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Merck KGaA Settles, Again

They just keep marching along, legal settlements, that is.  The latest entry in the parade is Merck KGaA (of Switzerland, not to be confused with the American Merck and Co, Inc), as per the AP, <a href="http://abcnews.go.com/Business/wireStory?id=13528024">via ABC News</a>: <blockquote>The Department of Justice said Wednesday that multinational drugmaker Merck Serono SA has agreed to pay $44.3 million to settle allegations that it illegally promoted one of its drugs using kickbacks to doctors. Federal prosecutors said that Merck Serono and EMD Serono allegedly made inappropriate payments to hundreds of doctors for prescribing its multiple sclerosis drug, Rebif, between 2002 and 2009. Merck Serono paid to send doctors to various training meetings and conferences at upscale resorts and other locations, according to the Department of Justice.</blockquote> Of course, while agreeing to pay out the money, the company denies everything: <blockquote>The company pointed out in a statement: 'the settlement contains no claims that unnecessary prescriptions for Rebif were written, no allegations of patient harm and no admission of fault by the company.'</blockquote> One wonders whether $44 million is now such a trivial amount to a large health care corporation that companies are willing to pay so much just to avoid the inconvenience of a trial? Or did perhaps the company leadership worry it might lose this trial? Note that regardless of the above company statement, the US Department of Justice asserted that the company made "improper payments" to physicians "For prescribing its drugs." So, unlike some of the many settlements we have discussed which involved only financial improprieties, this one allegedly involved actions that corrupted physicians. As we have noted previously, Transparency International defines corruption as "abuse of entrusted power for private gain." Physicians are entrusted to make decisions for individual patients for the patients' good. Accepting payments from a drug company to prescribe a particular good appear to be an abuse of such entrusted power, obviously for private gain. So the sorts of behavior that allegedly resulted in this settlement are particularly pernicious for medical professionalism, as well as for the good of patients. Nonetheless, despite protestations that they are going to get tough, US law enforcement seems unwilling to hold any individual accountable for this sort of behavior. Granting individual impunity, though, seems to provide no deterrent against future bad behavior.  For example, as we noted <a href="http://hcrenewal.blogspot.com/2010/12/mylan-settles-merck-kgaa-pays-fine.html">here</a>, Merck KGaA had to pay a settlement last year of claims that its previous subsidiary, Mylan, reported falsely inflated claims.  That legal action also imposed no negative consequences on individuals.  This legal action had been in the works since at least 2007, but as noted above, the actions that lead to the current settlement continued through 2009.  So, to repeat, repeat, 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.

Merck KGaA Settles, Again

They just keep marching along, legal settlements, that is. The latest entry in the parade is Merck KGaA (of Switzerland, not to be confused...

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"We're Only In It for the Money" - Big Businesses Pretending to be Medical Schools Discussed in Main-Stream Medical Journal

This is a first, the contention that medical schools are only in it for the money has appeared in a prestigious, main-line, large-circulation medical journal(1). The author started by noting that medical schools are now academic in name only. <blockquote>US medical schools have evolved into big businesses that derive most of their income by providing healthcare services and securing extramural research grants. In 2009, for example, 53% of medical school revenues came from clinical services and 29% from extramural grants. By comparison, less than 4% came from tuition.</blockquote> These big businesses disguised as academic institutions behave like other big businesses: <blockquote>Academic medical centers vie for clinical market share through direct-to-consumer advertising. To increase referrals, they offer free continuing medical education that boost the visibility of their most profitable services to community providers. Physicians with MBA degrees are becoming increasing common at academic medical centers....</blockquote> Then University of Utah cardiology professor Matthew Movsesian clearly asserted that faculty realize that they are only valued for the money they bring in: <blockquote>It's worth noting that medical school faculty members perceive that their-revenue-generating activities are of paramount importance in the eyes of academic leadership. In a recent survey of US medical schools, 51% of respondents agreed that 'the administration is only interested in me for the revenue I generate'; a less extreme statement might have elicited [even] more widespread concurrence. Emphasis on revenue generation by faculty is evident in the incentive plans that typically compensate clinicians in proportion to the billable services they provide. And researchers understand that their salaries for time spent on research must be paid, sometimes in full, from extramural grants.</blockquote> Dr Movsesian implied who the main beneficiaries of this revenue generation are: <blockquote>Executives at these teaching institutions are paid industry-level salaries.</blockquote> All of this should be familiar to those who have been reading <a href="http://hcrenewal.blogspot.com/">Health Care Renewal</a>.  We first wrote about how medical school leaders mainly evaluated faculty by their revenue generation, and dismissed those who did not generate sufficient revenue as "welfare recipients," <a href="http://hcrenewal.blogspot.com/2007/04/medical-schools-to-faculty-show-me.html">here</a> in 2007.  We discussed the survey that revealed that medical school faculty realize their supervisors only value their revenue generation <a href="http://hcrenewal.blogspot.com/2010/12/american-medical-schools-are-only-in-it.html">here</a> in 2010.  But the first post was derived from an interview in the SGIM newsletter, and the survey noted above so far is only publicly available in an on-line abstract.  To my knowledge, the notion that medical schools have abandoned their primary mission of discovering and disseminating the truth in favor of making money, perhaps mainly for the benefit of their top leaders, has not heretofore appeared in a main-stream medical or health care journal.  So this new publication marks an important weakening of the anechoic effect. Late in 2010, we discussed an important new report in the Lancet about the reform of global health care education(2)(see post <a href="http://hcrenewal.blogspot.com/2010/12/health-professionals-for-new-century.html">here</a>).  It hinted at some of the threats to the academic medical mission we have long discussed on Health Care Renewal.  An accompanying editorial stressed the need to uphold the academic mission, implying that it was in some way threatened, but again did not discuss what actually threatened it.(3)(See our post <a href="http://hcrenewal.blogspot.com/2010/12/lancet-emphasizes-threats-to-academic.html">here</a> which listed some of threats that should be considered.  The threats are reprinted in the box below.)  Now the peril to the mission of US medical, and by extension, perhaps global health care education has made it into polite discussion.  Maybe it is not too late to address threats to global health care education before the system collapses from its internal contradictions. Threats to the Global Health Care Education Mission (the "Thirteen Plagues") <a href="http://hcrenewal.blogspot.com/">Health Care Renewal</a>, is largely concerned with threats to health care's core values, including threats to the mission of academic medicine, largely from concentration and abuse of power.  The largest set of threats come from the ascendancy of financial goals amidst the commercialization of health care (mentioned briefly both in Frenk et al and the editorial).   <li>Abandonment of traditional prohibitions of the commercial practice of medicine - In the US, a Supreme Court decision was interpreted to mean that medical societies could no longer regulate the ethics of their members.  Until 1980, the US American Medical Association had  ruled that the practice of medicine should not be "commercialized, nor treated as a commodity in trade."  After then, it ceased trying to maintain this prohibition.  The result was increasing, now rampant commercialization.  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>.</li> <li>Making money takes precedence over education -  A recent survey showing that more than half the faculty at multiple US medical schools felt they were valued more for how much money they brought in than their teaching or patient care abilities (<a href="http://hcrenewal.blogspot.com/2010/12/american-medical-schools-are-only-in-it.html">here</a>), confirming previous anecdotal reports (see <a href="http://hcrenewal.blogspot.com/2007/04/medical-schools-to-faculty-show-me.html">here</a>).  </li> <li>The medical school re-imagined as a biotechnology company -  In 2000, a Vice President of the American Association of Medical Colleges(4) wrote that research universities must respond to "societal demands that they become engines of economic development…."  Many universities now defend lax conflict of interest policies with similar arguments.  For more details, go <a href="http://hcrenewal.blogspot.com/2010/11/who-you-gonna-call-how-should-young.html">here</a></li> <li>Faculty become employees of industry - For numerous examples of this and other kinds of conflicts of interest, go <a href="http://hcrenewal.blogspot.com/search/label/conflicts%20of%20interest">here</a>.  A survey by Campbell et al suggested that approximately two-thirds of medical academics get significant payments from industry.(5)</li> <li>Academics become "key opinion leaders" paid to market drugs and devices - Marketers regard "key opinion leaders" as salespeople who appear more credible because of their professional guise.  See anecdotal evidence <a href="http://hcrenewal.blogspot.com/search/label/key%20opinion%20leaders">here</a>. </li> <li>Control of clinical research given to commercial sponsors - A study by Mello et al showed how universities' grant administrators are willing to sign contracts giving commercial sponsors control over key aspects of human research studies.(6)  See post <a href="http://hcrenewal.blogspot.com/2005/05/troubling-study-of-contracts-between.html">here</a>. </li> <li>Conflicts of interest allow manipulation and suppression of clinical research - Commercially sponsored research design, implementation, and dissemination are often <a href="http://hcrenewal.blogspot.com/search/label/manipulating%20clinical%20research">manipulated</a> to favor the sponsor's interests.  When such manipulation fails to produce favorable results, the results may simply be <a href="http://hcrenewal.blogspot.com/search/label/suppression%20of%20medical%20research">suppressed</a></li> <li>Academics take credit for articles written by commercially paid ghost-writers - Such <a href="http://hcrenewal.blogspot.com/search/label/ghost%20writing">ghost-writing</a> is often part of organized <a href="http://hcrenewal.blogspot.com/search/label/stealth%20marketing">stealth marketing</a> campaigns.  </li> <li>Whistle blowers are discouraged, or worse, and academic freedom is damaged.  Discussion of some examples of what may happen to whistle blowers is <a href="http://hcrenewal.blogspot.com/search/label/whistle-blowers">here</a>.  The survey mentioned earlier (<a href="http://hcrenewal.blogspot.com/2010/12/american-medical-schools-are-only-in-it.html">here</a>) showed that about one-third of faculty fear they may be punished for speaking  out. </li> <li>Leadership of academic medical centers by businesspeople - <a href="http://hcrenewal.blogspot.com/search/label/ill-informed%20management">Ill-informed management</a> may result from leaders who have no background or training in actual health care.  </li> <li>Leaders of teaching hospitals and universities become millionaires -  A recent example is <a href="http://hcrenewal.blogspot.com/2010/08/more-hospital-ceos-join-millionaires.html">here</a>, and more may be found <a href="http://hcrenewal.blogspot.com/search/label/executive%20compensation">here</a>.  Leaders of academic medical centers and the parent universities of medical schools often make more than $1 million a year in the US.  When such amounts are in play, executives may focus more on short-term measures that lead to even more pay than on upholding the mission. </li> <li>Medical school leaders become stewards (as members of boards of directors) of for-profit health care corporations - A recent example is <a href="http://hcrenewal.blogspot.com/2010/12/duke-divinity-students-protest-pay-of.html">here</a>, and a summary of how we discovered this phenomenon in 2006 is <a href="http://hcrenewal.blogspot.com/2006/03/new-species-of-conflict-of-interest-in.html">here</a>.   The conflict of interest is severe because directors of for-profit corporations are supposed to have unyielding loyalty to the interests of the corporation and its stockholders, although they are frequently accused of acting mainly as cronies of the top hired executives (see <a href="http://hcrenewal.blogspot.com/2010/07/new-york-times-reports-university.html">here</a> and <a href="http://hcrenewal.blogspot.com/2010/01/one-small-step-towards-reducing.html">here</a>).</li> <li>Leaders of failed finance firms become stewards of academic medicine - We have found numerous examples, recently <a href="http://hcrenewal.blogspot.com/2010/04/failed-leaders-of-citigroup-as-leaders.html">here</a>, <a href="http://hcrenewal.blogspot.com/2010/04/wamu-worry-more-overlaps-between.html">here</a>, and <a href="http://hcrenewal.blogspot.com/2010/03/members-of-board-of-now-bankrupt-lehman.html">here</a>, of top executives and/or board members of the finance firms who helped bring on the global financial collapse also being trustees of medical schools, academic medical centers, or their parent universities.  Such "stewards" may bring to the academic environment the "greed is good" culture now pervasive in finance.  </li> Reference 1.  Movsesian M. Intramural conflicts of interest warrant scrutiny, too. Nature Medicine 2011; 17: 21. Link <a href="http://www.nature.com/nm/journal/v17/n5/full/nm0511-534.html">here</a>. 2.  Frenk J, Chen L, Bhutta ZA, Cohen J, Crisp N, Evans T et al. Health professionals for a new century: transforming education to strengthen health systems in an interdependent world.  Lancet 2010; 376: 1923-1958.  Link <a href="http://www.rockefellerfoundation.org/uploads/files/cc71deb1-1dd6-4a97-a4e3-678f520a0bc6-lancet.pdf">here</a>. 3.  Horton R. A new epoch for health professionals' education.  Lancet 2010; 376: 1875-7.  Link <a href="http://www.lancet.com/journals/lancet/article/PIIS0140-6736%2810%2962008-9/fulltext">here</a>. 4. Korn D. Conflicts of interest in biomedical research. JAMA 2000; 284: 2234-2237. Link <a href="http://jama.ama-assn.org/cgi/content/full/284/17/2234">here</a>. 5. Campbell EG, Gruen RL, Mountford J et al. A national survey of physician–industry relationships. N Engl J Med 2007; 356:1742-1750. Link <a href="http://www.nejm.org/doi/full/10.1056/NEJMsa064508">here</a>. 6. Mello MM, Clarridge BR, Studdert DM. Academic medical centers' standards for clinical-trial agreements with industry. N Engl J Med 2005; 352: 21. Link <a href="http://content.nejm.org/cgi/content/short/352/21/2202">here</a>. Title with apologies to the late Frank Zappa.

"We're Only In It for the Money" - Big Businesses Pretending to be Medical Schools Discussed in Main-Stream Medical Journal

This is a first, the contention that medical schools are only in it for the money has appeared in a prestigious, main-line, large-circulatio...

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Who Is Really "Bullying?" - Academic Leaders and the Stifling of Critics of Conflicts of Interests

Universities, which are supposed to discover and disseminate knowledge, ought to be the foremost defenders of free speech and a free press.  However, in the past decades, university executives have become notorious for trying to control speech that offends their political sensibilities (for numerous examples, see the FIRE - Foundation for Individual Rights in Education <a href="http://thefire.org/">web-site</a>.)  It seems that academic leaders get even more upset when their or their faculties' conflicts of interest are criticized, as demonstrated by updates about two important cases we have discussed. Columbia University We recently <a href="http://hcrenewal.blogspot.com/2011/04/henry-kissinger-icelands-promoter.html">posted</a> about reactions at the university to revelations in the movie "Inside Job" that the Dean of the Business School and one of its prominent professors failed to disclose pay they received that might have motivated their enthusiastic promotion of economic policies that helped contribute to the Great Recession.  These reactions occurred six months after the movie came out.  A Columbia Spectator student columnist <a href="http://www.columbiaspectator.com/2011/04/26/compromising-memory">asked</a> why it took so long: <blockquote>Why have students waited until April to address the consequences of “Inside Job” when the film was released in October? Why has our reaction been delayed by seven months?</blockquote> Her postulated answer: <blockquote> Why should Columbia need an outside documentary to point out its ethical failures? Embedded in the Spectator news article about the film—published April 15— is a quote from University Senator Liya Yu that offers a frightening answer to our question about the delayed student reaction. 'I think people in the Business School haven’t responded because they are afraid,' Yu was quoted saying. 'If you are the dean of a school, obviously all the students are going to be dependent on you for their careers and futures. It’s hard for them to do anything.' I think this explanation extends to students beyond those currently enrolled in the Business School. In fact, its implications pose a threat to student journalism as a whole. For the first time in history, everything that a student journalist writes during his or her time in college is published on the Internet. This is a good thing for many reasons: It increases readership, allows writers to cross-reference easily, etc. But it also creates a permanent, compromising memory that is available forever to anyone who seeks it. From the moment the college application process began, we were told that the content of our Facebook profiles could be used against us in admissions. We have learned to censor our traceable online behavior so as not to compromise our professional or educational prospects. Unfortunately, this has led to journalistic over-caution. We fear that anything we say now will be used against us later. And maybe it’s true. After all, not enough time has passed for us to take a careful account of the degree to which students’ first publications can affect their futures. Even editors have advised me to mitigate the strongest claims in my columns for fear of consequences to come. Perhaps they are right. But the most insidious kind of censorship—the hardest to recognize, the hardest to combat—is self-censorship, the persistent imaginative failure that prevents us from even recognizing what we should be writing about. In the Internet age, bravery in student journalism is not trailing a military unit on the Iraqi front lines. Rather, it is the willingness to address controversial issues as they surface, not once these points of view have become popular. Our brand of fear—which is frankly selfish—censors our thoughts almost unnoticed. Next time, let’s skip the delayed reaction. I for one hope to do better.</blockquote> So students may fear challenging conflicted faculty or administrators for fear of immediate academic punishment and future harm to career prospects in a society in which criticism of acquisitive leaders is decreasingly tolerated. University of Minnesota Earlier this year we <a href="http://hcrenewal.blogspot.com/2011/02/university-of-minnesota-where-nothing.html">posted</a> about the troubling case of the death of an ostensibly voluntary participant in a clinical trial at the University of Minnesota years ago.  A particular concern was whether the money they received from the trial's sponsor influenced faculty and university leaders to overlook problems that might have put patients at risk in a trial whose main goal was marketing, not science. The case got recent attention in an article by Dr Carl Elliott, a university professor of bioethics, and a letter he signed with other faculty requesting a new university inquiry into the case.  Not only did the university administration rebuff this request, but it now seems to be looking for ways to deter any future criticism of the institution's human research.  As <a href="http://chronicle.com/article/Some-U-of-Minnesota-Faculty/127261/">reported</a> in the Chronicle of Higher Education, <blockquote>At the prompting of the University of Minnesota's general counsel, a committee of the University Senate has taken up the question of how faculty should collectively respond to "factually incorrect attacks" on particular faculty research. Some faculty members say that direct appeal from the general counsel, Mark B. Rotenberg, is an attempt to quiet some faculty members' criticism of drug trials conducted at the university, including one seven years ago in which a participant, Dan Markingson, committed suicide. Before they took up the general counsel's question at a meeting this month, members of the university's Academic Freedom and Tenure Committee were provided with copies of material related to that case, including a letter sent by eight bioethicists to the Board of Regents last fall, asking it to appoint a panel of outside experts to examine the ethical issues raised by the death. Committee members discussed with two administrators who attended that meeting, on April 8, whether faculty members have a responsibility to respond to attacks on fellow faculty members, according to minutes from the meeting; failure to do so, one professor said, could be seen as parallel to 'bullying.'</blockquote> Professor Carl Elliott, who wrote the <a href="http://motherjones.com/environment/2010/09/dan-markingson-drug-trial-astrazeneca">Mother Jones article </a>that brought the recent unpleasantness of the Markingson case back into the public view, was concerned: <blockquote>In an interview, Mr. Elliott said the general counsel's actions are troubling. Instead of fostering an open discussion about research practices, Mr. Rotenberg, and by extension the university administration, is attempting to use the faculty senate as a 'stalking horse' for intimidation and punitive action, Mr. Elliott said.</blockquote> It defies common sense that Dr Elliott, representing only his own intellect and knowledge of ethics, was the "bully" in this case, while Mr Rotenberg, representing the university hierarchy, and the faculty members who ran the trial in which Mr Markingson died were the victims. As University of Minnesota faculty member Karen-Sue Taussig, a medical anthropologist, said <a href="http://www.thehastingscenter.org/Bioethicsforum/Post.aspx?id=5340&blogid=140">per the Bioethics Forum</a>: <blockquote>I was worried the committee might be being used to intimidate a member of the faculty who was critical of the University. It seemed to me that there was a logical inconsistency in the University counsel's position: he did not provide any evidence that any individual faculty member felt chilled by Carl's work, yet his bringing up the issue clearly posed the threat of chilling Carl's speech. . . . In short, I was concerned about the possibility of an Orwellian attempt to invoke academic freedom in order to chill academic freedom.</blockquote> By the way, there is also nothing to suggest that Dr Elliott's work was "factually incorrect."  Per the Bioethics Forum: <blockquote>Philosopher and historian of science Ken Waters, who also attended the second meeting, was just as concerned. 'The University's general council planted a false question, the implicature of which [the committee] seemed to be uncritically accepting (that Carl was advancing factually incorrect claims),' he wrote to me in an e-mail. 'And in planting the question, the counsel was trying to turn the tables and squelch my colleagues' academic freedom by somehow suggesting that they were impinging upon the academic freedom of others.'</blockquote> In the 1980s and 1990s, university administrators tended to attack speech they felt was hurtful to minorities and women, using speech codes (again as has been amply demonstrated by <a href="http://www.thefire.org/">FIRE</a>). Now they seem most sensitive to speech critical of their own exercise of power, and of the cozy financial relationships that generate conflicts of interest and threaten the academic mission.  Furthermore, now that it has become fashionable to decry "bullying," "anti-bullying" initiatives may become the chief way to quell criticism that make academic leaders uncomfortable. Summary At one time, university administrators and favored faculty justified attacks on free enquiry, a crucial part of the academic, by claiming a higher political or social purpose.  Now they seem to be willing to trash the core values of academia to stifle critics of their own actions, especially those involving lucrative conflicts of interest.   Such actions may be a major cause of the <a href="http://hcrenewal.blogspot.com/search/label/anechoic%20effect">anechoic effect</a>. Increasingly, academic institutuions seem to be run more for the personal benefit of their leaders and their cronies than to discover and disseminate knowledge.  True health care reform would return academic medicine to its fundamental purpose, and return its leadership to those who would uphold the mission rather than fill their pockets.   Hat tip to Ed Silverman <a href="http://www.pharmalot.com/2011/04/a-seroquel-clinical-trial-and-academic-freedom/">in the PharmaLot blog</a> re the University of Minnesota case.  See also comments by Prof William Gleason in the Periodic Table blog, e.g.,<a href="http://ptable.blogspot.com/2011/04/whos-making-factually-incorrect.html"> here</a> and <a href="http://ptable.blogspot.com/2011/04/should-general-counsel-at-university-of.html">here</a>, and by Gary Schwitzer <a href="http://www.healthnewsreview.org/blog/2011/04/questions-about-academic-freedom-in-continued-scrutiny-of-seroquel-trial-suicide.html">in the HealthNewsReview blog</a>.

Who Is Really "Bullying?" - Academic Leaders and the Stifling of Critics of Conflicts of Interests

Universities, which are supposed to discover and disseminate knowledge, ought to be the foremost defenders of free speech and a free press. ...

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The Perils of Physicians Practicing as Corporate Employees: the Contract Trap

A seriously chilling cautionary tale corroborated some of my <a href="http://hcrenewal.blogspot.com/search/label/corporate%20physician">previously expressed fears</a> about the perils of physicians practicing as corporate employees.  It unlikely venue was the April 25, 2011 issue of Medical Economics.  The article, not yet on the web, was "Selling to a Corporation Poses Challenges," by Todd R C Neely. Here is how the case started: <blockquote>A start-up company with a new medical treatment became a publicly traded corporation. The company's top managers were not physicians; they were finance and business experts familiar with the ways of Wall Street. To meet the corporation's goals and Wall Street expectations, the company used stock sale proceeds to aggressively market itself to doctors and buy established physician practices around the country. It quickly captured market share, exponentially raised the number of patients by the practices it owned, and developed substantial revenue streams. The physicians who sold their practices thought that selling would be a win-win situation for them and for the corporation. As marketed to them, the company would handle the business aspects of owning a medical practice - the ubiquitous paperwork, employee issues, and all the rest of the nonclinical task so distasteful to doctors. The physicians would spend all their work time practicing medicine using the latest technology. Benefiting from the company's promotion to the public, they would see an increase in their patient base. They would receive a base salary and, most significantly, a percentage of the profits of their practice.</blockquote> But here is how things turned out: <blockquote>Everything was great until the end of the first year. The physicians expected large payments from their practices' increased profits, but the large bonuses never came. </blockquote> What went wrong? The physicians were so blinded by the marketing pitch that they apparently never read the fine print: <blockquote>In negotiating the sale of the practices and the employee contracts, the doctors had not required the company to specify in writing what expenses the corporation would charge an individual practice and what accounting rules would be followed. So the corporation charged the practices for marketing, accounting, human resources, financing, and other services, wiping out the profits of each practice.</blockquote> The contracts were apparently designed by the corporation to favor all its interests (which should not have been surprising), but was accepted as is by the physicians: <blockquote>The contracts specified in precise terms the physicians' responsibilities, noncompete provisions, confidentiality, dispute resolution and the like. But although the contracts stated the corporation's initial responsibilities - mainly making payment on the negotiated purchase price - it phrased the company's other obligations in remarkably vague terms, or, astonishingly, did not specify them at all. The company was to make its 'best efforts' to accomplish certain goals, but the contract left the phrase 'best efforts' undefined. The phrase turned out to be quite malleable. The company's other responsibilities were to be determined at a later, unspecified time. The company's best efforts always turned out to be whatever efforts it chose to make.</blockquote> It was a trap,baited by marketing, into which the physicians neatly fell: <blockquote>Many sought legal advice and were told they had no legal resource. The noncompete clauses - fair provisions under the contract terms to which the physicians thought they were agreeing but that were disastrous under the terms (or lack thereof) of the actual contract - were broad, tight, specific, and ironclad. Many of the physicians even were barred from practicing medicine within the geographic area in which they lived. And under the equally ironclad confidentiality clause, the doctors could not publicly discuss their situations or, for that matter, anything else of significance about the corporation; if they did, they would be subject to high fines and penalties. What had appeared to the doctors as a mutually beneficial situation turned into a nightmare for them. They lost their practices and money and took years to recover. They had no legal recourse. They could not even warn others. The corporation could, and did, continue with impunity.</blockquote> Note that it is now obvious why the article was so vague about the identity of the corporation and the physicians it ensnared, and why it took so long for even such a vague version of this story to surface. The confidentiality (and probably anti-disparagement) clauses made it hazardous for anyone who signed these contracts to be forthright witnesses.  Obviously, the willingness of corporations to employ such clauses means that there may be many more cases like this out there, hidden behind the veil of contractual restrictions on free speech. We previously discussed how physicians often seem willing to blithely sign contracts without fully understanding them, thereby sacrificing their economic well-being and core values.  Here is another striking case of this phenomenon.  We previously attributed this tendency to <a href="http://hcrenewal.blogspot.com/2007/10/physicians-learned-helplessness.html">learned helplessness</a>.  The author of this article, however, suggested  that physicians were victims of carefully targeted marketing based on psychological manipulation.  It was meant to capitalize on three major factors: physicians' naive belief that everyone involved with medicine is interested in helping people by behaving rationally and logically; physicians' over-confidence in their ability to avoid failure (presumably including failure due to ignorance or misinterpretation of legal contracts); and physicians' feelings of entitlement.  In addition, the physicians seemed (probably foolishly) unaware that corporate executives are not interested in physicians' core values: <blockquote>Unlike physicians, the corporation and its top executives, non-doctors all, were involved in the practice of medicine solely to make money; the medical practices, and the very practice of medicine, were just commodities [to them].</blockquote> This observation corresponds with numerous observations about how leaders of health care organizations may ignore, or be expressly<a href="http://hcrenewal.blogspot.com/search/label/mission-hostile%20management"> hostile</a> towards physicians' core values. Thus, while the article went on to give some straight-forward advice about negotiating combined practice buy-out and corporate employment agreements, it becomes obvious that the main lesson is: physicians should not practice medicine as corporate employees. They should not sell their practices to and become employees of for-profit corporations as a way to practice medicine.  Otherwise, rather than being practitioners, they will end up as medical assembly line workers for bosses who only care about the revenue they generate. Physicians who have already inadvertently, foolishly, or under duress signed contracts that could threaten their professionalism and their patients' welfare need to do the right thing and challenge these contracts.  , or else there will soon be nothing left of the medical profession, and no one left to ethically care for patients.  With each new anecdote, it becomes clearer that the corporate practice of medicine will end up exploiting physicians and patients alike. So there is also a main lesson for patients: you should not go to doctors who are corporate employees, or practices or clinics that are run by corporations. If you do, you will end up being used only as a means for the bosses to make money. At a policy level, if we do not stop the corporate practice of medicine, we will all end up as increasingly unhealthy cogs in the corporate health care machine.

The Perils of Physicians Practicing as Corporate Employees: the Contract Trap

A seriously chilling cautionary tale corroborated some of my previously expressed fears about the perils of physicians practicing as corpor...

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The Continuing Parade of Legal Settlements by Health Care Organizations: Cardinal, Cerberus, Dartmouth-Hitchcock, Masonicare

Here is our latest round-up of the more colorful legal settlements made by some US health care organizations. Cardinal Health Cardinal Health is a pharmaceutical services company. <a href="http://www.kansascity.com/2011/04/21/2817951/former-chiefs-player-reaps-reward.html">Per</a> the Kansas City Star: <blockquote>A pharmaceutical distributor has settled a federal anti-kickback lawsuit by agreeing, in part, to pay $760,000 to former Kansas City Chiefs player Dan Saleaumua and a consultant. That money is part of an $8 million settlement that Cardinal Health Inc. of Ohio agreed to pay the U.S. government to settle the lawsuit. The lawsuit alleged that Cardinal offered Saleaumua and consultant Kevin Rinne an illegal $440,000 kickback so it could supply prescription drugs to seven Kansas City area Medicine Shoppe pharmacies that Saleaumua owned at the time.</blockquote> Cerberus Capital Management/ Dyncorp/ Steward Health Care This will require some explanation. Cerberus Capital Management now owns Steward Health Care, mostly composed of what was formerly known as Caritas Christi hospital system of Massachusetts, and a large group of physician practices now known as Caritas Christi Network Services (see posts <a href="http://hcrenewal.blogspot.com/2011/02/new-steward-health-care-will-superbowl.html">here</a> and <a href="http://hcrenewal.blogspot.com/2011/02/send-mercenaries-guns-and-money.html">here</a>). Cerberus Capital Management now also owns DynCorp (see <a href="http://www.dyn-intl.com/history.aspx">their web-site</a>), which has been called one of the "leading mercenary firms," by <a href="http://www.thenation.com/blog/mercenary-owners-they-are-changin-sort">an article </a>in the Nation. As <a href="http://www.bloomberg.com/news/2011-04-22/dyncorp-to-pay-7-7-million-for-inflated-claims-on-iraq-work-u-s-says.html">reported</a> by Bloomberg about DynCorp, and hence indirectly about Cerberus, and Steward Health Care: <blockquote>DynCorp International Inc., the largest U.S. contractor in Afghanistan, agreed to pay $7.7 million to resolve allegations it submitted inflated claims for construction work in Iraq, the U.S. said. The Justice Department said yesterday that DynCorp and its subcontractor, The Sandi Group, will settle a whistleblower case filed in federal court in Washington. The Sandi Group, accused of submitting false claims on a police-training contract in Iraq, will pay more than $1 million. 'The hard work of stabilizing Iraq is challenging enough without contractors and subcontractors inflating the cost of rebuilding by making false claims at taxpayers’ expense' Assistant Attorney General Tony West, who oversees the department’s civil division, said in an e-mailed statement. DynCorp inflated the costs of building camps at various locations in Iraq, the U.S. said. </blockquote> Dartmouth-Hitchcock Medical Center Dartmouth-Hitchcock Medical Center is a prestigious medical center. <a href="http://www.unionleader.com/article.aspx?headline=Dartmouth-Hitchcock+pays+%242.2m+in+whistle-blower+suit&articleId=9574df3c-da6c-41a0-9a1f-55ba55002aee">Per</a> the New Hampshire Union-Leader: <blockquote>Dartmouth-Hitchcock Medical Center has settled a case of alleged billing fraud to various federal health programs, such as Medicare, Medicaid and Veterans Affairs. DHMC, which denied any liability in the matter, agreed to pay $2,227,075. The federal government recovers $1.5 million, Vermont $80,396, and New Hampshire $61,541, the U.S. Attorney for the District of Vermont announced Tuesday. The investigation began in 2007 following a complaint filed by Dr. Thomas J. Prendergast, who was a physician in the DHMC pulmonary department in Lebanon. The complaint alleged the hospital improperly billed federal health care programs for services performed by resident staff without sufficient supervision by physicians. Regulations allow physicians to bill for certain services by resident staff, but only if the services are performed in the presence of a physician. The investigation, conducted with the hospital's cooperation, found alleged improper billing in the anesthesiology department, pain clinic and radiology, according to the government. The billings at issue were from 2001 to 2007.</blockquote> Masonicare <a href="http://www.masonicare.org/">Masonicare</a> is a not-for-profit "senior services provider." <a href="http://http//www.myrecordjournal.com/wallingford/article_2fce0e70-7036-11e0-8479-001cc4c002e0.html">Per</a> the Meriden (CT) Record-Journal: <blockquote>A settlement agreement was reached today where Masonicare Health Center will pay the government almost $450,000 to resolve allegations the facility violated the False Claims Act, according to an announcement from U.S. States Attorney David B. Fein. Fein explained the allegations against the senior-focused inpatient and outpatient health care facility involved improper billing to Medicare and Medicaid for injections of leuprolide acetate, or Lupron. The medication is used to treat prostate cancer in men and endometriosis and fibroids in women. The billing code for the female-related dosage has a higher reimbursement rate than the code for male-related doses, according to the statement. The government alleges that Masonicare regularly billed for the female-related code for male patients who were being treated for prostate cancer, so they received a substantially higher reimbursement than it should have received, according to the statement. Further, the government alleges that in 2009, the company realized it had improperly coded the Lupron injections services but never self-disclosed its improper bulling to the government or made any attempt to pay the money back to the Medicare and Medicaid programs, Fein said.</blockquote> Summary So in the last 10 days or so, we have seen legal settlements of charges of kickbacks by a pharmaceutical services provider, submitting inflated claims to the federal government made by a subsidiary of a private equity group which also owns a large hospital system and group of physicians' practices, billing fraud by an academic medical center, and false claims by a senior health care services provider.  I begin to think that if we keep this blog going long enough, the <a href="http://hcrenewal.blogspot.com/search/label/legal%20settlements">parade of legal settlements</a> will include the majority of US health care organizations.  Again, such legal settlements serve as markers of the scope of bad behavior by a wide variety of health care organizations, including some of the largest and/or most prestigious, but also including many organizations that work regionally or at the community level.  Bad behavior indicated by<a href="http://hcrenewal.blogspot.com/search/label/legal%20settlements"> these settlements</a> seems so prevalent that it must be an important reason for the chronic problems that afflict US health care, rising costs, diminishing access, and stagnant quality.  However, it still seems to be politically incorrect to discuss such mismanagement, malfeasance and/or corruption as important causes of US health care problems.  Although sometime in the past there may have been a general societal understanding that health care organizations ought to be held to the highest standards, and ought to be lead by people with the best character and of the best reputation, now one seldom hears an expression of shame when such organizations settle claims alleging fraud, over-billing, etc, etc, etc. Like nearly all such cases we have previously reported, none of these cases seemed to involve any negative consequences for any persons who authorized, directed, or implemented the questionable acts.  While the fines involved may seem large to ordinary folk, they are not big enough to markedly affect the organizations involved.  So the <a href="http://hcrenewal.blogspot.com/search/label/legal%20settlements">parade of legal settlements</a> has had little deterrent effect.  Once again, I say: 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.

The Continuing Parade of Legal Settlements by Health Care Organizations: Cardinal, Cerberus, Dartmouth-Hitchcock, Masonicare

Here is our latest round-up of the more colorful legal settlements made by some US health care organizations. Cardinal Health Cardinal Healt...

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CPOE Cesspool

An accomplished physician who <a href="http://hcrenewal.blogspot.com/2011/04/when-will-first-class-action-lawsuit-on.html">read my post on CPOE</a> at Memorial Sloan Kettering causing medical errors and near misses, and lack of FD&C Act regulation of health IT medical devices, relates the following: <blockquote>So I want to stop medications on a patient. The device only allows me to stop one at a time, and for each one, it requires me to type in a reason. Then, I get another pop up screen to enter my password. Six clicks and two manual entries to stop an aspirin, not counting the click to get to the med list. [What a valuable use of physician time! - ed.] Also, I have found that when I want an order for something that is labor intensive to enter, and I ask house staff [trainees - ed.] to do it, I get balking as to why I want that treatment or infusion. The arguments, I have found, are not really about the treatment. They are about their avoiding the pain in the ass of having to deal with the user unfriendly screens for that order. The doctors all put up with this.</blockquote> Yet for some reason this waste of valuable clinician time due to antediluvian HIT design, and even wild goose chases for critical medications such as in my Apr. 5, 2011 post "<a href="http://hcrenewal.blogspot.com/2011/04/special-k-red-berries-mission-hostile.html">Mission Hostile Health IT Obstructs Physicians From Ordering Life Saving Drugs In Critical Emergency</a>", are considered "progress" in medicine. World class medical centers such as Sloan Kettering consider CPOE a "<a href="http://hcrenewal.blogspot.com/2011/04/when-will-first-class-action-lawsuit-on.html">critical vulnerability</a>" towards near misses and outright medical errors. Still, this IT toxicity is considered "progress" right up to our Department of HHS and POTUS. Why? -- SS

CPOE Cesspool

An accomplished physician who read my post on CPOE at Memorial Sloan Kettering causing medical errors and near misses, and lack of FD&C...

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The Quack Remedy of Commercialization

Paul Krugman has a recent column, <a href="http://www.nytimes.com/2011/04/22/opinion/22krugman.html?_r=2&hp">"Patients Are Not Consumers."</a> He concludes the column by saying:<blockquote>The idea that all this can be reduced to money — that doctors are just “providers” selling services to health care “consumers” — is, well, sickening. And the prevalence of this kind of language is a sign that something has gone very wrong not just with this discussion, but with our society’s values.</blockquote>I like Krugman’s having the good common sense to realize that medical care is NOT all or only about money – and that we are in trouble if we think it is. The reduction of EVERYTHING to money is a key driver, I think, in making corruption invisible to people. As Krugman observes: <blockquote>Now politicians and supposed reformers talk about the act of receiving care as if it were no different from a commercial transaction, like buying a car — and their only complaint is that it isn’t commercial enough. What has gone wrong with us? </blockquote>James Kwak at the Baseline Scenario <a href="http://baselinescenario.com/2011/02/18/is-economics-the-problem/#more-8696">details research</a> which shows that the more people think about money, the less admirably they act. As well, taking economics classes may have a negative effect on behavior: <blockquote>Robert Frank, Thomas Gilovich, and Dennis Regan wrote two papers on this back in the 1990s that most of the professional economists out there already know. In one of their experiments, they asked undergraduates at the beginning and end of the semester several questions such as whether or not they would return $100 lost by a stranger at the end of the semester. They found that the proportion of students who gave more dishonest answers at the end of the semester than at the beginning was highest for students who took introductory micro from the mainstream economist, lower for students who took introductory micro from the developmental economist, and lowest for students who took introductory astronomy. If there’s an effect here, I don’t think the mechanism is that economics makes you a bad person. Instead, it changes your expectations about what the rest of the world is like. If you are an altruistic person and someone teaches you that (a) most people are self-interested and (b) the world would be better if everyone behaved in a self-interested way, that is likely to make you behave in a less altruistic way.</blockquote>I was really struck by Krugman’s words that: “and their only complaint is that [medicine] isn’t commercial enough.” Somehow, more commercialization has become the always-prescribed panacea to everything. The same universal nostrum is also prescribed for education. Recently in Texas, there has been a lot of emphasis in education in whether professors and research are on balance money-making or money-losing for their universities. Commercialization is not only no panacea – it is often not a remedy at all, like other quack prescriptions. Fortunately, many good people within organizations that pay lip service to money as the only value do NOT act that way and do subvert their corrupt leadership. But we also need to challenge the frameworks that people use when they talk – very unrealistically – as though human beings were, above all, “consumers.” In reality, life is NOT all about money – and we get in trouble when we act or think as though it is.

The Quack Remedy of Commercialization

Paul Krugman has a recent column, "Patients Are Not Consumers." He concludes the column by saying: The idea that all this can be ...

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