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IOM Committee on Patient Safety and Health IT, Meeting Two: Institute of Medicine, or of Mediocrity?

In my Jan. 2011 post "<a href="http://hcrenewal.blogspot.com/2011/01/institute-of-medicine-committee-on.html">Institute of Medicine Committee on Patient Safety and Health Information Technology, and Thoughts on Social Aspects of Health IT Evaluation</a>" I wrote that: <blockquote>The U.S. National Research Council of the <a href="http://www.nationalacademies.org/">National Academy of Sciences</a> issued a report in early 2009 on the state of health IT. That study's report, led in part by pioneers in Medical Informatics G. Octo Barnett and William Stead, was entitled "Computational Technology for Effective Health Care: Immediate Steps and Strategic Directions" (pre-publication PDF available free at <a href="http://www.nlm.nih.gov/pubs/reports/comptech_prepub.pdf">this link</a>). The report was announced under the following header: <a href="http://www8.nationalacademies.org/onpinews/newsitem.aspx?RecordID=12572"> </a><blockquote><a href="http://www8.nationalacademies.org/onpinews/newsitem.aspx?RecordID=12572">CURRENT APPROACHES TO U.S. HEALTH CARE INFORMATION TECHNOLOGY ARE INSUFFICIENT </a></blockquote> The insufficiencies were largely in the areas of difficulties with data sharing and integration, deployment of new IT capabilities, large-scale data management, and lack of cognitive support by health IT for busy clinicians. One might reasonably conclude such deficits could affect patient safety. Recently the <a href="http://www.iom.edu/About-IOM.aspx">Institute of Medicine</a> (the health arm of the National Academy of Sciences) formed a Committee to study health IT safety. It held its first meeting on Dec. 14, 2010 (quite a few years late in my opinion, and only after tens of billions of dollars have been earmarked for health IT, but better late than never): <blockquote> The <a href="http://www.iom.edu/Activities/Quality/PatientSafetyHIT.aspx" style="font-weight: bold;">Institute of Medicine Committee on Patient Safety and Health Information Technology</a> is holding its first meeting on December 14-15, 2010. The first day, December 14, 2010 beginning at 10:30 am, is open to the public to observe the committee proceedings. The committee will hear presentations by the Office of the National Coordinator and other invited guests. There will also be an opportunity for members of the public and representatives of interested organizations to make a brief statement before the committee. Prior registration is requested for attendees and required for those wishing to make a statement.</blockquote></blockquote><blockquote></blockquote> Here are links to the PPT presentations from Meeting 2 of the Committee on Patient Safety and Health IT that took place Feb. 24, 2011: <blockquote> <a href="http://www.iom.edu/%7E/media/Files/Activity%20Files/Quality/Patient%20Safety%20and%20HIT/Meeting%202/Dwork.pdf">http://www.iom.edu/~/media/Files/Activity%20Files/Quality/Patient%20Safety%20and%20HIT/Meeting%202/Dwork.pdf</a> <a href="http://www.iom.edu/%7E/media/Files/Activity%20Files/Quality/Patient%20Safety%20and%20HIT/Meeting%202/WoodsNormanFeb2011.pdf">http://www.iom.edu/~/media/Files/Activity%20Files/Quality/Patient%20Safety%20and%20HIT/Meeting%202/WoodsNormanFeb2011.pdf</a> <a href="http://www.iom.edu/%7E/media/Files/Activity%20Files/Quality/Patient%20Safety%20and%20HIT/Meeting%202/Harper%20IOM%20HIT%20Patient%20Safety.pdf">http://www.iom.edu/~/media/Files/Activity%20Files/Quality/Patient%20Safety%20and%20HIT/Meeting%202/Harper%20IOM%20HIT%20Patient%20Safety.pdf</a> <a href="http://www.iom.edu/%7E/media/Files/Activity%20Files/Quality/Patient%20Safety%20and%20HIT/Meeting%202/Chrisman-.pdf">http://www.iom.edu/~/media/Files/Activity%20Files/Quality/Patient%20Safety%20and%20HIT/Meeting%202/Chrisman-.pdf</a> <a href="http://www.iom.edu/%7E/media/Files/Activity%20Files/Quality/Patient%20Safety%20and%20HIT/Meeting%202/Palmer.pdf"> http://www.iom.edu/~/media/Files/Activity%20Files/Quality/Patient%20Safety%20and%20HIT/Meeting%202/Palmer.pdf</a></blockquote> The PPT's can be downloaded directly from these links. <a href="http://www.blogger.com/redir.aspx?C=6a066a21e02c4884bce66800e5d0abb6&URL=http%3a%2f%2fwww.iom.edu%2f%7e%2fmedia%2fFiles%2fActivity%2520Files%2fQuality%2fPatient%2520Safety%2520and%2520HIT%2fMeeting%25202%2fPalmer.pdf" target="_blank"></a> I note several observations: <ul><li>The overall quality of these presentations appears mediocre; </li></ul><ul><li>Issues of healthcare IT risks - as they exist on the ground in 2011 - are addressed poorly if at all; </li></ul><ul><li>Proposed "solutions" are really nothing novel or new compared to existing literature or recommendations made in earlier studies, including that of the US NRC;</li></ul><ul><li>That these presentations come from the highest scientific body in the United States is, in my opinion, a disappointment and, indeed, an embarrassment.</li></ul> The IOM's rules of engagement, according to the Study Director, preclude my testifying, as a Medical Informatics specialist and former CMIO, about a relative's nearly being killed by poorly designed and implemented health IT. Instead, the linked presentations above are presented. Here's an example of what I consider a somewhat rigorous and critical thinking-based presentation on health IT risks: <a href="http://www.ischool.drexel.edu/faculty/ssilverstein/Clinical_IT_benefits_risks.ppt"></a><blockquote><a href="http://www.ischool.drexel.edu/faculty/ssilverstein/Clinical_IT_benefits_risks.ppt">http://www.ischool.drexel.edu/faculty/ssilverstein/Clinical_IT_benefits_risks.ppt</a></blockquote> I think the IOM should be able to do better than a mere small-university medical informatics adjunct professor. -- SS

IOM Committee on Patient Safety and Health IT, Meeting Two: Institute of Medicine, or of Mediocrity?

In my Jan. 2011 post " Institute of Medicine Committee on Patient Safety and Health Information Technology, and Thoughts on Social As...

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Once More with Feeling: Another Defense of Conflicts of Interest Based on Logical Fallacies

Despite increasing recognition of the adverse effects of <a href="http://hcrenewal.blogspot.com/search/label/conflicts%20of%20interest">health care professionals'</a> and <a href="http://hcrenewal.blogspot.com/search/label/institutional%20conflicts%20of%20interest">health care institutions'</a> conflicts of interest on health care, such financial relationships continue to have their prominent defenders.  The latest example was <a href="http://www.medscape.com/viewarticle/737428">an article</a> in Medscape General Surgery by Frank J Veith MD, entitled "Physicians and Industry: Fix the Relationships, but Keep Them Going."  Dr Veith is a prominent vascular surgeon who "received numerous awards and honors as a leader, outstanding teacher, and innovator in vascular surgery," <a href="http://www.nyuvascular.org/handler.cfm?event=practice,template&cpid=19999">according to New York University</a> We have noted before how defenders of conflicted professionals and professional societies often employ <a href="http://hcrenewal.blogspot.com/search/label/logical%20fallacies">logical fallacies</a> to support their arguments.  Some recent examples were discussed <a href="http://hcrenewal.blogspot.com/2010/11/there-you-go-again-richard-epstein-says.html">here</a>, by a prominent ostensibly libertarian attorney and law professor; <a href="http://hcrenewal.blogspot.com/2009/09/latest-version-of-argument-that-we-are.html">here</a>, published in a well-known medical journal by the former director of "medical communications" for a large pharmaceutical firm; and <a href="http://hcrenewal.blogspot.com/2009/07/again-logical-fallacies-in-defense-of.html">here</a>, by the president of a large medical society, published again in a well-known medical journal. Dr Veith seems to be continuing that tradition. His approach emphasized frequent repetition of the same fallacious argument. Straw Man: "Totally Interrupt All Doctor-Industry Relationships" Dr Veith's main argument seemed to be with attempts to prevent physicians from having any relationships with industry, presumably including not just financial relationships, but professional collaborations or even personal friendships.  For example, he wrote about <blockquote>a recent initiative to completely sever the relationship between industry and doctors has gained traction. This initiative has been supported by several states, including Massachusetts and Vermont, and universities, such as Harvard, Stanford, the University of Massachusetts, and the University of Michigan, which have enacted draconian laws or policies designed to separate doctors and industry and to interrupt any relationship between them.</blockquote> Furthermore, <blockquote>Even many individual physicians have sanctimoniously jumped on the bandwagon and written articles or opinion pieces attacking the evils of any relationship between industry and doctors, suggesting the severance of any such relationships. </blockquote> Then later, Dr Veith wrote, <blockquote>We should establish rules to prevent or minimize the abuses, but we should not totally interrupt all doctor-industry relationships. To do so is wrong-headed and would eliminate the many beneficial effects that accrue to medical care and society from these relationships. It would be throwing the baby out with the bathwater.</blockquote> Finally, he concluded thus, <blockquote>These will be far better solutions than completely eliminating all industry-doctor relationships.... Such safeguards will be better than the present trend for institutions and governments to enact strict measures to separate physicians from industry.</blockquote> Despite making this argument at least four times, the problem is that Dr Veith provided no citations, much less evidence that such "draconian" policies have been enacted or even advocated. There have been new policies on conflicts of interest suggested or adopted by some organizations. None, to my knowledge have been exactly "draconian." For example, Harvard University does have a new policy on conflicts of interest. Maybe Dr Veith was referring to it above when he mentioned Harvard. However, in an interview about the new policy involving university leaders <a href="http://news.harvard.edu/gazette/story/2010/07/conflict-of-interest-policy-adopted/">published</a> in the Harvard Gazette, the Vice Provost of the University said, <blockquote>The University is not designed to be an ivory tower isolated from the world. So the trick is to be able to have a robust system for affording faculty opportunities to engage with the commercial world and at the same time not threaten in any way their own fundamental integrity or that of Harvard.</blockquote>That hardly sounds like a policy that completely severs all relationships between faculty and industry. So Dr Veith's main premise seems to be based on a multiply repeated <a href="http://www.nizkor.org/features/fallacies/straw-man.html">straw-man argument</a>. He argued again and again against a policy that no one seems to be advocating. (And even I, as a hard-liner about conflicts of interest, have never advocated a complete interruption of all relationships of any kind between all physicians and all of industry.) Appeal to Fear: You Will be "Blighted" Perhaps just to spice things up, Dr Veith warned of the dire consequences of the "draconian" policies that no one was advocating: <blockquote>Those institutions that choose such inquisitional approaches will be blighted and suffer competitive disadvantages.</blockquote> Dr Veith had asserted multiple benefits of continuing relationships among physicians, health care institutions, and commercial firm. He presented no evidence to support his assertions, most of which can be questioned (see below). His warning that institutions will be "blighted" was based on his assertion that the stringent policy no one advocated would eliminate these unproven benefits, hence his warning of  something so severe as "blight" seemed to be an <a href="http://www.nizkor.org/features/fallacies/appeal-to-fear.html">appeal to fear</a>. Ad Hominem: "Sanctimonious" Physicians Leading a "Witch Hunt" As noted above, Dr Veith referred to anonymous physicians who "sanctimoniously jumped on the bandwagon," thus leading to <blockquote>The initiative to separate industry from physicians and surgeons [which] has taken on the trappings of a witch hunt.</blockquote> And again, <blockquote>Their leaders should recognize this and resist the temptation to join the separation witch hunt....</blockquote> My interpretation is that this was an implied set of <a href="http://www.nizkor.org/features/fallacies/ad-hominem.html">ad hominems</a>. Those who supposedly advocated the "draconian" policy were made out to be "sanctimonious" witch hunters. After just having seen "The Crucible," I could also argue that the use of the term "witch hunt," with its current extreme emotional references (apparently to a case in which presumably innocent people were hanged), amounted to an <a href="http://www.nizkor.org/features/fallacies/appeal-to-emotion.html">appeal to emotion</a> and an <a href="http://www.nizkor.org/features/fallacies/appeal-to-fear.html">appeal to fear</a>. Summary I must admit Dr Veith's entire set of arguments was not completely based on logical fallacies.  However, the rest of his arguments hardly appeared even-handed.  He presented a series of assertions about the benefits of such relationships, including that they "foster innovation and development," that "industry-sponsored medical education helps to keep physicians informed about new developments," that industry sponsored education about devices prevents "difficult and dangerous" practices, and helps physicians use devices "better and more safely."  He provided no evidence in favor of these claims, and seemed to ignore arguments about the hazards of payments to physicians biasing their clinical practice, teaching and research. I should also note that these arguments were made by a physician who appears to have his own personal financial relationships with industry.  <a href="javascript:newshowcontent('active','authordisclosures');">In the Medscape article</a>, Dr Veith "disclosed no relevant financial relationships."   However, as a member of the <a href="http://www.medscape.com/public/bios/ed-surgery">editorial board of Medscape General Surgery</a>, Dr Veith "disclosed the following relevant financial relationships: Owns stock, stock options, or bonds from: Vascular Innovations, Inc."  Furthermore, the <a href="http://iconmeeting.org/sites/default/files/file/iCON2011_DISCLOSURE%20SUMMARY_4.pdf">disclosure summary for the iCON2011 conference</a> includes the following for Dr Veith, "Honorarium/Expenses: Cook Medical, Cordis, WL Gore, Medtronic." Finally, Dr Veith apparently runs the Veith Symposium, which <a href="http://www.veithsymposium.org/index.php?pg=acknowledgments">in 2010 acknowledged</a> the following commercial sponsors: Aastrom, Abbott Vascular, Aptus Endosystems Inc, Atrium, Bard Peripheral Vascular, Boston Scientific, Cook Medical, Cordis Cardiac and Vascular Institute, Delcath Systems Inc, Gore, Hansen Medical, Lombard Medical Technologies, Maquet, Medtronic, Organogenesis Inc, Sanofi-Aventis, St. Jude Medical, Tenaxis Medical, Triavascular, Vascutek Terumo. So Dr Veith's article continues the tradition of defenses of physicians' and health care institutions' conflicts of interest based on logical fallacies and unbalanced and unsupported assertions.  Also, note that all the examples of such defenses we have discussed were made by people with their own financial relationships with drug, device, and/or biotechnology companies, although some of them disclosed these relationships.  I have yet to see a defense of such conflicts based on logic and evidence, or a defense of such conflicts made by someone who has absolutely no conflicts of his or her own.  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, much less someone who does not have such relationships. I will note that the defenses of conflicts of interest begin to seem drearily similar.  Not only do they often use the same logical fallacies, but they repeat the same stale and unsupported arguments about the benefits of financial relationships with industry: that they foster "innovation," and that they provide better educational opportunities than unconflicted programs and educators.  We now know that the managed care industry has engineered stealth health policy advocacy campaigns that furnish talking points to "third parties" which may get caught up in the larger policy discourse (see posts <a href="http://hcrenewal.blogspot.com/2011/02/wendell-potters-deadly-spin.html">here</a> and <a href="http://hcrenewal.blogspot.com/2011/02/health-care-corporate-disinformation.html">here</a>).  I wonder whether some such stealth health policy advocacy campaign by pharmaceutical, device and/or biotechnology companies seeded the discourse about conflicts of interest with some of the logical fallacies and unproven assertions that have become so familiar.  We need to elevate our discourse about health care policy.  People involved in health policy discussions should at least disclose their conflicts of interest when making their points.  We should be very skeptical of  arguments and look carefully for the evidence and logic that supports them.  When we find that evidence and logic is lacking, be even more skeptical about who benefits from them.

Once More with Feeling: Another Defense of Conflicts of Interest Based on Logical Fallacies

Despite increasing recognition of the adverse effects of health care professionals' and health care institutions' conflicts of int...

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A Brief Primer on Health IT Problems

I have noted that numerous policy makers I've spoken with freely admit their knowledge of healthcare IT is zero, or limited to what they've seen and heard in the press (i.e., mainly marketing messages in disguise). Since most of these officials have little time to study the issues about health IT in depth, I've created a zipped archive of four articles I consider key. The articles can serve as a primer on health IT problems: <blockquote>1. Joint Commission Health IT Sentinel Events Alert, 2009. 2. FDA Internal Report on Adverse Events Involving Health IT. ("Not intended for public use" - but obtained by the press last year, presumably via FOIA), 2010. 3. ECRI Institute Top 10 Health Technology Hazards of 2011 - see hazard #5. 4. Hoffman/Podgurski, Case Western Reserve School of Law: E-HEALTH HAZARDS: PROVIDER LIABILITY AND ELECTRONIC HEALTH RECORD SYSTEMS - comprehensive article, one of a series, 2009. </blockquote> The zipped file can be downloaded from here: <a href="http://www.ischool.drexel.edu/faculty/ssilverstein/HIT_issues_Primer.zip"></a><blockquote><a href="http://www.ischool.drexel.edu/faculty/ssilverstein/HIT_issues_Primer.zip">http://www.ischool.drexel.edu/faculty/ssilverstein/HIT_issues_Primer.zip</a></blockquote> It is 2.7 Mb in length. (A compilation of over fifty articles is at <a href="http://www.ischool.drexel.edu/faculty/ssilverstein/HITreadinglist.doc">http://www.ischool.drexel.edu/faculty/ssilverstein/HITreadinglist.doc</a>, for those with lots of time.) -- SS

A Brief Primer on Health IT Problems

I have noted that numerous policy makers I've spoken with freely admit their knowledge of healthcare IT is zero, or limited to what they...

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More Hospitals Settle, But Not for Much

In late February, there have been several notable legal settlements made by more or less prominent hospitals, discussed in rough order of size. United Regional Health Care System <a href="http://www.thecypresstimes.com/article/News/National_News/JUSTICE_DEPARTMENT_REACHES_SETTLEMENT_WITH_TEXAS_HOSPITAL_PROHIBITING_ANTICOMPETITIVE_CONTRACTS_WITH_HEALTH_INSURERS/41050">Per the Cypress Times</a>, <blockquote>The Department of Justice announced today that it has reached a settlement with United Regional Health Care System of Wichita Falls, Texas, that prohibits it from entering into contracts that improperly inhibit commercial health insurers from contracting with United Regional’s competitors. The department said that United Regional unlawfully used these contracts to maintain its monopoly for hospital services in violation of Section 2 of the Sherman Act, causing consumers to pay higher prices for health care services.</blockquote> Note that this appears to be the first settlement involving the Sherman Anti-Trust Act that included a hospital system, or any health care organization which we have discussed. As the Times article mentioned, <blockquote>This is the first case brought by the department since 1999 that challenges a monopolist with engaging in traditional anticompetitive unilateral conduct. </blockquote> Here is more detail about the alleged offenses: <blockquote>According to the complaint, United Regional is by far the largest hospital in Wichita Falls. Its share of general acute-care inpatient hospital services is approximately 90 percent, and its share of outpatient surgical services is more than 65 percent. It is the region’s only provider of certain essential services such as cardiac surgery, obstetrics and high-level trauma care. In Wichita Falls, United Regional’s average per-day rate for inpatient hospital services sold to commercial health insurers is about 70 percent higher than its closest competitor for the services that are offered by both hospitals. The department said that in order to maintain its monopoly in the provision of inpatient hospital and outpatient surgical services, United Regional systematically required most commercial health insurers to enter into contracts that effectively prohibited them from contracting with United Regional’s competitors. United Regional’s contracts required these insurers to pay significantly higher prices if they contracted with a nearby competing facility. Since United Regional is a must-have hospital for any insurer that wants to sell health insurance in the Wichita Falls area, and because the penalty for contracting with United Regional’s rivals was so significant, almost all insurers offering health insurance in Wichita Falls entered into exclusionary contracts with United Regional. As a result, competing hospitals and facilities could not obtain contracts with most insurers and were less able to compete, helping United Regional maintain its monopoly in the relevant markets and raising health-care costs to the detriment of consumers.</blockquote> As far as I could tell, however, for this apparently severe offense there will be no actual penalty. The settlement only appears to provide for a promised change in future behavior by the hospital: <blockquote>The proposed settlement, which if accepted by the court would be in effect for seven years, restores lost competition by prohibiting United Regional from using agreements with commercial health insurers that improperly inhibit insurers from contracting with United Regional’s competitors. In particular, United Regional is prohibited from conditioning the prices or discounts that it offers to commercial health insurers based on whether those insurers contract with other health-care providers and from inhibiting insurers from entering into agreements with United Regional’s rivals. United Regional is also prohibited from taking any retaliatory actions against an insurer that enters into an agreement with a rival provider.</blockquote> So if a hospital engages in actions that restrain competition and results in a de facto monopoly, all the hospital leaders must fear is that at some point it may have to change its monopolistic behavior, according to this settlement. Catholic Healthcare West <a href="http://www.bizjournals.com/sanjose/news/2011/02/22/catholic-healthcare-west-agrees-to.html">Per the San Jose Business Journal</a>, <blockquote>Catholic Healthcare West, parent company to local Mercy hospitals, has agreed to pay $9.1 million to settle allegations that seven of its hospitals submitted false Medicare claims, U.S. Attorney Benjamin Wagner announced late Friday.</blockquote> Here is more detail about the alleged offenses: <blockquote>The hospitals include Community Hospital of San Bernardino, St. Bernadine Medical Center in San Bernardino and St. Elizabeth Community Hospital in Red Bluff. The settlement also included allegations that O’Conner Hospital in San Jose, Seton Medical Center in Daly City and St. Joseph’s Hospital and Medical Center in Phoenix submitted inflated costs for their home health agencies and were overpaid. The agreement also resolves allegations that St. Joseph’s overstated how much was owed in disproportionate share funding for indigent patients. CHW no longer owns O’Conner Hospital or Seton Medical Center. The settlement resolves allegations that St. John’s Regional Medical Center in Oxnard was overpaid for treating a high percentage of patients with end-stage kidney disease for several years, including two when it was not eligible.</blockquote> Note that while the amount of the payment assessed appears substantial, it will be made a very long time after the alleged bad behavior occurred: <blockquote>All of the problems occurred in the 1990s. Federal investigators began looking into the matter in 2001, but it took years to compile evidence and reach a settlement. All of the hospitals had set aside money in a reserve account should they have to pay funds back to the government.</blockquote> So if a hospital submits false claims to the US government, hospital leaders need not fear paying anything back for more than 10 years, according to this settlement. By the way, this was not the first such settlement that Catholic Healthcare West has had to make: <blockquote>In 1998, a whistleblower at Woodland Healthcare disclosed instances of alleged fraud by two medical groups affiliated with local Mercy hospitals, Woodland Clinic Medical Group and Medical Clinic of Sacramento. Following an extensive investigation, former U.S. Attorney John Vincent announced a $10.25 million settlement in May 2001. The allegations included false claims to inflate reimbursement from Medicare, Medi-Cal and military health insurance programs.</blockquote> Massachusetts General Hospital (Partners Healthcare) <a href="http://www.boston.com/news/local/massachusetts/articles/2011/02/25/mgh_to_pay_1m_to_settle_privacy_case/">Per the Boston Globe</a>, <blockquote>Massachusetts General Hospital has agreed to pay the federal government $1 million to settle potential violations of patient privacy laws, which occurred when an employee commuting to work lost patient records on the T’s Red Line two years ago.</blockquote> Here is more detail about the alleged offenses: <blockquote>Health information for 192 patients in Mass General’s Infectious Disease Associates outpatient practice was lost in the incident, including that of patients with HIV/AIDS. The documents included a patient schedule containing names and patient medical record numbers, as well as billing forms containing the name, birth date, medical record number, health insurer and policy number, diagnosis, and name of providers for 66 of those patients.</blockquote> Note that Massachusetts General Hospital is not independent, but part of Partners Healthcare, which reported net patient service revenue of $1.5 billion in the most recent quarter, again <a href="http://www.boston.com/business/healthcare/articles/2011/02/12/partners_healthcare_reports_overall_first_quarter_gain/">per the Boston Globe</a>. So this settlement amounted to about 0.00167% of the system's patient revenue. So if a hospital engages in actions that violate the trust patients have that their information will be kept confidential, all hospital leaders have to fear is that their institution will eventually have to pay something much less than round-up error of their revenue, according to this settlement. Summary Again, the volume of participants in the ongoing <a href="http://hcrenewal.blogspot.com/search/label/legal%20settlements">march of legal settlements</a> is a reminder of how pervasive bad behavior is in the US health care system. Remember that these settlements are in some sense the tip of the iceberg. They only indicate behavior that inspired legal action which was in turn was publicized. It is likely that for each behavior that eventually leads to a settlement, there are many behaviors that go unreported, or that cause no reaction. It is interesting that sorts of bad behavior that formerly caused no official reaction are now leading to settlements. As noted above, there had been no recent legal actions against <a href="http://hcrenewal.blogspot.com/search/label/concentration%20of%20power">concentration of power</a> in health care up to the United Regional Health Care System settlement. However, like many of the settlements we have previously noted, the latest crop seem to have little deterrent power. The United Regional Health Care System settlement seemingly involved no monetary penalties whatsoever, only a promise of not to do it again. The Catholic Healthcare West settlement's monetary penalties were so delayed, occurring over 10 years after the actions in question, their deterrent power is highly questionable. The Massachusetts General Hospital (really the Partners Healthcare) monetary penalty was infinitesimal compared to the size of the institution's budget. Furthermore, as in nearly every other case we have reported, no person who authorized, directed or implemented the actions in question had to pay any penalty, or suffer any negative consequence, or was even identified. So while there seems to be some increased interest in addressing some kinds of bad behavior, like monopolistic practices, that heretofore generated no official reactions, regulatory authorities still seem loathe to even slap the wrists of the people whose aggregated actions are making our health care so expensive, so inaccessible, and probably of such mediocre quality. Thus, in recent years, health care leaders, like leaders of financial service companies, seem to have impunity,  Up to now, they have been able to preside over all sorts of bad behaviors that help support their exorbitant remuneration without fearing any personal penalties.  As Charles Ferguson, the director of <a href="http://www.sonyclassics.com/insidejob/">Inside Job</a>, said when accepting his Academy Award last night, <a href="http://www.marketwatch.com/story/inside-job-director-slams-wall-street-2011-02-28?reflink=MW_news_stmp">per MarketWatch</a>, <blockquote>Forgive me, I must start by pointing out that three years after a horrific financial crisis caused by fraud, not a single financial executive has gone to jail — and that’s wrong</blockquote> After a slow-motion health care train wreck over the last 30 years, hardly any health care executives have even had to pay a fine, much less go to jail. So I repeat, and repeat, and repeat: 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.

More Hospitals Settle, But Not for Much

In late February, there have been several notable legal settlements made by more or less prominent hospitals, discussed in rough order of si...

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Electronic Medical Records: Two Weeks, Two Reams

Electronic medical records in the pioneering years were about helping clinicians better understand a patient. They were about easing the clinicians' work in evaluating and caring for a patient, or in performing a consult on a patient being cared for by a colleague. The commercial electronic medical record is another beast entirely. Thanks the the imperative to document anything and everything to drive up billing, and due to the "computer as a data warehouse", <a href="http://hcrenewal.blogspot.com/2008/05/seedie-society-for-exorbitantly.html">early 20th century programmable card-tabulator culture</a> of mercantile, manufacturing and management computing specialists (A.K.A. the MIS personnel in most hospitals and health IT vendor development shops), these systems have become a distraction and an error-promoting nightmare. In the June 20, 2009 Wall Street Journal article "<a href="http://online.wsj.com/article/SB10001424052970204005504574235751720822322.html">The Myth of Prevention</a>", Abraham Verghese, Professor and Senior Associate Chair for the Theory and Practice of Medicine at Stanford, echoed <a href="http://hcrenewal.blogspot.com/2009/06/wharton-on-healthcare-it-can-i-go-home.html">several Wharton professor's doubts</a> about the cost savings and ultimate value of electronic medical records, touted as the cybernetic savior of healthcare: <blockquote>... I have similar problems with the way President Obama hopes to pay for the huge and costly health reform package he has in mind that will cover all Americans; he is counting on the “savings” that will come as a result of investing in preventive care and investing in the electronic medical record among other things. It’s a dangerous and probably an incorrect projection. </blockquote> In the Feb. 26, 2011 New York Times Op-ed "<a href="http://www.nytimes.com/2011/02/27/opinion/27verghese.html?_r=1&ref=opinion">Treat the Patient, Not the CT Scan</a>", Verghese also observed that: <blockquote>... the complaints I hear from patients, family and friends are never about the dearth of technology but about its excesses. My own experience as a patient in an emergency room in another city helped me see this. My nurse would come in periodically to visit the computer work station in my cubicle, her back to me while she clicked and scrolled away. Over her shoulder she said, “On a scale of one to five how is your ...?” The electronic record of my three-hour stay would have looked perfect, showing close monitoring, even though to me as a patient it lacked a human dimension. I don’t fault the nurse, because in my hospital, despite my best intentions, I too am spending too much time in front of the computer: the story of my patient’s many past admissions, the details of surgeries undergone, every consultant’s opinion, every drug given over every encounter, thousands of blood tests and so many CT scans, M.R.I.’s and ultrasound images reside in there. </blockquote> One of the reasons he and other physicians are spending too much time in front of the computer is because the computer EMR application is poorly engineered, presenting a <a href="http://www.tinyurl.com/hostileuserexper">mission hostile user experience</a> and characterized by "clickorrhea" in order to navigate the perfect storm of informational disarray and chaos. The systems also cannot support clinician's cognitive processes properly, as was the original intent of these systems (See, for example, the <a href="http://www8.nationalacademies.org/onpinews/newsitem.aspx?RecordID=12572">2009 National Research Council report on health IT</a>.) Another is due to the computer technician and billing department's fetish with massive detail. All of these issues are easily illustrated via one picture: Two weeks of hospitalization of one patient generated about 1000 pages, or two reams of paper (one ream = 500 pages, as sold at office supply stores everywhere) that another physician who sent this photo needed to wade through: <div style="text-align: center;"><a href="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEhgUAW-xeDVERKetXUUuEi-XvqZieWAVzeymJzVrZXoDRNa5ZVhY4M_kWTxaCPcLPA15I8hP5AaqqMe3izFXMNMLwXEhMindBUSB0pINVALSmHgubTbGXua1ysF5eE-5x-cXUDu_PaOYpMB/s1600/two_reams.jpg"><img alt="" border="0" id="BLOGGER_PHOTO_ID_5578489619128093474" src="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEhgUAW-xeDVERKetXUUuEi-XvqZieWAVzeymJzVrZXoDRNa5ZVhY4M_kWTxaCPcLPA15I8hP5AaqqMe3izFXMNMLwXEhMindBUSB0pINVALSmHgubTbGXua1ysF5eE-5x-cXUDu_PaOYpMB/s320/two_reams.jpg" style="display: block; margin: 0px auto 10px; text-align: center; cursor: pointer; width: 320px; height: 240px;" /></a>Two weeks, two reams. More stunning full-sized. Click to enlarge. </div> The content of these reams, rather than being learned medical prose, is what can be more accurately referred to as "legible gibberish." These "records" have all the fluency of a computer programmer's grasp of Shakespeare, or, as one commenter <a href="http://blogs.wsj.com/health/2011/02/23/physicians-more-skeptical-of-electronic-medical-records/tab/comments/">here</a> colorfully put it, "cloistered coding gnomes." It could have been worse. In the case of a relative, just over two and a half weeks of the initial phase of their hospitalization for an EMR-caused medical catastrophe generated approximately 2,900 pages of legible gibberish - six reams (or three reams, double-sided) for which I had to pay about $1000 to obtain. This 'paper-orrhea', needless to say, is reckless and a medical information science absurdity. It is crazy stuff. ... Anyone who thinks these systems in their present form benefit clinical medicine needs to have their head examined. Preferably, by a psychiatrist not suffering from irrational exuberance himself or herself, and not taking notes into a computer facing away from the examination couch. Perhaps a psychiatrist like <a href="http://hcrenewal.blogspot.com/2011/01/dr-monteith-hit-testimony-to-hhs.html">this</a>? [/satire off] -- SS Addendum: it occurs to me I may have selected the wrong body part for examination. Those who gleefully and uncritically push this experimental technology for national rollout, even in the face of literature such as I aggregated at <a href="http://hcrenewal.blogspot.com/2011/02/updated-reading-list-on-health-it.html">"An Updated Reading List on Health IT</a>", perhaps (metaphorically speaking) should have the contents of their hip pocket or purse examined: <a href="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEiRfDcyY7WBtfThrbMhkMuMz0dcrS3VffxmKjlWV3s4wZs5X24TL8Ooo3Noo8I1zhQVSje0sSrsOwFyl56I3YIGJBPCQJ0WybNbwojXGWjSchtfWKaF4FyId-q0w7wMRA4bkIxrJgH9Quh4/s1600/wallet.jpg"><img alt="" border="0" id="BLOGGER_PHOTO_ID_5578789429068575426" src="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEiRfDcyY7WBtfThrbMhkMuMz0dcrS3VffxmKjlWV3s4wZs5X24TL8Ooo3Noo8I1zhQVSje0sSrsOwFyl56I3YIGJBPCQJ0WybNbwojXGWjSchtfWKaF4FyId-q0w7wMRA4bkIxrJgH9Quh4/s320/wallet.jpg" style="display: block; margin: 0px auto 10px; text-align: center; cursor: pointer; width: 275px; height: 184px;" /></a> -- SS

Electronic Medical Records: Two Weeks, Two Reams

Electronic medical records in the pioneering years were about helping clinicians better understand a patient. They were about easing the cl...

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"Replace the RUC!"

We have frequently posted, first <a href="http://hcrenewal.blogspot.com/2007/03/on-disparities-between-reimbursement-of.html">here in 2007</a>, and more recently <a href="http://hcrenewal.blogspot.com/2010/07/primary-care-and-hc-renewal-ruc-kus.html">here</a> and <a href="http://hcrenewal.blogspot.com/2010/06/ruc-off-new-england-journal-once-again.html">here</a>, about the little-known group that controls how the US Medicare system pays physicians, the RBRVS Update Committee, or RUC. Since 1991, Medicare has set physicians' payments using the Resource Based Relative Value System (RBRVS), ostensibly based on a rational formula to tie physicians' pay to the time and effort they expend, and the resources they consume on particular patient care activities. Although the RBRVS was meant to level the payment playing field for cognitive services, including primary care vs procedures, over time it has had the opposite effect, as explained by Bodenheimer et al in a 1997 article in the Annals of Internal Medicine.(1) A system that pays a lot for procedures, but much less for diagnosing illnesses, forecasting prognoses, deciding on treatment, and understanding patients' values and preferences when procedures and devices are not involved, is likely to be very expensive, but not necessarily very good for patients. As we <a href="http://hcrenewal.blogspot.com/2009/02/what-ruc-again-one-of-worlds-most.html">wrote before</a>, to update the system, the Center for Medicare and Medicaid Services (CMS) relies almost exclusively on the advice of the <a href="http://www.ama-assn.org/ama/pub/physician-resources/solutions-managing-your-practice/coding-billing-insurance/medicare/the-resource-based-relative-value-scale/the-rvs-update-committee.shtml">RBRVS Update Committee</a>. The RUC is a private committee of the AMA, <a href="http://www.ama-assn.org/ama1/pub/upload/mm/380/toptenthings.pdf">touted</a> as an "expert panel" that takes advantage of the organization's First Amendment rights to petition the government. Membership on the RUC is allotted to represent specialty societies, so that the vast majority of the members represent specialties that do procedures and focus on expensive, high-technology tests and treatments. However, the identities of RUC members are opaque, and the proceedings of the group are secret. To expand on the penultimate point, <a href="http://www.ama-assn.org/ama/pub/physician-resources/solutions-managing-your-practice/coding-billing-insurance/medicare/the-resource-based-relative-value-scale/the-rvs-update-committee.shtml">the current page on the AMA web-site that describes the RUC</a> only lists its members in terms of their specialties and organizational affiliation. Their names do not appear. A <a href="http://www.ama-assn.org/ama1/pub/upload/mm/380/posesresponse.pdf">response</a> to a <a href="http://hcrenewal.blogspot.com/2009/02/what-ruc-again-one-of-worlds-most.html">previous post</a> by me on the subject by the then Chair and Chair-Elect of the RUC suggested that the RUC membership is not quite secret. They stated that "a list of the individual members of the RUC is published in the AMA publication, Medicare RBRVS 2009: The Physicians Guide." This publication is available from the AMA <a href="https://catalog.ama-assn.org/Catalog/product/product_detail.jsp?productId=prod1170041">here</a> for a mere $71.95 (although now with the notation that the product has been "discontinued.") However, the book is not on the web, or in my local or university library, and I have no other way to easily access it. Thus, the RUC membership is at best relatively opaque. To expand on the ultimate point, as Goodson(2) noted, RUC "meetings are closed to outside observers except by invitation of the chair." Furthermore, he stated, "proceedings are proprietary and therefore not publicly available for review." The fog surrounding the operations of the RUC seems to have affected many who write about it. We have posted (<a href="http://hcrenewal.blogspot.com/2007/12/is-sustainable-growth-rate-main-problem.html">here</a>, <a href="http://hcrenewal.blogspot.com/2008/07/can-we-fix-medicare-while-pretending.html">here</a>, <a href="http://hcrenewal.blogspot.com/2008/12/no-such-ruc-new-england-journal-takes.html">here</a>, and <a href="http://hcrenewal.blogspot.com/2010/06/ruc-off-new-england-journal-once-again.html">here</a>) about how previous publications about problems with incentives provided to physicians seemed to have avoided even mentioning the RUC. Up until 2010, after the US recent attempt at health care reform, the RUC seemed to remain the great unmentionable. Even the leading US medical journal seemed reluctant to even print its name. That <a href="http://hcrenewal.blogspot.com/2010/10/ruc-it-up-how-us-government-fixes.html">changed</a> in October, 2010.  A combined effort by the Wall Street Journal, the Center for Public Integrity, and Kaiser Health News yielded two major articles about the RUC, <a href="http://online.wsj.com/article/SB10001424052748704657304575540440173772102.html">here</a> in the WSJ (also with two more spin-off articles), and <a href="http://www.publicintegrity.org/articles/entry/2571/">here </a>from the Center for Public Integrity (also <a href="http://www.kaiserhealthnews.org/Stories/2010/October/27/AMA-center-public-integrity.aspx">reprinted</a> by Kaiser Health News.) The articles covered the main points about the RUC: its de facto control over how physicians are paid, its "secretive" nature (quoting the WSJ article), how it appears to favor procedures over cognitive physician services, etc. So the RUC became less anechoic.  Now, four months later, there is more news.  A <a href="http://replacetheruc.org/">new site</a> called "Replace the RUC!" has now appeared, with the following introduction: <blockquote>This site has been developed - see here for our backgrounds - to help primary care physicians and other interested individuals obtain verifiable background from reputable sources on: * The evolution and structure of the US' medical payment system. * How it came to devalue primary care and favor specialty services. * How that has translated to lower quality care at far greater expense in the US. We believe the overwhelming majority of American primary care physicians are deeply frustrated with the differences in how primary and specialty care are valued by the current system, and the havoc that system has wrought throughout health care and the nation. The first step to remedying this situation is for the primary care medical societies to visibly and loudly withdraw from participation in the RUC, de-legitimizing the process. That said, this effort is most decidedly NOT primarily about getting primary care physicians more money, but bringing our health system back into homeostasis.</blockquote> We have previously noted that there are many unanswered questions about the RUC: <ul><li>How did the government come to fix the payments physicians receive? Government price-fixing has not been popular in the US, yet this has caused no outcry.</li><li>Why is the process by which they are fixed allowed to be so opaque and unaccountable? Why are there no public hearings on the updates, and why is there no input from practicing physicians or organizations other than those related to the RUC?</li><li>How did the RUC become de facto in charge of this process?</li><li>Why does the AMA keep the membership of the RUC so opaque, and give no input into the RUC process to its general membership?</li><li>Why is the RUC membership so dominated by procedural specialists? Why were primary care physicians, who made up at least a sizable minority of physicians when the update process was started, not represented according to their numbers?</li><li>Why has there been so little discussion of the RUC and its responsibility for an extremely expensive health care system dominated by high-technology, expensive, risky and invasive procedures?</li></ul>We welcome this new site as a way to answer these questions, and more importantly, as a way to develop more rational incentives within the health care system. Note that "Replace the RUC!" will be added to our link list. References 1. Bodenheimer T, Berenson RA, Rudolf P. The primary care-specialty income gap: why it matters. Ann Intern Med 2007; 146: 301-306. (Link <a href="http://www.annals.org/content/146/4/301.full">here</a>.) 2. Goodson JD. Unintended consequences of Resource-Based Relative Value Scale reimbursement. JAMA 2007; 298(19):2308-2310. (Link <a href="http://jama.ama-assn.org/cgi/content/short/298/19/2308">here</a>.)

"Replace the RUC!"

We have frequently posted, first here in 2007 , and more recently here and here , about the little-known group that controls how the US Med...

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Send Mercenaries, Guns, and Money? - Cerberus Tries to Buy Jackson Health

The latest twist in the tale of one of the US great safety-net public hospitals raises some interesting questions.  As <a href="http://www.miamiherald.com/2011/02/22/2079083/boston-firm-offers-600-million.html">reported</a> by John Dorschner in the Miami Herald, Jackson Health System has had some bad times: <blockquote>the system, ... has served for a century as Miami-Dade County’s safety net healthcare system for the poor and uninsured. But money and management woes in recent years have pushed the system to the brink of failure time and again. Last week, its executives said it would run out of cash in July unless drastic measures are taken.</blockquote>The Bid for Jackson Health The latest drastic measure proposed was a take-over by a for-profit corporation, one that <a href="http://hcrenewal.blogspot.com/search/label/Cerberus">we have heard of before:</a> <blockquote>A Massachusetts hospital chain led by a Cuban American heart surgeon with family ties to Miami has sent Jackson Health System a non-binding 'expression of interest' letter, offering to take over the financially troubled public hospitals, invest $600 million in capital and assume $500 million in debt. The $1.1 billion offer from Ralph de la Torre of Steward Health Care System was delivered Tuesday morning to members of the capital committee of the Public Health Trust, Jackson’s governing body.</blockquote> Questions Appear Immediately The proposed deal immediately raised questions and concerns. The very nature of the deal was unclear: <blockquote>Trust member Ernesto de la Fe said he wasn’t sure if the company was proposing a straight-out sale, while other board members said they thought the offer envisioned 'a public-private' partnership.</blockquote> Also, in a <a href="http://www.miamiherald.com/2011/02/23/2082142/questions-raised-about-bid-to.html">follow-up story </a>by the same reporter, there were questions about the rapid time-table, <blockquote>Jackson is in such difficult financial conditions – its executives warn it may run out of cash in July – that many leaders are willing to consider a sale, but they wondered whether the 90-day timetable set by Steward Health Care System is realistic and what the deal might mean for the 500,000 uninsured persons in Miami-Dade County.</blockquote>There were questions about the company which proposed to buy Jackson: <blockquote>'We need to know a lot more about this company,' said Sal Barbera, an adjunct professor at Florida International University and a former hospital executive. Steward has existed only since November, when Cerberus Capital Management finalized a $895 million deal to turn six Catholic hospitals into a for-profit entity. Steward has since bought two other small hospitals. Altogether, the Steward system has 1,565 licensed beds. Jackson has 2,100. De la Torre has been a hospital executive for less than three years. That’s 'a very short track record,' said Mark Rogers, a Trust member and former chief executive of the Duke University Hospital.</blockquote>Would the Mission be Upheld? The issue of whether a private, for-profit company would respect the mission of a safety-net hospital came up quickly, <blockquote>Alan Sager, a health policy professor at Boston University, said some Steward facilities are money losers in poor neighborhoods. 'Some of us had a lot of questions' about the Cerberus take-over and how the investment company could squeeze returns for investment out of hospitals that were struggling as nonprofits. 'We asked repeatedly. We never received answers,' Sager said. He said his fear is that patient care will be reduced to make profits. 'I think there should be concerns about preserving essential patient care in Dade County' if Steward took over Jackson, he added. 'If the object is merely to cut costs to make money … then that is not the right approach for Jackson,' said Rogers, the former Duke executive. 'Clearly some costs have to come out, but we have to invest in new programs to maintain the quality of medical care that Jackson has always provided.'</blockquote> One day later, John Dorschner again writing for the Miami Herald <a href="http://www.miamiherald.com/2011/02/24/2084167/one-of-the-biggest-private-investment.html">raised more questions </a>about why a large private equity company would want to buy a money-losing public hospital system? First he noted, <blockquote>While the human face on the $1.1 billion bid to buy Jackson Health System is a Cuban-American heart surgeon with strong family ties to Miami, a vast and powerful entity looms in the background: Cerberus Capital Management. The company, named for the mythological three-headed dog that guards the gates of Hades, is one of the biggest private investment firms in the United States, and it is the owner of Steward Health Care, the Boston hospital group that this week said it is interested in buying Miami-Dade’s public hospitals</blockquote> So, <blockquote>The question that perplexes some Trust members is why such a big-time investment firm would be interested in a healthcare system with three public hospitals that lost $244 million in fiscal 2009, is expected to lose $105 million in fiscal 2010 and is projected to run out of cash in July unless drastic measures are taken.</blockquote> The concern, again, was whether Cerberus would uphold the current mission of the hospital system: <blockquote>Trust Treasurer Marcos Lapciuc said Thursday that Cerberus is 'in the driver’s seat' on this deal, not Steward. 'They are going to expect some return on their investment. This is not going to be charitable donation,' he said.</blockquote> Of course, the <a href="http://www.jhsmiami.org/body.cfm?id=143">central mission </a>of the current Jackson Health System would seem to be charitable. <blockquote>To build the health of the community by providing a single, high standard of quality care for the residents of Miami-Dade County</blockquote> The implication of "single, high standard" is that applies to all residents, regardless of financial status or ability to pay. More Questions The CEO's Short Term Focus There is good reason to question whether Steward Health Care, formerly Caritas Christi, and now owned by Cerberus Capital Management would uphold that mission. As we <a href="http://hcrenewal.blogspot.com/2011/02/new-steward-health-care-will-superbowl.html">noted recently</a>, the Steward Health Care CEO seems to have a very short-term focus, suggested by the track record of the Cerberus CEO, who quickly left an organization he had aggressively promoted, suddenly switched from the Republican party to become a big contributor to the Democratic party, abandoned his medical license after developing a good reputation as a cardiovascular surgeon, and famously was quoted, "burn the boats on the beach, baby." Would he support the long-term commitment needed to make both the Massachusetts based and now the proposed Florida based hospitals, most of which are safety net hospitals, succeed? "Leakage Reduction" - a Threat to Physicians' Professionalism? As we also <a href="http://hcrenewal.blogspot.com/2011/02/new-steward-health-care-will-superbowl.html">noted recently</a>, the main tenet of his business plan seemed to be to reduce "leakage," to make sure patients who start within the system are referred within the system and do not "leak" elsewhere. The problem with this is that physicians are supposed to decide how to manage patients, and specifically to decide where to refer patients in the patients' interests, not just to keep money flowing to the health care system. "Leakage reduction" may possibly threaten physicians' first commandment, to make decisions to maximize benefits and minimize harms to individual patients, before all other considerations. Also, as we noted earlier, since Steward Health Care purchased not only some Massachusetts hospitals, but a big network of physician practices, there could be a risk that the physicians who are now employed by a private equity group would be pushed to make referral decisions for financial reasons, rather than in the best interests of the patients. Note that a <a href="http://www.healthecareers.com/physicians-surgeons-md-do/job/senior-medical-director/1171863">recent (posted 9 February, 2011) advertisement </a>for a Senior Medical Director (physician leader) of the Caritas Christi Network Services, the physician group owned by Steward Health Care LLC, said the Director's first goal would be: <blockquote>This position will have a leadership role in all aspects of the CCNS system, including responsibility and accountability for: - Lead/Mentor/Support IPA based Medical Directors (at both the IPA and Pod level) to achieve Medical Management goals and objectives in Quality, Leakage, Utilization, and Risk performance</blockquote>Keeping Company with Gun and Ammunition Manufacturers and "Mercenaries" There are also questions about whether the corporate culture of Cerberus Capital Management would be compatible with the management of safety-net hospitals. Cerberus has some current investments in firms whose operations seem oddly askew from providing medical care to patients regardless of their ability to pay. First, Cerberus owns the biggest manufacturer of firearms and ammunition in the US. As <a href="http://www.businessweek.com/magazine/content/10_33/b4191041673261.htm">reported</a> by BusinessWeek last year, <blockquote>Cerberus had more than DPMS [Firearms] in its sights. From April 2006 to January 2008 it bought three other firearms companies: Bushmaster, Remington, and Marlin. And it kept adding to its collection. Cerberus now controls 13 brands in a holding company it created, Madison (N.C.)-based Freedom Group. With sales of $848.7 million in 2009, Freedom Group is the largest gun and ammo maker in the U.S. That means Stephen A. Feinberg, Cerberus' founder and managing member, is the country's top civilian gun magnate. </blockquote> In addition, <blockquote>Luth, the rifle maker, says that when he arrived at Cerberus' Park Avenue offices to negotiate a deal in 2007, he discovered that Feinberg and several of his partners 'are real gun guys.' </blockquote> Also, as <a href="http://dealbook.nytimes.com/2010/04/12/cerberus-to-buy-dyncorp-for-1-5-billion/">reported</a> by the New York Times, Cerberus recently bought one of the biggest "private military contractors," <blockquote>DynCorp International, the private military contractor, said on Monday it has agreed to sell itself to Cerberus Capital Management for $1.5 billion, as the private equity industry continues to return to its core business of deal-making. Cerberus will pay $17.55 a share for DynCorp, a 49 percent premium to Friday’s closing price of $11.75. DynCorp now has 28 days under a 'go-shop' provision within the deal agreement to find a higher and better offer. While DynCorp has continued to win new contracts from the federal government, it has also been the subject of controversy over the years for its assignments in Iraq.</blockquote> That controversy was amplified in <a href="http://www.thenation.com/blog/mercenary-owners-they-are-changin-sort">an article </a>in The Nation by Jeremy Scahill, entitled "The Mercenary Owners, They Are a Changin' (Sort of) <blockquote>Blackwater and DynCorp, the two leading mercenary firms servicing the US wars in Iraq and Afghanistan have both undertaken steps toward significant structural changes over the past month. In the case of DynCorp, the ownership of the whole business seems to be changing hands, while Blackwater is dumping its private air force. Cerberus Capital Management, one of the largest private equity firms in the US announced April 12 it was buying DynCorp, the massive, publicly traded company, which is akin to the Wal-Mart of the private security industry, for $1 billion in cash. Cerberus counts among its big wigs former vice president Dan Quayle, who often represents the company internationally. DynCorp has had its share of scandals over the years, including whistle blower allegations that personnel have engaged in organized sex-slave trading with girls as young as 12 and allegations its personnel have assaulted journalists. It has been rebuked by the State Department for its 'aggressive behavior' in interactions with European diplomats, NATO forces and journalists in Afghanistan. A 2007 US government audit of DynCorp's work in Iraq found that the State Department 'does not know specifically what it received for most of the $1.2 billion in expenditures under its DynCorp contract for the Iraqi Police Training Program.' More recently, the company was in the news facing allegations its training of the Afghan National Police was shoddy, including allegations its trainees didn't know how to adjust the sights on their AK-47s. If the Cerberus deal goes through, it will mean that the publicly-traded DynCorp will go private, meaning that it will be infinitely more difficult to get information on the company. Cerberus seems to have had a dream of owning its own mercenary business for at least a few years. In April 2008, the company was reportedly looking to buy Blackwater. The deal apparently fell through because of concerns over Blackwater's reputation.</blockquote>Summary So we have come a long way from 1980, when the US American Medical Association gave up the rule that the practice of medicine should not be "commercialized, nor treated as a commodity in trade."  (See posts <a href="http://hcrenewal.blogspot.com/2007/12/relman-in-jama-on-threats-to-physicians.html">here </a>and <a href="http://hcrenewal.blogspot.com/2009/06/why-did-us-physicians-give-up-their.html">here</a>.)   Now we have private equity firms buying or trying to buy formerly non-profit safety net hospital systems to be included in portfolios that can include gun and ammunition manufacturers and private armies.  Now we have physician networks owned by private equity firms focused on choking off "leakage."  Such ownership may initially inject lots of money into the system, and may eventually profit the new private owners, but what will we give up in this brave new world of commercial safety-net hospitals and for-profit physician practices? 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. Coda The title requires apologies to Warren Zevon, who famously <a href="http://www.youtube.com/watch?v=S5puAN1PGQw">performed</a> "Send Lawyers, Guns and Money." <iframe title="YouTube video player" width="425" height="349" src="http://www.youtube.com/embed/S5puAN1PGQw?rel=0" frameborder="0" allowfullscreen></iframe>

Send Mercenaries, Guns, and Money? - Cerberus Tries to Buy Jackson Health

The latest twist in the tale of one of the US great safety-net public hospitals raises some interesting questions. As reported by John Dor...

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