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The New Steward Health Care: Will Superbowl Ads and "Leakage Reduction" Keep the Ship Afloat, or Will a "Greater Fool" Be Left Trying to Bail it Out?

Some recent publications raise interesting questions about the leadership of a regional health care organization which now seems to have intentions of going national.  A Superbowl Ad for Steward Health Care The millions watching the Superbowl, maybe the biggest single US sports event, expect to be dazzled by the new, extremely expensive advertisements to be aired during the television coverage of the event.  The Boston Globe <a href="http://www.boston.com/business/healthcare/articles/2011/02/04/caritas_owner_to_introduce_itself_in_local_super_bowl_ad">reported</a> that the glitzy offerings by Volkswagen and Budweiser will have an odd companion, at least in the Boston area: <blockquote>The local television audience for Super Bowl XLV on Sunday will get the usual array of high-impact commercials, from the suds of Budweiser to the sedans of Kia Motors. But amid all the elaborate productions, one quieter spot might stand out — an ad for Steward Health Care System, the Boston company formed to oversee the six Caritas Christi hospitals. During the 30-second commercial, Massachusetts residents talk about the importance of quality health care, as the camera roams through Brighton and Dorchester — the homes of St. Elizabeth’s Medical Center and Carney Hospital. There was no such marketing campaign for the hospitals before November, when they were bought by New York private equity firm Cerberus Capital Management. The ad will be broadcast only on WFXT-TV (Channel 25), not nationally. Officials at Steward said they were looking to introduce the health care service company to customers who may have never heard of Steward. The campaign also further demonstrates a different marketing approach for the regional hospital network as it transitions to a for-profit health care player.</blockquote> Why would a hospital system advertise during the Superbowl? <blockquote>Brian Carty, chief executive marketing officer at Steward, said that’s the aim: make a debut during the Super Bowl to reach a large swath of local consumers. 'You can only launch a brand once, and we wanted to launch it in the biggest way we could,' said Carty.</blockquote> It certainly is curious, particularly when the brand is only new in the most superficial sense. As noted above, Steward Health Care System is the new name given the former Caritas Christi, a regional Massachusetts health care system that was formerly non-profit and run by the Catholic Church, but was recently bought out by Cerberus Capital Management, a private equity company. We discussed concerns about whether a private equity group would put its short-term financial gain ahead of the patient care mission if given the chance to run a hospital system in a <a href="http://hcrenewal.blogspot.com/search/label/Caritas%20Christi">series of posts </a>in spring, 2010. A CEO with a Short-Term Focus Things get curiouser and curiouser. The Boston Globe also just published a lengthy <a href="http://www.boston.com/lifestyle/health/articles/2011/02/06/how_caritas_christi_ceo_ralph_de_la_torres_wall_street_gamble_will_rock_main_street_health_care">report</a> on former Caritas Christi, now Steward Health Care CEO Ralph De La Torre, which emphasized, perhaps unintentionally, his chronic focus on short-term gain. <blockquote>[Friend and mentor Dr David] Torchiana has been fielding questions from lots of colleagues wondering what de la Torre might to next. 'My view of Ralph,' he tells them, 'is that he's aggressive and unpredictable.'</blockquote> Forced Out His BIDMC Chief Dr de la Torre trained as a cardiovascular thoracic surgeon who apparently was a very highly regarded surgeon. But then, the article described how Dr de la Torre forced out his clinical and academic leader at the Beth Israel Deaconess Medical Center: <blockquote>He stayed at Boston Medical for only a year, jumping to Beth Israel Deaconess Medical Center for a better opportunity. Dr. Frank Sellke, Beth Israel’s relatively young interim chief of cardiothoracic surgery, saw great things in him. </blockquote> But then, <blockquote>After a couple of years, Sellke, who officially became chief in 2001, started hearing chatter that de la Torre was gunning for his job. He didn’t take it seriously. Traditionally, to be a chief at a Harvard-affiliated hospital like Beth Israel, you needed heavy research and teaching credentials, which de la Torre did not have. 'When I heard Ralph was trying to undo me, I thought it was joke,' Sellke says. 'It turns out the joke was on me.' In 2004, de la Torre greatly expanded his reach when hospital officials named him chief of cardiac surgery, a section within the division of cardiothoracic surgery. Two years later, he gained freer reign over cardiac care after the hospital removed Sellke as chief of the division. Sellke – who stresses that he is happy now as a chief at Brown Medical School and remains one of the country’s best-funded cardiac researchers – says that although he respects de la Torre’s talents, he lost respect for him as a person. 'He has a take-no-prisoners approach. If he interrupts or destroys someone else’s career, that doesn’t bother him in the least.'</blockquote>Developed CardioVascular Institute, then Left After this little coup d'etat, Dr de la Torre hatched a plan to integrate cardiovascular care at the BIDMC, but then flew the coop after it did not work out as planned: <blockquote>Instead, he hatched a plan to revolutionize cardiac care at Beth Israel. Traditionally, cardiac surgeons, vascular surgeons, and cardiologists operated in their own silos, even though they were all treating related cardiovascular diseases. De la Torre proposed the CardioVascular Institute, or CVI, as a way to break down those silos and centralize care by creating a 'hospital within a hospital.'</blockquote> But, <blockquote>The CVI officially opened in 2007, with de la Torre as president and CEO. He continued his work as a surgeon, maintaining the salary of more than $1.3 million that he had earned the previous year. Pomposelli says de la Torre’s enormous talent, intellect, and drive helped the CVI succeed in many ways, notably in removing waste from hospital operations and in building strong networks of affiliated physicians. De la Torre wined and dined community cardiologists around the region, persuading them to become affiliates and refer patients to Beth Israel for care. But Pomposelli concedes that the CVI fell short in other ways. The silos were harder to break down than they thought, especially since “we didn’t pay enough attention to academics and research.” Also the “enhanced revenues” to physicians turned out to be far less than promised, leading to resentment. Pomposelli, who remains the chief of vascular surgery at Beth Israel, stresses that the CVI still exists, but in a much less ambitious form. 'Ralph’s a builder. He loves the deal, loves creating new things,' Pomposelli says. 'I don’t think he loves managing things as much. Running the CVI turned out to be tedious and difficult.'</blockquote> And de la Torre was out the door before this idea turned out to be less than what he touted: <blockquote>In 2008, just a year after seeing his brainchild become a reality, de la Torre told Pomposelli he would be leaving to run the ailing Caritas hospital network.</blockquote>Left Republican Party, Became Democrat After assuming control of Caritas, Dr de la Torre seemed to abandon his previous political affilisations. <blockquote>As recently as 2007, he was a registered Republican. De la Torre (pronounced DEL-a-TOR-ree) says that, like many children of Cuban immigrants, he has long identified with the conservative Republican outlook on foreign policy, though he is a social liberal. Sometime after he moved to Newton, he switched his registration to independent. Regardless, he stresses that he was not politically active until recently, when he became motivated to fund Democratic candidates because of that party’s commitment to overhauling health care.</blockquote> Then, the instant Democrat contributed substantially to the campaign of Massachusetts Attorney General Martha Coakley, who had to approve the take-over by Cerberus of Caritas: <blockquote>she was the guest of honor at a ... fund-raiser held at the de la Torre home the previous fall when she was running for US Senate. Some state Republicans complained that Coakley should not have been signing off on a deal being advanced by a major campaign donor, although they could produce no evidence that her office’s review was anything but thorough and deliberative.</blockquote> And he hosted a better noticed fundraiser that that included a visit by President Obama, <blockquote>Just before 5 p.m. on a Saturday in mid-October, a Cadillac limousine climbed the curvy driveway outside the Newton home belonging to Dr. Ralph de la Torre and his wife, Wing. Inside, the 75 guests were anxiously awaiting the main attraction while staying busy wondering how long the de la Torres’ adorable 2-year-old twin sons would be able to keep their neckties attached and their dress shoes on. Swell parties like this are not uncommon in the West Newton Hill neighborhood, which is dotted with multimillion-dollar houses like the de la Torres’ place. Still, this gathering stood out for two reasons. First, just about every person attending had paid $15,000 a pop to be there. Second, the guest of honor was none other than President Obama.</blockquote>Abandoned Surgery and His Medical License More strikingly Dr de la Torre also effectively abandoned the profession which had earlier brought him so much recognition: <blockquote>After a decade of training to become a cardiac surgeon and endless effort to become one of the best in the business, de la Torre decided to walk away from surgery. He’d been in practice for only about nine years. De la Torre says it’s impossible to be a great heart surgeon working only part time. He even took the drastic step of letting his medical license expire, his way of refusing to look back. 'Burn the boats on the beach, baby!' he says.</blockquote>Saving Caritas: "Leakage Reduction" So what set of boats would he burn to promote Steward Health Care? When he took over Caritas, he was able to improve its finances, but only up to a point, <blockquote>The hospitals in the chain – flagship St. Elizabeth’s in Brighton, the Carney in Dorchester, Holy Family in Methuen, Good Samaritan in Brockton, St. Anne’s in Fall River, and Norwood Hospital – were all hurting. Worse, the system was weighed down by debt and underfunded pensions. De la Torre moved quickly to cut costs, improve efficiency, and negotiate increased reimbursement rates paid to Caritas hospitals by Blue Cross and other insurers. His actions helped turn around Caritas’s finances, going from a $20 million loss in 2008 to a $30 million operating income in 2009. But the debt, pension liabilities, and lack of access to capital combined to become an albatross on the chain. As of March 2009, Caritas had only 40 days’ cash on hand, according to Mark Rich, the CFO, who took to keeping extra-large bottles of Tums on his desk.</blockquote> His solution was the private equity take-over: <blockquote>In classic de la Torre style, the deal promised something for each of the stakeholders. The archdiocese, which administered the Caritas pension fund, would see support for the fund to the tune of $295 million as well as a continued commitment that the hospitals would follow Catholic doctrine and not perform abortions or sterilizations. The SEIU would get job preservation and a stronger beachhead in Boston from which to try to expand its organizing efforts into the city’s big-name hospitals. The communities would see their local hospitals stay alive, even getting spruced up rather than stripped for parts. And Cerberus would get a dynamic leader who could offer them both a laboratory for testing the post-health care-overhaul national market and a sort of cloak of righteousness, given the hospitals’ history of working with the poor. </blockquote> But how would Cerberus make money on its investment? The explanation in the article raises more questions than it answers: <blockquote>As he sees it, through investment in information technology and bricks-and-mortar hospitals, he will be able to offer a highly integrated 'accountable care organization' that gives patients quality care, close to home, thereby keeping costs down. The key is insisting that patients get all but the most complex care from their community hospital, rather than seeking treatment for pneumonia or a broken arm at a big shop like Mass. General.</blockquote> Left unsaid, though, is who could effectively "insist" that patients get all their care within the system? The notion that such insistence is the key also appeared in other reports on the Cerberus take-over of Caritas. For example, on October 14, 2010, the Boston Globe <a href="http://www.boston.com/business/healthcare/articles/2010/10/14/with_new_licenses_caritas_will_ask_sjc_to_approve_sale">reported</a> on Dr de la Torre's responses to the Massachusetts Public Health Council in a hearing on whether the take-over should be approved: <blockquote>De la Torre said his aim was to stop the 'leakage' of patients from communities served by Caritas hospitals to academic medical centers in Boston. 'The business plan, the strategy, or whatever you want to call it, is all about keeping care locally,' he said. 'If we improve the facilities, improve the infrastructure, make it so that our very own patients want to stay in our hospitals, that’s the business plan.'</blockquote> The same notion appeared in a <a href="http://blogs.wpri.com/2010/11/16/would-caritas-christi-buy-tauntons-morton-hospital/">post</a> in local television station WPRI's news blog about the possible take-over by Steward of another local hospital <blockquote>Private equity investors did not buy Caritas and turn it into a for-profit medical complex for the purpose of standing still. Caritas executives say they want to improve business by reducing 'leakage' — patients leaving its suburban medical settings to be treated in Boston teaching hospitals.</blockquote> In fact, a little Google searching revealed that Caritas Christi Network Services had been pushing "leakage reduction" in its own <a href="http://www.caritaschristi.org/doc/Page.asp?PageID=DOC002360">newsletter</a> in the Fall, 2009 issue: <blockquote>Our job now is to focus performance on two critical success factors: reducing leakage and improving quality.</blockquote> So, <blockquote>Leakage Reduction: Keep the Care in Caritas Network-wide Referral Management Our first initiative to help reduce leakage is to implement a network wide referral management program.</blockquote> Furthermore, <blockquote>Region Specific Leakage Action Plans Each of the Hospital and IPA presidents will collaborate to develop region specific action plans to reduce leakage. Together they will develop goals, identify reporting needs, and establish processes to achieve leakage targets. The participation and support of each physician IPA member will be important to the success of this initiative. You and Your Patient Your support in keeping the care you provide within the Caritas system and in participating in the care management initiatives is critical to the system’s success.</blockquote> Note that <a href="http://www.caritaschristi.org/CCNS/Home_Page">Caritas Christi Network Services </a>is apparently the subsidiary of Caritas Christi, now Steward Health Care, that employs physicians: <blockquote>Caritas Christi Network Services (CCNS) is the second largest physician network in Massachusetts. Established in 2001, CCNS is responsible for the implementation and successful execution of managed care contracts, providing physicians with medical management services (referral and care management), quality improvement programs, data analysis, information systems and financial expertise. </blockquote> But here is where it gets really tricky. It is one thing to aim to improve hospital services and accessibility in the hopes of attracting more patients. It is another thing to push physicians to refer patients to specific facilities for economic reasons, because physicians are supposed to make decisions for individual patients, including decisions about where to refer, based on the particular patient's needs and preferences. So there are major questions about both the effectiveness and the ethics of "leakage reduction" based on applying leverage to physicians. Summary: Will Someone End Up the "Greater Fool?" Meanwhile, Paul Levy, the soon to be former CEO of BIDMC, who has not been afraid to say what he thinks on his blog, now called <a href="http://runningahospital.blogspot.com/">Not Running a Hospital</a>, <a href="http://runningahospital.blogspot.com/2011/02/is-greater-fool-theory-alive-in.html">suggested</a> that Cerberus, and by implication, Dr de la Torre, are not in this for the long haul. He first introduced the "greater fool" theory of business management, <blockquote>It seems that there is no end to the number of people with cash who will be intoxicated by a good story line, even when there is little substance to back it up. All of these stories depend on the capital markets to bolster the price of investments, counting on the 'greater fool' theory: There is always someone who will take on a bad investment at just the wrong time, providing a good return to those who are lucky enough to escape before the crash.</blockquote> Then he raised the concern: <blockquote>Those seeking to regulate the behavior and financial decisions of for-profit hospitals will find that their post hoc authority will likely be insufficient to protect the public interest from a depletion of plant and equipment and from a plan that is mainly meant to burnish the pre-tax and pre-depreciation short-term earnings of the firm so that it is ready for the initial public offering or resale to another private equity firm.</blockquote> So the question is whether Superbowl advertisements and "leakage reduction" management can really make the new Steward Health Care a lasting success? And if not, will Cerberus Capital Management hang around just long enough to buff the system up for the next buyer? And if that happens, Levy noted: <blockquote>Who gets hurt if these deals go bust when the next generation of owners takes over and discovers that creating the margin to generate the expected return is very hard in the hospital world? Well, that very last set of investors, the 'greater fools.' But, as we have seen in the examples above, the hurt goes much further. Hospitals, though, are in a special category. Investors may come and go, but the community depends on its local hospital to provide high quality service. It is the residents of the community who are left holding the bag if the hospital corporation reaches the conclusion that ownership is not financially viable.</blockquote> As we said before,.... Deals that turn not-for-profit hospital systems into privately held for-profit systems ought to be scrutinized with extreme skepticism. Furthermore, once such deals are made, the results ought to be watched extremely closely to make sure they do not put private gain ahead of individuals' and the public's health. For-profit hospitals have generally not lived up to the promises they made to provide quality, accessible health care at a cheaper price.  It is yet to be seen whether private equity running for-profit hospital systems (and physicians networks) will do any better.

The New Steward Health Care: Will Superbowl Ads and "Leakage Reduction" Keep the Ship Afloat, or Will a "Greater Fool" Be Left Trying to Bail it Out?

Some recent publications raise interesting questions about the leadership of a regional health care organization which now seems to have int...

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Conflating Heavy Coffee Drinkers With Glue Sniffers and PCP Abusers: Why Computer Personnel Should Not Play Doctor

I present a new, true case example of health IT-created problems, with some parallels to this <a href="http://hcrenewal.blogspot.com/2009/04/should-google-seek-resignations-of.html">prior health IT information science debacle</a> where I had written: <blockquote>... What manner of amateurs made and approved the decision to map semantically and often medically imprecise, and often deliberately overstated or misused billing codes to diagnoses, and then display the diagnostic terms to a user - ANY user, patient or "learned intermediary" - in an electronic health record?</blockquote> Here are the de-identified details: A clinician participated in a psychiatry team meeting. The patient was in attendance and had dutifully been reviewing the treatment plan and records. The patient was upset that the Axis I diagnoses included “inhalant abuse.” In fact, here’s what the patient's EMR-generated record indicated: <blockquote style="font-weight: bold;"> “305.90 CAFFEINE INTOXICATION, INHALANT ABUSE, OTHER (OR UNKNOWN) SUBSTANCE ABUSE, PHEN” [PHEN = phencyclidine, a.k.a. PCP or "Angel Dust" - ed.] </blockquote> The problem was that individual diagnoses are inexplicably conflated, leaving the user no choice but to select an overly broad, insufficiently "granular" diagnosis code. The EMR diagnosis dataset did not correctly reflect the Diagnostic and Statistical Manual of Mental Disorders (<a href="http://www.amazon.com/gp/product/0890420254/ref=assoc_qcb_im">DSM</a>), the "Bible" of psychiatric diagnosis published by the American Psychiatric Association. (What about all of the people who have a history of “caffeine intoxication” but now also have a history of “inhalant abuse” because of the EMR's forcing diagnostic "blur" onto its users, the clinician wondered?) The patient understandably interpreted the document as indicating that they had a history of “inhalant abuse,” and wanted it changed. (They probably would also have thought the document indicated they abused Angel Dust if they'd known what "PHEN" stood for.) The patient does have a history of substance abuse, but not inhalant abuse, and the clinician's progress notes reflected these facts. The patient was upset in part because they didn't want something in the records that was inaccurate and/or could be misconstrued by someone in the future (e.g., law enforcement, the courts, an employer, a spouse, etc.) The team and the clinician spoke with the patient, apologized for the inaccuracy about a history of “inhalant abuse,” acknowledged that there was no such history in the progress notes, indicated that the “other (or unknown) substance abuse” part was correct (with which the patient agreed), and offered to write a separate update note to reflect exactly what was meant in the diagnostic section. The clinician also indicated that they would follow up with leadership to see that the EMR was corrected so that this type of problem would not continue. One wonders what other diagnoses were conflated. The prevention of this type of problem is obvious to those who know even a smattering about medicine and medical information science (e.g., Medical Informatics). There should have been separate entries/options in the EMR such as follows, not one entry with all of them packed together, e.g.: <blockquote> 305.90 Caffeine Intoxication 305.90 Inhalant Abuse 305.90 Other (or unknown) Substance Abuse 305.90 Phencyclidine Abuse</blockquote> Each diagnosis should be a separate user option, as reflected in the DSM. They should not be “bundled together” into one package as they are, forcing the user to enter incorrect diagnostic information that comes with the "bundle." Clinicians do not think in terms of "diagnostic bundles", nor does medicine work that way. Worst of all, the blurred information may at some time cause clinical or social harm to the victim. This is a commercially sold EMR in wide use in some practices and even entire municipal health services departments. The conflation of diagnoses codes reflects a major design error for the convenience of the designers/programmers (I can think of no other valid reason). This "feature" reflects a clear lack of comprehension of medicine and the social/societal implications by the EMR-merchant company of ill conceived blunders such as this. -- SS 2/7/11 Addendum: a witness to these affairs indicates that, while the IT department is opaque and doesn’t readily ‘open the curtains’ for clinicians to ‘see’ what’s going on [typical - ed.], in this case faulty vendor design apparently led to implementation “workarounds” that led to the incorrect/bad outcomes. In other words, problems on top of problems led to more problems, in their words.

Conflating Heavy Coffee Drinkers With Glue Sniffers and PCP Abusers: Why Computer Personnel Should Not Play Doctor

I present a new, true case example of health IT-created problems, with some parallels to this prior health IT information science debacle w...

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Brief Comments on the President’s Council of Advisors on Science and Technology (PCAST) Report on Health IT

A short post. In Dec. 2010 the President’s Council of Advisors on Science and Technology issued a 108-page report entitled: <blockquote>REPORT TO THE PRESIDENT: REALIZING THE FULL POTENTIAL OF HEALTH INFORMATION TECHNOLOGY TO IMPROVE HEALTHCARE FOR AMERICANS: THE PATH FORWARD</blockquote> The PCAST health IT report is available from whitehouse.gov in PDF format <a href="http://www.whitehouse.gov/sites/default/files/microsites/ostp/pcast-health-it-report.pdf">here</a>. Rather than reproduce the executive summary of the report, a terse "PCAST Report Summary" can be seen about midway down the page of the HISTalk blog <a href="http://histalk2.com/2011/02/01/news-2211/">here</a>. My comments are simple and twofold: 1. The term "risk" is absent from the PCAST report in the context of risk to patients from clinical IT. Instead, the context is largely about the risk to patients of NOT having health IT. 2. The term "safety" is similarly absent in the context of adverse effects of HIT, and only present in the context of how HIT will improve safety, except for one instance where the match to my search for the term "safety" was not in the text, but in the cited URL itself: <blockquote>... The Food and Drug Administration (FDA), while not currently regulating EHRs, currently does receive voluntary reports of death and injury associated with EHR malfunctions. FDA officials have suggested possible future regulatory strategies that could include mandatory adverse event reporting, or even classifying EHRs as medical devices, which would make them subject to pre-market regulation. [13] [13] Healthcare IT News (February 26, 2010) at <a href="http://www.healthcareitnews.com/blog/should-fda-regulate-ehr-safety">http://www.healthcareitnews.com/blog/should-fda-regulate-ehr-safety</a></blockquote> I find this paucity of a certain context for these terms in a report to the President of the United States striking. Finally, ONC solicited responses to the PCAST report. The American Medical Informatics Association (<a href="http://www.healthcareitnews.com/blog/should-fda-regulate-ehr-safety">AMIA</a>) issued a response that is very good. It outlines practical matters, the need for more Medical Informatics specialists and incorporation of their work into national efforts at a common "language" for medicine, interoperability, and other issues. For instance: <blockquote>AMIA applauds the PCAST report for addressing important issues regarding interoperability and quality improvement. However, we note that the report highlights potential shortcomings and inadequacies in the current approaches and proposes a number of activities in addition to or instead of those currently underway. AMIA believes that the report would benefit from additional details and specificity to support the recommendations that are proposed. The report does not mention the significant prior work that has been conducted in these areas. Additional consideration of data and lessons learned from the scientific and peer-reviewed literature would help to further support and substantiate the ideas presented.</blockquote> The AMIA response is available <a href="https://www.amia.org/files/AMIA-PCASTComments-Submitted-to-ONC-1-19-11.pdf">at this link</a> (also PDF). Also see summaries of other responses to the PCAST report at the Jan. 23, 2011 e-CareManagement blog post aptly entitled "<a href="http://e-caremanagement.com/comments-to-onc-pcast-hit-report-becomes-a-political-pinata/" rel="bookmark" title="Permanent Link to Comments to ONC: PCAST HIT Report Becomes a Political Piñata">Comments to ONC: PCAST HIT Report Becomes a Political Piñata</a>." -- SS

Brief Comments on the President’s Council of Advisors on Science and Technology (PCAST) Report on Health IT

A short post. In Dec. 2010 the President’s Council of Advisors on Science and Technology issued a 108-page report entitled: REPORT TO THE PR...

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David Blumenthal to Resign as Director of the Office of the National Coordinator of HIT (ONC)

From NextGov.com - TECHNOLOGY AND THE BUSINESS OF GOVERNMENT <blockquote><a href="http://healthitupdate.nextgov.com/2011/02/dr_david_blumenthal_who_has.php?oref=latest_posts">Blumenthal Calls It Quits</a><div class="lingo_nolink"> By John Pulley, March 3, 2011 </div> Dr. David Blumenthal, who has pushed the country's health care providers to give up paper files in favor of electronic medical records, announced Thursday that he is stepping down as the country's de facto <a class=" lingo_link" href="http://topics.nextgov.com/Health+IT/" rel="nofollow" style="cursor: pointer; display: inline; font-family: "Times New Roman",Times,serif; font-size: 15px; font-weight: 400; font-style: normal;">health IT</a> czar after almost two years on the job. He will return to Harvard University, according to news reports. Blumenthal served as National Coordinator for Health IT during a period of tremendous change. In 2009, Congress allocated billions of dollars to expand the Office of the National Coordinator's authority and to make available incentive funds intended to encourage mass adoption of electronic medical records. The first of those incentives payments were disbursed recently. ... Health and Human Services Secretary Kathleen Sebelius, writing in a memo obtained by Kaiser Health News, said that "David will leave his post having built a strong foundation, created real momentum for [<a class=" lingo_link" href="http://topics.nextgov.com/health+information+technology/" rel="nofollow" style="cursor: pointer; display: inline; font-family: "Times New Roman",Times,serif; font-size: 15px; font-weight: 400; font-style: normal;">health information technology</a>] adoption, charted a course for the meaningful use of [electronic health records] and launched a new phase of cooperative and supportive work with the health care community, states and cities across the nation." Despite that progress, however, there has been no shortage of impediments to large-scale adoption, including the dearth of qualified health IT specialists, a lack of certified health IT products [which by the way is an artificial, government and industry lobby-created impediment; "certification" does not equal safe or effective; it's merely a hastily-evaluated features check - ed.], disruptions in work flow caused by the switch to electronic health records [which in large part remain <a href="http://www.tinyurl.com/hostileuserexper">mission hostile</a> to clinical work - ed.] and the challenge of meeting "meaningful use" standards that trigger incentive payments. </blockquote> I wish Dr. Blumenthal well. ONC Chair is not an easy role, as I'm sure his predecessors would confirm. My final comment is that the last paragraph might be rearranged as follows: <blockquote>... Despite the impediments to large scale adoption, however, there has been no shortage of irrational exuberance in the technology, nor progress in taking seriously the <a href="http://hcrenewal.blogspot.com/2011/01/maude-and-hit-risk-mother-mary-what-in.html">risks to patients</a>. Many of the "impediments" are probably not surmountable at our present dearth of understanding of this experimental technology and its sociotechnical complexities, with many in government, medicine and the IT industry dismissing a growing body of "inconvenient" literature (such as <a href="http://hcrenewal.blogspot.com/2011/02/updated-reading-list-on-health-it.html">here</a>), and these same people and IT merchants ignoring those who do understand those issues (or worse, such as <a href="http://www.ischool.drexel.edu/faculty/ssilverstein/cases/?loc=cases&sloc=lawsuit">here</a>). </blockquote>-- SS

David Blumenthal to Resign as Director of the Office of the National Coordinator of HIT (ONC)

From NextGov.com - TECHNOLOGY AND THE BUSINESS OF GOVERNMENT Blumenthal Calls It Quits By John Pulley , March 3, 2011 Dr....

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More Legal Theater: Actavis Convicted, CareSource Settles

The march of <a href="http://hcrenewal.blogspot.com/search/label/legal%20settlements">legal settlements</a>, and guilty pleas and verdicts continues.  The latest on parade, in alphabetical order, are: Actavis As <a href="http://www.statesman.com/news/texas/jury-orders-drug-company-to-pay-170-million-1226298.html">reported</a> by the (Austin, Texas) American-Statesman: <blockquote>In what state officials describe as a record-setting verdict, a Travis County jury found Tuesday that a global drug manufacturer misrepresented prices to the state's Medicaid program and said the company should pay the state and federal government $170.3 million. The verdict concluded a nearly three-week trial in state district court, where lawyers for the Texas attorney general's office argued that Actavis Mid-Atlantic LLC and co-defendant Actavis Elizabeth LLC artificially inflated the costs of medications to obtain more money. Medicaid reimbursed pharmacies at higher rates because of the falsely reported prices, officials said.</blockquote> Actavis is apparently part of a multinational corporation based in Iceland that <a href="http://www.actavis.com/en/about+actavis/default.htm">claims</a> to have 10,000 employees. The company was taken private in 2007, and has not supplied financial reports since 2006 (see <a href="http://www.actavis.us/en/media+center/financial+publications/annualreports.htm">here</a>), so the effect of the apparently large fine on its financial health is unclear, but I would guess not too severe. Despite their conviction, Actavis leadership responded predictably, failing to admit any problem occurred: <blockquote>Actavis officials said in a statement that they are disappointed by the verdict and 'are exploring our legal options.' 'Actavis remains, as always, committed to offering high-quality, lower-cost alternatives for health consumers, including the millions of Americans who participate in the Medicaid program,' said John LaRocca, the company's vice president and chief legal officer.</blockquote> CareSource As <a href="http://www.dispatch.com/live/content/local_news/stories/2011/02/01/managed-care-company-will-pay-$26-million-settlement-ohio-case.html?sid=101">reported</a> by the Columbus Dispatch, <blockquote>A Dayton-based managed health care company agreed today to pay $26 million to settle allegations that it defrauded Ohio's Medicaid program. CareSource, which provides managed care benefits to Medicaid recipients in Ohio and other states, was accused of failing to provide required screenings, assessments and case management for special-needs children and adults and submitting false data to make it appear as they had which allowed them to be reimbursed for services.</blockquote> Once again, the amount of the fine was small in relation to the size of the company, which is actually a not-for-profit organization, and the magnitude of its revenues. According to a <a href="http://www.dispatch.com/live/content/local_news/stories/2011/02/02/medicaid-fraud-suit-settled.html?sid=101">follow-up article </a>in the Columbus dispatch: <blockquote>The settlement is a fraction of the $2.3 billion the state paid the company last year.</blockquote> The Attorney General said it was fraud: <blockquote>'Medicaid program dollars need to be used to do what they are intended to do -- and that is to provide health care to some of our most vulnerable citizens,' Attorney General Mike DeWine said in a statement released by his office. 'The defendants in this case defrauded the state's Medicaid program by failing to provide critical health care services, which is both unconscionable and unacceptable.'</blockquote> Again, company leaders denied there was a problem: <blockquote>CareSource officials denied the allegations, saying they agreed to the settlement simply to end the matter. 'Because we are a mission-driven organization and because it is the right thing to do, we have always dealt with our relationship with the state of Ohio and the management of Medicaid funds with the highest integrity,' said Pamela Morris, chief executive officer of CareSource, in a statement.</blockquote> State government officials also seemed unconcerned: <blockquote>A spokesman for the Ohio Department of Job and Family Services, which oversees Medicaid, said CareSource will continue working for the state. 'The allegations are a cause for concern, but we are comfortable with the relationship and the terms of the settlement,' said Benjamin Johnson.</blockquote> Summary The continued march of legal settlements, and guilty pleas and convictions provide some measure of the current amorality of health care corporate leadership.  But I do not expect that these frequent legal proceedings will induce leaders to become more ethical. These two cases, one involving a Icelandic, multinational generic pharmaceutical company, the other a US based managed care company, showed how corporate misdeeds lead to an elaborate, theatrical, but ultimately ineffective ritual. The prosecution denounces the vileness of the deeds and the severe consequences. The corporation pays a fine that seems big to those down on the farm, but in reality is a tiny fraction of revenues. Despite the prosecutorial assessment of the severity of the offense, no charges against any individuals are pursued. The corporation denies anything bad happened, but reaffirms its commitment to a somewhat vague mission. Since nothing bad happened, the corporation does not punish any employees who authorized, directed, or implemented the bad behavior. Finally, those in government who have to continue to work with the corporation plod on without fuss. The impression is that no one in government is really serious about deterring corporate misdeeds.  Although there have been promises of a tougher approach that will actually hold corporate leaders  personally accountable for the misdeeds that occurred on their watch, the theater continues. As long as the penalties to the corporation are relatively small, and can be diffused among stock-holders or owners, employees, and patients, clients or customers, as long as there is no compulsion to change how the corporation operates, and as long as no individual suffers any consequences, why should corporate leaders not continue to do what the government may call "unconscionable," but which results in net financial gains and no personal penalties?  (Note that we posted <a href="http://hcrenewal.blogspot.com/2010/01/non-profit-health-care-organization.html">here</a> about the large and increasing compensation given to CareSource's CEO, which had grown far faster than its revenues, and seemed to contrast with its stated mission to help the underserved.) So I say again: we will not deter unethical behavior by health care organizations until the people who authorize, direct or implement bad behavior fear some meaningfully negative consequences. Real health care reform needs to make health care leaders accountable, and especially accountable for the bad behavior that helped make them rich. Meanwhile, the continued unwillingness of government leaders to take on corporate leaders suggests how corporatist the US has become.  Government for the corporations, by the corporations, and of the corporations, bodes no good for the people whose rights are increasingly being displaced.

More Legal Theater: Actavis Convicted, CareSource Settles

The march of legal settlements , and guilty pleas and verdicts continues. The latest on parade, in alphabetical order, are: Actavis As repo...

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Health Care Corporate Disinformation Campaigns: Wendell Potter's "Deadly Spin"

I wish I had gotten to this earlier....  In 2009, Wendell Potter, a mild-mannered former chief of public relations for for-profit health care insurance company Cigna, testified before Congress about how insurance companies manipulated public opinion to support corporate vested interests.  <blockquote>insurance companies make promises that they have no intention of keeping, how they flout regulations designed to protect consumers . . . and how they ‘purge’ small businesses when their employees’ medical claims exceed what underwriters expected [Kendall]</blockquote>In November, 2010, he published a book entitled <a href="http://wendellpotter.com/deadlyspin/">Deadly Spin</a> on this topic.  Starting then, a series of op-ed pieces by Potter, reviews of his book, and interviews with him provided a chilling picture about how corporate health care uses disinformation to support its interests, regardless of the public's interests.  I am sure there is much more in the book, which I will endeavor to purchase and read forthwith.  Meanwhile, pieced together from these articles are examples of insurance industry disinformation campaigns, and some observations about how their disinformation machine works. Stifling the Clinton Administration's Health Care Reform <blockquote>He took part in the planning for the 'Harry and Louise advertising blitz that helped derail the Clinton health-care initiative and used to bandy about catchphrases that have resonated in more recent campaigns. [Wilemon]</blockquote> Discrediting Michael Moore's Movie Sicko <blockquote>I described the meticulously planned and deception-based strategy the health insurance industry developed and carried out -- with help from one of Washington's biggest PR firms -- to discredit documentary maker Michael Moore and his 2007 movie, Sicko. Because the movie laid much of the blame for the seemingly intractable problems of the American health care system on insurers, the industry I used to work for spent a big chunk of policyholders' premiums on a behind-the-scenes campaign to demonize Moore and to misinform Americans about the health-care systems in Canada and Europe that -- as Moore explained in the movie -- provide coverage for all their citizens and provide high quality care for them at much lower costs than we do in the U.S. [Potter, Huffington Post]</blockquote> Quieting the Furor After a Denied Liver Transplant In 2007, Cigna initially denied payment for a liver transplant for a 17-year old girl named Nataline Sarkisyan, creating a national uproar. <blockquote>We learn that executives at Cigna worried that Nataline’s situation would only add fire to the growing public discontent with a health care system anchored by private insurance. As the case drew more national attention, the threat of a legislative overhaul that would ban for-profit insurers became real, and Mr. Potter found himself working on the biggest P.R. campaign of his career.[Chen] As busy as they might have felt in the days leading up to Nataline’s death, he and his staff were inundated with calls from the news media immediately afterward. To bolster what was seen as a fight for its survival, Cigna hired a large international law firm and a P.R. firm already well known to them from previous work aimed at discrediting Michael Moore and his film 'Sicko.' [Chen]</blockquote> Twisting "Obamacare" to Benefit the Insurance Industry Mr Potter himself wrote about how "Obamacare" was twisted into a win for the insurance industry in an op-ed entitled "Repeal and Replace?": <blockquote>Despite all the attacks on 'Obamacare,' the new law props up the employer-based system that insurers and large corporations benefit from so greatly. It also guarantees that private insurers will get billions of dollars in new revenue. And the insurers won’t have to share a penny of that windfall with a government-run public option the president once said was necessary 'to keep insurers honest.' [Potter, Newsweek]</blockquote> On one hand, the goal of the insurance industry was the "individual mandate," the requirement that all Americans MUST purchase insurance, which for most means insurance provided by for-profit health insurance companies: <blockquote>Although I was ashamed of many of the things I did during my career, I didn’t plan to speak out about the industry’s devious practices until I saw Karen Ignagni, president of America’s Health Insurance Plans, tell President Obama at the end of his March 2009 White House Forum on Health Reform, 'You have our commitment to play, to contribute, and to help pass health-care reform this year.' Then I knew the industry’s disingenuous charm offensive had begun. Soon after that I read that, Aetna chairman and CEO Ron Williams, the driving force behind the industry’s effort to get the individual mandate enacted, had met with the president half a dozen times. I knew Williams was trying to persuade the president to drop his insistence on the public option and to embrace the individual mandate. Sure enough, Williams got his wish. [Potter, Newsweek]</blockquote>In fact, <blockquote>For months before I left my job, I worked closely with my counterparts at the other big insurers to develop the list of must-haves our well-connected army of lobbyists would take to Capitol Hill when lawmakers began drafting reform legislation. Despite their public statements to the contrary, insurance companies really liked much of what was in both House and Senate versions of the bill—big chunks of which they actually wrote behind the scenes—especially the requirement that all Americans buy insurance if they’re not eligible for an existing public program like Medic-aid or Medicare. [Potter, Newsweek]</blockquote> On the other hand, the industry wanted to make sure that the law did not regulate them too tightly, or otherwise inconvenience them or cost them too much money: <blockquote>During the reform debate, the industry’s deception-based PR strategy had two active fronts. One was a highly visible charm offensive designed to create an image of the industry as an advocate for reform and a good-faith partner with the president and lawmakers in achieving it. The second was a secret fearmongering campaign using shadowy 'AstroTurf' groups and business and political allies as shills to disseminate misinformation and lies—like the one about the creation of 'death panels'—with the sole intent of killing any reform that might hurt the bottom line. [Potter, Newsweek]</blockquote> Tactic: Front Groups This seems right out of the old KGB playbook, as described by Mr Potter in an interview about the campaign to discredit Michael Moore's Sicko: <blockquote>one key component was to fund a front group, and that is something that I write about quite a bit in the book, about how special interests, and the insurance industry, in particular, will use premium dollars to funnel thousands and thousands, if not millions, of dollars to big PR firms to set up fake grassroots organizations—astroturf, as we call it—and front groups. And in this case, there was a front group that was set up called Health Care America, and the sole purpose for it to be set up was to attack Michael Moore and to attack the notion of a single-payer system in this country. [Goodman]</blockquote> Note that this particular tactic was never previously exposed: <blockquote>I’ve done a search recently just to find out how they were covered, and they were never exposed. [Goodman]</blockquote> But it was quite influential: <blockquote>They were quoted extensively. They sent out press releases. And they were given status as a legitimate organization, even by the New York Times. [Goodman]</blockquote> Tactic: Third Parties (Useful Idiots?) An example from Potter's account of how insurers manipulated the Obama administration's health care reform: <blockquote>He contends that the insurance industry used 'third parties,' such as sympathetic congressmen, 'to kill key elements of the president’s plan, if not all of it, by scaring and lying to the public.' [Weiss]</blockquote> Here is another version used in the campaign to quell the furor over the denial of the liver transplant: <blockquote>the aggressive placement of articles with friendly 'third party' reporters, editors and producers who would 'disabuse the media, politicians and the public of the notion that Nataline would have gotten the transplant if she had lived in Canada or France or England or any other developed country.' [Chen]</blockquote> Tactic: Spies This really is out of the espionage playbook: <blockquote>A 'spy' was dispatched to Nataline’s funeral; and when the Sarkisyan family filed a lawsuit against the insurer, a team of lawyers was assigned to keep track of actions and comments by the family’s lawyer. [Chen]</blockquote> Tactic: Distractions to Make Important Issues Anechoic We have often discussed how some of the issues we discuss on Health Care Renewal are anechoic, generating almost no discussion, polite or otherwise in the medical and health care research and policy literature, and sometimes even in the main-stream media. Part of the anechoic effect may be due to deliberate distraction, as Potter discussed in reference to the campaign to manipulate "Obamacare": <blockquote>Potter shows then-Cigna chairman Edward Hanway's leading role in "a multi-milllion-dollar public relations and advertising campaign" in the run-up to the 2008 presidential election, designed to 'divert the public's and the media's attention' away from the central fact of millions of uninsured and underinsured sick people, toward other problems that were harder to blame on insurers: aging Americans, extravagant doctors, expensive technology, and consumers demanding costly operations they don't need. [DiStefano]</blockquote>Note that the usual dogma one sees in the medical and health care research/ policy literature about the causes of US health care's excess costs, declining access and poor quality are just as listed above: an aging population, high doctors' fees and excessive utilization, technology that appears to be ever costlier (unlike technology everywhere but health care), and patients' unreasonable demands. Tactic: Message Discipline As discussed by Potter in terms of the campaign to align "Obamacare" with the insurance industry's interests: <blockquote>It's incredible message discipline, and it's based on an understanding of ideology. The health insurers know that they need to be allied with big, well-researched organizations like the Chamber of Commerce. They want to be associated with people who can convince us that the way to go for health care is market-based. You're going to be hearing in the weeks to come, as we revisit health care, from Republicans and big business and those in the industry that what we need are 'common-sense, market-based solutions.' Those are carefully crafted words, just as what we have now was a 'government takeover of the health care system.' They spend enormous amounts of money very carefully selecting words and putting them together in a way that will elicit an emotional response. The people who are saying this believe their own talking points because they don't have an understanding of how the system is working or not working. If they are conservative, they think, 'I'm supposed to believe this.' They're supposed to believe that the market should work well in health care. They just simply have their blinders on and won't take them down to see the reality. [Whitaker]</blockquote>Tactic: Entrapment (Double-Think?) Finally, Potter discussed how public relations leaders keep their own people in line: <blockquote>There's an entrapment that's part of the problem here. I was paid very well, but I wasn't independently wealthy, and I had to consider my own ability to make the house payments and the car payments and putting the kids through school. You also find that your ego and what you do for a living, you let it define you. How much money you make, what neighborhood you're able to live in, where you're able to send your kids to school, it all becomes part of your shell and your own self-identity. To do anything that will potentially destroy that is too frightening for people. It was certainly something I had to deal with, and I had to come to terms with the fact that I could lose all of that, whatever I had. I came to feel, well, I could lose it but what have I lost? A good friend of mine said, 'Well, you can at least push a broom, can't you?' I didn't think I was going to end up pushing a broom, but I didn't have to have all of that stuff. But people are afraid of losing all that stuff because they're afraid of losing part of their identity. So, financially and psychologically and from an ego point of view, it's hard to separate yourself from something you've been involved in. [Whitaker]</blockquote>Summary In Mr Potter's own words, the for-profit health insurance industry's public relations machine, and by extension, the public relations machines of all the big health care corporate players <blockquote>onslaught drastically weakened health-care reform and how it plays an insidious and often invisible role in our political process anywhere that corporate profits are at stake, from climate change to defense policy. [Potter, Huffington Post]</blockquote>So, <blockquote>The onslaughts of spin will not stop, the distortions will not diminish, and the spin will not slow down. To the contrary, spin begets spin, as the successes of corporate PR functionaries increase the revenues of their employers, further funding their employers' efforts to create a more hospitable climate for their business interests. Americans are thus being faced with increasingly subtle but effective assaults on their beliefs and perceptions. Their best defense right now is to understand and to recognize the sophisticated tactics of the spinners trying to manipulate them. Most important is a singular mandate: Be skeptical. [Potter, Huffington Post]</blockquote> I hope that summarizing some of Mr Potter's amazing points will help us all to be much more skeptical. Note that Mr Potter has his own blog <a href="http://wendellpotter.com/blog/">here</a>, which will be added soon to our blog roll. References Chen P. When insurers put profits between doctor and patient. New York Times, January 6, 2011. Link <a href="http://www.nytimes.com/2011/01/06/health/views/06chen.html">here</a>. DiStefano JN. Potter vs Hanway: Cigna rebel tells all in book. Philadelphia Inquirer, January 20, 2011. Link <a href="http://www.philly.com/philly/blogs/inq-phillydeals/Potter_vs_Hanway_Cigna_rebel_tells_all_in_book.html">here</a>. Goodman A. "Push Michael Moore off a cliff." Democracy Now, November 17, 2010. Link <a href="http://www.democracynow.org/2010/11/17/push_michael_moore_off_a_cliff">here</a>. Kendall J. An insider dissects the health insurance industry. Boston Globe, November 22, 2010. Link <a href="http://www.boston.com/ae/books/articles/2010/11/22/a_former_health_insurance_pr_executive_and_whistleblower_flays_the_industrys_deception_of_the_american_public/">here</a>. Potter W. Repeal and replace? Newsweek, November 5, 2010.  Link <a href="http://www.newsweek.com/2010/11/05/why-healthcare-reform-will-survive.html">here</a>.  Potter W. Why I will stay far away from cliffs from now on. Huffington Post, November 9, 2010. Link <a href="http://www.huffingtonpost.com/wendell-potter/why-i-will-stay-far-away_b_780961.html">here</a>. Weiss G. Spin doctor reveals all. Portfolio.com, December 21, 2010. Link <a href="http://www.portfolio.com/industry-news/banking-finance/2010/12/21/wendell-potter-book-deadly-spin-says-insurance-pr-spun-health-care-reform">here</a>. Whitaker R. The insurance industry scam. Austin Chronicle, January 21, 2011. Link <a href="http://www.austinchronicle.com/news/2011-01-21/the-insurance-industry-scam">here</a>. Wilemon T. 3 events led 'Deadly Spin' author to turn on health insurance industry. Tennessean, January 13, 2011. Link <a href="http://www.tennessean.com/article/20110113/NEWS01/101130319/3-events-led-Deadly-Spin-author-turn-health-insurance-industry">here</a>.

Health Care Corporate Disinformation Campaigns: Wendell Potter's "Deadly Spin"

I wish I had gotten to this earlier.... In 2009, Wendell Potter, a mild-mannered former chief of public relations for for-profit health car...

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FDA to Scientific Protein Laboratories Managerement: "We Are Concerned About Your Fundamental Understanding"

Per Ed Silverman <a href="http://www.pharmalot.com/2011/02/heparin-supplier-is-warned-again-by-the-fda/">on the Pharmalot blog</a>, we hear of new concerns about a company in the supply chain that ended up with adulterated heparin and dead patients.  Before summarizing what the blog reported, let me summarize the case again. Case Summary - We have posted several times, recently <a href="http://hcrenewal.blogspot.com/2010/12/unreasonably-dangerous-heparin.html">here</a>, about the tragic case of suddenly allergenic heparin. Although heparin, an intravenous biologic anti-coagulant, has been in use for over 70 years, serious allergic reactions to it had heretofore been rare. Starting in 2008, hundreds of such reactions, and now over 80 deaths were reported in the US after intravenous heparin infusions.All the heparin related to these events in the US was sold by Baxter International. - We then learned that although the heparin carried the Baxter label, it was not really made by Baxter. The company had outsourced production of the active ingredient to a long, and ultimately mysterious supply chain. Baxter got the active ingredient from a US company, Scientific Protein Laboratories LLC, which in turn obtained it from a factory in China operated by Changzhou SPL, which in turn was owned by Scientific Protein Laboratories and by Changzhou Techpool Pharmaceutical Co. Changzhou SPL, in turn, got it from several consolidators or wholesalers, who in turn got it from numerous small, unidentified "workshops," which seemed to produce the product in often primitive and unsanitary conditions. None of the stops in the Chinese supply chain had apparently been inspected by the US Food and Drug Administration nor its Chinese counterpart. - The heparin proved to have been adulterated with over-sulfated chondroitin sulfate (OSCS), and many patients who received got seriously ill or died. While there have been investigations of how the adulteration adversely affected patients, to date, there have been no publicly reported investigations of how the OSCS got into the heparin, and who should have been responsible for overseeing the purity and safety of the product. Despite the facts that clearly patients died from receiving this adulterated drug, no individual has yet suffered any negative consequence for what amounted to poisoning of patients with a brand-name but adulterated pharmaceutical product.  (For a more detailed summary of the case, look <a href="http://hcrenewal.blogspot.com/2010/05/more-questions-no-answers-about-case-of.html">here</a>, and for all our posts on this topic, look <a href="http://hcrenewal.blogspot.com/search/label/heparin">here</a>.) The FDA Letter Pharmalot reported that the US Food and Drug Administration (FDA) sent a warning letter dated January 20, 2011, to Scientific Protein Laboratories LLC, and provided <a href="http://freepdfhosting.com/e89847cc8b.pdf">a link</a> to the letter.  The letter identified continuing serious problems with Scientific Protein Laboratories' operations: <blockquote>During our July 28, 2010 - September 3, 2010, inspection of your active pharmaceutical ingredient (API) manufacturing facility, Scientific Protein Laboratories LLC, located at 700 E. Main Street, Waunakee, WI, investigators from the Food and Drug Administration (FDA) identified significant deviations from Current Good Manufacturing Practice (CGMP) for the manufacture of drugs. These deviations cause your drugs to be adulterated within the meaning of section 501(a)(2)(B) of the Federal Food, Drug, and Cosmetic Act (the Act) [21 U.S.C. § 351(a)(2)(B)] in that the methods used in, or the facilities or controls used for, their manufacture, processing, packing, or holding do not conform to, or are not operated or administered in conformity with CGMP.</blockquote> The firm failed to adequately respond to complaints about its products, including heparin: <blockquote>Failure to investigate all quality related complaints whether received orally or in writing according to a written procedure. For example, your firm failed to conduct a formal investigation concerning a complaint identifying potential contamination with Oversulfated Chondroitin Sulfate (OSCS) in a lot of Heparin Sodium USP (lot 1035-0778) on October 9, 2008. Your firm did not initiate a formal investigation until September 9, 2009. In addition, at that time, your firm failed to extend your investigations to other lots of Heparin Sodium USP manufactured using the same crude lot identified with OSCS contamination. Your investigation did not consider the other lot of Heparin Sodium USP that was associated with the same contaminated crude lot until May 26, 2010, eight months after initiating a formal investigation (i.e., lot 1035-0780, which tested negative for OSCS in June 2010). We acknowledge that you initiated a voluntary recall of Heparin Sodium USP that included lots 1035-0778 and 1035-0780 on October 13, 2010. In your response, your firm notes that you have revised your procedure to state, “Any SPL employee will inform QA of a customer complaint.” However, this response does not address the fundamental issues that allowed the delays in communications and investigation to occur. Your handling of the heparin contamination complaint suggests the need to evaluate training across all departments about the types of information requiring prompt reporting to the quality unit. Further, your response does not address how you will ensure that complaint investigations are handled in a timely manner.</blockquote> Also, the firm still had problems overseeing the work of companies that supplied it: <blockquote>Your firm failed to properly evaluate a contract laboratory to ensure GMP compliance of operations occurring at the contract site</blockquote> Furthermore, it did not use the proper equipment: <blockquote>Failure to have equipment for the manufacture of APIs of appropriate design for its intended use.</blockquote> The FDA seemed concerned that company management did not understand its responsibilities: <blockquote>The manner in which you addressed this problem [the contamination of the heparin] is very worrisome with respect to the timeliness of the investigation, the identification of all potentially affected drugs, and implementing appropriate actions to resolve these issues. Be advised that your firm has the responsibility to ensure the quality, safety, and integrity of its drugs. FDA expects that your corporate management will immediately undertake a comprehensive evaluation of your quality system to ensure comprehensive compliance with CGMP.</blockquote> In addition, <blockquote>However, we are concerned about your firm’s fundamental understanding of what is required by your Quality Unit and the regulatory expectations for a firm that enters into agreements with contract testing laboratories. Although you have agreements with other firms that may delineate specific responsibilities to each party, you are ultimately responsible for the quality of your products and the reliability of test results. Regardless of who tests your products or the agreements in place, you are required to manufacture these products in accordance with section 501(a)(2)(B) of the Act to assure their identity, strength, quality, purity, and safety.</blockquote>Summary In previous discussions of the case of the adulterated heparin I speculated about reasons that the current leaders of health care corporations may have abandoned their most fundamental responsibilities, <a href="http://hcrenewal.blogspot.com/2010/12/unreasonably-dangerous-heparin.html">for example</a>: <blockquote>I submit that corporate cultures increasingly influenced by the arrogant, greedy, amoral leadership of the financial services industry that lead us to the brink of another depression are also leading us to the brink of a poisonous era in health care. Corporate leaders intent on cutting costs, and paying themselves as much of the resulting proceeds as possible, may see quality and safety as just another cost cutting target. Corporate leaders brought up in the culture of finance, but untrained and inexperienced in engineering, science, and medicine find it all too easy to ignore quality and safety and focus on the bottom line. </blockquote> The FDA letter to Scientific Protein Laboratories seems to confirm my fear that leaders of health care corporations no longer seem to understand their most elementary responsibilities for providing safe products, in this case, pure, unadulterated drugs. It did not speak to why that may be the case, but certainly does not contradict my theory above. The letter provides some reassurance that the FDA, at least, has not forgotten the case of the adulterated heparin. However, despite the number of deaths involved, this case has been relatively <a href="http://hcrenewal.blogspot.com/search/label/anechoic%20effect">anechoic</a>, and never fully investigated. So here I go again: as long as the leaders of health care organizations are not held accountable for the results of their decisions on health care quality, cost, and access (even in such extreme quality violations as those resulting in multiple patient deaths), we can expect continuing decisions that sacrifice quality, increase costs, and worsen access, but that are in the self-interest of the people making them. To really reform health care, we must hold health care organizations and their leaders accountable (and not blame all the problems on doctors, other health care professionals, patients, and society at large).

FDA to Scientific Protein Laboratories Managerement: "We Are Concerned About Your Fundamental Understanding"

Per Ed Silverman on the Pharmalot blog , we hear of new concerns about a company in the supply chain that ended up with adulterated heparin ...

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