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Despite Recalls, Legal Settlements, Guilty Plea, Johonson & Johnson Board Paid CEO $29 Million, Says He "Met Expectations"

For our latest story about the tremendous disconnect between the pay and performance of leaders of health care organizations, we turn to <a href="http://www.reuters.com/article/2011/03/16/jj-ceo-idUSN1614271320110316">Reuters</a>.  Astronomical Pay Despite having a very bad 2010, Johnson and Johnson continued to reward its CEO royally: <blockquote>After a year in which Johnson & Johnson's product quality control was deemed such a shambles that the U.S. government will oversee some plants, the board had praise for Chief Executive William Weldon and awarded him almost $29 million in overall compensation. The once golden reputation of the diversified healthcare giant was severely tarnished by seemingly endless recalls of widely used consumer products as well as recalls of medical devices and products from other units in 2010. U.S. consumer product sales fell by more than 19 percent in 2010 and the company's 2011 forecast for earnings growth of only 1 percent to 3 percent fell shy of Wall Street projections. Weldon's compensation was trimmed 7 percent, but in what appears to be a disconnect with the reality of its situation, J&J's (JNJ.N) board, in a year-end regulatory filing, said his performance 'generally met expectations' despite a year in which 'operational sales declined and fell below the goals for the year.' 'The board believes that Mr Weldon provided strong leadership during a very demanding year and has worked to resolve multiple challenging issues and position the company for future growth,' it said in the filing. The rash of consumer medicine recalls in 2009 and 2010 were largely responsible for the first back-to-back years of company sales declines since World War Two. Last week, U.S. health regulators filed a consent decree against J&J's McNeil consumer unit that will put some of its manufacturing plants under government supervision for at least five years. The McNeil unit has recalled more than 300 million bottles and packages of Tylenol, Motrin, Rolaids, Benadryl and other products in the past year over faulty manufacturing and quality control problems. The recalls cost the company $900 million in sales last year and hurt earnings, and Weldon was called to testify before Congress about problems that left pharmacy and supermarket shelves without Children's Tylenol. But Weldon's 2010 compensation fell just 7 percent to $28.7 million from the $30.8 million he received in 2009. His performance bonus for 2010 was down 45 percent to $1.98 million.</blockquote>The Wall Street Journal <a href="http://online.wsj.com/article/SB10001424052748703899704576204633314372972.html">article</a> on Weldon's pay also mentioned that Weldon also received " perquisites and other benefits in 2010 [which] included personal use of company aircraft, valued at $89,796; a car and driver for commuting and other personal transportation valued at $29,635; and a nominal amount of home security system monitoring fees." The <a href="http://files.shareholder.com/downloads/JNJ/0x0xS950123-11-25772/200406/filing.pdf">2011 Johnson and Johnson proxy statement</a> also noted that the other four of the five most highly paid Johnson and Johnson executives received compensation valued from $5,632,285 to $8,851,965 in 2010. In particular, Ms Colleen A Goggins, who retired under fire as head of the embattled Johnson and Johnson consumer group, walked away with $7,738,614 in 2010. Other Aspects of Bad Company Performance The WSJ Health Blog has been keeping an eye on the running total of Johnson and Johnson recalls. <a href="http://blogs.wsj.com/health/2011/03/09/jj-recall-watch-more-than-384000-insulin-pump-cartridges-pulled/">On 9 March, 2011</a>, the list included 18 separate recalls of various different drugs and devices since July, 2009, from over-the-counter cold medications to sutures and hip replacements. While suffering such a massive breakdown of the ability to perform the company's most basic function, to supply pure, unadulterated medicines and well-made devices, the company has also suffered from ethical lapses which were not listed in the Reuters article. In 2010, these included a jury verdict that the company had committed marketing fraud in its promotion of the atypical anti-psychotic drug Respirdal (see post <a href="http://hcrenewal.blogspot.com/2010/10/last-weeks-scandals.html">here</a>), and a guilty plea to a misdemeanor for and civil settlement of charges of "misbranding" Topamax by Johnson and Johnson subsidiary Ortho-McNeil-Janssen Pharmaceuticals (see post <a href="http://hcrenewal.blogspot.com/2010/05/sunday-settlement-and-guilty-plea.html">here</a>). Of course, we once speculated that the Johnson and Johnson CEO commanded such astronomical pay in part based on his ability to influence US government health policy in favor of his and his company's interests (see <a href="http://hcrenewal.blogspot.com/2010/05/corporate-proxies-suggest-ceos-rewarded.html">this post</a>). Who Made Up the Board Who Was Responsible? Responsible for the astronomical amounts paid to Mr Weldon despite his company's ongoing inability to make pure, unadulterated medicines, and to other executives who presided over the company's recalls, guilty plea, and legal settlements was the company's board of directors.  Its members are listed below.  For explanation of the color coding, see the explanation below: <div></div><ul><li>Mary Sue Coleman - President, University of Michigan.</li><li>James G Cullen - Retired Chairman and CEO, Bell Atlantic Corp</li><li>Ian E L Davis - Senior Advisor, Apax Partners; Former Chairman and Worldwide Managing Director, McKinsey & Company, non-executive director, BP plc</li><li>Michael M E Johns - Chancellor, Emory University, Past Chair of the Council of Teaching Hospitals, member of the editorial board, JAMA, chair of the publication committee, Academic Medicine</li><li>Susan L Lindquist - Member and Former Director, Whitehead Institute for Biomedical Research, Co-Founder of FoldRx Pharmaceuticals, Inc, a subsidiary of Pfizer Inc.</li><li>Anne M Mulcahy - Former Chairman and CEO, Xerox Corp, director of the Washington Post Company, previously director of Citigroup Inc, and Federal National Association (Fannie Mae)</li><li>Leo F Mullin - Retired Chairman and CEO, Delta Airlines, director of Education Management Corporation</li><li>William D Perez -Senior Advisor, Geenhill & Co, Inc, Trustee of Cornell University and Northwestern Hospital</li><li>Charles Prince - Senior Counselor, Albright Capital Management LLC, Retired Chairman and CEO, Citigroup</li><li>David Satcher - Director, Center of Excellent on Health Disparities, Director, Satcher Health Leadership Institute and Poussaint-Satcher-Crosby Chair in Mental Health, Morehouse School of Medicine, and trustee of the Kaiser Family Foundation</li></ul>Of Johnson and Johnson's 10 directors (excluding its CEO), four have leadership positions at teaching hospitals, academic medical centers, medical schools or their parent universities.  Of these, two also had leadership positions at other influential non-profit health care organizations, including medical journals, a teaching hospital association, and a charitable foundation. One had a management position at a competing pharmaceutical company. Four had leadership positions in  financial services corporations, including some that were implicated in the global financial collapse, and/or required massive federal bail-outs to avoid collapse. Three had had leadership positions in other organizations now under fire , that is, McKinsey, for the role of one of its former executives in an alleged insider trading scandal (e.g., <a href="http://dealbook.nytimes.com/2011/03/16/rajaratnam-lawyer-seeks-to-discredit-witnesss-testimony/">latest coverage</a> in the NY Times); several for-profit higher education companies caught up in allegations of luring students destined to fail in order to collect tuition funded by government loans;  and BP, under investigation for its role in a massive oil spill. Summary So here we have the latest striking case that indicates the confluence of forces that can lead to health care dysfunction.  Not only has the compensation given to health care leaders got so large that it is per se a cause of increased health spending, but also, and more importantly, such compensation often provides perverse incentives that perpetuate mismanagement, raising costs and lowering quality.  This situation appears to be enabled by governance by individuals who are often fellow members of the CEOs' club, and hence who may feel more sympathy with the executives they are supposed to supervise than the stockholders whose financial interests they are supposed to protect, or the public whom the companies' products and services are supposed to benefit.  Moreover, these individuals often have conflicts of interest which may mitigate against objective scrutiny of the executives they are supposed to oversee.  Finally, these individuals often may come from corporate cultures which do not espouse the values that we in health care are supposed to uphold.  (See <a href="http://hcrenewal.blogspot.com/2010/12/on-interconnectedness-of-leadership-of.html">this post</a> and its links for other examples of the sorts of people who are supposed to provide stewardship to health care organizations.) So to repeat once more- I strongly believe that there needs to be much more investigation, academic, journalistic, and perhaps legal, of the identity, nature, and culture of the leaders of health care, and their relationships. A few bloggers cannot do it all. Obviously, the anechoic effect mitigates against medical and health care academics looking into their own leaders. However, failing to understand who is leading our march to the brink of health care failure ought not to be something such academics would want on their conscience. Finally, and obviously, health care organizations need leaders that uphold the core values of health care, and focus on and are accountable for the mission, not on secondary responsibilities that conflict with these values and their mission, and not on self-enrichment. Leaders ought to be rewarded reasonably, but not lavishly, for doing what ultimately improves patient care, or when applicable, good education and good research. If we do not fix the severe problems affecting the leadership and governance of health care, and do not increase accountability, integrity and transparency of health care leadership and governance, we will be as much to blame as the leaders when the system collapses. ADDENDUM (17 March, 2011) - Also see comments on by Jim Edwards <a href="http://m.bnet.com/blog/drug-business/j-j-ceo-8217s-pay-is-rigged-to-reward-him-even-when-he-fails/7639">on the Placebo Effect blog</a>: "heads he wins, tails shareholders lose," as do patients and doctors.

Despite Recalls, Legal Settlements, Guilty Plea, Johonson & Johnson Board Paid CEO $29 Million, Says He "Met Expectations"

For our latest story about the tremendous disconnect between the pay and performance of leaders of health care organizations, we turn to Reu...

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What does a "problem list" of typical health IT look like?

<div style="text-align: center;">Mar. 20, 2011 update: see the much more extensive charts via the link at my followup post <a href="http://hcrenewal.blogspot.com/2011/03/real-medical-informatics-what-does.html">"Real" Medical Informatics: What Does a Problem List of Typical Health IT Look Like, Part 2</a>. </div> What does a high level "problem list" of typical health IT look like? Like <a href="http://sydney.edu.au/engineering/it/%7Ehitru/index.php?option=com_content&task=view&id=120&Itemid=116">this</a>, from Prof. Jon Patrick at U. Sydney: <blockquote> This Technology Problem List has been drawn up to collate all the technical problems in the report that have been identified in the Cerner Millenium version used for the FirstNet installations in Emergency Departments in the NSW, Australia. [<a style="font-weight: bold; font-style: italic;" href="http://sydney.edu.au/engineering/it/%7Ehitru/index.php?option=com_content&task=view&id=91&Itemid=146">Link</a>, as I wrote about in my Mar. 2011 post "<a href="http://hcrenewal.blogspot.com/2011/03/on-emr-forensic-evaluation-from-down.html">On an EMR Forensic Evaluation by Professor Jon Patrick from Down Under: More Thoughts</a>" and others - ed.] This is a list of the errors and bugs identified by ED directors in the study published on the 4th March 2011 that seem to have a technical origin, that is we would expect that some change in the underlying technology would solve the problem. The likelihood of resolving the problem is a function of what part of the software the problem is created at. The explanations and dates presented here are postulated based on an interpretation of the likely cause for the fault drawn from the report. I'm happy to be informed whenever these problems are corrected or if new problems arise.</blockquote> <table border="0"><tbody><tr><td> </td> <td style="background-color: rgb(255, 255, 255); border: 1px solid rgb(0, 0, 0);"> <h4>Problem Description </h4></td> <td style="background-color: rgb(255, 255, 255); border: 1px solid rgb(0, 0, 0);"> <h4>Possible Explanation</h4></td> <td style="background-color: rgb(255, 255, 255); border: 1px solid rgb(0, 0, 0);"> <h4>Publication Date</h4></td> <td style="background-color: rgb(255, 255, 255); border: 1px solid rgb(0, 0, 0);"> <h4>Possible Correction Date </h4></td> </tr> <tr> <td>1 </td> <td style="background-color: rgb(255, 255, 255); border: 1px solid rgb(0, 0, 0);">Problems arise when the documents are saved but not signed. Documents may become difficult to find even for the experts. The First Net trainers state “Never use the save button”. Cerner was asked to remove the save button. However, the answer was that it could not be done. </td> <td style="background-color: rgb(255, 255, 255); border: 1px solid rgb(0, 0, 0);"> Button is built into the underlying software </td> <td style="background-color: rgb(255, 255, 255); border: 1px solid rgb(0, 0, 0);">4-03-2011 </td> <td style="background-color: rgb(255, 255, 255); border: 1px solid rgb(0, 0, 0);"> Never</td> </tr> <tr> <td>2 </td> <td style="background-color: rgb(255, 255, 255); border: 1px solid rgb(0, 0, 0);">If the record is unsigned and the doctor walks away to an emergency leaving the data on the screen. The unsigned data can be cancelled by the next person who wants to use the computer. </td> <td style="background-color: rgb(255, 255, 255); border: 1px solid rgb(0, 0, 0);"> </td> <td style="background-color: rgb(255, 255, 255); border: 1px solid rgb(0, 0, 0);"> </td> <td style="background-color: rgb(255, 255, 255); border: 1px solid rgb(0, 0, 0);"> </td> </tr> <tr> <td>3 </td> <td style="background-color: rgb(255, 255, 255); border: 1px solid rgb(0, 0, 0);">The templates are not symptom generated and try to cover every topic and every specialty. Each template is like an index to a comprehensive textbook on socio-economics combined with medicine. You scroll through a list of demographic information, social information, signs and symptoms. As with other templates, you circle or backslash to confirm or deny. However, when this information is converted to prose, it is a series of disconnected phrases that do not provide a grammatically correct easy to read document. </td> <td style="background-color: rgb(255, 255, 255); border: 1px solid rgb(0, 0, 0);"> <div> Built into underlying software </div> </td> <td style="background-color: rgb(255, 255, 255); border: 1px solid rgb(0, 0, 0);"> 4-03-2011</td> <td style="background-color: rgb(255, 255, 255); border: 1px solid rgb(0, 0, 0);"> Never</td> </tr> <tr> <td>4 </td> <td style="background-color: rgb(255, 255, 255); border: 1px solid rgb(0, 0, 0);">The FirstNet templates are a list of words. There are no diagrams although it is possible to find diagrams in another part of FirstNet. The templates do not flow according to usual work practice. They do not act as an aid to memory. They are not user friendly. If a junior doctor tries to use the template, it can take hours to document the record of a single patient. </td> <td style="background-color: rgb(255, 255, 255); border: 1px solid rgb(0, 0, 0);"> <div> Design not matched to user requirements. Built into software </div> </td> <td style="background-color: rgb(255, 255, 255); border: 1px solid rgb(0, 0, 0);"> 4-03-2011</td> <td style="background-color: rgb(255, 255, 255); border: 1px solid rgb(0, 0, 0);"> Never</td> </tr> <tr> <td>5 </td> <td style="background-color: rgb(255, 255, 255); border: 1px solid rgb(0, 0, 0);">Documentation Screen. To add a note click on the note icon and a window opens into which the note can be written. The note is then shown on the screen. Subsequently if you click on the text of the note it then disappears entirely. To add to the note you have to do a right click on the notes icon and then select Open to open the note. The delete process can only be reversed by moving to the top menu bar and selecting Edit and then Undo and without this knowledge new users are lead to the belief that their work has just disappeared and is irrecoverable. </td> <td style="background-color: rgb(255, 255, 255); border: 1px solid rgb(0, 0, 0);"> <div> Built into software </div> </td> <td style="background-color: rgb(255, 255, 255); border: 1px solid rgb(0, 0, 0);">4-03-2011 </td> <td style="background-color: rgb(255, 255, 255); border: 1px solid rgb(0, 0, 0);"> Never</td> </tr> <tr> <td>6 </td> <td style="background-color: rgb(255, 255, 255); border: 1px solid rgb(0, 0, 0);"> 1. Triage box allows about 2.5 lines of text or ~50 words. Choosing from the triage problem list of 51 items is not compulsory nor even close to being comprehensive so staff workaround by writing their own entries. The entries are free text and thus not part of a searchable “reason for presentation” database field. 2. Most staff write in a text description of the problem as the problem list is defective with poor wording, "bleed haematuria" or unfamiliar descriptions "orbital disorder" and lacks common usage of terminology. </td> <td style="background-color: rgb(255, 255, 255); border: 1px solid rgb(0, 0, 0);"> Configuration of problems list</td> <td style="background-color: rgb(255, 255, 255); border: 1px solid rgb(0, 0, 0);"> 4-03-2011 </td> <td style="background-color: rgb(255, 255, 255); border: 1px solid rgb(0, 0, 0);"> 4-03-2013</td> </tr> <tr> <td>7 </td> <td style="background-color: rgb(255, 255, 255); border: 1px solid rgb(0, 0, 0);"> <div> The database search for diagnosis or problem requires an exact match and does not assist with finding synonyms or approximate matches not found because of spelling mistakes. </div> </td> <td style="background-color: rgb(255, 255, 255); border: 1px solid rgb(0, 0, 0);"> <div> Built into the software </div> </td> <td style="background-color: rgb(255, 255, 255); border: 1px solid rgb(0, 0, 0);"> 4-03-2011</td> <td style="background-color: rgb(255, 255, 255); border: 1px solid rgb(0, 0, 0);"> Never</td> </tr> <tr> <td>8 </td> <td style="background-color: rgb(255, 255, 255); border: 1px solid rgb(0, 0, 0);">A referral letter needed to be re-sent to a different provider after the weekend. Staff went to the Discharge letter, ticked the box "Correct", and it was then noted that they could make changes to the original letter and save them to the system without needing to make any identification of self as editing the letter. The letter was saved under the name of the original authoring doctor and no record is made that it was the work of a different author or the extent to which it was changed. This means that the EMR does not constitute a valid legal record. </td> <td style="background-color: rgb(255, 255, 255); border: 1px solid rgb(0, 0, 0);"> <div> Built into the software </div> </td> <td style="background-color: rgb(255, 255, 255); border: 1px solid rgb(0, 0, 0);">4-03-2011 </td> <td style="background-color: rgb(255, 255, 255); border: 1px solid rgb(0, 0, 0);"> Never</td> </tr> <tr> <td>9 </td> <td style="background-color: rgb(255, 255, 255); border: 1px solid rgb(0, 0, 0);">All notes on a patient cannot be seen in one page. In 'Clinical notes', when nurses fill out 'continuation notes', they should read old notes from 'clinical notes' and then see 'pathway' but they have to move to other pages to find this material so it is inefficient. </td> <td style="background-color: rgb(255, 255, 255); border: 1px solid rgb(0, 0, 0);"> Built into software </td> <td style="background-color: rgb(255, 255, 255); border: 1px solid rgb(0, 0, 0);"> 4-03-2011</td> <td style="background-color: rgb(255, 255, 255); border: 1px solid rgb(0, 0, 0);">Never </td> </tr> <tr> <td>10 </td> <td style="background-color: rgb(255, 255, 255); border: 1px solid rgb(0, 0, 0);">Clinical staff have to sign in to confirm arranging a test for patients, at which time the user name cannot be changed. If one doctor signed on to one workstation and then went away to take care of patient, and during that time, another doctor has come to the workstation and signed the previous doctor off all his work will be lost. </td> <td style="background-color: rgb(255, 255, 255); border: 1px solid rgb(0, 0, 0);"> Built into software </td> <td style="background-color: rgb(255, 255, 255); border: 1px solid rgb(0, 0, 0);"> 4-03-2011</td> <td style="background-color: rgb(255, 255, 255); border: 1px solid rgb(0, 0, 0);"> Never</td> </tr> <tr> <td>11 </td> <td style="background-color: rgb(255, 255, 255); border: 1px solid rgb(0, 0, 0);">There is no button to add new clinical notes. When reviewing 'continuation notes', there is no button to add a new one. It needs to be done in another place, so it is inefficient. </td> <td style="background-color: rgb(255, 255, 255); border: 1px solid rgb(0, 0, 0);"> Built into the software </td> <td style="background-color: rgb(255, 255, 255); border: 1px solid rgb(0, 0, 0);"> 4-03-2011</td> <td style="background-color: rgb(255, 255, 255); border: 1px solid rgb(0, 0, 0);"> Never</td> </tr> <tr> <td>12 </td> <td style="background-color: rgb(255, 255, 255); border: 1px solid rgb(0, 0, 0);">Functionalities for clinical staff are of limited use. For example: From the list of medical pre-designed documents generated for the patient's electronic record, the index is not clear. Staff have to scroll through an index which has every document in the AHS from across many disciplines. For example, ED staff can choose Botox clinic documents. Staff are required to scroll through hundreds of documents one by one to identify what document they want to use. </td> <td style="background-color: rgb(255, 255, 255); border: 1px solid rgb(0, 0, 0);"> Built into the software </td> <td style="background-color: rgb(255, 255, 255); border: 1px solid rgb(0, 0, 0);">4-03-2011</td> <td style="background-color: rgb(255, 255, 255); border: 1px solid rgb(0, 0, 0);">Never </td> </tr> <tr> <td>13 </td> <td style="background-color: rgb(255, 255, 255); border: 1px solid rgb(0, 0, 0);">Once they have identified the document they want to use such as 'ED discharge summary', there are too many clicks to complete the form, and the process is unnecessarily complicated </td> <td style="background-color: rgb(255, 255, 255); border: 1px solid rgb(0, 0, 0);"> Built into the software </td> <td style="background-color: rgb(255, 255, 255); border: 1px solid rgb(0, 0, 0);">4-03-2011</td> <td style="background-color: rgb(255, 255, 255); border: 1px solid rgb(0, 0, 0);">Never </td> </tr> <tr> <td> </td> <td style="background-color: rgb(255, 255, 255); border: 1px solid rgb(0, 0, 0);"> </td> <td style="background-color: rgb(255, 255, 255); border: 1px solid rgb(0, 0, 0);"> </td> <td style="background-color: rgb(255, 255, 255); border: 1px solid rgb(0, 0, 0);"> </td> <td style="background-color: rgb(255, 255, 255); border: 1px solid rgb(0, 0, 0);"> </td> </tr> <tr> <td>14 </td> <td style="background-color: rgb(255, 255, 255); border: 1px solid rgb(0, 0, 0);">Before seeing a patient, a staff member goes to the ‘To be seen’ tab, allocates themselves to the patient. The KPI package pops up and staff insert the ‘seen by time’. Ideally it would be good if there was an arrival time default inserted into this time as a prompt for staff. </td> <td style="background-color: rgb(255, 255, 255); border: 1px solid rgb(0, 0, 0);"> Configuration requirement </td> <td style="background-color: rgb(255, 255, 255); border: 1px solid rgb(0, 0, 0);">4-03-2011</td> <td style="background-color: rgb(255, 255, 255); border: 1px solid rgb(0, 0, 0);"> 4-03-2013</td> </tr> <tr> <td>15 </td> <td style="background-color: rgb(255, 255, 255); border: 1px solid rgb(0, 0, 0);">The Dr sees the patient and then returns to the computer and documents the interview. If they document in FirstNet when they record the patient’s chart they have multiple clicks to open the chart before they can start documenting. </td> <td style="background-color: rgb(255, 255, 255); border: 1px solid rgb(0, 0, 0);"> Built into the software </td> <td style="background-color: rgb(255, 255, 255); border: 1px solid rgb(0, 0, 0);">4-03-2011</td> <td style="background-color: rgb(255, 255, 255); border: 1px solid rgb(0, 0, 0);">Never</td> </tr> <tr> <td>16 </td> <td style="background-color: rgb(255, 255, 255); border: 1px solid rgb(0, 0, 0);">The Dr can enter a diagnosis via the documentation / diagnosis (chart) or depart process. A diagnosis is nine clicks to enter. </td> <td style="background-color: rgb(255, 255, 255); border: 1px solid rgb(0, 0, 0);"> Built into the software </td> <td style="background-color: rgb(255, 255, 255); border: 1px solid rgb(0, 0, 0);">4-03-2011</td> <td style="background-color: rgb(255, 255, 255); border: 1px solid rgb(0, 0, 0);">Never </td> </tr> <tr> <td>17 </td> <td style="background-color: rgb(255, 255, 255); border: 1px solid rgb(0, 0, 0);">A diagnosis is not flagged or seen on the tracking list so other staff need to search through the entire documentation to find it. This is time consuming as it is not possible to identify externally which note from a set of documents contains the diagnosis. </td> <td style="background-color: rgb(255, 255, 255); border: 1px solid rgb(0, 0, 0);"> Configuration requirement </td> <td style="background-color: rgb(255, 255, 255); border: 1px solid rgb(0, 0, 0);">4-03-2011</td> <td style="background-color: rgb(255, 255, 255); border: 1px solid rgb(0, 0, 0);">4-03-2013</td> </tr> <tr> <td>18 </td> <td style="background-color: rgb(255, 255, 255); border: 1px solid rgb(0, 0, 0);">Dr “seen-time” needs to be on the tracking list (or LOS) since Dr “seen-time” is used to manage dept case load, and ensure triage categories get a balanced throughput. </td> <td style="background-color: rgb(255, 255, 255); border: 1px solid rgb(0, 0, 0);"> Configuration requirement </td> <td style="background-color: rgb(255, 255, 255); border: 1px solid rgb(0, 0, 0);">4-03-2011</td> <td style="background-color: rgb(255, 255, 255); border: 1px solid rgb(0, 0, 0);">4-03-2013</td> </tr> <tr> <td>19 </td> <td style="background-color: rgb(255, 255, 255); border: 1px solid rgb(0, 0, 0);">FirstNet does not work well on differentiating practitioners and MOs, because both of them are assigned patients in the same place. </td> <td style="background-color: rgb(255, 255, 255); border: 1px solid rgb(0, 0, 0);"> Configuration requirement </td> <td style="background-color: rgb(255, 255, 255); border: 1px solid rgb(0, 0, 0);">4-03-2011</td> <td style="background-color: rgb(255, 255, 255); border: 1px solid rgb(0, 0, 0);">4-03-2013</td> </tr> <tr> <td>20 </td> <td style="background-color: rgb(255, 255, 255); border: 1px solid rgb(0, 0, 0);">Unable to see previous observations - Lose ‘feel’ for patient as everything in silos. </td> <td style="background-color: rgb(255, 255, 255); border: 1px solid rgb(0, 0, 0);">Configuration requirement </td> <td style="background-color: rgb(255, 255, 255); border: 1px solid rgb(0, 0, 0);">4-03-2011</td> <td style="background-color: rgb(255, 255, 255); border: 1px solid rgb(0, 0, 0);">4-03-2013</td> </tr> <tr> <td>21 </td> <td style="background-color: rgb(255, 255, 255); border: 1px solid rgb(0, 0, 0);"> 1. Poor graphical representation - graphing not finite enough to be of use. 2. FirstNet has 'vital signs' functionality but the trends are not finite enough here the important thing for staff in ED is to see the trend. Successive results cannot be displayed together making it far more difficult to get a trend or sequence of processes. </td> <td style="background-color: rgb(255, 255, 255); border: 1px solid rgb(0, 0, 0);">Built into software</td> <td style="background-color: rgb(255, 255, 255); border: 1px solid rgb(0, 0, 0);">4-03-2011</td> <td style="background-color: rgb(255, 255, 255); border: 1px solid rgb(0, 0, 0);">Never </td> </tr> <tr> <td>22 </td> <td style="background-color: rgb(255, 255, 255); border: 1px solid rgb(0, 0, 0);"> Staff will not search for trends because the system is too slow, making staff reluctant to open charts. </td> <td style="background-color: rgb(255, 255, 255); border: 1px solid rgb(0, 0, 0);">Engineering, Configuration and/or installation problem</td> <td style="background-color: rgb(255, 255, 255); border: 1px solid rgb(0, 0, 0);">4-03-2011</td> <td style="background-color: rgb(255, 255, 255); border: 1px solid rgb(0, 0, 0);"> Uncertain</td> </tr> <tr> <td>23 </td> <td style="background-color: rgb(255, 255, 255); border: 1px solid rgb(0, 0, 0);">No prompts for unusual observations, e.g. diabetic BSL or any form of useful alerts. </td> <td style="background-color: rgb(255, 255, 255); border: 1px solid rgb(0, 0, 0);">Built into the software</td> <td style="background-color: rgb(255, 255, 255); border: 1px solid rgb(0, 0, 0);">4-03-2011</td> <td style="background-color: rgb(255, 255, 255); border: 1px solid rgb(0, 0, 0);">Never </td> </tr> <tr> <td>24 </td> <td style="background-color: rgb(255, 255, 255); border: 1px solid rgb(0, 0, 0);"> Unnecessarily Difficult to add allergies: Staff think there are too many steps to record allergies and a complex and non-intuitive process. Adding an allergy is a 7 step process. Once the screen is opened it is difficult to work out 'how' to add the allergy. There is no rational flow to the data entry, nor are there prompts to guide the user. Staff are required to be trained or they would take a long time to work out the process. </td> <td style="background-color: rgb(255, 255, 255); border: 1px solid rgb(0, 0, 0);">Built into the software </td> <td style="background-color: rgb(255, 255, 255); border: 1px solid rgb(0, 0, 0);">4-03-2011 </td> <td style="background-color: rgb(255, 255, 255); border: 1px solid rgb(0, 0, 0);">Never </td></tr></tbody></table> This is an EHR slated for Emergency Departments, of all places, not the hemorrhoid clinic. Do you want your emergency care mediated by such a device? I don't. As I wrote <a href="http://hcrenewal.blogspot.com/2009/03/health-care-information-technology.html">here</a> regarding HIT vendor "hold harmless" clauses, I am aware of major healthcare organizations with "portfolios" of hundreds or thousands of issues and defects (often more "granular" than the above) awaiting remediation. Worse, the CMIO's are struggling with cavalier bureaucracies who want the doctors even in critical care areas to live with the problems (I've faced that scenario <a href="http://www.ischool.drexel.edu/faculty/ssilverstein/cases/?loc=cases&sloc=clinical%20computing%20problems%20in%20ICU">personally</a>), and with vendors who are not in a hurry to fix their products. Some percentage of those "issues" and defects are deemed by their organizations to rise to the level of "may cause patient harm if uncorrected." -- SS

What does a "problem list" of typical health IT look like?

Mar. 20, 2011 update: see the much more extensive charts via the link at my followup post "Real" Medical Informatics: What Doe...

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How Terrible Health IT (And Other Healthcare Toxic Waste) Gets Pushed on Naïve and Malleable Physicians, Hospital Executives and Governments

Over at "<a href="http://brodyhooked.blogspot.com/">Hooked: Ethics, Medicine, and Pharma</a>", University of Texas Medical Branch at Galveston (UTMB) Institute for the Medical Humanities professor <a href="http://www.utmb.edu/imh/faculty.asp?FacID=53">Howard Brody MD, PhD</a> offers a fascinating piece "<a style="font-weight: bold;" href="http://brodyhooked.blogspot.com/2010/06/how-does-drug-industry-exert-power.html">How Does the Drug Industry Exert Power? An Anthropological Perspective</a>." The piece is based on writings of of <a href="http://www4.uwm.edu/letsci/anthropology/faculty/applbaum.cfm">Kalman Applbaum</a>, of the Department of Anthropology, University of Wisconsin-Milwaukee, and summarizes how the drug industry achieves its aims in today's society. In Prof. Brody's post: <blockquote>... Applbaum begins by teaching us marketing neophytes about "channels." Marketing drugs is highly complicated because there's no direct pipeline from the manufacturer to the end-user. Lots of folks control and manipulate the pathway that delivers the drug eventually to the mouth or body of the patient--most notably the physician who has to write the prescription, but also insurance companies, government regulators, managers of hospital formularies, and numerous other players. The key to selling drugs successfully today is first, to be able to control the channel: "Pharmaceutical manufacturers, like other marketing-driven enterprises, have realized that it is less in the product, the brand or even the patent where their fortunes lie, but in the stream, the marketing channel. Once you control the channel, you can insert any product you like into it, no matter how useless or dangerous." [Such as grossly <a href="http://sydney.edu.au/engineering/it/%7Ehitru/index.php?option=com_content&task=view&id=91&Itemid=146">unfit for purpose</a>, clinically disruptive, <a href="http://www.tinyurl.com/hostileuserexper">mission hostile</a> healthcare IT - ed.] But, if Rule One is control the channel, Rule Two is not to appear obviously to do so. </blockquote> Read the entire post at the above link. The observation that "once you control the channel, you can insert any product you like into it, no matter how useless or dangerous" explains many observations about the healthcare IT industry as well, such as how reports from the U.S. <a href="http://www8.nationalacademies.org/onpinews/newsitem.aspx?RecordID=12572">National Research Council</a> and many others (e.g., <a href="http://www.ischool.drexel.edu/faculty/ssilverstein/cases/?loc=cases&sloc=2009">here</a>, <a href="http://www.ischool.drexel.edu/faculty/ssilverstein/cases/?loc=cases&sloc=readinglist">here</a>, and <a href="http://www.ischool.drexel.edu/faculty/ssilverstein/cases/?loc=cases&sloc=firstnet">here</a>) can simply be ignored. In the health IT industry, that "channel" is controlled, right up to the highest levels of numerous governments. Observations such at my April 2010 post "<a href="http://hcrenewal.blogspot.com/2010/04/healthcare-it-corporate-ethics-101.html">Healthcare IT Corporate Ethics 101: A Strategy for Cerner Corporation to Address the HIT Stimulus Plan</a>"; at my post just a few days later on the "disappearance" of materials cited in my above exposé, "<a href="http://hcrenewal.blogspot.com/2010/04/corporate-ethics-101-paper-and-website.html">Cerner - Fuqua School of Business 'Corporate Ethics 101' Paper and Website Disappear</a>"; and at my Jan. 2010 post "<a href="http://hcrenewal.blogspot.com/2010/01/more-on-perversity-in-hit-world.html">More on Perversity in the Healthcare IT World: Is Meditech Employing Sockpuppets?</a>" (where I exposed a likely industry shill through IP forensics), among others, can be placed better into context as components of "controlling the channel" for health IT, and not appearing obvious in doing it. Physicians especially need to re-learn the mantra "Critical thinking always, or your patient's dead" of my late mentor, cardiothoracic surgery pioneer Victor Satinsky MD. Medical schools also should be developing and teaching courses in how the healthcare industries attempt to "control the channel." These issues go far beyond the mere "tension management" issues of forbidding students, residents and attending physicians from accepting coffee cups, lunches, stethoscopes or other gifts of nominal value from the industry. -- SS

How Terrible Health IT (And Other Healthcare Toxic Waste) Gets Pushed on Naïve and Malleable Physicians, Hospital Executives and Governments

Over at " Hooked: Ethics, Medicine, and Pharma ", University of Texas Medical Branch at Galveston ( UTMB) Institute for the Medica...

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Some Dare Call It "Corruption" - the Massachusetts Blue Cross Blue Shield Golden Parachute Scandal Continues

We have discussed many cases of health care organizations' leaders <a href="http://hcrenewal.blogspot.com/search/label/executive%20compensation">reaping rewards</a> disproportionate to any concept of their performance, and especially to any concept of the effect of their conduct on patients' or the public's health.  Most of these cases have been pretty anechoic, but for some reason, the case of the huge golden parachute given to the outgoing CEO of Massachusetts Blue Cross Blue Shield despite a tenure  marked by financial losses and no particularly brilliant advances in patients' care or outcomes, (see <a href="http://hcrenewal.blogspot.com/2011/03/massachusetts-blue-cross-blue-shield.html">this post</a>) continues to generate responses.  <a href="http://www.tauntongazette.com/opinions/x698043762/OUR-VIEW-Blue-Cross-pricey-board#axzz1GbmtyVjB">One editorial</a> suggested that should the non-profit health insurance company continue to pay so lavishly, it should lose its tax exemption.  <a href="http://www.wbjournal.com/news48593.html">Another</a> noted that the company should start putting its stakeholders, defined as its policy-holders "first and its funding of overly generous compensation packages to board members and outgoing CEOs somewhere far below."  Finally, <a href="http://www.projo.com/opinion/editorials/content/ED_blue11_03-11-11_02MUBQQ_v10.1f424a3.html">an editorial</a> in the local Providence Journal used the "c" word, "corruption," to define the company's and its CEO's behavior. So it should not be surprising that defenders of the company have appeared.  The Boston Globe published <a href="http://www.boston.com/business/healthcare/articles/2011/03/13/its_not_just_pay_that_is_pushing_up_health_care_costs/">an article</a> which featured attempts to minimize the importance of the CEO's golden parachute. Further analysis of the points are in order. Executive Salaries are a Minimal Component of Cost The article quoted an expert who asserted executive salaries are not themselves a big component of cost: <blockquote>The outcry grew big enough to force Blue Cross board members to vote to suspend their own payments and to lead the insurer to make promises to curb excessive payouts to executives. There’s just one problem: Those steps will do little to fix soaring health care costs. 'I have the same outrage,' Stuart H. Altman, a national health policy professor at Brandeis University, said about Blue Cross’s payments. But, 'We need to put executive pay and board salaries in perspective. It is not the major force, or even close to the major force, in driving up health care costs.'</blockquote>My comment is that just because administrative costs are not the largest component of health care costs does not mean they do not drive health care costs. As I have argued before, the biggest problem created by excess compensation for health care organizations' leaders is not the amount of money they get, per se.  The problem is the effect of the perverse incentives created by the money.  One concern is that people paid that much may make decisions that support their pay in the short-term, but damage the organizations' mission in the long-term.  Another is that the sorts of people attracted by the possibility of big pay packages are those least likely to uphold the mission in the first place.  Another is that the huge disparity between the pay of the top leaders and of everybody else is demoralizing for the relatively poorly paid staff who actually must do the work. Finally, it may be worth quoting the former President of Princeton University, just <a href="http://blog.nj.com/njv_kelly_heyboer/2011/03/william_bowen_qa_former_prince.html">interviewed</a> about what academic leadership was like in the days before giant pay packages: <blockquote>I’m not a fan of huge salaries for presidents of academic institutions. These are hard jobs. But people don’t really do them for the money. What kind of message do you really want to convey concerning the nature of the institution and its leadership? I always thought that it was important to convey a message of we’re all in this together. If you as president earn so much more than everyone else, it’s hard to argue that we’re all in this together.</blockquote>Focusing on Executive Compensation Distracts from the Real Issues The final argument in the Boston Globe piece was that huge executive compensation just is a distraction from the real issues: <blockquote>Yet [current Massachusetts Blue Cross Blue Shield CEO Andrew] Dreyfus said he is concerned that the focus on executive and director pay will distract insurers, providers, and policy makers from addressing factors driving health care costs higher. Those factors range from an aging population to increases in obesity to expensive tests, drugs, and treatments that cure diseases and prolong lives. 'If you had a dozen health economists sitting in this room and you asked them what’s driving health care [costs], you know executive and board compensation wouldn’t be at the top of the list,' he said. 'It would be chronic illness and prices of hospitals and doctors and medical advances and discoveries and technology.'</blockquote> That list of the "real" drivers of health care costs sounds very familiar. Wendell Potter's <a href="http://wendellpotter.com/deadlyspin/">Deadly Spin</a>, is an expose of how how insurance and managed care corporations' public relations departments used deception, propaganda, and outright disinformation campaigns to make sure health policy supported the companies' interests. Potter wrote (p.110) about how PR campaigns were designed to distract the public and policy makers from the industry's responsibility for health care dysfunction: <blockquote>Rather than admit responsibility for the failures, insurance executives pointed the finger of blame at their customers, the 'consumers' of health care, and, of course, the providers of care. In introducing the concept of their new silver bullet - consumer driven health care - insurance executives claimed that the 'real drivers of health care costs' (one of my CEO's favorite expressions) were the people who sought care when they really didn't need it and the doctors and hospitals who were all too willing to provide this unnecessary care. Sure, the aging population and expensive new technology were also factors, but the main culprits were people who just didn't realize how expensive health care had become.</blockquote>I color coded the factors listed by the current Blue Cross CEO as the real "drivers" of health care using the same colors with which I coded Mr Potter's list the specific distractors created by insurance company executives to deflect attention from the companies' inability (and probable) disinclination to control costs. So it appears that Andrew Dreyfus is working from the same playbook that Wendell Potter described, down to the "drivers of health care costs" terminology.  Summary The Massachusetts Blue Cross Blue Shield kerfuffle seems to be enlarging into a good case to teach about what health care dysfunction is really all about.  It shows how the leaders of large health care organizations seem to be putting their self-interest ahead of the missions they are supposed to uphold.  Without governance structures that hold them accountable for upholding these missions, they have set up perverse incentives to pay themselves very well regardless of the effects of their actions on patients' or the public's health.  So it appears, as the Providence Journal editorial asserted, that the leadership of health care organizations is increasingly corrupt, at least using the <a href="http://www.transparency.org/news_room/faq/corruption_faq">Transparency International definition of corruption</a>, abuse of entrusted power for private gain.  True health care reform would make leaders of health care organizations accountable for upholding their missions, and for patients' and the public's health.  Leaders of health care organizations ought to get reasonable incentives for improving health, but not incentives so large as to demoralize the people who actually do the work and take care of the patients.  Post Script: More Undisclosed Conflicts of Interest It is obvious why Andrew Dreyfus, the new CEO of Massachusetts Blue Cross Blue Shield might quote the health insurance industry public relations party line about drivers of health care costs that conveniently do not include insurance company practices and executive compensation.  It was not obvious when reading the Boston Globe article why Professor Altman might be susceptible to that party line.  Perhaps his conclusions were only based on his scholarship. However, the Boston Globe article failed to disclose Prof Altman's part-time jobs.  As per <a href="http://www.sec.gov/Archives/edgar/data/882235/000119312510074491/ddef14a.htm">this 2010 proxy statement,</a> he is a member of the board of directors of <a href="http://www.lincare.com/">Lincare</a>, a company that provides respiratory care services, including disease management, and of <a href="http://www.manta.com/c/mmnthrl/aveta-inc">Aveta Inc</a>, a privately held health insurance company.  Prof Altman's total compensation from Lincare in 2009 (per the latest proxy statement available, i.e., that issued in 2010), was over $1.7 million.   Note that corporate directors, as we have discussed previously, have a fiduciary duty to exhibit "unyielding loyalty" to the stockholders of the company and their interests  [Per Monks RAG, Minow N. <a href="http://www.amazon.com/Corporate-Governance-Robert-G-Monks/dp/1405116986">Corporate Governance</a>, 3rd edition. Malden, MA: Blackwell Publishing, 2004. P.200.].  Given Prof Altman's membership in the board of directors of a health insurance company, and his towering compensation as a director of a health care company that may need to maintain good relationships with health care insurers, it would seem that he has multiple financial relationships that could lead to sympathy with the health insurance industry's public relations party line. So it seems that regardless of the intent of the reporter who wrote it, the latest Boston Globe article about the Massachustts Blue Cross Blue Shield CEO golden parachute scandal ended up being an apologia for excess compensation of health care insurance executives that followed the script written years ago by health care insurance corporate public relations. So I need to add another conclusion.  The discussion of health care policy needs to be informed by disclosure of the financial interests of those participating, particularly those participating as experts in the media.   True health care reform would lead to such disclosure.  However, in our currently dysfunctional health care environment, be very skeptical about the interests of "health policy experts" who seem eager to support the powers that be.

Some Dare Call It "Corruption" - the Massachusetts Blue Cross Blue Shield Golden Parachute Scandal Continues

We have discussed many cases of health care organizations' leaders reaping rewards disproportionate to any concept of their performance...

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AMA, Deluded on Health IT, Begs For Doctor Penalty Extension - Not Penalty Termination

The American Medical Association (AMA) has become worse than useless: <blockquote>AMA urges issuance of EMR penalties be delayed <a href="http://library.cqpress.com/cqweekly/login.php?requested=%2Fcqweekly%2Findex.php&PHPSESSID=199il1erbvjc117chl5h4pauo7">Congressional Quarterly</a>'s CQ Weekly (3/14, Zeller) reports that "Congress strongly believes that electronic medical records will bring down the cost of healthcare, so much so that it has passed two laws providing incentives for doctors who upgrade their systems and levying penalties on those who don't." But, the American Medical Association is urging that the penalties be delayed. Notably, the association "says a Government Accountability Office study released in February bolsters its point that the two laws create competing incentives that contradict each other." [Just our <a href="http://www.gallup.com/poll/145238/congress-job-approval-rating-worst-gallup-history.aspx">sub-15%</a> approval rating Congress at work - ed.] The article adds that the Department of Health and Human Services "announced that doctors will face penalties of 1 percent of their Medicare fees if they don't start issuing electronic prescriptions this year," which the AMA says would be a waste because physicians would buy e-prescribing software that they would discard when they install records systems in 2012. [Lest they face other Medicare penalties for non-"meaningful use" of EMR's - ed.] </blockquote> Aside from the Congressional mayhem created by conflicts between e-Prescribing and EMR coercion laws, if the AMA were not completely useless, and truly represented physicians (and patients), they'd be pushing not for a delay in penalties, but for their abolition. This would help return HIT to a sensible voluntary path from the path of irrational exuberance it's now on. -- SS<a name="S2"> </a>

AMA, Deluded on Health IT, Begs For Doctor Penalty Extension - Not Penalty Termination

The American Medical Association (AMA) has become worse than useless: AMA urges issuance of EMR penalties be delayed Congressional Quarterly...

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Why The Overambitious, Cavalier Approaches of the Healthcare IT Industry Are Harmful To Health: Guest Post by Dr. Jon Patrick, U. Sydney

Apparently Holland is now veering away from a national project for health information exchange. From a researcher at Erasmus University Rotterdam: <blockquote style="font-family:arial;"> While failures of IT implementation in the UK and more recently the Cerner implementation in Australia has been dissected by [U. Sydney Professor] Jon Patrick, the Dutch initiative for a national health IT infrastructure for exchanging patient data that would start with a medication record and a summary record is about to be voted down in the upper house (Senate) of the Dutch parliament. It means that the trajectory to get this infrastructure and which lasted thirteen years will grind to a halt. Unfortunately this implementation has been poorly documented in scientific journals (to my knowledge only one paper describing the infrastructure was published in Methods of Information in Medicine).</blockquote> I wrote about the exposé by Prof. Jon Patrick of U. Sydney of poor software engineering practices, poor usability, unreliability, and dangers posed by a commercial health IT product slated for the ED's of the Australian state of <a href="http://en.wikipedia.org/wiki/New_South_Wales">New South Wales</a> (NSW) at my Mar. 5, 2011 post "<a href="http://hcrenewal.blogspot.com/2011/03/on-emr-forensic-evaluation-from-down.html">On an EMR Forensic Evaluation by Professor Jon Patrick from Down Under: More Thoughts</a>". Prof. Patrick offers the following additional pithy and highly insightful commentary, reposted here with his permission (emphases mine): <blockquote style="font-family:arial;"><div>Colleagues, Since the publication of my long report on the discontent with and weaknesses of Cerner Firstnet/Millenium in Australia (see <a href="http://www.it.usyd.edu.au/%7Ehitru/index.php?option=com_content&task=view&id=91&Itemid=146" target="_blank">http://www.it.usyd.edu.au/~hitru/index.php?option=com_content&task=view&id=91&Itemid=146</a>) I have been pondering the issue of how we can better define the "EMR" and its functions. I certainly think that the notion of an EMR in terms of current popular discussions in AMIA-WGs [American Medical Informatics Association work groups - ed.] and blogs [such as this one - ed.], government policy and vendor publicity is defined at too high a level of generalisation for analysts to create an adequate specification of it and likewise for the engineers to understand the requirements so that they can build such a system. <div>This position is further justified by the failures to create such systems in the UK, NSW and Victoria (Australia) and the loss of political support in Holland. A counterpoint to this are the successes in New Zealand, Denmark and Scotland with systems of smaller ambition and scale targeted at particular problems. </div> <div>I offer this thesis for deliberation: that large scale enterprise software implementations are an over generalisation of the EMR problem so that their lack of ability to capture local context and their intrinsically weak engineering base demonstrate that the advocates of large scale EMR don't know how to do it, have failed to do it in the past at great cost to various communities, and will continue to fail until they understand and define the task properly and in great detail of what has to be done and how to do it.</div></div></blockquote><div style="font-family:arial;"><div> In other words, the healthcare IT industry itself - starting with its leadership - does not know what it's doing and may itself be ill-suited to purpose, the purpose of facilitating better healthcare. Its overall brute-force, mass-scale, ham-fisted ideologies and approaches cannot succeed except in wasting billions of healthcare dollars. Or, more precisely, transferring that wealth to the IT sector and leaving little to show for it in the health sector. <div>I agree with Prof. Patrick's "thesis." At my own HIT website now at <a href="http://www.ischool.drexel.edu/faculty/ssilverstein/cases/" target="_blank">http://www.ischool.drexel.edu/faculty/ssilverstein/cases/</a> years ago I wrote similar words: </div> <blockquote style="margin-right: 0px;" dir="ltr"> <div> <div style="margin-top: 0px; margin-bottom: 0px;">Healthcare information technology (HIT) holds great promise towards improving healthcare quality, safety and costs ... however, this potential has been largely unrealized. Significant factors impeding HIT achievement have been false assumptions concerning the challenges presented by this still-experimental technology, and underestimations of the expertise essential to achieve the potential benefits of HIT. This often results inclinician-unfriendly HIT design, and HIT leaders and stakeholders operating outside (often far outside) the boundaries of their professional competencies. Until these issues are acknowledged and corrected, HIT efforts will unnecessarily over-utilize precious healthcare resources, will be unlikely to achieve claimed benefits for many years to come, and may actually cause harm.</div></div></blockquote> </div></div>Once again, you heard it here first. I also reiterate, our own "National Program for Health IT in the HHS" needs the same treatment that Prof. Patrick recommends for his own state of NSW, as at my Mar. 8, 2011 post "<a style="font-family: arial;" href="http://hcrenewal.blogspot.com/2011/03/future-pathways-for-e-health-in-nsw.html">The Future Pathways for e-Health in NSW</a>." -- SS

Why The Overambitious, Cavalier Approaches of the Healthcare IT Industry Are Harmful To Health: Guest Post by Dr. Jon Patrick, U. Sydney

Apparently Holland is now veering away from a national project for health information exchange. From a researcher at Erasmus University Rot...

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The Massachusetts Blue Cross Blue Shield CEO's Golden Parachute - "'Have's' Greasing One Another's Pockets"

We have frequently discussed the kind of <a href="http://hcrenewal.blogspot.com/search/label/executive%20compensation">compensation</a> now frequently given to leaders of health care organizations.  Although often even the most disproportionately outrageous compensation only attracts transient interest, a recent regional story in this genre has really gotten legs. How Big the Golden Parachute? The story was about the severance package given to one Cleve L Killingsworth, the former CEO of not-for-profit health care insurance company <a href="http://hcrenewal.blogspot.com/search/label/Blue%20Cross%20and%20Blue%20Shield%20of%20Massachusetts">Massachusetts Blue Cross Blue Shield</a>.  While first reported as being worth $8.6 million,(1) the estimate of his total severance was soon raised to $11 million.(2) This is a Way to Control Costs? Immediately, that amount was contrasted with the supposed emphasis of the company on controlling costs, and its recent poor performance: <blockquote>Killingsworth’s tenure at Blue Cross, which has nearly 3 million members, was marked by efforts to address skyrocketing medical costs by launching a 'global payment' pilot program, under which health care providers are given an annual budget and incentives to keep patients healthy and out of the hospital. 'Without Cleve’s leadership, we wouldn’t be where we are today in shifting from fee-for-service to global payments,' said senior vice president Jay McQuaide. But the insurer stumbled financially in recent years, recording back-to-back operating losses totaling nearly $215 million in 2009 and 2010 as the economy weakened and state regulators acted to limit premium increases for policies covering small businesses and individuals.(3)</blockquote>Then focus shifted to the company's board of trustees, which lead to recognition of some more striking contrasts. First, some prominent members of the board which approved the huge golden parachute had been vocal supporters of controlling health care costs: <blockquote>Key members of the Blue Cross Blue Shield board that gave the nod to then-CEO Cleve Killingsworth’s controversial $11 million severance have been public advocates for trimming soaring health-care costs — even as they sat on a panel that quietly approved the departing chief’s golden parachute. Greater Boston Chamber of Commerce President Paul Guzzi has crusaded to lower health-care costs in his day job representing the interests of local businesses, many of which struggle under the burden of rising premiums for their employee health plans. 'Advancing payment reform to bring health-care costs under control' is one of the Greater Boston Chamber of Commerce’s top policy agenda items, Guzzi said in a statement in January. Guzzi made $84,463 as the Blue Cross board chairman at the time of the Killingsworth vote. Robert J. Haynes, president of the Massachusetts AFL-CIO who made $72,700 as a Blue Cross board member in 2010, has championed health-care cost reduction for the thousands of union members he represents. 'Unions stand ready to be part of the solution to the health-care cost crisis in which we all find ourselves,' Haynes said in an AFL-CIO statement in January. 'The only way to ensure we are part of the solution is to guarantee that we have a voice and meaningful role in how cost savings are achieved.' Bentley University president Gloria Larson, who earned $76,400 as a Blue Cross board member last year, helped organize a confab of business, labor and political leaders in Ashland in January that addressed rising health-care costs. Those who planned to attend reportedly included two other Blue Cross board members — Haynes and former Suffolk District Attorney Ralph C. Martin II.(4)</blockquote>Why Pay a Non-Profit's Trustees? Also, as the quote above pointed out, it appears that the board members were themselves paid fairly well for a very part-time job, even though in general trustees of not-for-profit organizations serve as unpaid volunteers. However, it was soon revealed the paying board members is common practice for all Massachusetts non-profit health insurance companies.(5) Some Blue Cross board members tried to defuse the issue by minimizing the impact of their pay on the organization's total budget: <blockquote>Robert J. Haynes, president of the Massachusetts AFL-CIO and a critic of excessive corporate pay, was questioned about his role on the board following a State House news conference he held on a union-backed plan aimed at lowering health care costs. He said he would not give up his $72,000 annual payment from Blue Cross until the issue was reviewed by the company, and said the money given to board members does not play a role in rising health care costs. 'The cost of health insurance is not affected very much,' Haynes said. 'It’s about $1 million that board members get paid. On $13 billion in revenue, it’s like pennies a year.' (6)</blockquote>What Should the New CEO Be Paid? However, soon the board felt the need to suddenly stop paying itself.(7) The current Blue Cross CEO noted how little he would be paid: <blockquote>Dreyfus emphasized that he has taken 'rock-bottom-of-the-market' compensation levels -- $800,000 in base pay with the opportunity for $1.6 million in severance – for comparable positions in the insurance industry. 'I will be one of the lowest paid Blue Cross executives in the country,' he said.... (8)</blockquote>Things are tough all over. What is Mr Killingsworth Now Up To? Meanwhile, Mr Killingsworth seems to be weathering the storm. An enterprising reporter attempted to interview him in his house in New York, described as "a sprawling clapboard monstrosity with the charm of an assisted-living facility." However, "Mr Killingsworth was nowhere to be found," and Mrs Killingsworth "slammed the door" on the reporter.  (See picture in cited article.)  (9) Possibly, Mr Killingworth was away tending his other responsibilities, which include serving on the Boards of Directors of <a href="http://investor.travelers.com/phoenix.zhtml?c=177842&p=irol-govBio&ID=165042">The Traveler's Company</a> and <a href="http://www.tiaa-cref.org/public/about/governance/corporate/board-composition/tiaa-overseers/cleve_l_killingsworth.html">TIAA-CREF</a>, and apparently despite their apparently competitive nature, on the boards of the Harvard Medical School and <a href="http://www.bu.edu/trustees/boardoftrustees/members/">Boston University</a>. The Reaction There were plenty of reactions, mostly vigorously unfavorable, to the contrast between the company's non-profit status, supposed commitment to reducing costs, and financial performance, on one hand, and the compensation given to executives, and board members: "undermines the credibility of insurers when they say they're serious about bringing down the cost of care" Deidre Cummings, President of the Massachusetts Public Interest Research Group (3) "If you lose $149 million and then you get paid $11 million for doing it, it is very clear to people where their health-care dollars are going.  And it is not to health care." - Ethan Rome, Health Care for America Now (2) There were also judgments that health care had become the sandbox for wealthy and well-connected insiders, at the expense of everyone else: "What we have here today is yet another enraging story of the 'haves'greasing one another's pockets while the 'have-nots' slip beneath the waves." Margery Egan, columnist for the Boston Herald(10) "Therein lies the problem with boards.  They're supposed to provide oversight, but too often it's the same people tossing money at each other to serve on the boards of each other's companies, the operative word always being 'Yes!'" Brian McGrory, Boston Globe columnist (5) Most pessimistically: "If Massachusetts is the model, then national health care reform is ultimately doomed." Derrick Z Jackson, Boston Globe columnist (11) I am actually now more optimistic.  The coverage of this story really shows that the <a href="http://hcrenewal.blogspot.com/search/label/anechoic%20effect">anechoic effect</a> may be fading .  There is starting to be frank discussion of the role of bad leadership of health care organizations as a cause of health care dysfunction.  If we start to admit these problems, maybe we can figure out solutions. I will add just one opinion to those expressed in these articles.  The clear problem here is again perverse incentives.  The issue with how much this CEO was paid, and how his board members were paid was not mainly the diversion from direct health care of the funds involved.  Instead, the concerns ought to be: what sorts of people do these payments attract?  Are they the sorts of people who will uphold the organization's mission?  Once attracted, what sorts of incentives do the prospects of these payments supply for what sorts of decisions?  Do these sorts of incentives lead to decisions that uphold the mission in the long-term? In this case, these concerns are underlined by the Blue Cross trustees' cavalier attitude to their own pay, and the new CEO's belief that $800,000 a year is "rock-bottom."  I hope that the amount of discussion this case provoked might actually lead to some needed regional changes. More globally, as we have <a href="http://hcrenewal.blogspot.com/search/label/executive%20compensation">said before</a>, far too often the leaders of not-for-profit health care institutions seem more interested in padding their own bottom lines than upholding the institutions' missions. They often seem entirely unaware of their duty to put those missions ahead of their own self-interest. Like the financial services sector in the era of "greed is good," health care too often seems run by <a href="http://hcrenewal.blogspot.com/2009/12/compensation-madness-insiders-hijacking.html">"insiders hijacking established institutions for their personal benefit."</a> True health care reform would encourage leadership of health care who understand health care and care about its mission, rather than those who see a quick way to make a small fortune. References 1.  Gil G. <a href="http://www.boston.com/business/healthcare/articles/2011/03/02/blue_cross_ceo_got_86m_in_exit_deal/">Former Blue Cross CEO got $8.6m last year</a>.  Boston Globe, March 1, 2011.  2. McConville C. <a href="http://www.bostonherald.com/news/regional/view.bg?articleid=1320386&srvc=rss">Ex-Blue Cross CEO walks away with $11M</a>. Boston Herald, March 2, 2011. 3. Weisman R. <a href="http://www.boston.com/business/healthcare/articles/2011/03/02/blue_cross_ceo_got_86m_in_exit_deal">Blue Cross CEO got $8.6m in exit deal</a>. Boston Globe, March 2, 2011. 4. McConville C, Chabot H. <a href="http://www.bostonherald.com/news/regional/view/2011_0303behind_the_hield_trio_publicly_crusaded_against_rising_health_costs/srvc=home&position=0">Trio publicly crusade against rising health costs: behind the shield</a>. Boston Herald, March 3, 2011. 5. McGrory B. <a href="http://www.boston.com/news/local/massachusetts/articles/2011/03/04/such_healthy_pay_its_sick">Such health pay, it's sick</a>. Boston Globe, March 4, 2011. 6. Levenson M, Weisman R. <a href="http://www.boston.com/lifestyle/health/articles/2011/03/08/2_blue_cross_directors_justify_stipends">2 Blue Cross directors justify stipends</a>. March 8, 2011. 7. Crimaldi L, Dwinnell J. <a href="http://news.bostonherald.com/news/regional/view/2011_0308blue_cross_to_suspend_board_member_pay/srvc=home&position=0">Blue Cross board suspends pay, CEO perks cut</a>. Boston Herald, March 8, 2011. 8. Cheney K. <a href="http://www.enterprisenews.com/business/x2011258314/Amid-outrage-Blue-Cross-chief-fights-to-reclaim-company-s-standing#axzz1GKC5WDrB">Amid outrage, Blue Cross chief fights to 'reclaim' company's standing</a>. Enterprise News, March 10, 2011. 9. Gelzinis P. <a href="http://www.bostonherald.com/news/columnists/view/2011_0311cleves_ny_castle_not_shielded_from_bad_taste">Cleve Killingsworth's New York castle not shielded from bad taste</a>. Boston Herald, March 11, 2011. 10. Egan M. <a href="http://www.bostonherald.com/news/columnists/view.bg?articleid=1320681">You call this health care? - it's nauseating</a>.  Boston Herald, March 3, 2011. 11.  Jackson DZ. <a href="http://www.boston.com/bostonglobe/editorial_opinion/oped/articles/2011/03/05/no_wonder_health_costs_are_so_high">No wonder health costs are so high</a>.  Boston Globe, March 5, 2011.

The Massachusetts Blue Cross Blue Shield CEO's Golden Parachute - "'Have's' Greasing One Another's Pockets"

We have frequently discussed the kind of compensation now frequently given to leaders of health care organizations. Although often even th...

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