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Huffington Post Investigative Fund: FDA, Obama Digital Medical Records Team at Odds over Safety Oversight

<div style="text-align: center;">(Note: also see my followup post "<a href="http://hcrenewal.blogspot.com/2010/08/more-on-huffington-post-investigative.html">More on Huffington Post Investigative Fund: "FDA, Obama Digital Medical Records Team at Odds over Safety Oversight"</a>) </div> The Huffington Post Investigative Fund has published a remarkable expose of health IT difficulties and the Big Politics that surround them regarding safety and efficacy: <a href="http://huffpostfund.org/stories/2010/08/fda-obama-digital-medical-records-team-odds-over-safety-oversight"></a><blockquote><a href="http://huffpostfund.org/stories/2010/08/fda-obama-digital-medical-records-team-odds-over-safety-oversight">FDA, Obama Digital Medical Records Team at Odds over Safety Oversight</a> Aug. 3, 2010 By <a title="View user profile." href="http://huffpostfund.org/users/fredschulte" jquery1280932414984="124">Fred Schulte</a> and <a title="View user profile." href="http://huffpostfund.org/users/eschwartz" jquery1280932414984="125">Emma Schwartz</a> Computers at a major Midwest hospital chain went awry on June 29 [after an 'upgrade' - ed.], posting some doctors’ orders to the wrong medical charts in a few cases and possibly putting patients in harm’s way. The digital records system “would switch to another patient record without the user directing it to do so,” said Stephen Shivinsky, vice-president for corporate communications at Trinity Health System. Trinity operates 46 hospitals, most in Michigan, Iowa and Ohio. [In other words, data entered by clinicians was going into the wrong charts. How many charts were involved? Does the hospital system even know, I wonder? - ed.] Less than two weeks later, an unrelated glitch caused Trinity to shut down its $400 million system for four hours at 10 hospitals in the network because electronic pharmacy orders weren’t being delivered to nurses for dispensing to patients, he said. ... Even absent any harm to patients, such incidents underscore possible risks faced by even large health organizations that have eagerly embraced new medical software to track patient records and treatment. As the Obama administration ramps up plans to create a digital medical file for every American by 2014 – at an anticipated tab to taxpayers of up to $27 billion – technology’s boosters tend to tout its potential benefits to patients and ability to slow runaway medical costs. Yet despite the high [actually, potentially catastrophic - ed.] political and financial [and clinical -ed.] stakes, the administration has established no national mandatory monitoring procedure for the new devices and software. That no process exists to report and track errors, pinpoint their causes and prevent them from recurring is largely the result of two decades of resistance by the technology industry, a review of government records and interviews by the Huffington Post Investigative Fund shows. The industry argues that even with flaws, digital systems are an improvement over current paper records.</blockquote> I began to document some of the problems and the resistance of what Washington Post reporter Robert O'Harrow Jr. in May 2009 called the "<a href="http://www.washingtonpost.com/wp-dyn/content/article/2009/05/15/AR2009051503667.html?hpid=topnews">Healthcare IT lobby</a>" a decade ago in a website. That website, now hosted at Drexel University, is entitled "<a style="font-weight: bold;" href="http://www.ischool.drexel.edu/faculty/ssilverstein/cases/">Contemporary Issues in Medical Informatics: Common Examples of Healthcare Information Technology Difficulties</a>." Few in government and industry were apparently listening, despite <a href="http://www.ischool.drexel.edu/faculty/ssilverstein/cases/content/documents/FINAL_Healthcare%20IT%20Failure_Oct_19_2006.ppt">ongoing worldwide interest in the topic</a> (PPT). Read the Huffington Post report in its entirety. It includes a slide-show timeline of the health IT industry's sidestepping of government oversight and safety concerns. As I am currently busy helping out my ill mother, I will offer more commentary later. However, one quote really stuck out. Is the Chairman of the Office of the National Coordinator for Health IT (ONC) <a href="http://healthit.hhs.gov/portal/server.pt?open=514&objID=15930&&PageID=15653&mode=2&in_hi_userid=10731&cached=true&utm_source=National+eHealth+Collaborative&utm_campaign=e1871fd68c-CONNECT_09_announcement_061209&utm_medium=email">Dr. David Blumentha</a>l lying, or simply misinformed? Judging by the quality of academic discourse these days, I'd hope the latter (an alarming situation in and of itself), but the former is also possible. He is quoted as stating: <blockquote> “We know that every study and every professional consensus process has concluded that electronic health systems strongly and materially improve patient safety. And we believe that in spreading electronic health records we are going to avoid many types of errors that currently plague the healthcare system,” Blumenthal said when unveiling new regulations in Washington on July 13.</blockquote> As at my July 14, 2010 post <a href="http://hcrenewal.blogspot.com/2010/07/new-england-journal-on-meaningful-use.html">Science or Politics? The New England Journal and "The 'Meaningful Use' Regulation for Electronic Health Records"</a> , however, I pointed out some examples that contradict this meme. This list is just for starters: (Hyperlinks to these and others can be found at my Medical Informatics teaching site <a href="http://www.ischool.drexel.edu/faculty/ssilverstein/cases/?loc=other">here</a> and <a href="http://www.ischool.drexel.edu/faculty/ssilverstein/cases/?loc=cases&sloc=2009">here</a>:) <div class="PlainText" style="font-family:arial;"></div> <blockquote style="margin-right: 0px;font-family:arial;" dir="ltr"><div class="PlainText" style="font-family:arial;"></div><div class="PlainText" style="font-family:arial;">1. Health IT Project Success and Failure: Recommendations from Literature and an AMIA Workshop by Bonnie Kaplan and Kimberly D. Harris-Salamone. From the May/June 2009 issue of JAMIA. 2. "E-Health Hazards: Provider Liability and Electronic Health Record Systems.” Hoffman and Podgurski’s followup paper on EHR medical and legal risks 3. Role of Computerized Physician Order Entry Systems in Facilitating Medication Errors. Ross Koppel, PhD, et al, Journal of the American Medical Association, 2005;293:1197-1203 4. Electronic Health Record Use and the Quality of Ambulatory Care in the United States. Arch Intern Med. 2007;167:1400-1405. The authors examined electronic health records (EHR) use throughout the U.S. and the association of EHR use with 17 basic quality indicators. They concluded that “as implemented, EHRs were not associated with better quality ambulatory care.” 5. Pessimism, Computer Failure, and Information Systems Development in the Public Sector. (Public Administration Review 67;5:917-929, Sept/Oct. 2007, Shaun Goldfinch, University of Otago, New Zealand) 6. <a href="http://www.blogger.com/redir.aspx?C=cd79bb9ef239435c91597828510ff401&URL=http%3a%2f%2fiig.umit.at%2fefmi%2fbadinformatics.htm" target="_blank"></a>Bad Health Informatics Can Kill. his site contains summaries of a number of reported incidents in healthcare where IT was the cause or a significant factor. It comes from the Working Group for Assessment of Health Information Systems of the European Federation for Medical Informatics (EFMI). </div><div class="PlainText" style="font-family:arial;"></div><div class="PlainText">7. The U.S. National Research Council’s "Current Approaches to U.S. Health Care Information Technology are Insufficient." 8. The UK Public Accounts Committee report on disastrous problems in their £12.7 billion national EMR program. 9. Gateway reviews of the UK National Programme for IT from the Office of Government Commerce (OGC) (released under the UK’s Freedom of Information Act). 10. A report on the serious problems with the Department of Defense’s AHLTA system, Electronic Records System Unreliable, Difficult to Use, Service Officials Tell Congress. (This system, as I <a href="http://hcrenewal.blogspot.com/2010/07/4-billion-military-emr-ahlta-to-be-put.html">wrote here</a>, is slated for abandonment. I cannot imagine it was greatly improving outcomes). 11. A New York Times report “Little Benefit Seen, So Far, in Electronic Patient Records” on Jha’s research at the Harvard School of Public Health, that compared 3,000 hospitals at various stages in the adoption of computerized health records and found little difference in the cost and quality of care. 12. An American Journal of Medicine paper “Hospital Computing and the Costs and Quality of Care: A National Study” by Himmelstein and Woolhandler at Harvard Medical School, that also concluded “as currently implemented, hospital computing might [very] modestly improve process measures of quality but not administrative or overall costs." 13. A Milbank Quarterly article “Tensions and Paradoxes in Electronic Patient Record Research: A Systematic Literature Review Using the Meta-narrative Method" by Greenhalgh, Potts, Wong, Bark and Swinglehurst at University College London. 14. Health Affairs, 29, no. 4 (2010): 639-646 Electronic Health Records’ Limited Successes Suggest More Targeted Uses, Catherine M. DesRoches et al. 15. NORCAL Mutual Insurance Company: "Electronic Health Records: Recognizing and Managing the Risks" (PDF <a href="http://www.norcalmutual.com/publications/claimsrx/oct_09.pdf">here</a>) </div></blockquote> My healthcare informatics graduate students are well aware of studies such as these. [Feb. 2011 addendum: see a much longer list at this link - <a href="http://hcrenewal.blogspot.com/2011/02/updated-reading-list-on-health-it.html">An Updated Reading List on Health IT</a> - ed.] Why isn't ONC Chairman Dr. Blumenthal? Perhaps equally as remarkable is this from <a href="http://www.trinity-health.org/index.htm">Trinity Health</a>, the healthcare system whose health IT crashed: <blockquote>We are not aware of any patient safety or quality of care issues caused by this event,” he said. </blockquote> Many of the "safety and quality" issues due to erroneous data in charts can come out weeks, months or even years later. The issue that the health IT cheerleaders seem to ignore is risk. Has the erroneous data been identified and corrected, I wonder? Probably not. According to the Huffington Post Investigative Fund article, they don't even know what caused the problem: <blockquote>... While doctors were concerned about the problems, ... [well, yes, I'd be quite frightened myself, especially considering who <a href="http://www.ischool.drexel.edu/faculty/ssilverstein/cases/?loc=cases&sloc=koppel_kreda">holds the liabilities</a> for health IT defects - ed.] ... Shivinsky said that most are happy with the system and would “never go back to paper.” [That sounds very nice. Is it true? - ed.] Meanwhile technicians are still trying to figure out the root cause. “We’ll get to the bottom of it and fix it,” he said.</blockquote> Eventually, I would hope, since the kludged "correction" I heard about is that clinicians can now only open one electronic patient chart at a time, potentially slowing and impairing their work. I've emailed Mr. Shrivinsky asking if they'd truly identified and remediated the problem yet. -- SS

Huffington Post Investigative Fund: FDA, Obama Digital Medical Records Team at Odds over Safety Oversight

(Note: also see my followup post " More on Huffington Post Investigative Fund: "FDA, Obama Digital Medical Records Team at Odds o...

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ETHICS TURNAROUND (sort of) by NIH INSTITUTE DIRECTOR

ETHICS TURNAROUND (sort of) by NIH INSTITUTE DIRECTOR What a difference a month makes. When I went on vacation in June the Director of NIMH, Thomas Insel, was stonewalling about his relationship with Charles Nemeroff. Insel wanted to put distance between himself and the poster boy for conflict of interest in academic medicine. The heat was on Insel because of revelations that he helped Nemeroff get a new position at Miami after his fall from grace at Emory. Insel also gave a green light for Nemeroff to reapply for NIMH grant funding, and he appointed Nemeroff to new research review committees. These actions were widely seen as efforts to help Nemeroff get back into circulation. It didn’t help that people called attention to past favors and lobbying by Nemeroff on behalf of Insel. Things continued to unravel, and on about June 29 Insel placed a <a href="http://www.nimh.nih.gov/about/director/2010/more-on-public-trust-and-conflict-of-interest.shtml">disclaimer</a> on his official blog. Insel here allowed that his earlier official statements “may be viewed as misleading.” This softening of Insel’s position was picked up June 29 by the <a href="http://chronicle.com/blogPost/NIH-Official-Softens-Denial-of/25174">Chronicle of Higher Education</a>. Not only was Insel’s disclaimer on his official weblog undated, it is mealy mouthed and it was widely criticized – <a href="http://hcrenewal.blogspot.com/2010/06/insel-admits-his-statements-may-be.html">here</a> and <a href="http://1boringoldman.com/index.php/2010/06/29/plausible-deniability-is-neither-a-medical-nor-scientific-standard/">here</a>, for instance – as further evidence of Insel’s disingenuousness. By July 7 we learned of further revisions to Insel’s position. In response to pressure from Senator Charles Grassley (R-Iowa), Insel <a href="http://freepdfhosting.com/2e0f575924.pdf">issued</a> a mea culpa in which he agreed that Nemeroff’s actions constituted “an egregious violation of NIH policy and University rules.” Insel also acknowledged that his willingness to help Nemeroff “may have created the appearance of favoritism. In retrospect, I regret that my actions… appear inappropriate for a Federal research official given my past association with Dr. Nemeroff.” This new statement also was raked over as further evidence of Insel’s dissembling – see <a href="http://www.pharmalot.com/2010/07/nimhs-insel-on-nemeroff-i-regret-my-actions/">here</a> and <a href="http://1boringoldman.com/index.php/2010/07/08/a-start/">here</a> and <a href="http://www.margaretsoltan.com/?p=24272">here</a>. Nowhere in Insel’s new self serving statements is there any apology for his ill advised appointment of Nemeroff to new Federal research review panels. This signals once again that Insel just doesn’t get it when it comes to his crony Nemeroff. It is not in the job description of an NIH Institute Director to taint research review panels with compromised and sanctioned scientists. Keep in mind that the appearance of malfeasance and impropriety most often occurs in the presence of malfeasance and impropriety. That is a standard Bayesian proposition that Insel seems not to grasp. In light of these developments, who can take seriously the work Dr. Insel says he has done to develop a new NIH initiative on ethics? The leadership of NIH tacitly acknowledged this problem when they recently <a href="http://blogs.nature.com/news/thegreatbeyond/2010/07/nih_extends_public_comment_per.html">extended</a> the period of comment on the new ethics proposals. This was done specifically to mend the regulatory hole that Insel and his crony Nemeroff walked through when Insel assured Pascal Goldschmidt at Miami that Nemeroff could go right ahead to apply for new NIMH funding. Left to his own initiative, Insel kept the hole wide open. His July 7 statement to Senator Grassley that "I do not condone the gap in our policy that allowed (Nemeroff) to avoid the penalty implemented by Emory by moving to another university…” rings hollow: actions speak louder than words, and Insel had many months in which he could have closed the gap before the present scandal surfaced. How much longer can NIH tolerate an ethical prevaricator as an Institute Director? Bernard Carroll

ETHICS TURNAROUND (sort of) by NIH INSTITUTE DIRECTOR

ETHICS TURNAROUND (sort of) by NIH INSTITUTE DIRECTOR What a difference a month makes. When I went on vacation in June the Director of NIMH,...

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Primary Care and the HC Renewal RUC-kus

Dr. Richard Baron, a Philadelphia internist who's unusual in that he's both a private-practice clinician and a well-published and -respected academic (he was recently ABIM <a href="http://www.abim.org/news/news/07_01_08-baron.aspx">Chair</a>), has been mixing it up in the pages of the New England Journal. To readers of this blog, it'll be useful armchair review: not just because the theme of generalist clinicians' decline should concern us, but because the blog itself comes into play! The topic of the day: why primary care doctors are in trouble. Why they're (my words, perhaps, not his) so prone to burnout. And why they're not replacing themselves. In his original April 26, 2010 <a href="http://www.nejm.org/doi/full/10.1056/NEJMon0910793">article</a>, Baron provided a "snapshot" from his own group practice to address the question, "What's keeping us so busy in primary care?" The piece repays reading if one wants the gory detail on just how tedious and time-consuming the "long tail" of primary care has become. Largely because of demands of third parties, primary care providers are mired in the briar patch of making money for other people instead of themselves, through myriad pre-authorizations, forms, renewals, and all the other parts of the glue that keeps health care going. We already knew a lot of this, at least tacitly. But what's wonderfully useful about Baron's above piece was that (a) he spelled it out crisply, (b) he did so with lots of numbers people could cite, and (c) did so in such a highly visible and prestigious venue. Now, in the latest number of the NEJM, Baron <a href="http://www.nejm.org/doi/full/10.1056/NEJMc1006151">mixes it up </a>with a couple of critics. First I have to wonder aloud, just how did the journal pick these particular two letters? (Or maybe the author did? Hard to believe they were the only two.) Typical--and this is something else it would be easy to measure in the Journal's correspondence pages--in that they both come from the ivory tower, not the trenches where Baron himself labors. The first letter, from a non-clinician at the Palo Alto Medical Foundation Research Institute, lamely posits the value of the electronic health record in identifying staffing needs for primary care. We happen to know not only that Baron's practice was a very early EHR adopter, but Dr. Baron himself has published eloquently on the sundry limitations of the EHR. In response, Baron gently reminds the Palo Alto ivory tower-dweller that very few practices can afford a registered nurse--even if the EHR could somehow magically discern the need for such a presence. A second writer chimes in from the equally rarefied reaches of the AMA's Relative Value Update Committee, or RUC, "appointed by the American Academy of Neurology." This writer avers that "the value assigned for evaluation and management is the same for all specialties," which clearly is the RUC's take on things but is fairly jaw-dropping to the rest of us. In response, Baron cites R. M. Poses, MD, moderator of the present blog, and a June 1, 2010 HCRenewal <a href="http://hcrenewal.blogspot.com/2010/06/ruc-off-new-england-journal-once-again.html">offering</a>--Poses has in fact given us many such offerings on the RUC--regarding the "significant structural and political issues" surrounding that body's untransparent deliberations. Usefully, Baron finally joins others stepping outside the visit-oriented physician payment schema, urging a paradigm shift in which he urges "systems that encourage and support services of high value ... rather than anchoring payment to visits." This exchange is telling in a number of ways. It shows up the lack of sync between the basic understandings on the part of health policy's chattering classes--those prone to publish and write letters to premiere journals--and of those actually doing the work of primary care. It also, I'll venture to say, shows up something more elusive about why this predicament is so difficult to fix. That is, we have, almost uniquely in this country, an imbalance--the imbalance in numbers, slowly evolving over the past century, between generalists and specialists--that's been around so long it's become part of the warp and woof. Something like ubiquitous guns or illicit cannabis, something very difficult to even think of getting beyond. We've written in this blog about the anechoic effect, how so much of what happens in health care (corrupt executives, nontransparent RUCs, etc. etc.) barely stirs a ripple in the public consciousness. Why that is we'll leave for another day, but it's been lately of interest to more and more folks. (For starters, just plug the term "anechoic" into the HCRenewal search box.) Add to this, now, what one might call the reverse Robin Hood effect. The result of such an effect is how the RUC and others--many others, in government as well as in industry--have managed to set in motion a specious reasoning process, a process that allows decision makers to justify robbing from the poor to give to the rich. Understandably, Baron does not go beyond the bland statement that such a process has "militated against appropriate updates for primary care services." But imagine what would happen if the RUC were suddenly, in what really boils down to a matter of power, dominated by people from primary care. Imagine what would then happen not only to reimbursements for cognitive services, but also to practitioners' morale, and to recruitment of medical students into primary care. History, both recent and not-so-recent, bears out such an assertion. When the UK increased the value of primary care a few years ago, in terms of pounds sterling, it had a salutary effect on non-fiduciary metrics such as recruitment. To quote Gomer Pyle, "surprise surprise surprise." Indeed, as the Economist <a href="http://www.economist.com/node/3966234">reported </a>five years ago (the preceding <a href="http://www.economist.com/node/3966234">link</a> may require subscription or library access), price signals worked wonders in making the primary care role more attractive. Further back, ironically, when procedural specialties had lower status than cognitive specialties--we're talking a couple hundred years ago, now--this controversy would have been simply incomprehensible to patients and clinicians alike. For those who'd respond, "but back in the wayback, we didn't have all the fabulous benefits of modern procedures," the simple response is, well, stuff and nonsense. The rising tide of science has raised all boats. Not a week goes by that the evidence base doesn't provide new reasons to assay minimally- or non-invasive technologies that are devolved to primary care physicians. No, underlying Baron's plea is the reverse Robin Hood effect and a simple matter of power. In fact, it's a phenomenon exceedingly well known to sociologists ever since <a href="http://www.garfield.library.upenn.edu/merton/matthew1.pdf">Robert Merton</a> in the 1960s. They call it the "<a href="http://en.wiktionary.org/wiki/Matthew_principle">Matthew Principle</a>," after the Gospel of St. Matthew. "To him who has, it shall be given." But in the US such a system, like that of sub-prime mortgages earlier in the present decade, has finally become so over-evolved it's threatening to topple over of its own weight. Thus, lobbyists are just now fighting the recess <a href="http://www.businessweek.com/news/2010-07-19/obama-sends-senate-berwick-nomination-for-medicare.html">appointment </a>of Dr. Don Berwick not because they think he doesn't understand how these processes work, but because they know that he does. Wish him, and Dr. Baron, luck.

Primary Care and the HC Renewal RUC-kus

Dr. Richard Baron, a Philadelphia internist who's unusual in that he's both a private-practice clinician and a well-published and -r...

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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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