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Ela Medical (Now the Sorin Group) Settles

And we return to the parade of <a href="http://hcrenewal.blogspot.com/search/label/legal%20settlements">legal settlements</a>, which is still marching along.  The next entrant to the parade was <a href="http://www.miamiherald.com/2010/11/01/1903266/ela-medical-settles-miami-whistle.html">described</a> by the Miami Herald: <blockquote>In a four-year-old case with nationwide implications, Ela Medical has agreed to pay $9.2 million to settle a whistle-blower case brought by a former Miami technician who charged the company used several schemes to pay kickbacks to South Florida doctors.</blockquote> The details of the allegations were: <blockquote>In the Miami case, brought by May and Ben Kuehne, Lee alleged that Ela gave money to doctors for questionable studies, had Ela techs do work on patients that doctors later billed Medicare for, gave doctors free trips and helped doctors get monitoring equipment that to led to more Medicare billing. The moves were made by the company to boost sales in the multibillion-dollar field of cardiac devices, where pacemakers can cost up to $7,000 and defibrillators up to $18,000. These devices have batteries that run down in about three years, the lawsuit said, and patients need to be monitored to see how much battery life their devices have left. An Ela tech performed the tests in doctors' office. 'Although Medicare required a physician to be present during the battery test, physicians never attended these battery check appointments,' the lawsuit alleged. Doctors then billed Medicare for the techs' work. Other times, doctors were paid $2,500 to $4,000 for each Ela patient enrolled in a study, even though patients were never informed and never gave the required permission, the lawsuit said. 'The physicians had no role and in fact did nothing in furtherance of the study,' the lawsuit stated. 'However, Medicare was billed each time the study was conducted, as if the physician had participated.'</blockquote> Of course, the company's statement had all the expected elements: <blockquote>Closure of this investigation places this legacy issue firmly behind us and clearly enhances our ability to execute on our plans for CRM [cardiac rhythm management] in the United States. Our commitment to provide patients and healthcare providers with life-saving and life-enhancing innovation, and to conduct our business in a highly ethical manner is stronger than ever.</blockquote> I leave it to my dear readers to decide on how ethically the company's previous business operations were, based on the above. I would note that not only did the company want to put this case behind it, it seemed to want to put its old name behind it too. Ela Medical is now apparently known only by the name of its Italian parent company, <a href="http://www.sorin.com/">the Sorin Group</a>. To add a final disturbing note, this case illustrates why people who see what appears to be unethical, or even illegal behavior are not rushing to report it: <blockquote>On Monday, May, the attorney, said Lee 'is not talking to anybody. This has been a difficult experience.' She quit Ela when, after complaining about the company's questionable practices, she was told to transfer to California. She took a job with a competitor, but was dropped when the industry learned she had filed the lawsuit. 'She was blackballed,' May said. 'She's basically gone from $100,000 a year to minimum wage.'</blockquote> One would hardly have expected Ms Lee to have kept her job at Ela once she reported what was going on there. However, it was worse than that. Being known as a whistle-blower may make one radioactive enough to preclude any employment in a segment of health care that is at all related to the one in which one blew the whistle. The Herald article did note that Ms Lee stands to get part of the settlement. Yet this will come at least four years after the case began, as her lawyer said: <blockquote>the 'money will allow her basically to start over.' If she had kept her mouth shut, 'she would have made far more money in her lifetime than she will get as a percentage of the settlement.'</blockquote> As we just <a href="http://hcrenewal.blogspot.com/2010/11/blogscan-corporate-characteristics-that.html">noted</a>, in health care, the incentives are strongly tilted to favor financial productivity , or "making the numbers," and to disfavor ethical conduct, especially when it requires dissenting with top managers. If we really want accessible, affordable, high-quality health care, we will have to get rid of these sorts of perverse incentives. So the march of <a href="http://hcrenewal.blogspot.com/search/label/legal%20settlements">legal settlements</a> continues.  As in many previous cases, note that the monetary cost of the above settlement, while it seems large to normal humans, would be just slightly more than round-up error for a large multi-national company.  As I have said repeatedly,  penalties that only appear to be (relatively small) costs of doing business are unlikely to deter future bad behavior. Until the people who actually authorized, directed and implemented the bad behavior have to suffer some negative consequences, expect the bad behavior to continue.

Ela Medical (Now the Sorin Group) Settles

And we return to the parade of legal settlements , which is still marching along. The next entrant to the parade was described by the Miam...

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On AMIA's Jan. 2009 Letter to The Office of President Elect Barack Obama: Something is Missing

<div style="text-align: center;">------------------------------------------ Nov. 11, 2010 note: see the new post on an AMIA Board Position Paper released this day (Nov. 11) entitled "Report of an AMIA special task force on challenges in ethics, safety, best practices, and oversight regarding HIT" at <a href="http://hcrenewal.blogspot.com/2010/11/report-of-amia-special-task-force-on.html">this link</a>. ------------------------------------------ </div> I was somewhat taken aback by the appearance of the article by Karsh et al. entitled "Health information technology: fallacies and sober realities" (covered at Healthcare Renewal <a href="http://hcrenewal.blogspot.com/2010/10/jamia-health-information-technology.html">here</a>) in the Oct. 2010 Journal of the American Medical Informatics Association (<a href="http://jamia.bmj.com/">JAMIA</a>). I was taken aback since the article rains heavily on the academic memes of healthcare IT as a benign and deterministic solution to healthcare's ills, and of health IT-related adverse outcomes being mere "anecdotes." (It is ironic that my own relative recently fell victim to healthcare IT's supposed beneficence. They were harmed via health IT-related disruptions in care continuity.) My blog posting on that Karsh article brought a letter to my attention, authored by AMIA's leadership and sent on Jan. 7, 2009 to the Office of President Elect Barack Obama. The full PDF of the letter is <a href="http://www.ischool.drexel.edu/faculty/ssilverstein/cases/ObamaLetter_January2009.pdf">here</a>. Here are relevant excerpts about which I will make only a single comment: <blockquote>January 7, 2009 Dear Mr. President-Elect, On behalf of the more than 4,000 physicians, nurses and other members of the American Medical Informatics Association (AMIA) who use health information and communications technology (HIT) to improve the quality, efficiency and safety of healthcare, I am writing to applaud and encourage your commitment to investing in a genuine transformation of our nation’s healthcare system. Properly deployed and supported, HIT can be part of broad health care reform and, importantly in this time of economic challenge, a significant economic multiplier that will encourage the creation of new jobs and real improvements in patient care, public health and life sciences research. ... If we are to develop a national infrastructure for the use of health information to benefit individuals and our entire population, the United States must – <ul><li>Develop mechanisms, including grants, loans and financial incentives for physicians, nurses, and healthcare organizations to deploy, implement successfully, and widely disseminate electronic health records (EHRs);</li><li>Develop and support local, regional and national health information exchange to ensure that accurate, secure health information is available whenever and wherever needed by those authorized to access such information;</li><li>Develop and support programs to address the need for a prepared health information technology workforce, with training and continuing education of physicians, nurses, health information managers and others;</li><li>Develop more effective ways to address the health needs of underserved populations, including providing equitable access to health information and communications technology;</li><li>Develop and assure compliance with standards, policies and practices that support effective sharing of health information, while fostering security, confidentiality and transparency, and building trust with the public;</li><li>Develop and maintain health terminologies and classifications that will allow health data to be not only useful, but uniform and consistent, and enable interoperability across myriad information systems;</li><li>Develop proper means to link information related to individuals in order to ensure the validity and integrity of health data used to inform care and research;</li><li>Develop proper means for authentication of the identity of individuals and caregivers and any others authorized to access identifiable health information;</li><li>Support the development of decision-making and other knowledge-management tools in order to permit the delivery of individualized, evidence-based care;</li><li>Develop and support secure web-portals to link individuals to their caregivers and ensure genuinely patient-centered care;</li><li>Develop appropriate and secure linkages between EHRs and the public health system to ensure safety from bioterrorism, rapidly spreading infectious diseases, and other threats;</li><li>And provide appropriate funding for the development of a robust national health information strategy, with support for continued HIT and informatics research and innovation.</li></ul>During the Presidential campaign, you demonstrated your boldness and vision by pledging to allocate $10 billion annually for five years to promote the adoption and use of health IT. Such an investment will pay dividends not only in improving health care, but in creating jobs...</blockquote> These are all laudable and interesting goals for an experimental technology, as tacitly admitted in the above goals (although it would have been more ethical, I believe, to have waited for the technology to have "needed" fewer of these goals as a result of research in constrained settings before boldly promoting expensive national rollouts on live patients). In any case, however, something very, very important is missing... There is no mention of healthcare IT safety. At $10 billion annually, surely the AMIA leadership could have specifically and explicitly recommended that some fraction, even a token % (even a small percentage of $10,000,000,000 is not chicken feed), should have been dedicated to help ensure the disruptions and unintended consequences caused by any new/developing/expanding information and communications technology (ICT) didn't kill or maim patients. Perhaps through the publication of the aforementioned Karsh study on HIT fallacies and sober realities, the AMIA leadership is subconsciously seeking absolution. -- SS Addendum: my own Dec. 7, 2008 "<a href="http://hcrenewal.blogspot.com/2008/12/open-letter-to-president-barack-obama.html">Open letter to President Obama</a>" on healthcare IT took a decidedly different approach, namely, I attempted to make the President-elect aware of numerous HIT "fallacies and sober realities": <blockquote>... our government has been seduced by the promise, the potential, the Siren Song if you will of HIT, and shielded from information on its true challenges, difficulties, downsides and failures. An "irrational exuberance", a Syndrome of Inappropriate and Uninformed Overconfidence in Computers prevails in healthcare. ... [If HIT itself is not reformed,] billions of precious healthcare dollars that might be spent on “IT misadventure” in a time of unprecedented national financial challenges and hardships might simply be better spent on delivery of needed medical services, health insurance and other "safety net" interventions. ... healthcare’s defects cannot be effectively changed or reformed via healthcare IT, if that healthcare IT itself is defective.</blockquote> AMIA leadership and I also differed on the issue of health IT regulation, as I posted in July 2009 at "<a href="http://hcrenewal.blogspot.com/2009/07/health-care-information-technology.html">JAMA letter: Health Care Information Technology, Hospital Responsibilities, and Joint Commission Standards</a>." On that issue, JAMA published my commentary, not theirs. -- SS

On AMIA's Jan. 2009 Letter to The Office of President Elect Barack Obama: Something is Missing

------------------------------------------ Nov. 11, 2010 note: see the new post on an AMIA Board Position Paper released this day (Nov. 11)...

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There You Go Again: Richard Epstein Says "Conflict-of-Interest Rules Thwart Medical Progress"

Richard Epstein, a professor at the New York University and University of Chicago law schools, just authored a report on the perils of conflict of interest rules.  <a href="http://blogs.forbes.com/richardepstein/2010/10/26/causing-more-harm-than-good-conflict-of-interest-rules-thwart-medical-progress/">In his blog</a>, "The Libertarian," he summarized his beliefs that strict conflict of interest (COI) rules and restrictions on pharmaceutical marketing "spell lower rates of innovation and slower dissemination of new products."  Prof Epstein is extremely prominent.  The Manhattan Institute, of which he is a fellow, <a href="http://www.manhattan-institute.org/html/epstein.htm">claimed</a>, "Professor Epstein's influence is profound: he is one of the three most cited law professors in the United States and the most cited professor writing largely in private law." Thus, it is disturbing that it appears that his objections are based on a series of logical fallacies.  (Note that we critiqued a defense of certain conflicts of interest he made in 2007<a href="http://hcrenewal.blogspot.com/2007/03/drug-crazy.html"> here</a> on similar grounds.) Ad Hominem: Enemies of Capitalism Prof Epstein implied that the people who advocate strong conflict of interest rules are enemies of capitalism and free markets.  For example, he wrote, "most of the modern critics of the drug and medical device industries start with the assumption that the profit-motive alone is sufficient to distort the behavior of all scientists and researchers."  Later, "the people who line up most strongly against drug and device companies often treat the phrase 'market forces' as though it embodies the worst things in life."  How he was able to read the minds of those who disagree with him is unclear.  Attacking proponents of strict COI regulation as anti-capitalists (and by implication, socialists or communists) appears to be an <a href="http://www.nizkor.org/features/fallacies/ad-hominem.html">ad hominem</a> fallacy. Burden of Proof: Ignoring Evidence of Harms of COI, Asserting Evidence of Benefits Prof Epstein argued that COIs rarely if ever leads to bad effects: "the number of instances of serious abuses of power in the drug and device industry, like in medical research itself, is small, relative to the huge number of interactions that have taken place." Thus, he ignored evidence that commercially funded research may be biased in favor of the sponsors' products.(1-4) On the other hand, he implied that financial relationships  among physicians and researchers and commercial firms that sell health care products and services are necessary for "rapid development and deployment of new pharmaceuticals and medical devices," and for "innovation" in the field, but provided no evidence for these points.  Thus, while ignoring evidence of the possible harms of COIs, he failed to provide evidence for their benefits.  By placing the burden of proof on those who disagree with him, while avoiding it himself, he invoked the <a href="http://www.nizkor.org/features/fallacies/burden-of-proof.html">burden of proof (or appeal to ignorance) fallacy</a>. Appeal to Common Practice: Scientists Wearing Multiple Hats Prof Epstein asserted that strict COI rules would disturb what is now common practice.  They would threaten how "the best research scientists in universities ... wear multiple hats.  In addition to researching within the academy, they also offer consulting services to drug companies, or start businesses of  their own."  Academics may currently behave in this way, but that does not mean this behavior is optimal in any sense.  Thus, Epstein employed the fallacy of the <a href="http://www.nizkor.org/features/fallacies/appeal-to-common-practice.html">appeal to common practice</a>.  Slippery Slope: Silencing Communication and Collaboration Prof Epstein asserted that strict rules on COI would "prohibit the collaborative efforts that have long characterized standard practices [in research]."  Specifically, he asserted the rules could stipulate that "no scientist who sits on any Food and Drug Administration (“FDA”) review committee, or any hospital conflict of interest committee, should be allowed to have connections with the pharmaceutical industry."  Also, "collaborations between government and industry scientists on research projects of common interests should either be totally eliminated or heavily regulated."  Finally, he asserted, "free interchange of information within and across firm boundaries is best calculated to allow the sharing and coordination of vital information," but "strong conflict of interest regulation poses real threats to these dynamic interactions." Yet rules about conflicts of interest generally refer to those generated by financial relationships, most often payments by commercial firms to academics, researchers or physicians.  Payments are not necessary for collaboration.  Researchers can communicate, share information, even work together without one party paying the other.  Warning of such dire consequences of regulations that have nothing directly to do with communication or collaboration amount to the <a href="http://www.nizkor.org/features/fallacies/slippery-slope.html">slippery slope fallacy</a>. Appeal to Authority: the "Most Gifted Members of the Academy" Prof Epstein noted above that it was the best researchers who consult for commercial firms or start their own firms.  Later, he stated, "the ablest scientists often have the most extensive outside practices."  In complaining about rules that limit the pay of faculty members for services on boards of directors of for-profit health care companies, he asked, "why crimp the behavior of the most gifted members of the academy who can also make major contributions to industry?"  Thus he seemed to agree with the arguments made by representatives of pharmaceutical and device companies that the doctors who they pay to speak, consult, or do research are the best and the brightest.  However, there is considerable evidence (e.g., see posts <a href="http://hcrenewal.blogspot.com/2010/10/not-best-and-brightest-drug-marketers.html">here</a> and <a href="http://hcrenewal.blogspot.com/2008/06/key-opinion-leaders-were-sales-people.html">here</a>), that such "key opinion leaders" or "thought leaders" are chosen because of their sympathy to the companies and their products, and their malleability.  In addition, there is evidence that medical schools now put more emphasis on ability to attract external funding than any other faculty characteristic in decisions about payment, promotion, and retention (see post<a href="http://hcrenewal.blogspot.com/2007/04/medical-schools-to-faculty-show-me.html"> here</a>).  Prof Epstein's invocation of the need to honor the best and the brightest appears to be a variant on the <a href="http://www.nizkor.org/features/fallacies/appeal-to-authority.html">appeal to authority fallacy</a>.  Summary So here we have another example, by " one of the nation's most prolific legal thinkers, (<a href="http://www.manhattan-institute.org/html/epstein.htm">according to the Manhattan Institute</a>) of a defense of the prevalent conflicts of interest that affect academic physicians and clinical researchers.  Like many previous such defenses, it seemed to be mainly based on logical fallacies.  Also, like many previous such defenses, it was made by someone with a history of his own financial relationships with health care corporations.  To his credit, Prof Epstein did disclose, "over the years, I have worked extensively with various groups in the pharmaceutical industry, but have done no such work in the past few years."  On the other hand, he did not disclose his previous relationships with eSapience, a company which once claimed it "shapes the debate on issues that intersect law, economics, and policy."  (See post <a href="http://hcrenewal.blogspot.com/2007/04/defending-conflicts-of-interest-and-how.html">here</a>.) The currently prevalent relationships with health care corporations among academic physicians, researchers, and other decision makers and influencers in health care have been lucrative for them.  I have yet to see a coherent, logical argument that these relationships are good for patients, medical education, biomedical or clinical science, or public health made by anyone who does not have such relationships. By the way, Prof Epstein also complained about overly rigorous regulation of pharmaceutical marketing in the same blog post, but since this really seems to be a distinct topic, I will not discuss his arguments here.  References 1.  Bekelman JE et al. Scope and impact of financial conflicts of interest in biomedical research: a systematic review.  JAMA 2003; 289: 454-465.  Link <a href="http://jama.ama-assn.org/cgi/content/full/289/4/454">here</a>. 2.  Lexchin J et al.  Pharmaceutical industry sponsorship and research outcome and quality: systematic review.  Brit Med J 2003; 326:  1167.  Link <a href="http://www.bmj.com/content/326/7400/1167.abstract">here</a>. 3.  Jorgenson AW et al. Cochrane reviews compared with industry supported meta-analyses and other meta-analyses of the same drugs: systematic review. Brit Med J 2006; 333: 782.  Link <a href="http://www.bmj.com/content/333/7572/782.abstract">here</a>. 4.  McGauran N et al. Reporting bias in medical research - a narrative review.  Trials 2010; 11: 37.  Link <a href="http://www.ncbi.nlm.nih.gov/pubmed/20388211">here</a>.

There You Go Again: Richard Epstein Says "Conflict-of-Interest Rules Thwart Medical Progress"

Richard Epstein, a professor at the New York University and University of Chicago law schools, just authored a report on the perils of confl...

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BLOGSCAN: Corporate Characteristics that Lead to Fraud

BLOGSCAN: Corporate Characteristics that Lead to Fraud

Kurt Eichenwald on the corporate characteristics that lead to fraud: 1) huge positive incentives for achieving financial targets, huge negat...

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A Great Investment Opportunity? - Biotechnology Company Run by an Ex-Convict

A sad commentary on the current morality of the health care "business," as <a href="http://www.nytimes.com/2010/11/01/business/01waksal.html">provided </a>by the New York Times. Sam Waksal is back in the biotechnology business: <blockquote>Mr. Waksal says his new venture, Kadmon Pharmaceuticals, will be 'a fully integrated biopharmaceutical company from the get-go,' replete with everything, including its own research and products on the market or in clinical trials that it acquires from others. 'You’ll see a company that next year will be doing significant revenues in a growth area, with earnings, probably five Phase 3 programs and a couple of Phase 2 products,' Mr. Waksal said Sunday in a telephone interview. Phase 3 and Phase 2 are the late and middle stages, respectively, of clinical trials. Several of Mr. Waksal’s former colleagues from ImClone have joined him at Kadmon, a name from kabbalah, the Jewish mystical movement. He even looked into leasing the Lower Manhattan headquarters ImClone is vacating. Kadmon, which will focus on cancer, infections and autoimmune diseases, has started to make deals. On Monday it is expected to announce it has licensed an experimental hepatitis C drug from Valeant Pharmaceuticals International, a person close to the transaction said. That follows the disclosure last week that it had acquired Three Rivers Pharmaceuticals, a Pennsylvania company specializing in hepatitis drugs. Kadmon circulated a private placement memorandum in February to raise $50 million to $175 million. As of July, it had raised $10.8 million from 26 investors, a filing with the Securities and Exchange Commission said. But David Pitts, a spokesman for Kadmon, said that other debt and equity offerings had raised more than $200 million, with the biggest investor being SBI Holdings of Japan. </blockquote> Is there a catch? It might be Mr Waksal's record, criminal record. Mr Waksal's previous company was ImClone: <blockquote>That started to come undone in December 2001, when Mr. Waksal got word that the Food and Drug Administration was not going to approve Erbitux. Before the company announced the news, Mr. Waksal alerted relatives to sell their ImClone stock and tried to sell some of his. Martha Stewart sold her ImClone shares and was given a five-month prison sentence and five months of home confinement for lying to federal investigators about it. Mr. Waksal pleaded guilty to securities fraud, bank fraud, perjury, obstruction of justice and conspiracy. He is prohibited by a settlement with the S.E.C. from serving as an officer or director in a publicly traded company. </blockquote> Presumably, Kadmon is not publicly traded, so the SEC ban does not apply to his leadership of that company. Yet despite the ban and his criminal record, investors seem to be ready to throw money at him.  Maybe it has more to do with emotion than reason, much less morality, <blockquote>One investor in Kadmon, who also sits on its board, said Mr. Waksal’s energy and his acumen in spotting promising drugs far outweigh his past problems. 'He is irrepressible,' said this investor, who spoke on the condition that she not be named because her company has a policy against being quoted in the media. 'I don’t think what happened to Sam in the past is going to have a negative effect on my investment in this business.'  [Being convicted of 'securities fraud, bank fraud, perjury, obstruction of justice, conspiracy' is a good background for a company CEO? - Ed]</blockquote> Furthermore, <blockquote>prospective investors say his trademark exuberance and penchant for hyperbole remains. 'He hadn’t changed,' said a prospective investor who met with Mr. Waksal and spoke on the condition of anonymity to retain relations with him. 'He was spinning big stories about big money, big deals' Another prospective investor said Mr. Waksal had told him that Carl C. Icahn, the billionaire who is a friend of Mr. Waksal and had invested in ImClone, had committed $30 million to Kadmon. Marc Weitzen, a lawyer for the investor, said Mr. Icahn had evaluated Kadmon but 'decided to pass.'  [It sounds like Mr Waksal has not developed any new affinity for the truth - Ed.] The private placement memorandum circulated in February said Kadmon had 'a simple yet revolutionary plan for creating the pre-eminent 21st century biopharmaceutical company.' </blockquote>To make it even more explicit: <blockquote>Mr. Waksal, who earned a doctorate in immunology, is charming to the point of being seductive. He was a fixture in New York social circles, befriending celebrities and dating many women, including Alexis Stewart, daughter of his friend Martha Stewart. He lived in a spacious SoHo loft with millions of dollars in art, where he hosted extravagant parties and intellectual salons attended by leading lights in literature, art and science. </blockquote> In my humble opinion, an investor who throws money at an ex-con, apparently because he seems exuberant, irrepressible, even seductive, needs a brain transplant.  (But maybe some investors should read Snakes in Suits, see post<a href="http://hcrenewal.blogspot.com/2006/06/snakes-in-suits-book.html"> here</a>.) But this blog is not about giving advice to investors. If Mr Waksal invested in basically harmless products that had nothing to do with patients' health and safety, the foolishness of investment decisions about his company would have nothing to do with me. However, Mr Waksal is proposing to develop drugs to be given to patients: <blockquote>In its first big deal, Kadmon announced last Monday that it had acquired privately held Three Rivers for more than $100 million. Three Rivers, whose main products are drugs for hepatitis C, is meant to be the commercial base of Kadmon, its revenues helping to defray the cost of developing new drugs. The deal, an investor familiar with the structure said, is highly leveraged, to the extent that Three Rivers’ earnings might not be sufficient to cover the debt. But Mr. Waksal is betting that sales will soar because new pills being developed by other companies will make treatment more effective, enticing more people with hepatitis C to be treated. 'The hep C market is going to undergo a real sea change next year,' Mr. Waksal said. Three Rivers has a proprietary form of the drug ribavirin that requires two pills a day, instead of the standard six to eight. Even with new drugs coming, ribavirin will remain a mainstay of treatment. In fact, Mr. Waksal is increasing that bet. On Monday, Kadmon is expected to announce that it has obtained exclusive worldwide rights to taribavirin, a form of ribavirin that may have fewer side effects. Kadmon is paying $5 million initially, with other payments possible later, to Valeant Pharmaceuticals, which has been testing the drug in clinical trials, according to the person close the transaction. Valeant will pay $7.5 million for rights to sell Kadmon’s ribavirin in Eastern Europe. Kadmon has bought a tiny company started by Princeton professors that has a way to measure cell metabolism. Influencing a cell’s use of nutrients is emerging as a novel way to treat cancer and infectious diseases. </blockquote> So, we are not talking about merely foolish investment decisions, but amoral ones. The amorality of this brave new business world becomes relevant. <blockquote>For many investors, 'there are few judgments beyond whether you made me money,' said Samuel D. Isaly, managing partner at OrbiMed Advisors, a big investor in biotech companies that was not asked to invest in Kadmon. 'Sam Waksal made a lot of people a lot of money with ImClone.' </blockquote> There, in a nutshell seems to be the problem with running health care organizations not just in a business-like manner, but as businesses, businesses in a completely laissez faire environment, businesses in a new world run by new robber barons. Would you trust a company run by an ex-convict to product safe, effective, and unadulterated drugs? (After all, some very respected companies run by people who are certainly not ex-cons have proven to be unable to keep all of their products pure and <a href="http://hcrenewal.blogspot.com/search/label/adulterated%20drugs">unadulterated</a>.) This case vividly illustrates the need for assuring that the leaders of all health care organizations, including but not limited to pharmaceutical and biotechnology companies, have some knowledge of the health care context, some sympathy for the values of health care professionals, including putting patients' health and welfare first, and are externally accountable. But at a minimum, health care organizations should not be run by former felons. However, in our extremely laissez faire environment, in a country now increasingly dominated by new robber barons, ex-convicts can run biotechnology companies.

A Great Investment Opportunity? - Biotechnology Company Run by an Ex-Convict

A sad commentary on the current morality of the health care "business," as provided by the New York Times. Sam Waksal is back in t...

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BLOGSCAN: Florida Doctors Endorse Ex- Columbia/ HCA CEO for Governor

Rick Scott was the CEO of for-profit hospital chain Columbia/ HCA.  The company ended up settling civil and criminal charges for $1.7 billion.  Like many other examples in the march of legal settlements about which we have often posted, no individual who authorized, directed, or implemented the relevant bad behavior suffered any sort of negative consequence or paid any penalty.  Rick Scott left the company, but with a golden parachute.  Now he his running for Governor of Florida, using a substantial amount of his own money (but money that probably mostly came from Columbia / HCA). (See post <a href="http://www.healthbeatblog.com/2010/10/rick-scott-and-the-florida-gubernatorial-race-nurses-are-for-sink-doctors-are-for-scott-voters-still.html">here</a>.)  He may be in the lead.  And the Florida Medical Association has just endorsed him.  <a href="http://www.healthbeatblog.com/2010/10/rick-scott-and-the-florida-gubernatorial-race-nurses-are-for-sink-doctors-are-for-scott-voters-still.html">In the Health Beat blog</a>, Maggie Mahar is all over this story.  Read it and weep.  Remember another good reason for the people who lead health care organizations to be truly accountable for their actions.

BLOGSCAN: Florida Doctors Endorse Ex- Columbia/ HCA CEO for Governor

Rick Scott was the CEO of for-profit hospital chain Columbia/ HCA. The company ended up settling civil and criminal charges for $1.7 billio...

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Hoffman and Podgurski: A relatively lawless industry and "meaningful use" of health IT, with safety as an afterthought

In their article "Meaningful Use and Certification of Health Information Technology: What About Safety?" (free PDF <a href="http://papers.ssrn.com/sol3/Delivery.cfm/SSRN_ID1697587_code691672.pdf?abstractid=1697587&mirid=1">here</a>), Sharona Hoffman (Professor of Law and Bioethics and Co‐Director of the Law‐Medicine Center, Case Western Reserve University School of Law) and Andy Podgurski (Professor of Electrical Engineering and Computer Science, Case Western Reserve) make an important case for what I've previously described as "putting the cart before the horse." At my Oct. 1, 2010 post "<a href="http://hcrenewal.blogspot.com/2010/10/cart-before-horse-again-institute-of.html">Cart before the horse, again: IOM to study HIT patient safety for ONC</a>" I argued that the IOM was only called in to study HIT safety after plans for national rollout were put into law, and a "stimulus to adoption" (with penalties for refusniks) financed at the cost of tens of billions of dollars. I found this approach to HIT and the sequencing of events - the development of "meaningful use" criteria before usability and safety criteria - quite cavalier. Hoffman and Podgurski go a step further. They begin: <blockquote>In the summer of 2010, the Department of Health and Human Services (HHS) published three sets of regulations to implement ARRA. This article briefly describes and critiques the regulations, arguing that (1) they fail to appropriately address HIT safety and (2) further steps must be taken to protect patients and serve public health needs in the new digital era.</blockquote> After a brief review of the Meaningful Use and "Certification" (a.k.a. features qualification) regulations and programs, they go on to critique those regulations and programs as a "step towards comprehensive oversight", but a very deficient step considering the ambitions and timelines of the HITECH act and the federal government. They aptly note (along with with footnotes): <blockquote> ... While advocates argue that computerization will reduce errors, numerous recent reports have demonstrated that the opposite can be true. Hospitals have experienced incidents in which doctors’ orders were posted to the wrong patient charts and electronic drug orders were not delivered to nurses who needed to dispense them to patients. A published 2009 review of almost 56,000 CPOE prescriptions found that approximately 1% of them contained errors. Patients who do not receive needed medication or whose treatment is otherwise mismanaged because of software or usability problems can suffer catastrophic consequences. General system safety is a property that is attainable only through rigorous processes for development and evaluation. [Evaluations of the kind the healthcare IT industry seems to have steadfastly circumvented and avoided - ed.] However, the regulations do not address certification of EHR vendors’ software development processes or even require vendors to analyze and mitigate potential safety hazards. [In other words, they are essentially meaningless in terms of HIT safety - ed.] Furthermore, ATCBs [ONC 'Authorized Testing and Certification Bodies'] will use testing requirements developed by the National Institute of Standards and Technology (NIST) that are apparently intended only to determine whether systems include certain features. Passing such tests is not sufficient to ensure that those features function properly in the long term and under varied operating conditions. [In other words, a preflight checklist will be conducted of aircraft that have rarely or never actually flown, to declare them flight ready for the amateur pilot - ed.] </blockquote> They note the obvious: <blockquote> Meticulous testing of EHR products is critical to their safety. Because of the government’s lucrative incentive payments, many new vendors may attempt to enter the market and to quickly produce EHR systems whose quality is unproven and perhaps dubious.</blockquote> A key passage in this article is this: <blockquote> Admittedly, clinical evaluation of new products poses challenges for vendors who would need to find facilities willing to accept the administrative burdens of assessing systems that may ultimately fail. [In other words, it will cost them to improve the safety of their products, a core competency they should have developed decades ago - ed.] Such facilities would also experience delays in receiving incentive payments because they would use uncertified systems during the evaluation period. However, certification of HIT that has not been thoroughly evaluated is no more responsible than approval of medications or devices that have not been carefully scrutinized by the FDA </blockquote>"No more responsible than approval of medications not scrutinized by FDA" is quite on target. I personally would use a stronger term than deficient responsibility, however: deliberate reckless indifference to health IT safety seems more descriptive. The authors do note that: <blockquote> The delegation of EHR approval responsibilities to ATCBs will ease HHS’s regulatory burdens and likely supply an adequate pool of experts for HIT testing. HHS is authorized to monitor ATCBs through on‐site visits, reports, and review of documentation. It remains to be seen if these measures will ensure that ATCB members are qualified, competent, and free of conflict of interest. These issues will become more critical if HHS eventually requires rigorous clinical testing of EHR systems as described above.</blockquote> Considering the track record of the pharma and medical device industries as presented in many case examples at this blog, "qualified, competent, and free of conflict of interest" is a tall order indeed for the health IT industry and its "certifiers." The authors again state the obvious (albeit an "inconvenient truth"): <blockquote>... it is naive to assume that any use of HIT is better than no use of HIT. [This warning echoes the "use equals success" fallacy as described by Karsh et al. in their recent JAMIA article described <a href="http://hcrenewal.blogspot.com/2010/10/jamia-health-information-technology.html">here</a> - ed.] EHR systems constitute complex technology that can introduce errors as well as prevent them. Medical errors can occur because of computer bugs, computer shut‐downs, or user mistakes that may be attributable to a flawed user interface. Through communication tools, electronic ordering, decision support features, and data management, EHR systems will guide many aspects of patient care. Treatment success will often depend on their proper functioning. </blockquote> They conclude: <blockquote>HHS’ new regulations constitute positive first steps and a laudable reversal of a relatively lawless approach to EHR system design and deployment. Previously, the only certification program was offered by the Certification Commission for Health Information Technology, a private industry group that was not subject to regulation.</blockquote> I used terms such as "wild west", "out of control" and "pre-Flexnerian" to describe the HIT industry. That an attorney would use the term "lawless" seems quite fitting to describe similar observations. Finally, they state: <blockquote>Still, much more work must be done to protect public health in the digital era. We urge that future meaningful use and certification criteria and the post‐2011 permanent certification program be more attentive to safety issues. EHR system approval should be no less rigorous than the FDA’s process for drug and device approval because HIT is as safety‐critical for patients. A prime criterion for certification should be a documented history of safe operations in a number of clinical environments. The federal government would be wise to focus less on the speed of EHR adoption and more on product quality. Only through sufficient safeguards for EHR system safety can this technology fulfill its promise to dramatically improve individual and public health outcomes. </blockquote> In my opinion, the HITECH timelines are far too ambitious (I sense a similar sentiment "between the lines" in the above passage). Perhaps it's time for those timelines to be revisited. A new Congress should take that on, or defund HITECH and rewrite it to prevent patient harm and AHLTA and UK NPfIT-like debacles, to save billions of taxpayer dollars we really don't have to spare at the moment. -- SS

Hoffman and Podgurski: A relatively lawless industry and "meaningful use" of health IT, with safety as an afterthought

In their article " Meaningful Use and Certification of Health Information Technology: What About Safety? " (free PDF here ), Sharo...

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