royalties from Medtronic. A quick review of a few of Dr Lenke's published articles reveal such vague disclosures as: <blockquote>One or more of the author(s) has/have received or will receive benefits for personal or professional use from a commercial party related directly or indirectly to the subject of this manuscript: e.g., honoraria, gifts, consultancies, royalties, stocks, stock options, decision making position.</blockquote>[Bridwell KH, Glassman S, Horton W, Shaffrey C, Schwab F, Zebala LP, Lenke LG, et al. Does treatment (nonoperative and operative) improve the two-year quality of life in patients with adult symptomatic lubmar scoliosis: a prospective multicenter evidence-based study. Spine 2009; 34: 2171-78.] The most specific disclosure I could find was: <blockquote>Dr Lenke was a consultant for Medtronic until January, 2009, and is a patent holder with Medtronic.</blockquote>[Silva FE, Lenke LG. Adult degenerative scoliosis: evaluation and management. Neurosurg Focus 2010; 28: 1-10.] So the more things change, the more they stay the same. Device companies are still paying royalties, sometimes enormous sums, to the surgeons who helped them develop lucrative devices. Many of these surgeons are in practice, and some are prominent academics. The surgeons, and their academic institutions when applicable, do not seem to be going out of their way to reveal these sometimes massive financial relationships to patients, many of whom end up implanted with the very devices that generate these enormous payments. While some of the surgeons and influential academicians and prolific authors, they do not seem to go out of their way to reveal these sometimes massive financial relationships to their audiences and readers, even while touting aggressive, procedure-oriented, device-centric approaches to manage orthopedic problems. So although the "Sunshine Act" was made part of the US health reform legislation, there is not yet much sunshine out there.  In my humble opinion, at a minimum, physicians should reveal, in detail, all financial relationships that might appear to have a probability of influencing their clinical decision making to the patients for whom such decisions are made.  Physicians should also reveal, in detail, all financial relationships that might appear to have a probability of influencing any related teaching or research.  Furthermore, as <a href="http://www.iom.edu/~/media/Files/Report%20Files/2009/Conflict-of-Interest-in-Medical-Research-Education-and-Practice/COI%20report%20brief%20for%20web.ashx">an Institute of Medicine's report on conflicts of interest</a>, which as received strikingly little attention, recommended: <blockquote>researchers should not conduct research involving human participants if they have a financial interest in the outcome of the research, for example, if they hold a patent on an intervention being tested in a clinical trial.</blockquote> Also, the report said we need <blockquote>to develop a new system for funding high-quality accredited continuing medical education that is free of industry influence.</blockquote> These idealistic recommendations seem a long way from the reality of our currently money-focused system of medical education and research.

Deferred Prosecution Agreements End, So Let the Payments Grow

Starting in 2007, we posted ( here , here , here , here and here ) about the payments, often huge, that five manufacturers of prosthetic jo...

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INSEL and NEMEROFF - WHAT SANCTIONS?

INSEL and NEMEROFF – WHAT SANCTIONS? Thomas Insel, Director of NIMH, has another <a href="http://www.nimh.nih.gov/about/director/2010/more-on-public-trust-and-conflict-of-interest.shtml">posting</a> in his own defense on his official blog today. He has been widely <a href="http://http//hcrenewal.blogspot.com/2010/06/public-trust-at-nimh.html">criticized</a> lately for the appearance of cronyism in his relationship with Charles Nemeroff. For the past three months, Insel has been trying to put some distance between himself and Nemeroff, but the public isn’t buying it. I have called his statements disingenuous <a href="http://hcrenewal.blogspot.com/2010/04/quis-custodiet-ipsos-custodes.html">here</a> and <a href="http://www.miamiherald.com/2010/06/10/1672327/senator-tells-um-hes-troubled.html">here</a>. Dr. Insel’s statements today are equally disingenuous. <a href="http://1boringoldman.com/index.php/2010/06/15/de-barred-not-a-bad-idea/">Negative reactions</a> are already appearing from those familiar with Nemeroff’s history. There is no argument that Nemeroff was instrumental in Insel’s move to Emory in 1994, that Nemeroff was Insel’s department chairman at Emory, that Nemeroff helped Insel again when Insel’s initial term as director of the Yerkes laboratory at Emory was not renewed in 1999, or that Nemeroff lobbied for Insel’s appointment as NIMH Director in 2002. There is no argument that Insel and Nemeroff have given <a href="http://hcrenewal.blogspot.com/2010/04/quis-custodiet-ipsos-custodes.html">glowing public recommendations </a>of each other, or that they have a record of <a href="http://www.pharmalot.com/2010/06/can-the-nih-really-monitor-conflicts-of-interest/">cozy personal communications</a>. There is no doubt that Pascal Goldschmidt at Miami sought and received a recommendation from Insel before hiring Nemeroff last year or that Insel went out of his way to put a personal gloss on the official NIH position regarding Nemeroff’s eligibility for grant funding if he left Emory. These are matters about which Dr. Insel prevaricates today in his blog. Continuing his prevarication, Dr. Insel today also avoids confronting the issue of Nemeroff’s continuing service on NIMH review committees under Insel’s watch during the period that he was under sanction by Emory University, and banned from participating in NIH grants – before he relocated to Miami. Nemeroff’s curriculum vitae on the U Miami website states that he is a member of the NIMH Review Group, Interventions Committee for Adult Mood and Anxiety Disorders (ITAV), 7/1/2006 - 6/30/2010. This means Insel allowed Nemeroff to continue in that peer review role even though he was banned by Emory from association with NIH grants. The question is why? And what does that tell us about Insel's judgement? It gets worse. During the period that Nemeroff was at Emory and under sanction vis à vis NIH grants, he continued to function as operational director of a NIMH-funded program administered by the American Psychiatric Association (APA). It is inconceivable that Insel was not aware of this arrangement. The APA program is known as Research Colloquium for Junior Investigators, and it is funded through NIMH project # 5R13MH064074-10. For the past few years Nemeroff, as Chair of the APA Committee on Research Training, has directed this program. The nominal Principal Investigator is Darrel Regier, who is the Executive Director of the American Psychiatric Institute for Research and Education (APIRE). At the session in New Orleans during the annual APA meeting last month, one of the featured speakers was Bruce Cuthbert, PhD, one of Insel’s principal lieutenants. In God’s name, why is the APA fronting the compromised Nemeroff as a role model to junior investigators, and why does NIMH/Insel allow this unsavory arrangement to continue? Could it be that Nemeroff’s crony <a href="http://hcrenewal.blogspot.com/2008/08/follow-money-part-ii.html">Alan Schatzberg</a>, the outgoing president of the APA, ran interference for his friend? And what will the new APA president Carol A. Bernstein do about it? And then there is the issue of Nemeroff’s appointment to two new NIMH review committees just recently. Dr. Insel prevaricates again about his awareness or approval of those actions. As reported by Paul Basken in the <a href="http://chronicle.com/article/While-Revising-Ethics-Rules/65800">Chronicle of Higher Education</a>, “An NIH spokesman, John T. Burklow, answering written questions about the matter, confirmed Dr. Nemeroff's full eligibility for agency activities and said he will begin serving this coming week on two scientific panels that review NIH grant applications.” Here again, Dr. Insel seems to be trying to help his crony Nemeroff to get back into circulation after his fall from grace at Emory. Emory University went through the wringer to discipline Nemeroff, at long last, in 2008. The actions of Insel in running interference for Nemeroff’s rehabilitation must leave Emory perplexed. Are Dr. Insel’s statements today disingenuous? You bet. Isn’t it time for the adults at NIH to step in and end this farce?

INSEL and NEMEROFF - WHAT SANCTIONS?

INSEL and NEMEROFF – WHAT SANCTIONS? Thomas Insel, Director of NIMH, has another posting in his own defense on his official blog today. He ...

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More Hospitals Hiring CEOs' Children, Doing Business with Board Members' Firms

As we predicted (<a href="http://hcrenewal.blogspot.com/2010/05/at-upmc-dealings-with-board-members.html">here</a>), the new reporting requirements imposed on US not-for-profit organizations are beginning to yield interesting results about the coziness of the leadership of some health care organizations.  Western Pennsylvania For example, we start with an <a href="http://www.pittsburghlive.com/x/pittsburghtrib/news/regional/s_685865.html">article</a> in the Pittsburgh Tribune-Review about hospitals in western Pennsylvania. <blockquote>Board members at Western Pennsylvania hospitals have provided legal, real estate, insurance and advertising services to their organizations, according to IRS reports examined by the Tribune-Review. The reports, which cover the fiscal year ending June 30, 2009, are the first under new reporting requirements imposed on nonprofit hospitals by the IRS. Still more requirements will kick in next year. Details of the filings by the two largest area health care firms, UPMC and West Penn Allegheny, were made public last month. UPMC reported $10 million and West Penn reported $5 million in dealings with board members or top executives. Five other major nonprofit health care providers reported business dealings with board members and, like UPMC and West Allegheny, cited in-place reporting and monitoring systems to avert or minimize any conflict of interest. </blockquote> The specifics include this about Ohio Valley General Hospital: <blockquote>At Ohio Valley General Hospital, the tax return shows two relatives of the chief executive officer are on the payroll. Dr. David Provenzano, son of CEO William F. Provenzano, was paid $613,781 in salary and benefits. The CEO's daughter-in-law, Dr. Dana Dellapiazzo, was paid $130,525. David Provenzano is the medical director of the hospital's pain center. Dellapiazzo is an anesthesiologist.</blockquote> About Excela Health: <blockquote>At Excela Health, which operates the Westmoreland Regional Hospital and two other hospitals, a company part owned by CEO David Gallatin was paid $253,835 for direct mail services. Excela spokeswoman Robin Jennings said Mailing Specialists 'processes our mail in preparation for sending to the post office with appropriate bar coding.' Excela reported payments of $683,250 to Westmoreland Emergency Medicine, which employs board member Dr. Robert Whipkey.</blockquote> About Washington Hospital: <blockquote>At Washington Hospital, board member Thomas Northrop's Observer-Reporter newspaper was paid $212,071 for advertising services. The hospital paid $308,185 in premiums to the Campbell Insurance Agency, where board member John Campbell is an owner. </blockquote> About Jefferson Regional Medical Center: <blockquote>Jefferson Regional Medical Center in Jefferson Hills, according to its report, paid $151,940 in legal fees to the law firm of board member Gregory Harbaugh. It paid $331,280 in real estate commissions to the firm run by board member Kevin Langholz. The hospital paid $75,035 to the Thorpe Reed law firm where board member Anne Mulaney works. </blockquote> About St. Clair Hospital: <blockquote>At St. Clair Hospital in Mt Lebanon, a radiology firm that employs Dr. Donald Orr, who is a board member, was paid $1.95 million for providing medical services, according to the hospital's filing. The hospital paid $80,000 for insurance related services to the HGH Group headed by hospital board member Bryan Hondru. </blockquote> New Hampshire The New Hampshire Union-Leader <a href="http://www.unionleader.com/article.aspx?headline=Pitman+Giles%27+kin+also+at+CMC&articleId=70d997eb-d756-4a71-8c52-773046071cd0">reported</a> on Catholic Medical Center: <blockquote>The head of Catholic Medical Center, whose salary is being questioned by the Attorney General's Office, has two offspring and two step-children employed or in one case recently employed there, the hospital acknowledged. A hospital official defended its hiring practices, saying no favoritism is shown and that of the 11 members of senior CMC management, seven have relatives who either work or have worked at the hospital, some on a per-diem basis. Executive Vice President Ray Bonito said his own son held a per-diem job during college. Offspring of trustees can also work at the hospital, he said. Alyson Pitman Giles has been CMC president and chief executive officer since 1999. Her bid to intertwine CMC with Dartmouth-Hitchcock Health has been stalled by the New Hampshire attorney general, who deemed it an acquisition of CMC and said it violates state law and would need court approval. CMC provided the following information on Giles' four relatives. -- Son Seth Pitman has worked per-diem over the past several years. Late last month, the hospital said he was working as a project writer in the marketing office. But last week, the hospital said he is not actively employed there. -- Daughter Sarah Pitman manages a primary-care physician practice. The hospital has not said when she started at that job. She was a hospital volunteer from June 1999 to January 2001, when she started working per-diem. Two Giles stepchildren are also employed at the West Side hospital. -- Stepdaughter Megan DeSantis is a physician assistant at Surgical Care Group, where she was hired six years ago. CMC acquired the group in May 2009. -- Stepson William Giles is a physician recruiter. He started as a program analyst with the IT department in June 2000 and received several promotions over the last 10 years, CMC said.</blockquote> Summary The defenses for hiring top leaders' relatives, and doing business with top leaders' firms were similar in both locations. For example, in western Pennsylvania, <blockquote>All reported that any dealings with connected firms individuals were 'at arm's length' with prices set at 'fair market value.'</blockquote> In New Hampshire, <blockquote>'It's not just a question for hospitals,' Bonito said of hiring relatives. 'It's a question for all companies.' What's important, he said, is that a strict process be followed. 'Everyone goes through the same process. I don't care whose kids they are,' said Bonito. 'Everyone gets treated the same. We hire the most qualified candidate.'</blockquote> It all smacks of an excess of coziness.  One wonders if there was any effort made to find other candidates when the CEO's family members showed up, or to find any other vendors when the board members' firms were available. Maybe they could have found writers, physician recruiters, and even physicians other than the immediate family members of the hospital CEO. Maybe they could have found direct mail companies, advertising agencies, and law firms available where no relatives of the CEO work, and which were not run by hospital trustees.  However, rejecting a CEO's child, or a board member's firm may require an independence of spirit rarely found in today's bureaucratic health care environment.  Instead, it may be easier to "go along to get along." Once hired, furthermore, even when there are "processes and procedures" in place, it may become all to easy to treat the CEO's relatives differently than run of the mill employees, and to treat the trustees' firms differently than the usual vendors.  That is where the real conflicts of interest set in.  The sort of coziness that allows hiring leaders' relatives and doing business with leaders' firms could soon lead to confusion between leaders' interests and the institutions' mission.  However, leaders of hospitals and other not-for-profit health care organizations have a duty to put the mission of the organization ahead of their personal interests.  In my humble opinion, this sort of coziness, this sort of fuzziness at the boundaries of institutional duties and personal interests, may be a fundamental reason that our current health care system has become so solicitous of the interests and prerogatives of its leaders, and so cold to the needs of patients and the values of professionals.  The need for more transparent, accountable leadership of health care who explicitly are subject to clear ethical rules was never more apparent.  Stay tuned as more and more cases like this appear....

More Hospitals Hiring CEOs' Children, Doing Business with Board Members' Firms

As we predicted ( here ), the new reporting requirements imposed on US not-for-profit organizations are beginning to yield interesting resul...

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Finding Out About Health Care Bureaucracy the Hard Way

A persistent theme for Health Care Renewal has been how concentration and abuse of power in health care trap patients and heath care professionals in a maze of bureaucracy, perverse incentives, deception, and conflicts of interest.  To anyone who has to make the transition from person to patient, some of these problems become immediately obvious.  Consider, for example,<a href="http://www.mediapost.com/publications/?fa=Articles.printFriendly&art_aid=129700"> this account</a> of "going into a hospital for a minor procedure": <blockquote>The very idea of being a patient is anathema. To people of my generation -- the 'me' generation -- who like to be in control, the experience begins with loss of control. First the paperwork -- three or four times paperwork has to filled out and given to a succession of strangers. Then they take all of your belongings, they tell you to take your clothes off, and make you put on a gown that leaves you nearly naked, put in you in very small room, bring you inedible food according to a schedule they determine. And if you try to sleep, they leave lights on, and do everything they can to make sure you can't. At the end, if you are lucky, they deign to discharge you. Those of us who are boomers, entering a period where we will be drawing the biggest healthcare expenditure, will not put up with this.</blockquote> This description of health care in the real world may not seem surprising to readers of <a href="http://hcrenewal.blogspot.com/">Health Care Renewal</a>. When health care is run by <a href="http://hcrenewal.blogspot.com/search/label/ill-informed%20management">business people with no experience or training in actual patient care</a>, and controlled by a <a href="http://hcrenewal.blogspot.com/2005/04/growing-proliferation-of-managers.html">proliferation of managers and bureaucrats</a> (whose numbers increased by a factor of 8.26x from 1983 to 200), usually with similar business backgrounds, all motivated by short-term financial incentives to "make the numbers" at all costs, what other result would one expect? Of course, many people outside of health care may not appreciate these problems until they become patients themselves. The person who wrote the description above apparently had avoided in-patient hospital care until the events he described, so on that basis his surprise can be excused.  On the other hand, his outrage was understandable. But wait - the above is actually a quote by a speech to the Innovation Forum by no other than Jeffrey Kindler, Esq, the current CEO of Pfizer, the world's largest pharmaceutical company. So his apparent surprise at what he found when he became a patient is ample evidence how unfamiliar he had been with real health care on the ground until this experience.  In fact, that the CEO of the world's largest drug company was so unfamiliar with the real world of health care until he had to become a patient ought to prompt some outrage too.  I am not recommending that all executives of health care organizations undergo procedures. However, making sure that no one gets to a top leadership position in a health care organization without some real world health care experience might lead to some salutary changes in how health care is run. Also, we noted <a href="http://hcrenewal.blogspot.com/2010/05/corporate-proxies-suggest-ceos-rewarded.html">here</a> that Mr Kindler had been rewarded last year by his board of directors for his "constructive participation in the US legislative process to advance Pfizer's goals of achieving a more rational operating environment...." Maybe had he had his minor procedure earlier, he might have also wanted to advance the goal of making health care less bureaucratic and more focused on the patients. Hat tip to Jim Edwards' <a href="http://industry.bnet.com/pharma/10008488/how-pfizer-ceos-hospital-stay-was-a-kafkaesque-prison-of-his-own-making/">blog</a> on BNet.

Finding Out About Health Care Bureaucracy the Hard Way

A persistent theme for Health Care Renewal has been how concentration and abuse of power in health care trap patients and heath care profess...

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Guest Post: A Hospital Passing "That Low Cost Onto the Community" - By Secret Payments to Insurance Brokers to Sign Up Policy Holders?

Health Care Renewal presents a guest blog by Steve Lucas, a retired businessman who formerly worked in real estate and construction who has a long standing interest in business ethics, and has long observed the health care scene. We have a verdict in the largest legal suit, $110M, ever brought before the court in Stark County, Ohio. The issue at hand has been the payment of fees by a nonprofit hospital (Aultman) through its for-profit insurance subsidiary (AultCare) to switch clients to this hospital's insurance plan. Aultman is the only in program hospital in our area. Confidentiality agreements have kept this practice in place for a total of 12 years, with knowledge of the arrangement only recently becoming public. First the back story: What is today Mercy Medical Center is owned by The Sisters of Charity. This hospital had popular community and business support. Wishing to get away from the business of running a hospital and focus on philanthropy, half of the hospital was sold to Columbia Health in 1996. Columbia traded on the name and community support and followed a common course of action of reducing staff and maintenance in an effort to maximize profit. Realizing their mistake, the Sisters entered into another partnership with a nonprofit in 1999 and have recently been able to regain total control of the facility. During this time Aultman Hospital, owned by The Aultman Health Foundation, was able to leverage this discontent into a massive expansion of both its physical plant and position in the community. Unknown to the community at large this growth was being driven by questionable business practices: <blockquote>The case revolves around allegations by Mercy that Aultman 'bribed' brokers with extra payments – in some cases, as large as $1 million – to persuade employer groups to switch to Aultman’s insurance plans, AultCare and McKinley Life Insurance. These payments weren’t disclosed to the brokers’ clients or on federal tax forms that non-profits must fill out to maintain their tax-exempt status, lawyers told jurors in court.(1)</blockquote> The point of contention was the payment of to a select group of brokers of what amounted to a kick-back, without notifying their customers of the additional payments. We then find: <blockquote>The leader of Aultman Health Foundation on Tuesday defended the nonprofit’s practice of using tax-exempt money to fund confidential payments to select insurance brokers. (2)</blockquote> I guess it is ok as long as nobody knows, and the 65,000 people covered under this scheme should be happy. We then find that Mercy’s CEO: <blockquote>... said he first learned of Aultman’s program that gave extra payments to select brokers who switched clients from other insurance companies in a 2004 Akron Beacon Journal article. (3)</blockquote> The Aultman CEO responded: <blockquote>Roth said those payments were part of a business strategy to save area businesses money by sharing the results of Aultman Hospital’s cost cutting measures since the 1980’s. 'We want to pass to pass that low cost onto the community,' Roth said. (4)</blockquote> It is interesting to note that Aultman changed the structure of its agreements with doctors to allow for them, the doctors, to receive co-pays directly. It was also revealed Aultman was paying at least one large medical group direct payments for exclusive referrals. So now we come to the jury’s decision: $6.1M for Mercy, both sides claim victory. Mercy feels it will change the way Aultman does business. <blockquote>Aultman plans to continue business as usual and won’t make any changes as a result of the verdict, President and Chief Executive Edward Roth said. (5)</blockquote> In our small market, the dollars are so large in health care that a multi-million dollar settlement will not change behavior. The use of tax-exempt funds to pay kickbacks and bribes is ignored and there is no public out cry, only Aultman filing another suit to have the verdict set aside. Altman claimed it needed the payments to be competitive with Columbia. This, win at any cost business attitude, has taken over great parts of medicine reducing what was once a proud profession into a simple process of number crunching. Aultman focused time and time again during the trial on its size, the largest employer in Stark County, and its position in the community. This is no excuse for corrupt behavior. Has health care become so corrupt, the dollars so large, that a little corruption is ok, as long as it does not hurt the bottom line? Follow on radio reports made it very clear Aultman would suffer no financial hardship due to the verdict and there would be no change in services. Business would continue as usual. References (All from The Akron Beacon Journal) 1. April 3, 2010. <a href="http://www.ohio.com/news/90142917.html">Canton hospital exchange charges in court</a>. 2. April 14, 2010. <a href="http://www.ohio.com/lifestyle/health/90813054.html">Aultman executive defends payments</a>. 3. April 23, 2010. <a href="http://www.ohio.com/news/91888484.html">Mercy CEO testifies in court</a>. 4. May 5, 2010/ <a href="http://www.ohio.com/lifestyle/health/92824599.html">Aultman defends “unique” incentives</a>. 5. June 9, 2010. <a href="http://www.ohio.com/news/break_news/95914624.html">Jury awards Mercy $6.1 million</a>.

Guest Post: A Hospital Passing "That Low Cost Onto the Community" - By Secret Payments to Insurance Brokers to Sign Up Policy Holders?

Health Care Renewal presents a guest blog by Steve Lucas, a retired businessman who formerly worked in real estate and construction who has ...

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Public Trust at NIMH?

Public Trust at NIMH? The NIMH Director, Thomas Insel, MD, is under siege for his problematic relationship with Charles Nemeroff. In his own defense, Insel placed a remarkable new <a href="http://www.nimh.nih.gov/about/director/2010/nimh-reducing-conflict-of-interest-ensuring-public-trust.shtml">post</a> today on his official blog. It signals that Insel and NIMH just don’t understand the current controversy. Since the story appeared in <a href="http://chronicle.com/article/While-Revising-Ethics-Rules/65800">The Chronicle of Higher Education</a> 2 days ago, it has reverberated on <a href="http://hcrenewal.blogspot.com/2010/06/happy-times-at-nimh-part-iii.html">Health Care Renewal</a>, on <a href="http://www.pharmalot.com/2010/06/can-the-nih-really-monitor-conflicts-of-interest/">Pharmalot</a>, on <a href="http://www.margaretsoltan.com/?p=23664">University Diaries</a>, on the <a href="http://blogs.nature.com/news/thegreatbeyond/2010/06/another_conflict_brouhaha_for_1.html">Nature blog</a>, on the <a href="http://news.sciencemag.org/scienceinsider/2010/06/nih-conflicts-overhaul-bumps-up-.html">Science blog</a>, and on <a href="http://scienceblogs.com/drugmonkey/2010/06/more_evidence_that_the_nih_has.php?utm_source=networkbanner&utm_medium=link">Drug Monkey</a>, to name just a few. The authors on these sites have been uniformly critical of Insel and of NIMH, as have almost all the comments. What does Dr. Insel say in his defense today? Mainly, he demonstrates that he doesn’t get it. The very way in which he frames the issue tells us that. First he says it is about financial conflicts of interest. It isn’t. It is about the corruption of academic psychiatry. Financial conflicts of interest are just a part of that problem. Second, he says it is about whether the bad boys and girls in psychiatry were badder than those in other medical specialties. It isn’t. It never was. Third, he says he is surprised by criticism that he and NIMH have not taken firm action against the bad boys and girls, then he spends the rest of his column evading that issue. This degree of sophisticated indirection is achieved only in the highest echelons of bureaucracies. Instead of a frank discussion of the real issues, we get a self serving description of the ways in which NIMH has taken steps to preserve the integrity of the research that it funds (starting after the scandal about the bad boys and girls broke within the Senate Finance Committee in 2008 – a detail not included by Dr. Insel. Where were they before?). By the time one makes it through this glossed-up history and the new promissory notes, it is easy to lose sight of what provoked the controversy this week. It’s about the appearance of hypocrisy, with Insel assisting the compromised Nemeroff to land a new job at Miami while he is co-chairing a NIH effort to revise ethics guidelines. It’s about consistency of discipline. After Emory University went through the wringer to discipline Nemeroff, at long last, and to ban him from involvement with NIH grants for 2 years, doesn’t NIH have a responsibility to make the discipline stick? After all, NIH deferred to Emory in the investigation of Nemeroff to begin with. What message does it send for Insel, a well known crony of Nemeroff, to blithely assure Pascal Goldschmidt at Miami that Nemeroff is “absolutely in fine standing” with NIH and that he “not only could begin applying for NIH grants as soon as he arrived in Coral Gables, but that he could also continue to serve on the NIH's expert panels that help decide on which grant applications win federal financing?” As Drug Monkey said, “It’s about optics, NIH. This doesn’t look good.” It looks instead like cronies exploiting the gaps and inconsistencies in administrative oversight between academic centers and NIH. It’s also about common sense and administrative propriety. Let us perhaps grant that Insel could not prevent or discriminate against Nemeroff in applying for new NIMH funding. There is weasel wording to cover Insel if he chose to take such a position. But does that mean Insel has no discretion over whether Nemeroff is invited onto two new NIMH review panels? Nemeroff has no entitlement to claim a place on these peer review panels. Whatever possessed Insel to extend this privilege to a compromised individual like Nemeroff? The answer plainly is that Insel doesn’t recognize the compromise and corruption of his crony Nemeroff. The appearance is that Insel is setting out to help Nemeroff get back into circulation after his fall from grace at Emory. By his own blog posting today Insel tells us that he lacks the grasp of nuanced issues that his position requires. He doesn’t get the big picture in this controversy or, if he does, he wants to evade it. Either way, NIMH deserves better. Bernard Carroll.

Public Trust at NIMH?

Public Trust at NIMH? The NIMH Director, Thomas Insel, MD, is under siege for his problematic relationship with Charles Nemeroff. In his own...

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