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Where No Hospital CEOs are Below Average

In Lake Woebegon, all children are above average.  Now it seems that hospital CEOs have moved there.  Ventura County, Where No CEO is Below Average The Ventura County (California) Star <a href="http://www.vcstar.com/news/2010/jul/24/lofty-pay-for-hospital-ceos-area-administrators/">reported</a> on the uniformly high remuneration of the CEOs of local, mostly small, not-for-profit hospitals and hospital systems. <blockquote>T. Michael Murray reaped $330,545 in 2008 as chief executive officer of St. John’s hospitals in Oxnard and Camarillo. He drew an additional $187,071 in bonuses with $73,113 more in benefits and other compensation. His total package, according to IRS records, reached $590,729. And he may have been underpaid, according to a statewide survey of 118 nonprofit hospitals. The report by the Payers & Providers healthcare business publication suggests the base salary for CEOs averaged $514,237. Kick in bonuses, retirement money, reimbursement for education costs, expense accounts and the average total compensation hit $732,004. Public records show similarly lofty numbers at Ventura County’s three nonprofit, tax-exempt hospital groups. Gary Wilde of Community Memorial Health System, which runs hospitals in Ventura and Ojai, was the highest paid CEO in 2008. He earned a base salary of $508,682 and his total compensation was $853,528, with much of the additional money placed into a retirement fund that won’t be paid out until Wilde serves six more years as CEO. Simi Valley Hospital changed its leadership in 2008, with a total compensation of $1.25 million recorded in 990 tax forms for two different CEOs. That’s slightly more than the hospital provided in treatment for poor uninsured patients where there was no attempt to collect payment, though hospital leaders say charity care definitions encompass only a fraction of the total care they provide without pay. Outside the county, tax records from the Cottage Health System in Santa Barbara showed a base salary of $848,826 for CEO Ronald Werft and other compensation of $546,846. His total topped $1.3 million. Ken Anderson of the John Muir Health System, which operates hospitals in Walnut Creek and Concord, was the highest compensated CEO in the Payers & Providers study. He made $745,000 in base salary and nearly $7 million in other compensation, much of it deferred over his career for retirement.</blockquote>Recall that these people are leading relatively small, not-for-profit community hospitals whose missions are to provide health care to the community.  Total compensation ranging from three-quarters of a million dollars to multi-millions seems vastly disproportionate to the jobs and their settings. Explanations and Excuses As expected, those supporting the CEOs have all sorts of explanations and excuses: <blockquote>Hospital leaders in Ventura County and throughout California say the numbers are inflated by retirement plan accumulations that must be included on tax records even before executives qualify to receive the money. They defend the half-million-dollar salaries, with bonuses on top, as the only way to compete with for-profit hospitals for executives who can lead a facility that may employ more than 1,000 workers, drive a community’s economy, provide access to the uninsured and deliver care that saves lives. 'Given the context, it’s not out of line,' said Murray, a CEO with 28 years of experience who is now semiretired after resigning from St. John’s at the end of March. 'I think you need to retain and also attract sufficient talent. I’m not saying there aren’t inappropriate salaries out there. I don’t think mine was one of them.'</blockquote> Also, <blockquote>But [economist Sung Won] Sohn said that paying below average is risky. 'When you try to get somebody at $400,000 rather than $700,000 you will get plenty of takers but they’re not competent,' he said. 'Hospitals are so important in the community that you want to make sure it’s run properly.' Nor does he see any problem with paying more than average if a hospital board wants to reward an executive.</blockquote> Furthermore, <blockquote>John Romley, an economist at the Schaeffer Center for Health Policy and Economics at USC, said the amount hospitals spend on executive pay is a sliver of their total expenses and can’t legitimately be blamed for driving the rising cost of healthcare. 'I guess I’m not shocked even though I’m jealous,' he said of the compensation.</blockquote> Some people were not pleased about this use of health care dollars: <blockquote>Others worry the compensation may push hospitals into spending more on executives than their nonprofit mission of providing care for the poor. Federal regulations already limit compensation for CEOs of corporations bailed out by the government to $500,000. Similar caps placed on nonprofit hospitals could create dramatic differences, said Ron Shinkman, author of the Payers & Providers statewide survey on CEO salaries. 'You’re looking at close to $39 million that could be used on uncompensated patient care,' he said. 'It’s a lot of money.' Consumer advocates aim much of their concern at nonprofit hospitals that not only reward CEOs with lucrative paydays but also provide little charity care to poor, uninsured patients. The Payers & Providers research identifies 17 hospitals — all outside of Ventura County — where the total compensation to CEOs exceeded the cost of charity care. 'It would be outrageous if hospitals are paying more to their (entire) executive teams than in indigent care in their community,' said Anthony Wright of Health Access California. 'For some hospitals to provide more to one individual just seems wrong.'</blockquote>The Mechanism: Ego Bias The mechanism making CEO compensation constantly increase appears to be simple: <blockquote>Typically, hospital boards hire consultants to conduct studies showing market averages for comparable hospitals in their regions. They often try to pay somewhere around the 50th percentile. That’s a reasonable way to do it, but such studies tend to push up the salaries, said economist Sung Won Sohn, who was involved in setting compensation at two Minneapolis hospitals. 'People at the low end try to increase the CEO closer to the average,' said the professor at CSU Channel Islands. 'If everyone does that, the average CEO salary will go up.'</blockquote> So there you have it. At no hospital is the CEO deemed by a sympathetic (and sometimes crony filled board) below average. If the CEO's compensation has somehow dropped below average one year, it is immediately raised to at least average the next. Apparently almost never is the CEO's pay deemed to be too high. That notion is corroborated by the assumption by the CEO documented above that all CEOs have "sufficient talent," and the assertion above that anyone who would accept a lower salary would be "not competent." So every year all the CEOs who had below average compensation the previous year get compensation increased at least to last year's average.  Almost no CEO gets a reduction.  So the average moves up relentlessly year after year.  Of course, unless all CEOs are exactly alike, some CEOs must be below average.  So this becomes a great example of the ego bias at work. Ego bias is a common cognitive bias usually discussed in the context of making probabilistic judgments. A simple definition is that people tend to believe that outcomes of what they do, or what a group with whom they identify does will be above average. A long time ago, colleagues and I showed that interns in an intensive care unit judged the survival of their patients on average to be better than their judgments of the mean survival of all patients in the ICU. On the other hand, ICU attending physicians displayed a slightly more sophisticated version of the bias. They judged their patients' survival accurately, but judged the mean survival of their ICU's patients to be higher than it really was. [Poses RM, McClish DK, Bekes C, Scott WE, Morley JN.  Ego bias, reverse ego bias, and physicians' prognostic judgments.  Crit Care Med. 1991 Dec;19(12):1533-9.  Link <a href="http://www.ncbi.nlm.nih.gov/pubmed/1959374">here</a>.] So we have the ego bias writ large in judgments made about the performance and compensation of hospital CEOs, at least in Ventura County, California. The Implications I agree that paying a CEO more than a hospital's entire expenditures for the care of the poor is unseemly. However, in my humble opinion, the issue is even bigger than that. It is not so much how much of the hospital's budget goes to executive compensation, but what lessons this teaches CEOs.  I propose they are: -  I am a wonderful person.   I can do no wrong. -  If I do wrong, I cannot be punished. -  I can get rich and powerful doing this. Of course, as we have written many times, being the CEO of a small community hospital is supposed to be a calling, whose goal is to uphold the institution's mission.  Instead, CEOs are learning to be tin-pot dictators.  Some are probably sensible enough to resist learning this message.  I am afraid many are not. Furthermore, there is no reason to think that this phenomenon is confined to Ventura County, California, or to small community hospitals.  We have discussed how the management of health care organizations have become unsympathetic to, or even <a href="http://hcrenewal.blogspot.com/search/label/mission-hostile%20management">hostile to the mission</a>.  We have discussed their organizations' <a href="http://hcrenewal.blogspot.com/search/label/institutional%20conflicts%20of%20interest">institutional conflicts of interests</a>.   We have discussed how they have wound up with <a href="http://hcrenewal.blogspot.com/search/label/imperial%20CEO">imperial CEOs</a>.  The resulting ill-informed, mission-ignorant or mission-hostile, self-interested, conflicted, or even corrupt leadership is a major, but still largely anechoic cause of our health care dysfunction. As I have said endlessly, true health care reform will require finding well-informed leaders who understand and support the mission, put the mission before their own self-enrichment, and are unconflicted and honest.

Where No Hospital CEOs are Below Average

In Lake Woebegon, all children are above average. Now it seems that hospital CEOs have moved there. Ventura County, Where No CEO is Below ...

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The Hospital CEO as Debt Collector

Last year we <a href="http://hcrenewal.blogspot.com/2009/05/irs-changes-form-990-to-make-not-for.html">noted</a> that the US Internal Revenue Service (IRS) required more detailed reporting starting in 2009 by US not-for-profit organizations. Many US health insurance companies/ managed care organizations, most hospitals, nearly all medical associations, nearly all disease advocacy organizations, all health care charities, and nearly all medical schools are not-for-profit organizations. We suggested then that this reporting might lead to more transparency about the leadership and governance of these organizations.  The 2009 990 forms seem to be trickling into public view, sometimes leading to some striking disclosures about how US not-for-profit health care organizations are lead. The California Watch blog just <a href="http://californiawatch.org/watchblog/4-laguna-beach-hospital-ceo-was-also-debt-collector-34">reported</a> about the interesting part-time job of a hospital CEO: <blockquote>The former president of a Laguna Beach hospital has been operating a debt-collection company that recovered medical payments from his own facility, raising conflict-of-interest questions as the CEO moves to a new hospital in Riverside County. Bruce Christian ran South Coast Medical Center from 2005 until it was sold in 2009. At the same time, Christian was owner of Metro Republic Commercial Services, a consulting and medical debt-collection firm that provided at least $110,000 in services to South Coast while Christian was a top manager, records show. South Coast Medical Center disclosed the arrangement as 'self-dealing' in federal tax filings. State law allows self-dealing by board members of nonprofits, typically as long as the body explores other options and determines they are not unduly enriching one of their own.</blockquote> Of course, I also get to write, but wait, there is more: <blockquote>Christian was also at the helm of the hospital in 2006 when Adventist hired one of his Metro Republic consultants as interim chief financial officer, tax records show. Adventist said it appointed the interim CFO when it believed the hospital would be sold quickly. Additionally, a version of the Metro Republic <a href="http://web.archive.org/web/20040712223946/www.mrcsinc.com/set_repclients.htm">website</a> in 2006 said the firm supplied South Coast Medical Center with health care financial consulting, managed care-revenue recovery and accounts-receivable services. The website, which appears to have been offline since 2006, describes Christian as a health industry leader for 30 years who built the Corona-based Metro Republic from a three-person office to one with 150 employees.</blockquote> Predictably, the response from the hospital and its parent health system was that it was all no big deal. <blockquote>Adventist Health West, the Roseville-based company that owned South Coast, acknowledged that the arrangement was 'unusual' and 'not the norm' for the firm. In a statement, Adventist said Christian's firm collected hospital debts for years before Adventist bought the hospital and prior to Christian’s tenure as president and CEO. Board members were aware of the arrangement. It remained in place while the chain sought to sell the medical facility throughout Christian’s tenure, the statement said. 'Unfortunately, it took much longer than originally envisioned to sell the hospital,' Adventist Health said in a statement. 'Adventist Health continues its deep commitment to providing mission-driven, quality health care to the communities we serve.'</blockquote> Some thought otherwise: <blockquote>But allowing a hospital administrator – who can have considerable power over setting prices on medical procedures – to operate as the hospital’s own bill collector presents a thorny conflict of interest, said Ken Berger, executive director of Charity Navigator, a New Jersey-based charity evaluation group. 'Just because the (hospital) board may sanction it doesn’t make it right, appropriate or ethical,' he said. 'The mission of hospitals and the mission to squeeze money out of those that are slow to pay can be quite contradictory. It’s just wrong.'</blockquote> Another expert thought something ought to be done: <blockquote>Kathryn Peisert, managing editor for publications at the San Diego-based Governance Institute, said a hospital CEO’s duty is to further the interests of the hospital. As such, she said, Christian should have eliminated all appearances of impropriety and cut ties between the medical center and his consulting firm. 'That’s really a big no-no,' said Peisert, whose organization advises hospital boards. 'I’m surprised some regulatory agencies haven’t been after this.'</blockquote> We will see if anything will be done, but this conflict of interest seems not to have gotten in the way of Mr Christian's career advancement. <blockquote>Christian is now chief executive of a Loma Linda University Medical Center campus expected to open in 2011 in Riverside County. A Loma Linda University Medical Center spokesman said the Murrieta campus will not contract with Metro Republic.</blockquote> As I have said before, I expect that as more 990s dribble out, seemingly as slowly as many organizations can manage, we will see many more examples of these sorts of conflicts of interest, in which top organizational leaders also turn out to be vendors, consultants, etc. In theory, and perhaps in a golden era in the past, leaders of not-for-profit health care organizations were supposed to regard their work as a calling, and to be primarily concerned with upholding the mission of the organization. Instead, we now see more leaders who seem to regard their organizations as their own personal sand boxes, providing opportunities for play, and sometimes personal enrichment. (Note that Mr Christian's total compensation from the hospital was "$360,000 and $400,000 in salary, benefits and deferred compensation in 2006 and 2007 at South Coast Medical Center.") Unfortunately, Mr Christian's case demonstrates that leaders who get used to their organizations as personal sand boxes, rather than face punishment,  may be given the opportunity to play in larger venues. One wonders how much he will make at the helm of a new academic medical center, what other side deals he will manage, and how much he will be concerned with the academic and clinical missions. Once again, I say that true health care reform will only be achieved when health care organizations are lead by people who put the mission ahead of their personal enrichment, and are held accountable for their ability to do so.

The Hospital CEO as Debt Collector

Last year we noted that the US Internal Revenue Service (IRS) required more detailed reporting starting in 2009 by US not-for-profit organi...

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Are Ill-Informed Leaders the Cause of Drug Manufacturing Mishaps?

Fundamental Corporate Failures In the last few years, there seems to have been an epidemic of once revered companies suddenly unable to perform the most basic functions necessary for their businesses.  Finance firms ran out of money and ended up bailed out or bankrupt.  An automobile firm produced cars that seemed to accelerate out of control.  Another automobile company, once the world's biggest, went bankrupt and had to be bailed out by the government. An oil company took months to cap a blown out well.  In the health care world, drug companies which could no longer manufacture pure and unadulterated drugs.  Baxter International sold deadly contaminated heparin (post <a href="http://hcrenewal.blogspot.com/2010/07/more-about-what-we-dont-know-about.html">here</a>). Johnson and Johnson sold contaminated or wrongly dosed over-the counter childrens' medicines (post <a href="http://hcrenewal.blogspot.com/2010/05/19-million-means-never-having-to-say.html">here</a>). Another Troubled Johnson and Johnson Factory Now yet more problems have surfaced at a Johnson and Johnson factory.  As <a href="http://www.google.com/hostednews/ap/article/ALeqM5gKNufIGxLdxRyZ8TPAzFIe83oA1gD9H3M2B00">reported</a> by the AP: <blockquote>A dozen recent federal inspections of a Johnson & Johnson factory for heartburn and other nonprescription medicines show a host of violations that could affect the quality and makeup of the drugs. A new report on inspections at the Lancaster, Pa., factory in the past month indicates a pattern of ignoring rules for manufacturing and quality, failure to investigate problems that could affect the composition of products, carelessness in cleaning and maintaining equipment, and shoddy record-keeping. In some cases, medicine batches made during equipment failures were not checked for quality. Food and Drug Administration investigators had to ask for information many times in some cases, and then wait days to get it.</blockquote> The scope of the problems was large: <blockquote>The inspection report, released Wednesday, lists 12 different types of violations, from not determining the impact of equipment failures 'on the manufacturing process and products' to incomplete records of investigations into 'unexplained discrepancies' in manufacturing. The latter problem occurs 'whether or not the batch has already been distributed,' the report states.</blockquote> Some examples were: <blockquote>_'Laboratory controls do not include the establishment of scientifically sound and appropriate test procedures to assure that drug products conform to appropriate standards of identity, strength, quality and purity.' _Procedures to prevent 'objectionable microorganisms' from getting into medicines appear not to have been followed. _'Deviations from written test procedures are not justified.' _Staff were not following up 'to determine the causes for repeated mix-up of tablets.' _Written procedures for cleaning and maintenance did not have enough detail about the methods, equipment and materials to be used. _The plant did not have recent drug production and quality control records readily available to the inspectors, as is required. _Samples of drug products taken to determine if they met written specifications were not properly identified. _There was no preventive maintenance program for at least five types of complex manufacturing or testing equipment.</blockquote> Previous Problems at Johnson and Johnson Factories Note that just a few days before this hit the news, the Philadelphia Inquirer <a href="http://www.philly.com/inquirer/business/20100721_McNeil_faces_grand-jury_probe_over_problems_that_spurred_drug_recall.html">reported</a> this follow-up from the problems at the plant in Fort Washington, PA run by Johnson and Johnson's subsidiary McNeil Consumer Healthcare <blockquote>A federal grand jury is investigating problems at the now-shuttered McNeil Consumer Healthcare plant in Fort Washington that triggered the recall of children's Tylenol and other popular pediatric medicines, according to the company. The existence of the investigation was made public Tuesday by Louise Mehrotra, vice president for investor relations for Johnson & Johnson, McNeil's parent company.</blockquote> That report reminded us that there have been problems at a third Johnson and Johnson plant: <blockquote>[Johnson and Johnson subsidiary] McNeil is now dealing with FDA issues at three drug-making facilities, including one in Las Piedras, Puerto Rico. Problems at the Las Piedras plant last year set in motion the investigation at Fort Washington. At Las Piedras, FDA inspectors were chiefly concerned about why it took McNeil more than a year to respond to consumer complaints of a musty smell associated with Tylenol caplets produced at the plant. The smell was traced to a chemical used to treat wooden pallets at the plant.</blockquote> So three Johnson and Johnson manufacturing plants have recently allegedly failed to uphold basic quality standards, and thus have made medicines that ranged from musty smelling to contaminated. Clearly, the most basic responsibility of a drug manufacturer is to supply fresh, pure, unadulterated drugs, and now Johnson and Johnson, a once iconic American drug and device company, seems to be having trouble fulfilling this responsibility. Caused by Leadership Shortcomings? It seems that health care firms, like so many others, have been distracted by financing fantasies and marketing marvels from the most fundamental parts of their business. One wonders how responsible are leaders with little understanding of the fundamentals of the fields in which their firms operate, and who seem to just get richer no badly how their firms perform. Note that the current Johnson and Johnson CEO William C Weldon's background is in "sales,marketing and international management," not manufacturing, engineering, chemistry, or the biological sciences, per the <a href="http://files.shareholder.com/downloads/JNJ/974545981x0x359543/AA8DC9C8-C2E9-406E-9BC4-9BCBC25DF730/y81646_d-i001_a_UC.pdf">company's 2010 proxy statement</a>.  In 2009, with one factory already under investigation, his total compensation was over $30,000,000. The Johnson and Johnson board of directors all get more than $200,000 per year in compensation.  The board does include two biologists and two physicians  (Prof Mary Sue Coleman, is "professor of biological chemistry" at the University of Michigan; Michael M E Johns, MD, a physician; Susan L Lindquist, Professor of Biology at Massachusetts Institute of Technology; and David Satcher, MD a physician.)  However, while it also contains the retired CEOs of a telecommunications company, an electronics company, an airline, a food company, and an bank/ finance company,  it does not seem to contain anyone with experience in manufacturing, much less pharmaceutical manufacturing.   On the other hand, it includes several people with leadership positions in non-profit health care institutions  with whose primary responsibilities their Johnson and Johnson board membership may conflict.  (Mary Sue Coleman is President of the University of Michigan; Michael M E Johns, Chancellor of Emory University, member of the Institute of Medicine, member of the editorial board of JAMA, and chair of the publications committee of Academic Medicine; Susan L Lindquist, member of the Institute of Medicine; Leo F Mullin, Chairman of the Board of the Juvenile Diabetes Research Foundation; William D Perez, Trustee of Cornell University, and Trustee of Northwestern Memorial Hospital;  and David Satcher, board member for the Kaiser Family Foundation.)    Note that leaders of non-profit academic health care institutions who also serve on boards of for-profit health care corporations often justify the apparent conflict by the need to "have a voice and interact with the business world," as explained (see post <a href="http://hcrenewal.blogspot.com/2010/07/new-york-times-reports-university.html">here</a>) by a spokesperson for Mary Sue Coleman.  A university president who sits on a corporate board to "understand what the commercial world is doing," may have not learned enough about that world to make sure it is doing it well. Finally, several Johnson and Johnson board members are former or current leaders of some of the financial firms whose problems lead to the global financial meltdown, or "great recession," (Anne M Mulcahy has been a member of the Citigroup board since 2004, and was on the FNMA board from 2000 to 2004, both nearly failed, and required government bailouts to survive; Leo F Mullin, currently Senior Advisor to Goldman Sachs Capital Partners, a subsidiary of Goldman Sachs, which just settled charges by the SEC that it misled investors; and Charles Prince, CEO of Citigroup from 2003 to 2007.)   Are these the sort of people we should trust to uphold the fundamental quality of drug manufacturing?  Health care organizations are increasingly saddled with leaders who do not understand the fundamentals of the health care environment, are not pledged to support their missions, and may be distracted by conflicts of interest.  Such leaders may be increasingly responsible for the dysfunction of modern health care.  True health care reform requires leadership that understands the context, and supports the mission without conflict.

Are Ill-Informed Leaders the Cause of Drug Manufacturing Mishaps?

Fundamental Corporate Failures In the last few years, there seems to have been an epidemic of once revered companies suddenly unable to perf...

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An Open Question on Moral Authority and Healthcare IT

<div dir="ltr" style="font-family:arial;">I recently had the chance to observe a relative's care in a small community hospital. This was a hospital that, in my relative's last several days there before going back to a nursing home for rehab, went live with a major vendor CPOE. Just by passing the nursing station/doctor's charting room on my relative's floor and opening my eyes and ears, I saw doctors and nurses struggling to take care of patients while "getting the bugs out of the system." They had had received some classroom "training" in a static environment, but it was clear they were learning about a lot of "gotcha's" and unanticipated glitches in vivo. The fact of problems were predictable; I told several of my relative's physicians about my work in studying these issues. There was some skepticism (maybe in my nearly being in tears about my relative, I came off as a bit melodramatic). However, several later told me they "now knew what I was talking about" upon my relative's discharge, just several days into the go-live. One story I overheard during go-live especially sticks out in my mind. A newly-admitted patient who needed urgent heparinization did not receive the medication promptly. The patient's physician could not order it, and could not enter the required weight needed to order it, due to some type of 'glitch' or system malfunction. Physicians found no way to override, despite calls to the help desk, attempts by on site IT people and users from the parent hospital, etc. In the end, the pharmacist simply provided the med using a weight estimate despite no "official" order having been entered into CPOE. I heard that the delay was on the order of "several hours." Clearly, both technology and people issues were involved ... but I assure the reader, injured or dead patients really don't care exactly how their injury occurred, after the fact (other than in litigation, which doesn't fix the damage or remediate the suffering). Here, then, is my question: Where does the moral authority come from to subject live, unsuspecting, uninformed patients to the type of risks the patient whose heparin was delayed was subject to? What right did the hospital have to NOT inform this patient before admission that a new critical CPOE system was going "live" that day, and that the patient could consider going to another hospital a few miles down the road instead that had no such potential problems? From the <a href="http://en.wikipedia.org/wiki/Belmont_Report" target="_blank">Belmont Report</a> (also see <a href="http://ohsr.od.nih.gov/guidelines/belmont.html" target="_blank">http://ohsr.od.nih.gov/guidelines/belmont.html</a> ), the six fundamental ethical principles for using any human subjects for research are: </div><div dir="ltr" face="arial"></div><div dir="ltr" face="arial"><ul><li>(1) Respect for persons: protecting the autonomy of all people and treating them with courtesy and respect and allowing for informed consent; </li><li>(2) Beneficence: maximizing benefits for the research project while minimizing risks to the research subjects; and </li><li>(3) Justice: ensuring reasonable, non-exploitative, and well-considered procedures are administered fairly (the fair distribution of costs and benefits to potential research participants.) </li><li>(4) Fidelity: fairness and equality. </li><li>(5) Non-maleficence: Do no harm. </li><li>(6) Veracity: Be truthful, no deception.</li></ul></div>I would like a straight, unspun answer to this simple question:On the basis of Belmont Report and other medical ethics regulations, where does the moral authority come from for hospitals to put patients through such risks without informing them ahead of time and offering them an opt-out, even if only the continued use of paper in their care?I have passed this question on to major American Medical Informatics Association mailing lists and await replies. -- SS

An Open Question on Moral Authority and Healthcare IT

I recently had the chance to observe a relative's care in a small community hospital. This was a hospital that, in my relative's las...

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If Our Honored Military Personnel's Medical Care Was Not Involved, This WSJ Letter Might Have Been Considered Oddly Funny

In the WSJ today, a letter to the editor was published extolling the major strides made by the U.S. military in voice recognition technology for electronic health records: [Note: this is not to denigrate the military, and I am very thankful to all who serve and defend our country and freedoms. Health IT problems seem unfortunately universal - ed.] <blockquote><a href="http://online.wsj.com/article/SB10001424052748703467304575383621906130434.html"> Shared Information Can Give Better Medical Results</a> Wall Street Journal JUly 26, 2010 There is no question that medical information, notes and all, belong to both the patient and the provider, helping each of them to manage a medical condition ("The Informed Patient: What the Doctor Is Really Thinking," Personal Journal, July 20). In the U.S. Army in Europe, we are taking the concept a little further, from "what the doctor is really thinking" to "what the doctor is saying." For the last two years, we have been evaluating voice-recognition technology to improve the provider's experience with our electronic medical record. During the process, we came across a wonderful discovery: As doctors dictate medical notes into the record during patient visits, patients are paying much more attention to what doctors are saying, prompting them to ask important follow-up questions, add statements about something else that may be bothering them, or, most importantly, correcting the doctor when a dictation error is made. It's the type of patient-safety feedback loop that would otherwise be absent. The more we allow our patients behind the curtain to see and hear how we work, the more we will see patients become true partners in their own health care. Robert Walker, M.D. Chief Medical Information Officer Europe Regional Medical Command Heidelberg, Germany </blockquote> Here's the problem, as I outlined at my July 1, 2010 post "<a href="http://hcrenewal.blogspot.com/2010/07/4-billion-military-emr-ahlta-to-be-put.html">$4 Billion Military EMR "AHLTA" to be Put Out of Its Misery? Also, Does the VA Have $150 Million to Burn on IT That Was Never Used?</a>": <blockquote>I have heard from numerous reliable sources that the military's $4 billion+ EMR known as "Armed Forces Health Longitudinal Technology Application" (<a style="font-weight: bold;" href="http://dhims.health.mil/userSupport/ahlta/about.aspx">AHLTA</a>) is to be declared a failure, and replaced. I'd written about AHLTA's considerable problems at the post "If The Military Can't Get Electronic Health Records Right, Why Would We Think Conflicted EHR Companies And IT-Backwater Hospitals Can?" at <a href="http://hcrenewal.blogspot.com/2009/06/if-military-cant-get-electronic-health.html" target="_blank">http://hcrenewal.blogspot.com/2009/06/if-military-cant-get-electronic-health.html</a> . From that post: <blockquote> [AHLTA has been described as] difficult for physicians to use. Intolerable. Slow. Unreliable. Frequently crashes. Near mutiny. Morale. Affecting patient care, decreasing patient load. Can it get worse? Yes ... When the Army's Surgeon General observes that clinicians "spend as much or more time working around the system as they do with the system", and that the superusers are not enthusiastic about the system, and a Congressional hearing is held entitled "where do we go from here?" (it's clear to this author that they have no clue), one should start to very critically question basic assumptions about health IT. </blockquote> </blockquote>Read my June 2009 post on the AHLTA failure at <a href="http://hcrenewal.blogspot.com/2009/06/if-military-cant-get-electronic-health.html" target="_blank">http://hcrenewal.blogspot.com/2009/06/if-military-cant-get-electronic-health.html</a>, and the May 2009 piece I referenced from "US Medicine - the Voice of Federal Medicine" entitled "<a href="http://www.usmedicine.com/articles/electronic-records-system-unreliable-difficult-to-use-service-officials-tell-congress.html">Electronic Records System Unreliable, Difficult to Use, Service Officials Tell Congress</a>" by Sandra Basu, in their entirety. Extolling voice recognition advances in a failed $4+ billion EMR debacle due to severe unusability of most of the information system is akin to extolling the virtues of improving screen-door aesthetics on submarines being flooded by water entry. It could almost be considered funny, in a dark-humor sort of way - except the results are anything but humorous. "Dead serious" is a more apt term. Finally, while "shared information can give better medical results", there seems to be little shared information about others' healthcare IT failures. Organizations seem to be constantly re-learning that which others have learned years or decades in the past, repeating the same IT mistakes. The cost of this self-education is not at all cheap. (This failure to learn from others is one reason I write that health IT lacks the science and rigor of the field it ostensibly serves: medicine.) -- SS

If Our Honored Military Personnel's Medical Care Was Not Involved, This WSJ Letter Might Have Been Considered Oddly Funny

In the WSJ today, a letter to the editor was published extolling the major strides made by the U.S. military in voice recognition technology...

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Stifling Whistle-Blowers: Old and New Approaches

We have frequently discussed the <a href="http://hcrenewal.blogspot.com/search/label/anechoic%20effect">anechoic effect</a>, how it is just not done to discuss certain topics, particularly those related to the adverse effects of bad (ill-informed, incompetent, self-interested, conflicted, or corrupt) leadership and bad (opaque, unaccountable, mission-hostile, unethical) governance of health care organizations.  We have discussed many possible causes of the anechoic effect, but one particularly obvious cause is the silencing of dissenters and <a href="http://hcrenewal.blogspot.com/search/label/whistle-blowers">whistle-blowers</a>. Three recent stories illustrate old and new tactics to reinforce the anechoic effect. A Classic Case - ValleyCare Medical System Nurse Fired <a href="http://www.sfgate.com/cgi-bin/article.cgi?f=/c/a/2010/07/23/BA6H1EJ0NA.DTL">From the San Francisco Chronicle</a>, <blockquote>An Alameda County jury awarded more than $344,000 in damages this week against ValleyCare Medical System for refusing to rehire a Castro Valley operating nurse who claimed the hospital was retaliating against her for complaints she made about patient safety issues, including concerns about surgical equipment left inside patients. Kristeen Klaas, a 15-year veteran at ValleyCare and a registered nurse for more than 30 years, sued the hospital system, which has services in Pleasanton and Livermore, after she quit in distress in May 2008 and hospital managers failed to respond to her request to be rehired days later. The 54-year-old Klaas, who now works at Alta Bates Summit Medical Center in Oakland and San Leandro Hospital, had brought numerous safety complaints about the Pleasanton hospital to the attention of ValleyCare's management over the two years prior to her resignation. Klaas complained about a fellow nurse who brought a dog into the operating team's break room and jumped rope with an electrical cord in the operating room, as well as a surgical technician who brought a rifle into the operating room office to sell. She also complained that a tip of a surgical instrument went missing during a surgery and was never found, and that an instrument was left in a patient because the hospital did not have a formal policy of counting instruments after surgery. She also accused a supervisor of forging her signature on a performance evaluation after she refused to sign an evaluation that was backdated to comply with state regulations.</blockquote> Here is the tactic allegedly used to silence the whistle-blowing nurse: <blockquote>On her last day on the job, Klaas got permission from her supervising nurse to leave work because she was in distress after a colleague, the subject of three of her complaints, screamed at her. 'She realized, for the patient's safety, she couldn't continue to go forward that day in the operating room because she was so upset,' he said. But then a supervisor called her at home and accused her of leaving without permission, prompting Klaas to resign, he said.</blockquote> This is the classic, rather blunt way to do it: just make the would-be truth-teller's job experience so miserable that she quits. Now we will present two examples of a more subtle approach, one directly from health care, one at least from a sphere with major health care implications. A New Approach: A Contract Preventing Communication "Inimical" to a Pharmaceutical Company's Business This case was documented by a personal narrative by Marc Lipsitch, a Professor of Epidemiology and the Harvard School of Public Health, <a href="http://chronicle.com/article/The-Hidden-Risk-to-Academic/66050/">published in the Chronicle of Higher Education</a>, <blockquote>I received a request from a large pharmaceutical company to assist in the design of a clinical trial, and the proposed terms seemed to require that I sign away my right to criticize the product. One provision would prohibit me from entering into 'any agreement or relationship to render services as ... adviser or consultant to, any other individual, firm, or corporation that would be inimical to or in conflict with' the aspects of the company's business covered by the agreement. Another would forbid me to engage, in any capacity, directly or indirectly, in "any business," with or without compensation, relating to the class of products under discussion—not just for the term of the contract, but for the year after as well. Those provisions could restrain me from providing candid advice to a regulator, a government official, or the editor of a peer-reviewed journal about the class of products on which I was consulting, even if the advice were based on publicly available information. I objected to those terms, as did a colleague who was offered the same arrangement.</blockquote> Prof Lipsitch also noted that government research funding agencies and universities may not provide any protections to their faculty against such agreements. He also noted that the contract he was asked to sign was not one of a kind: <blockquote>Discussions with my colleagues suggest that the problem is not limited to one pharmaceutical company ....</blockquote> We and many others have frequently discussed the conflicts of interest that may be generated by physicians or health care academics having financial relationships with industry. The Institute of Medicine's definition of conflict of interest (in a health care context) found in its report, <a href="http://www.iom.edu/Reports/2009/Conflict-of-Interest-in-Medical-Research-Education-and-Practice.aspx">Conflict of Interest in Medical Research, Education, and Practice</a>, is: <blockquote>Conflicts of interest are defined as circumstances that create a risk that professional judgments or actions regarding a primary interest will be unduly influenced by a secondary interest. Primary interests include promoting and protecting the integrity of research, the quality of medical education, and the welfare of patients. Secondary interests include not only financial interests....</blockquote> Thus the concern is that a faculty member,for example, who is paid to consult for a drug company might tend to favor the company, its products, or policies to its advantage in his or her clinical teaching, scholarly talks and writing, or public policy opinions. That might happen even if the consulting work is technical or scientific and not directly related to the particular topic about which communication might be influenced. However, the situation described by Prof Lipsitch is much worse. Were he to have signed the contract, he would have been constrained by this legal agreement from writing or saying anything "inimical to or in conflict with" the company's business. Last week, a similar, but more wide-spread example surfaced (pardon the pun) in a domain that is at least related to health care. Another Version of the New Approach: the BP Consulting Contracts Making Any Communication Between the Company and the Consultant Confidential Originally <a href="http://www.bbc.co.uk/news/world-us-canada-10731408">reported by the BBC</a>, <blockquote>The head of the American Association of Professors has accused BP of trying to 'buy' the best scientists and academics to help its defence against litigation after the Gulf of Mexico oil spill. 'This is really one huge corporation trying to buy faculty silence in a comprehensive way,' said Cary Nelson. The BBC has obtained a <a href="http://news.bbc.co.uk/2/shared/bsp/hi/pdfs/22_07_bp_contract.pdf">copy of a contract</a> offered to scientists by BP. It says that scientists cannot publish the research they do for BP or speak about the data for at least three years, or until the government gives the final approval to the company's restoration plan for the whole of the Gulf. It also states scientists may perform research for other agencies as long as it does not conflict with the work they are doing for BP. And it adds that scientists must take instructions from lawyers offering the contracts and other in-house counsel at BP.</blockquote> Here are some examples of the wording of<a href="http://news.bbc.co.uk/2/shared/bsp/hi/pdfs/22_07_bp_contract.pdf"> the contract</a> as obtained by the BBC about confidentiality. <blockquote>Confidentiality. All communications (including non-public information disclosed in such communications) between you (and your agents), BP Attorneys and/or other BP representatives in the course of your performance of the BP NRDA Services are deemed to be incidental to the rendering of legal services and are to be privileged and confidential. You shall maintain a strict confidentiality of such non-public communications and information unless or until a person from whom you are authorized to take instructions informs you in writing that this restriction is no longer applicable to any particular non-public communications and information. In the event you are required to disclose such privileged and confidential non-public communication and information by an order entered by a court or by similar judicial process, or by a judicial or administrative subpoena, you shall notify a person from whom you are authorized to take instructions as soon as practicable, and you are required to cooperate with BP if BP decides to seek relief from such required disclosure, including commencement of a legal or administrative proceeding to prevent or limit disclosure of such privileged or confidential information.</blockquote>Here is the description of those from whom the signer of the contract must take orders. <blockquote>Instructions. You agree to take your instructions only from me, from other lawyers in my firm, from Brian Israel or other lawyers in the Arnold & Porter law firm, and from Donna Ward or other in-house counsel at BP (collectively 'BP Attorneys').</blockquote> Note that the contract defines privileged, confidential information as any communication between BP and its representatives and the contract signer. Thus, to make something confidential, all BP would have to do is mention it in a communication. It appears that this would allow BP to render off-limits any topic it chose. Also, since by the same mechanism, it appears that the contract itself, once signed, would also become privileged and confidential. Summary I submit that ideally medicine and health care ought to be a very transparent calling.  Physicians are obliged to keep confidential the information disclosed to them by patients, enabling the patients to trust physicians sufficiently to provide them the accurate information needed for optimal care.  However, it is hard to think of much other information or communication in health care that ought to be kept secret, (other than the processes used by commercial firms to manufacture drugs or devices.)  Yet as health care becomes more of a business and less of a calling, businesspeople's proclivity to keep as much as possible secret to avoid giving any advantage to a competitor has become more influential.  Furthermore, those leading big organizations have realized that it is easier to maintain their power if they can keep their mistakes, if not misconduct secret.  So businesspeople's proclivity to mount overwhelming legal defenses of their interests may lead to persuading or fooling people who might be inclined to delve into such mistakes and misconduct to sign contracts to keep them silent through confidentiality clauses, requirements to protect privileged or proprietary information, non-disparagement clauses and the like.  The result will be better coddled self-interests, but more opacity that is inimical to good patient care, teaching, research, and public policy discussion. To truly reform health care, we need more transparency.  To produce more transparency, we need constraints on contracts that inhibit needed clinical, teaching, research and public policy communication. Meanwhile, as my father, who was an attorney, done told me: "don't sign a contract you don't understand, and don't sign a contract giving away any right you need to keep."

Stifling Whistle-Blowers: Old and New Approaches

We have frequently discussed the anechoic effect , how it is just not done to discuss certain topics, particularly those related to the adv...

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More About What We Don't Know About the Contaminated Heparin from China

We last blogged about the case of Baxter International's adulterated heparin <a href="http://hcrenewal.blogspot.com/2010/07/prosecuting-doctors-for-importing-iuds.html">here</a>.  (For a more detailed summary of the case, look <a href="http://hcrenewal.blogspot.com/2010/05/more-questions-no-answers-about-case-of.html">here</a>.) In summary, Baxter International imported the "active pharmaceutical ingredient" (API) of heparin, that is, in plainer language, the drug itself, from China. That API was then sold, with some minor processing, as a Baxter International product with a Baxter International label. The drug came from a sketchy supply chain that Baxter did not directly supervise, apparently originating in small "workshops" operating under primitive and unsanitary conditions without any meaningful inspection or supervision by the company, the Chinese government, or the FDA. The heparin proved to have been adulterated with over-sulfated chondroitin sulfate (OSCS), and many patients who received got seriously ill or died. While there have been investigations of how the adulteration adversely affected patients, to date, there have been no publicly reported investigations of how the OSCS got into the heparin, and who should have been responsible for overseeing the purity and safety of the product. Despite the facts that clearly patients died from receiving this adulterated drug, no individual has yet suffered any negative consequence for what amounted to poisoning of patients with a brand-name but adulterated pharmaceutical product. Now, <a href="http://online.wsj.com/article/SB10001424052748703954804575381540372921432.html">an article</a> in the Wall Street Journal by Alicia Mundy tells us more about what we don't know, <blockquote>The Chinese government didn't pursue an investigation into contaminated heparin sent to the U.S. in 2007 and 2008, despite repeated requests from the U.S. for help, according to a congressional probe. Two House Republicans said Food and Drug Administration officials recently told them that the agency has been "severely hampered" by the lack of cooperation from China in finding those responsible.</blockquote> Furthermore, <blockquote>'It is shocking to find out two years after Chinese-made heparin was killing Americans, the Chinese government still has done no investigating to find out why,' said Mr. Barton, the top Republican on the House Energy and Commerce Committee. He called on ... [FDA Commissioner Margaret] Hamburg to air the issue with Chinese officials.</blockquote> Chinese officials denied there is a problem, <blockquote>Yan Jiangying, spokeswoman for China's State Food and Drug Administration, said the congressmen's accusations are 'not true.' Ms. Yan said her agency 'did a very thorough investigation, including very detailed inspection and testing, and surveys of enterprises as well. We signed an agreement with the FDA on drug safety in the end of 2007, and strengthened the monitoring of heparin.' </blockquote> Note that their investigation, such as it was, did not appear to identify any misconduct or wrong-doing by anyone. So now we know more about what we do not know about the deadly adulterated heparin from China. But remember this is a case about heparin sold in the USA by Baxter International, an American company as an American product, resulting in the death of Americans.  Also, remember that the American company obtained the heparin from another American 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.  Since Baxter International sold the heparin under its own label, should not its leaders be responsible for the safety and purity of the product?  Since Scientific Protein Laboratories LLC furnished the active pharmaceutical agreement to Baxter, and obtained it from a factory it partially owned in China, should not its leaders also be responsible for the safety and purity of the product? It would be important to find out ultimately where in China the adulterated heparin entered the supply chain, but the current uncertainty about the initial origin of the contamination does not absolve those in the US who sold the active pharmaceutical ingredient, and then sold that ingredient in bottles with a US company label of responsibility for the safety and purity of the drug. Why have we heard nothing more from Baxter International's and Scientific Protein Laboratories' leaders about the deadly heparin which they had sold?  Why have we heard nothing more about any investigation of these US based participants in this case?  Both US companies doubtless saved money by buying the heparin from the cheapest Chinese sources they could find, by not directly inspecting and supervising its production, and by at best ignoring the lack of regulation of producers of active pharmaceutical ingredients in China.  They and their leaders benefited from this out-sourced, off-shore production.  (Note that Baxter CEO Robert L Parkinson Jr received total compensation of $14,361,305 according to the company's <a href="http://www.baxter.com/downloads/investors/reports_and_financials/2010_baxter_proxy.pdf">proxy statement</a>, and six named officers all received more than $2,200,000.) Why aren't they being held accountable for its bad results? As we have said until being blue in the face, as long as the leaders of health care organizations are not held accountable for the results of their decisions on health care quality, cost, and access (even in such extreme quality violations as those resulting in multiple patient deaths), we can expect continuing decisions that sacrifice quality, increase costs, and worsen access, but that are in the self-interest of the people making them. To really reform health care, we must hold health care organizations and their leaders accountable (and not blame all the problems on doctors, other health care professionals, patients, and society at large). Hat tip to Ed Silverman <a href="http://www.pharmalot.com/2010/07/china-stymies-fda-probe-into-contaminated-heparin/">on the PharmaLot blog</a>.

More About What We Don't Know About the Contaminated Heparin from China

We last blogged about the case of Baxter International's adulterated heparin here . (For a more detailed summary of the case, look here...

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