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Fresenius Fined $82 Million for False Claims

We open the week with yet another story of a large health care organization found by the judicial process to have misbehaved. Here is the story, <a href="http://www.infozine.com/news/stories/op/storiesView/sid/47599/">courtesy</a> of the Kansas City InfoZine: <blockquote>The United States Attorney’s Office announced that a federal judge has entered a judgment of $82,642,592 in favor of the United States in a 'whistleblower' lawsuit originally filed in the federal district court in St. Louis in 2005, and then transferred to the federal district court in Nashville, Tennessee. The lawsuit claimed that Renal Care Group, Renal Care Group Supply Company and Fresenius Medical Care Holdings, Inc. recklessly disregarded federal law when billing the Medicare program for home dialysis supplies and equipment during 1999-2005.</blockquote> The judge's reasoning was apparently based on some colorful facts, <blockquote>The Court's orders in this case discuss the concerns of multiple Renal Care Group employees who complained about the operation and Medicare billing activity of the Renal Care Group Supply Company, including one regional manager who wrote, 'I do not wish to go to jail,' and felt the company 'was not in the best interests of patients' after receiving a corporate directive about converting patients into the Renal Care Group Supply Company. The Court further noted that Renal Care Group failed to heed the advice of the company's lawyers when operating the supply company and also discussed an internal audit of the supply company that found that one hundred percent of the company's files were missing information that Medicare required for billing. Renal Care Group ('RCG') was a publicly traded for-profit corporation and dialysis provider until it merged with dialysis industry competitor Fresenius Medical Care ('FMC'). RCG had its principal place of business in Nashville, Tennessee, and had locations throughout Missouri, including multiple facilities around the St. Louis metropolitan area. RCG Supply Company ("RCGSC") was a Tennessee corporation that was owned and operated by RCG.</blockquote> Note further the allegations of the mechanics of the misbehavior, as alleged by the government prosecutors: <blockquote>The Government's complaint alleged that between January 1999 and December 2005, RCGSC submitted claims to the Medicare program for home dialysis supplies provided to ESRD patients for reimbursement of the supplies and equipment. All of these claims, as well as related claims for support services rendered by RCG dialysis clinics were false because the defendants were prohibited from and not qualified to bill Medicare for these home dialysis patients. Under federal law, the Medicare program pays companies that provide dialysis supplies to ESRD patients only if the companies that provide the supplies are truly independent from dialysis facilities and the ESRD patient chooses to receive supplies from the independent supply company. Defendants set up a sham billing company, RCGSC, that was not independent from RCG. Further, RCG interfered with ESRD patients' choice of supply options, requiring patients to 'move' to RCGSC. Even after RCG employees raised concerns and industry competitors closed their supply companies, RCG kept RCGSC open because of the illicit revenue it created.</blockquote> Note further that we discussed an earlier judgment in this case, which has now been superseded, <a href="http://hcrenewal.blogspot.com/2010/03/settlement-and-conviction-round-up.html">here</a>. So here we go again: yet more misbehavior, yet another multi-million dollar fine, but no real live person suffers a negative consequence.   Almost daily, there are stories about criminal convictions for relatively small scale health care fraud, kickbacks, bribery, etc that often result in the perpetrators going to jail or paying potentially bankrupting fines. However, when misbehavior, including fraud, kickbacks, bribery is on a big scale, almost never does an individual pay a penalty. We have seen lots of stories of big corporations paying big fines like this (e.g., look <a href="http://hcrenewal.blogspot.com/search/label/legal%20settlements">here</a>.)  However, in a world where those who authorize, direct, or implement misbehavior that makes the company money can get big pay, do we really expect that fines assessed against the company itself, whose costs can be passed on to the employees at large, customers, and shareholders will have any deterrent power? It is interesting that this latest case occurred around the same time that yet another breathless story appeared in the media about how the US government is about to get tough with executives whose companies misbehave.  The Associated Press ran <a href="http://www.google.com/hostednews/ap/article/ALeqM5jIGsUXYEAKspVXkeAdCDNumbbNFA?docId=d620a807289f47a6b01dfe728972a0b3">a story</a> claiming: <blockquote>Previously, if a company got caught, its lawyers in many cases would be able to negotiate a financial settlement. The company would write the government a check for a number followed by lots of zeroes and promise not to break the rules again. Often the cost would just get passed on to customers. Now, on top of fines paid by a company, senior executives can face criminal charges even if they weren't involved in the scheme but could have stopped it had they known. Furthermore, they can also be banned from doing business with government health programs, a career-ending consequence.</blockquote> It included a quote by one government official with which I would agree. <blockquote>'When you look at the history of health care enforcement, we've seen a number of Fortune 500 companies that have been caught not once, not twice, but sometimes three times violating the trust of the American people, submitting false claims, paying kickbacks to doctors, marketing drugs which have not been tested for safety and efficacy,' said Lewis Morris, chief counsel for the inspector general of the Health and Human Services Department. 'To our way of thinking, the men and women in the corporate suite aren't getting it,' Morris continued. 'If writing a check for $200 million isn't enough to have a company change its ways, then maybe we have got to have the individuals who are responsible for this held accountable. The behavior of a company starts at the top.'</blockquote> I agree with the concept.  However, the AP story provided no evidence of a get tough policy newer than the case of the proposed "disbarment" from dealing with the government of the elderly CEO of Forest, which we discussed <a href="http://hcrenewal.blogspot.com/2011/04/will-pharmaceutical-ceo-finally-be-held.html">here</a>.  Although a year ago we <a href="http://hcrenewal.blogspot.com/2010/06/attempt-to-hold-health-care-leaders.html">discussed</a> threats by the US government to hold health care leaders accountable using the "Responsible Corporate Officer Doctrine," which has been available since 1943, so far there is no evidence that this concept has been made operational. So the march of <a href="http://hcrenewal.blogspot.com/search/label/legal%20settlements">legal settlements</a>, and corporate convictions for <a href="http://hcrenewal.blogspot.com/search/label/bribery">bribery</a>, <a href="http://hcrenewal.blogspot.com/search/label/fraud">fraud</a>, and <a href="http://hcrenewal.blogspot.com/search/label/kickbacks">kickbacks</a> continue, but the problem does not go away.  In 2006, we <a href="http://hcrenewal.blogspot.com/2006/08/schering-plough-settles-again-again.html">wrote</a>, "It all is becoming so familiar, almost wearisome, yet the questions remain. Why do the mainly monetary penalties seem mainly to come out of the hides of stock-holders and consumers, rather than the people who actually made the decisions that lead to the offenses? And after all the indictments, prosecutions, settlements, and convictions involving large health care organizations, when will academics, policy makers and politicians, much less company CEOs and other organizational leaders admit we have a systematic problem here?" In 2008, we <a href="http://hcrenewal.blogspot.com/2008/09/walgreen-settles.html">wrote</a>, "As long as health care leaders can shrug off the consequences of unethical behavior merely as acceptable costs of doing business, absent any serious attempts to get health care organizations to enforce internal codes of ethical behavior or to avoid hiring ethically challenged leaders, the procession will likely continue. The effects will be continually rising costs, declining quality, shrinking access, and rising numbers of demoralized health professionals." I wonder what we will write about this in 2012?

Fresenius Fined $82 Million for False Claims

We open the week with yet another story of a large health care organization found by the judicial process to have misbehaved. Here is the st...

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Medical Societies Paid To Do Corporate Public Relations

Background Last year we <a href="http://hcrenewal.blogspot.com/2010/07/sanofi-funded-society-of-hospital.html">posted</a> about how two medical societies which received funding from a drug manufacturer tried to persuade the US Food and Drug Administration (FDA) to deny approval of a generic competitor to one of that company's products.  The medical societies were the Society of Hospital Medicine (SHM) and the North American Thrombosis Forum (NATF).  The company was Sanofi-Aventis and the product involved was its anti-coagulant derivative of heparin, Lovenox.  At the time, we noted that the SHM CEO denied the need to specifically disclose funding from Sanofi-Aventis in the letter to the FDA, since he asserted the letter was about "providing the best, most effective care to the hospitalized patient." If so, I wondered why the SHM had not raised concerns about the case of the deadly contaminated <a href="http://hcrenewal.blogspot.com/search/label/heparin">heparin</a> which was sold by another company from which it received support.  I noted that as long as medical societies accepted money from companies that made drugs or devices their members might prescribe or use, there would be "suspicion that such societies may use their considerable influence to serve the corporations', not patients' interests, and so undermine the professional values of the societies' members." The Senate Report Now the US Senate Finance Committee has reported on their investigation of this incident, and the concerns it raises go beyond just suspicions.  As <a href="http://online.wsj.com/article/SB10001424052702303654804576343753512740330.html">reported</a> by Alicia Mundy in the Wall Street Journal, <blockquote>The Senate report, 'Sanofi's Strategic Use of Third Parties to Influence the FDA,' said the company enlisted medical experts to conduct 'independent interaction' with the FDA to hold on to Lovenox's market. Between 2007 and 2010, the company contributed more than $2.6 million to the Society of Hospital Medicine; more than $2.3 million to the North American Thrombosis Foundation, which studies blood clots; and more than $260,000 to Dr. Tapson, the report said. Sen. Max Baucus (D., Mont.), chairman of the Finance Committee, said: 'Pharmaceutical companies simply cannot be allowed to spend millions of dollars to buy medical opinions that claim objectivity but instead favor their products.' The Society of Hospital Medicine was initially reluctant to write the letter, according to emails released by the committee. The society's director told Sanofi in a June 2008 email that his group 'has no history of making similar comments to the FDA' and might not have 'the expertise or knowledge to say much about' the issue. However, the email added, 'we want to give any issue that is important to our partner careful consideration.' Two months later, the society sent its letter to the FDA. A Sanofi public-relations representative later cited the letter in an internal email as a 'key accomplishment.'</blockquote> The <a href="http://finance.senate.gov/newsroom/chairman/download/?id=69451e85-4d4c-403b-93e0-2d5e7b4010be">report itself</a> made clear why Sanofi wanted the FDA to delay or deny approval of the generic version of Lovenox: <blockquote>According to a 2009 Sanofi slide presentation on its 'Lovenox Patient Safety Strategy,' a core issue faced by Sanofi was the 'imminent threat to [Sanofi’s] Lovenox franchise' posed by 'generic alternatives.'</blockquote> It also made clear how much financial impact Sanofi had on the SHM: <blockquote>SHM received $2,675,850 from Sanofi from January 2007 through August 11, 2010 for conference exhibits, sponsorship, and grants. Sanofi’s payments to SHM totaled $1,132,500 between July 1, 2007 and June 30, 2009, accounting for 8 percent of SHM’s total revenue during those 2 years.</blockquote> It made clear that the letter the SHM wrote to the FDA resulted from its interactions with Sanofi: <blockquote>Internal Sanofi communications indicate that SHM consulted with the American College of Chest Physicians and Dr. Tapson about sending a letter to the FDA after 'a very positive meeting' with Sanofi officials.</blockquote>Summary So let us just walk through this again. Sanofi wanted to keep generic Lovenox off the market. Sanofi pushed two medical societies to which it provided considerable funding to try to persuade the FDA not to approve generic Lovenox, without revealing their financial ties to Sanofi or that Sanofi had instigated their protests. At the time, at least one of the societies' leaders denied that its attempt to persuade the FDA had anything to do with its relationship to Sanofi. Note that Sanofi's use of two medical societies and a "key opinion leader" to try to influence public policy without disclosing the company's causal role was an example of what Wendell Potter called a "third-party" tactic (see <a href="http://hcrenewal.blogspot.com/2011/02/health-care-corporate-disinformation.html">this post</a>).  While Mr Potter outlined a series of tactics used by public relations department of health insurance corporations to further their policy objectives, often in such deceptive and systematic ways as to constitute disinformation campaigns, there has not been such a broad description of these these tactics used by other kinds of health care organizations.  Now it looks like drug companies' PR departments are also users of these techniques.  Most likely they have been deployed throughout the health care sphere to promote policies that benefit particular companies, often at the expense of health care professionals, patients, or the public at large. On a personal note, I am a general internist who spent some time as an academic hospitalist.  The SHM is the main society for hospitalists, and is allied with the Society for General Internal Medicine (e.g., see <a href="http://www.sgim.org/index.cfm?pageId=815">here</a>), to which I belong, and which I have served in a variety of capacities.  Thus I am very sad about the hole into which the SHM leadership has apparently fallen.  The SHM and NATF leadership have apparently become stealth health policy advocates, and actively tried to change government policy on behalf of a corporation that had funded them.  Thus, these medical societies acted more like public relations or lobbying firms.  In doing so, they appeared to subverted their own missions, and their members' values. A short time ago, we <a href="http://hcrenewal.blogspot.com/2011/05/more-medical-societies-supported-by.html">noted</a> the cases of two medical societies that got substantial funding from drug and device companies, and thus seemed to function more like marketing firms that professional associations.  Now we have two cases of medical societies that seemed to function more like public relations and lobbying firms than professional associations. So all the organizations which ought to have upheld health care professionals' values against the onslaught of laissez faire commercialized medicine, now medical societies as well as academic medical centers, medical schools and their parent universities, and medical and health care foundations, seem to have been systematically sold out to big health care corporations' marketers and public relations flacks.  What Is To Be Done? If we health care professionals really want to improve patient care and the public health, we could start by exercising extreme skepticism about the funding and leadership intentions of our own professional associations.  If these societies appear as dependent on industry for money as they are dependent on their own members, and/or if they appear to be acting more like marketing, public relations or lobbying firms, why do we continue to enable such behavior?  Why should we pay dues to marketing, public relations or lobbying firms?  We need to have our medical societies uphold their own missions, or we need to get new medical societies.  Hat tip to the <a href="http://pogoblog.typepad.com/pogo/2011/05/another-doctor-bought-by-big-pharma.html">Project on Government Oversight (POGO) blog</a>.

Medical Societies Paid To Do Corporate Public Relations

Background Last year we posted about how two medical societies which received funding from a drug manufacturer tried to persuade the US Foo...

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Healthcare Renewal Cited in Pittsburgh Post Gazette on Health IT Issues

Healthcare Renewal was cited in the Pittsburgh Post Gazette today on health IT issues. Specifically, regarding issues I raised at my May 25, 2011 post "<a href="http://hcrenewal.blogspot.com/2011/05/transplant-team-at-upmc-missed.html">Transplant Team at UPMC Missed Hepatitis Result - Suspicious for Health IT Failure?</a>" I have several additional amplifying comments. <blockquote> <a href="http://www.post-gazette.com/pg/11147/1149429-114.stm" style="font-weight: bold;">Doctor, nurse disciplined by UPMC</a> Failed to detect hepatitis C in kidney donated for transplant Friday, May 27, 2011 By Jonathan D. Silver and Sean D. Hamill, Pittsburgh Post-Gazette A surgeon and a nurse were disciplined by UPMC for their roles in missing a positive hepatitis C test result in a kidney donor earlier this month that might have stopped the transplant, the hospital system said Thursday. The surgeon was demoted and the nurse suspended, though neither has been identified. In addition, after a discussion with federal officials, the hospital system voluntarily suspended its live-donor liver program as a precaution, three days after shutting down its live-donor kidney program on May 6, following the transplant error. Both programs remain closed. But while UPMC has taken action against the two staff members, health care technology experts say UPMC's information technology might have played a role in the incident. "Checking for all types of hepatitis is so ingrained in the culture of doctors," said Scot Silverstein, a medical informatics expert and adjunct professor at Drexel University in Philadelphia. "If they didn't check for hepatitis C, that means they didn't check for hepatitis A or B either, and that means they didn't check for anything." "That just isn't credible," said Dr. Silverstein, who explored the possible ways the technology played a role in the kidney transplant error in the blog Health Care Renewal. "There are two possibilities," he said. "Either you have a dozen or more people on that transplant team who are just stupid, or, more plausibly, when they looked at the record the hepatitis C record was just not there or it was incorrect when they saw it." The incident first came to light May 6, when UPMC notified the Centers for Medicare and Medicaid (CMS) as well as the United Network for Organ Sharing, that it had detected an error in a recent kidney transplant. It was a living kidney transplant between a woman and a man who are a couple, sources have told the Post-Gazette. The woman did not know she was hepatitis C positive, and she was tested, but the test results were somehow missed by people on the transplant team, and the transplant went forward. ... Because of the error, UPMC had decided on its own on May 6 to shut down the living donor kidney program. Then, on May 9, when UPMC officials were discussing the situation with the U.S. Health Resources and Services Administration, they mutually decided to shut down the living donor liver program, too, said Michele Walton, a CMS spokeswoman.</blockquote><div style="overflow: hidden; text-decoration: none; border: medium none;"> Read the entire article. I strongly feel there is much more going on here than a careless surgeon and nurse. Closing down these transplant programs for now is a major, major step that actually endangers patients on waiting lists. As per an anonymous comment received in my aforementioned May 25 post (<a href="http://hcrenewal.blogspot.com/2011/05/transplant-team-at-upmc-missed.html?showComment=1306413825524#c5274181212217164657">link to full comment</a>): <blockquote> I surely hope they get this figured out soon as there are MANY lives on the line here. A very good friend of mine is on the list there and has myself as a willing paired donor and another mutual friend of ours as a perfect match donor that has one test to be done and then it is a go. With all of the testing that we both have had to go through - and by the way, myself now a second round as it has been more than a year since the original testing and no paired match has been located as of yet, that these things are known as soon as the tests are ran. I would have to agree that this must be beyond human error. ... This needs to be addressed and corrected like YESTERDAY. We have many out their literally dying on the lists. </blockquote> I was also cited as follows later in the Post Gazette article: <blockquote>... Dr. Silverstein and other experts say the current electronic health records systems that highly wired hospitals like UPMC have in place routinely flag test results for everyone connected to a surgery to see. But those systems have been known to cause the same kinds of errors they were designed to prevent over the old-fashioned paper records. [E.g., as per the FDA internal memo on HIT risk I described <a href="http://hcrenewal.blogspot.com/2010/08/smoking-gun-internal-fda-memorandum-of.html">at this Aug. 2010 post</a>; see tables 4 and 5 - ed.]</blockquote><div style="overflow: hidden; color: rgb(0, 0, 0); background-color: transparent; text-align: left; text-decoration: none; border: medium none;"> </div></div>I do think the reliability of existing alerting systems has been over-represented. "Flagging" a test result awaiting someone to note the flag amidst a sea of screens, icons and clutter, and setting off aviation-like stall alarms and other fail-safes that nobody can miss, are two different matters. For the hundreds of millions of dollars spent on health IT by organizations like this, and the hype proffered about this technology, events such as the post-facto discovery of a tainted transplanted organ should truly be considered "cybernetic 'never' events." One might also wonder if the informational issues, whatever their source, occurred more than once: that is, if prior transplant recipients who participated in these programs need to be checked for tainted organs. That the Post-Gazette article was published on the one-year-to-the-day "anniversary" of my own mother being <a href="http://hcrenewal.blogspot.com/2011/05/how-hospital-emrs-and-experts-who.html">cybernetically turned into a train wreck</a> due to the toxic effects of HIT -- in an ED where I once worked in the paper era where I do not recall EOT mistakes of the kind that nearly killed my mother ever happening -- is ironic. Finally: If health IT is indeed implicated in the UPMC error, and if UPMC knew of system unreliabilities that could have caused the clinical errors, both patients and affected clinicians can likely raise charges of criminal negligence on the part of those responsible for these IT systems. Politics and an overall 'lawlessness' (per Hoffman & Podgurski) in the health IT sector needs to be replaced with the scientific and regulatory methods of medicine, such as intensive pre-marketing evaluations, clinical trials and post marketing surveillance of these systems. Perhaps some jail time for the cavalier would remind people these are not toys, gaming computers, or slot machines, and that the subjects of health IT systems are human beings, not lab rats. -- SS Addendum May 27, 2011: A reader reminded me of my 2009 post "<a href="http://hcrenewal.blogspot.com/2009/04/upmc-pioneers-in-health-it-or-pioneers.html">UPMC as Proving Ground for IT Tests On Children: Pioneers in Health IT, or Pioneers in Ignoring the Past</a>?" -- SS

Healthcare Renewal Cited in Pittsburgh Post Gazette on Health IT Issues

Healthcare Renewal was cited in the Pittsburgh Post Gazette today on health IT issues. Specifically, regarding issues I raised at my May 25,...

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Twelve Hour Health IT "Glitch" at Allegheny General Hospital - But Patients Unaffected, Of Course...

At "<a href="http://hcrenewal.blogspot.com/2011/05/transplant-team-at-upmc-missed.html">Transplant Team at Univ. of Pittsburgh Medical Center Missed Hepatitis Result</a>" I wrote about a kidney transplant gone bad at UPMC that may have been due to a computer "glitch." Now <a href="http://www.wpahs.org/agh/">Allegheny General Hospital</a> in Pittsburgh has suffered a "glitch" that shut down their entire health IT system for approximately 12 hours: <blockquote> <a href="http://www.pittsburghlive.com/x/pittsburghtrib/news/pittsburgh/s_738944.html">Allegheny General Hospital's records system back online</a> By Pittsburgh Tribune-Review Wednesday, May 25, 2011 Last updated: 10:26 pm Allegheny General Hospital's electronic medical records system was online Wednesday afternoon after a morning shutdown caused by a glitch in a vendor's computer software, a spokesman [Dan Laurent] said. ... The hospital's system underwent a routine upgrade during the weekend, Laurent said. Staff shut down the system about 5 a.m. Wednesday after noticing it was running too slow. New Jersey-based software vendor Allscripts made repairs, and the system was online by 5 p.m., he said.</blockquote> One might think the vendors of mission critical hospital systems would check their upgrades better before roll out to hospitals teeming with real, live, sick patients. Of course, patient care was unaffected. It never is when a "glitch" occurs, despite the massive inconvenience to doctors who actually have patients to care for, and the need for backloading paper data - with inherent opportunity for error - after the computer system is resuscitated. At a Jan. 2011 post "<a href="http://hcrenewal.blogspot.com/2011/01/orderless-in-seattle-software-glitch.html">Orderless in Seattle: Software glitch shuts down Swedish Medical Center's medical-records system</a>" I observed: <blockquote> There's that word "glitch" again that I see so frequently in the health IT sector when a system suffers a major crash that could harm patients. Why do we not call it a "glitch" when a doctor amputates the wrong body part, or kills someone? ... the shutdown likely affected about 600 providers, 2,500 staffers and perhaps up to 2,000 patients, but no safety problems were reported. As I've <a href="http://hcrenewal.blogspot.com/2010/08/huffington-post-investigative-fund-fda.html">noted at this blog before</a>, it is peculiar how such "glitches" never seem to produce safety problems, or even acknowledgments of increased risk.</blockquote> Same in this Allegheny General Hospital case: <blockquote>... [spokesman] Dan Laurent said staffers took drug and lab orders on paper forms, and that patient care was not affected by the shutdown.</blockquote> If patient care is never affected by shutdowns even as long as an entire working day, one wonders why the tens or hundreds of millions of dollars spent on these systems is needed in the first place... I have a solution. <a href="http://www.computerworld.com/s/article/9216098/Amazon_outage_sparks_frustration_doubts_about_cloud">Cloud computing!</a> -- SS

Twelve Hour Health IT "Glitch" at Allegheny General Hospital - But Patients Unaffected, Of Course...

At " Transplant Team at Univ. of Pittsburgh Medical Center Missed Hepatitis Result " I wrote about a kidney transplant gone bad at...

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Million Dollar Plus Hospital CEO Compensation: "It Is What It Is" or What the Board Says It Is?

Health care leaders' compensation has again been in the news. Below are highlights from stories about four medical centers, emphasizing the magnitude of executive compensation, how it is related, or not to hospital and executive performance, and whether and how the organizations' boards chose to justify it. The medical centers are in alphabetical order. University of Pittsburgh Medical Center Compensation <a href="http://www.post-gazette.com/pg/11134/1146439-28.stm">According</a> to the Pittsburgh Post-Gazette: <blockquote>In tax documents released Friday, Jeffrey Romoff, president and CEO of the University of Pittsburgh Medical Center, received $4.01 million in salary, bonuses and benefits that year.</blockquote> Also, <blockquote>Other top earners at UPMC include neurosurgeons Ghassan Bejjani, $2.37 million in salary and benefits, and Richard Spiro, $2.23 million; cardiothoracic surgeon James Luketich, $1.96 million and executive vice president Elizabeth Concordia, $1.88 million.</blockquote> In summary, UPMC has a four plus million dollar CEO, and a nearly two million dollar executive vice president. Hospital/ Executive Performance None of the articles I found on these executives' pay juxtaposed information on their or their institutions' performance. A Pittsburgh Business Times <a href="http://www.bizjournals.com/pittsburgh/news/2011/05/05/upmc-income-jumps-75-percent.html">article</a> summarized the medical center's recent financial results: <blockquote>Strength in outpatient revenue, insurance premiums and hospital admissions helped drive operating income to $313 million for the third quarter at the University of Pittsburgh Medical Center, a 75 percent increase from $179 million a year earlier, according to financial results released Friday.</blockquote> However, <blockquote>UPMC’s operating margin still trails the 4.1 percent of other institutions with an AA bond rating....</blockquote> However, there have been recent concerns about ethics and quality at the institution. Another Post-Gazette <a href="http://www.post-gazette.com/pg/11139/1147590-28-0.stm">article</a> revealed how relatives of top leaders seem to gain well-paid positions within the system: <blockquote>particularly at UPMC, gainful employment extends to other branches of the family tree. Mr. Romoff's daughter, Rebecca Kaul, was paid $388,659 in fiscal year 2010 for her work as president of UPMC's Technology Development Center. The center "is helping develop the next generation of information technology at UPMC," said spokeswoman Susan Manko. Ms. Kaul's salary jumped from the $264,274 reported for the fiscal year ending June 30, 2009, an increase that Ms. Manko said was the result of a sale of a computer-assisted coding product joint venture 'at a substantial return on investment at which time Ms. Kaul received certain compensation based on the terms of the sale of the company.' She added that, 'Mr. Romoff was not involved in the decisions pertaining to this transaction.' According to the tax document, Mr. Romoff's former son-in-law by another daughter, Scott Gilstrap, was paid $236,347. He worked with grants and services contracts before leaving UPMC in December 2009. Kathleen Pietragallo, sister-in-law of UPMC board member and attorney William Pietragallo, received $88,646 working in a laboratory at UPMC Presbyterian Hospital. Mr. Pietragallo's brother, Louis Pietragallo, is a medical oncologist for UPMC who was paid $613,082, according to the tax return. And Scott Cindrich, son of UPMC's former chief legal officer, Robert Cindrich, received $138,618 as legal counsel for UPMC, according to Ms. Manko. Also listed on the UPMC return is Anna Roman ($288,696), senior vice president for the University of Pittsburgh Physicians, who is the wife of University of Pittsburgh Physicians board member and UPMC pathologist George Michalopoulos. The University of Pittsburgh Physicians is a multispecialty practice plan that employs UPMC physicians who are on the faculty of the Pitt School of Medicine and also care for patients and train residents in UPMC facilities, Ms. Manko said.</blockquote>Note that we discussed questions of favoritism towards relatives of top leaders at UPMC <a href="http://hcrenewal.blogspot.com/2010/05/at-upmc-dealings-with-board-members.html">here</a>. Also, Dr Scot Silverstein just <a href="http://hcrenewal.blogspot.com/2011/05/transplant-team-at-upmc-missed.html">posted </a>on a major quality problem at UPMC, the transplantation of an organ from a hepatitis C positive donor. To summarize, the medical center is making a lot of money, but its operating margin may not be has high as some of its peers. There are questions about nepotism amongst the leadership, and there is a current serious concern about the medical center's transplant program. The Board's Justification There was no recent reporting on this. Valley Medical Center This hospital is in Renton, Washington. Compensation <a href="http://www.king5.com/news/investigators/valley-medical-center-122473009.html">Per</a> King5 News: <blockquote>The chief executive officer of the hospital, Rich Roodman, is the highest paid public employee in the state of Washington. Last year he made a base salary of $615,000. He also collected a bonus of $201,201 for meeting performance goals. On top of that he was paid $263,335 in a retention payment. In total, Roodman earned $1,134,837 in 2010 to run Valley Medical Center, which is part of King County Hospital District No. 1. </blockquote> Note that <blockquote>Roodman makes about 40 percent more than the chief executive officer of University of Washington Medicine and more than double what the executive director of the University of Washington Medical Center earns.</blockquote> Also, <blockquote>The reporters found it's not just the CEO, but all top managers at Valley Medical Center who pack home healthy paychecks. Paul Hayes, the executive vice president, made $588,249 last year, which included a bonus of $154,275 for meeting performance goals. The senior vice president of medical affairs, Kathryn Beattie, made $489,479. Those figures outpace the top boss at renowned Harborview Medical Center, which is also funded by tax dollars. The in-house attorney for Valley Medical Center, David Smith, pulled in $352,196 in 2010, which makes him the highest paid public lawyer in the state. Smith makes about two-and-a-half times what Attorney General Rob McKenna is paid.</blockquote> In summary, the CEO of a relatively small, public hospital made over $1 million, and several executives made over $350,000. Hospital/ Executive Performance <blockquote>Controversy over money isn't new to Valley Medical Center. Four years ago the Washington State Public Disclosure Commission (PDC) fined CEO Roodman $120,000 after they found the hospital illegally spent tax dollars on mailings, postage and consultants to sway voter opinion on ballot measures in 2005 and 2006. The PDC called it the biggest case ever involving a public agency misusing taxpayer dollars for a campaign. Valley Medical Center called it a misunderstanding. In 2009 the Washington State Auditor’s Office found Roodman collected a troubling $1.7 million retirement payment that year, on top of the $900,000 salary he earned in 2009. The auditor found the commissioners authorized this payment 'without explanation or public benefit.' The auditor also recommended Valley Medical Center should 'avoid including similar provisions in future contracts.'</blockquote> State authorities have questioned the ethics and legality of actions apparently authorized by the hospital's top leadership. The Board's Justification <blockquote>Board president Sue Bowman did speak with KING 5 by telephone. She said the compensation levels are important to stay competitive. They don’t want to lose top talent to other hospitals. 'I don’t know why Rich’s [CEO] pay is an issue? Commissioner Hemstad brings it up over and over again. I told him, 'Anthony, it is what it is,'' said Bowman. 'I don’t think the five-member board needs to keep focusing on compensation. What are we doing for the community? That’s what’s important.' Bowman also said the board carefully considers research presented to them by outside consultants and attorneys before voting on CEO compensation. Milliman, a healthcare compensation consulting firm, provides the hospital with a full analysis of market comparative data every other year. They consistently find Valley Medical Center’s pay structure is right on target. John Hankerson, principal and strategic rewards practice leader of Milliman, wrote a memo about his findings to Roodman and Bowman dated February 9, 2011. 'We have consistently found that base pay and total cash compensation have been well aligned with [hospital goals] and that the magnitude of the incentive plan is consistent with other healthcare organizations that are striving to improve performance and quality patient care,' wrote Hankerson. 'We defined the appropriate market [comparable salaries] as ‘where VMC [Valley Medical Center] might recruit executive talent from or where it might lose executive talent to.’ In that light we have included such local organizations as Evergreen, Overlake, Virginia Mason to name just a few,' wrote Hankerson. 'In our opinion, the current levels of incentives used at VMC are appropriate and consistent with best practice as well as smart management.'</blockquote> However, note that: <blockquote>Senator Cheryl Pflug, the ranking minority on the Senate Health & Long-Term Care Committee, doesn’t think public hospitals should be basing salaries on what non-profit and for-profit institutions pay. 'They pick and choose who they compare themselves to. A much more appropriate comparison would be the University of Washington,' said Pflug.</blockquote> Note that the chair of the hospital board first tried to give the impression that the executives' compensation was a natural phenomenon ("it is what it is,") rather than set by the board. Then it appeared that the compensation was set partially by referring to pay at clearly dissimilar institutions which generally pay more than public hospitals. Finally, although the implication was that high levels of compensation were justified by the performance of the executives, no specifics about that performance was provided, and certainly the recent questions about the ethics and legality of the executives' decisions were ignored. Wake Forest Baptist Medical Center Compensation The Winston-Salem Journal <a href="http://www2.journalnow.com/business/2011/may/18/wake-forest-baptists-mcconnell-made-168-million-in-ar-1044492/">reported</a>: <blockquote>Dr. John McConnell, the system's chief executive, was paid $1.68 million in total compensation for fiscal 2009-10, compared with $764,797 for fiscal 2008-09. McConnell took over as chief executive — a new position — in October 2008. McConnell was paid $831,288 in salary for fiscal 2009-10, as well as $266,667 in bonuses and incentives, and $115,661 in other reportable compensation. He also received $441,589 in retirement and other deferred compensation. In fiscal 2008-09, McConnell was paid $133,333 in salary, $140,000 in bonuses and incentives, $38,564 in other compensation and $440,105 in deferred compensation. Donny Lambeth, the president of N.C. Baptist Hospital, had a 29 percent increase in total compensation to $849,521. His salary was raised 20 percent to $604,495, while his bonus and incentive compensation decreased 37 percent to $70,030. He had $136,459 in retirement and other deferred compensation. Edward Chadwick, the system's chief financial officer, received $734,282 in total compensation, including $294,218 in salary and $350,000 in bonus and incentive compensation. He took over in his role in July 2009. Besides McConnell, the top executives listed for Wake Forest University Health Sciences were Dr. William Applegate, president of the division and dean of its medical school; Dr. Thomas Sibert, its president and chief operating officer; and Doug Edgeton, president of the Piedmont Triad Research Park. Applegate, who is retiring from both posts June 30 to focus on his geriatrics practice and research, received a 38 percent increase in total compensation to $996,706. His salary was raised 4 percent to $534,843 in salary, while his bonus and incentive compensation rose from $115,000 to $378,900. Sibert received $974,188 in total compensation, including $266,654 in salary, $550,000 in bonus and incentive compensation and $112,390 in other reportable compensation. Sibert took over his role in September 2010. Edgeton received a 44 percent increase in total compensation to $906,202. His salary was raised 7 percent to $491,391, while his bonus and incentive compensation rose from $102,200 to $361,600.</blockquote> In summary, the CEO made over $1.5 million, and other leaders made from just under three-quarters to just under $1 million. Hospital/ Executive Performance There was nothing in the article above or in the news media about the performance of the executives or the hospital. The Board's Justification Per the Winston-Salem Journal: <blockquote>Wake Forest Baptist said in a statement that it has a 'very rigorous system' to determine and approve its executive compensation packages. It has an external compensation consultant provide comparable data from similar health-care institutions, such as Duke University Health System, UNC Health Care and the University of Chicago Medical Center. The Wake Forest Baptist system said that as one of 130 academic medical centers in the United States, 'there are few executives with the required skill set to manage and provide leadership for an integrated (center) such as ours.' 'Wake Forest Baptist's executive-compensation packages are fiscally responsible, appropriate for the marketplace and an essential part of the effort to recruit and retain skilled executives and visionary leaders for the medical center,' the statement said.</blockquote> <a href="http://www.bizjournals.com/triad/news/2011/05/18/wf-baptists-mcconnell-paid-168-m.html">According</a> to the Triad Area Business Journal: <blockquote>'Recruitment and retention of the capably skilled executives is key to keeping Wake Forest Baptist fiscally sound and appropriately managed so we can continue to be a primary medical resource for patients in our community and our region,' the health system said in a prepared statement.</blockquote>Again, much was made of process that compared the executives' compensation to that of other institutions. Their compensation was apparently based on the assertion that they were all "skilled and visionary," without any specifics provided to back it up. West Penn Allegheny Health System Compensation Again, <a href="http://www.post-gazette.com/pg/11134/1146439-28.stm">according</a> to the Pittsburgh Post-Gazette <blockquote>Christopher Olivia, ... at West Penn Allegheny Health System, received total compensation worth $1.91 million.</blockquote>Also, <blockquote>At West Penn, neurosurgeon Hae Dong Jho received $1.39 million in compensation in 2009 and Roy Santarella, executive vice president and chief administrative officer for the health system, received $1.25 million.</blockquote> In summary, the CEO received nearly $2 million, and the executive vice president $1.25 million. Hospital/ Executive Performance <a href="http://www.pittsburghlive.com/x/pittsburghtrib/news/pittsburgh/s_737000.html">Per</a> the Pittsburgh Tribune-Review: <blockquote>The region's No. 2 hospital network is losing money, but West Penn Allegheny Health System's board of directors gave its CEO a 40 percent bonus, according to tax documents released on Friday.</blockquote> More specifically, <blockquote>West Penn Allegheny Health System reported an operating loss of $89.9 million in the fiscal year that ended June 30. From July to December, it lost an additional $26.8 million, a drop officials attributed to $12 million in employee severance packages, extra consulting fees and falling inpatient volumes. In a bid to improve its financial position, the system is consolidating many of its services at Allegheny General Hospital in the North Side. Last year, it shut down its emergency room at Suburban General Hospital in Bellevue and plans to do the same at West Penn Hospital in Bloomfield on Dec. 31. The system's officials have said they expect to lay off up to 400 workers this year.</blockquote> In summary, the hospital is losing a lot of money, and likely will be laying off a lot of workers. The Board's Justification <blockquote>Kelly Sorice, a hospital system spokeswoman, declined to comment on the bonus.</blockquote> Summary CEOs at even small medical centers in the US can now expect to receive more than $1 million a year in compensation.  Those at larger institutions may get several millions a year.  Other top executives can now expect proportionately high compensation.  Thus, being a top executive at a medium or large hospital now practically guarantees becoming rich.  Worse, there seems to be no correlations among compensation and performance of the executives or the hospitals.  Executives at hospitals that are losing money, having quality problems, or criticized for unethical behavior still can make this much. The boards that are supposed to exercise stewardship over these institutions do not seem to feel the need to justify the money they hand to executives in any detail.  They almost never seem to feel that their own executives are anything less than above average, despite facts that might cast doubt on this assumption, and almost always seem to feel that their executives are entitled to be paid at least as well as their peers.  This suggests at best a lack of critical thinking by board members, and at worst, crony capitalism. Making hospital leaders feel entitled to make more and more regardless of their or their institutions' performance seems to be a recipe for <a href="http://hcrenewal.blogspot.com/2011/05/severance-package-to-un-severed-ceo.html">"CEO Disease,"</a> leading to disconnected, unaccountable, self-interested leaders.  The increasing prevalence of CEO disease in health care may explain why costs keep increasing, access keeps declining, and quality and safety are stagnant.  So, as I have said before,.... 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. On the other hand, those who authorize, direct and implement bad behavior ought to suffer negative consequences sufficient to deter future bad behavior. 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.

Million Dollar Plus Hospital CEO Compensation: "It Is What It Is" or What the Board Says It Is?

Health care leaders' compensation has again been in the news. Below are highlights from stories about four medical centers, emphasizing ...

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Transplant Team at UPMC Missed Hepatitis Result - Suspicious for Health IT Failure?

A story suspicious for EMR malfunction appeared in the Pittsburgh Post Gazette: <a href="http://www.post-gazette.com/pg/11141/1148149-114-0.stm"> </a><blockquote><a href="http://www.post-gazette.com/pg/11141/1148149-114-0.stm">Transplant team missed hepatitis result</a> <div class="story_subheadline"> Kidney donor, recipient unaware of virus' presence</div> <div class="story_lastupdate">Saturday, May 21, 2011</div> <div class="story_byline">By Sean D. Hamill and Jonathan D. Silver, Pittsburgh Post-Gazette The living donor and recipient of a recently flawed kidney transplant at UPMC are a couple who did not know that the donor, a woman, was hepatitis C positive, and didn't find out until after the kidney was transplanted into the man [which stunningly implies the entire transplant team didn't know, either - ed.], sources told the Pittsburgh Post-Gazette. The woman was tested for hepatitis C prior to surgery, and the results showed she was positive for the virus, but the two people on the transplant team who should have checked the results and stopped the transplant, failed to do so, sources also said. [Or was the data missing? Something is not right here. What, exactly, was checked, and what, exactly, was not checked? Did they also check for other infectious diseases such as HIV, hepatitis A, B, etc., or did they "miss" them, too? See below - ed.] On May 11, two days after the transplant became public, a board member said Elizabeth Concordia, UPMC's executive vice president, gave a 20-minute presentation to the hospital system's board of directors during its regular meeting and told them that the positive test was missed during 12 steps throughout the process. The failure to act on the positive test was so serious that it was considered a "systemic" problem in the way the protocols failed in this one case, Ms. Concordia said, according to the board member, and that's why UPMC voluntarily shut down its living donor transplant program May 6. [A rather extreme measure - ed.] The program will remain closed until an investigation is completed and new protocols can be drawn up to prevent the error from occurring again. The hospital system would not confirm these details or release a copy of its internal protocols that would show who on the transplant team should have reviewed the test results. Because of the current federal, state, county and internal investigations, "I don't think it's appropriate for us to say right now what the protocols are," said UPMC spokeswoman Jennifer Yates. "But we are reviewing everything to ensure it is not a systemic problem" beyond this one case. Ms. Yates said UPMC has done 975 living donor kidney transplants since 1988 and this is the only known case of a hepatitis C positive donor kidney being transplanted into someone who was hepatitis C negative. The error was discovered by UPMC, which self-reported it to the Centers for Medicare and Medicaid Services (CMS), and it was not related to a review by CMS that was "coincidentally" ongoing at the time of the discovery at Children's Hospital of Pittsburgh of UPMC, a CMS spokeswoman said.</div> </blockquote><div class="story_body"> This hepatitis-C fiasco to my eye seems a likely case of IT error of omission or transmission (EOT, see Tables 4 and 5 at the FDA internal memo I cached at <a href="http://www.blogger.com/redir.aspx?C=1602b58534374db09c306e05ab7125ac&URL=http%3a%2f%2fwww.ischool.drexel.edu%2ffaculty%2fssilverstein%2fInternal-FDA-Report-on-Adverse-Events-Involving-Health-Information-IT.pdf" target="_blank">http://www.ischool.drexel.edu/faculty/ssilverstein/Internal-FDA-Report-on-Adverse-Events-Involving-Health-Information-IT.pdf</a>). It's inconceivable to me experienced transplant personnel, used to checking for data such as HIV, hepatitis status of donor and recipient, and other blood abnormalities would just miss this. I would believe the hepatitis status, e.g., Hepatitis A, B, C, would be presented on the same screen. (If not, that's a design flaw itself.) That the Hep-C value could be missed by more than one person [possibly many people; see addendum below -ed.] seems very unlikely - even if the presentation screen(s) were cryptic and poorly organized. A more plausible explanation to me is that a positive result simply wasn't present at the time when it was needed, e.g., due to a Laboratory Information System (LIS)-Hospital Information System (HIS) interface problem, or a HIS data erasure or misidentification error after the data was correctly received. Another issue: For the hundreds of millions of dollars spent on computers at this medical center, I wonder why their "system" in critical areas such as transplantation (as it would appear from the reports) is entirely dependent on two people looking at data. After all, the IT is "supposed" to reduce error by infallibly calling attention to critical abnormalities such as this. The EMR alerting systems should have been going off like cockpit stall warnings at the data combination of "transplant" and "hepatitis C". That's not rocket science. This further supports my hypothesis of a health IT malfunction, as does what I read about their "shutting down the living donor transplant program" for now - an extreme measure if this medical error were merely the result of a person or persons simply forgetting to check a data screen or sheet. More generally, in a nutshell: commercial health IT from the current sellers is a fiasco. It alone among medical devices is unregulated under the FD&C Act <a href="http://www.emrupdate.com/forums/t/27502.aspx">even though FDA admits it is a medical device</a>, it is <a href="http://hcrenewal.blogspot.com/2011/03/brief-primer-on-health-it-problems.html">unsafe</a>, the literature shows its <a href="http://www.ischool.drexel.edu/faculty/ssilverstein/HITreadinglist.doc">benefits grossly exaggerated</a>, it probably cannot be made to work considering the current HIT "<a href="http://www.ischool.drexel.edu/faculty/ssilverstein/cases/?loc=cases&sloc=ecosystem">ecosystem</a>" and its pathologies and incompetents, and has only <a href="http://www.washingtonpost.com/wp-dyn/content/article/2009/05/15/AR2009051503667.html?hpid=topnews">captured the market</a> through the purveyors "<a href="http://hcrenewal.blogspot.com/2011/03/how-lousy-health-it-gets-pushed-on.html">controlling the channel</a>" of information and memes through their massive trade association HIMSS and political connections to HHS. Think tobacco circa 1940's-1950's.Yet UPMC could get away with this debacle scot-free:</div><blockquote><div class="story_body">Despite the way it occurred, UPMC will probably not be found in violation of any federal guidelines for the failure of the transplant team to review the positive hepatitis C test [or failure of the health IT system to properly transmit it, if that is indeed what occurred - ed.] That's because while current guidelines from the United Network for Organ Sharing, the organization that oversees the nation's transplant centers and could suspend or shut a program down for deficiencies, do cover deceased donor transplants, they do not specifically cover living donor transplants, except in a limited way. Emily Blumberg, an infectious disease specialist at the University of Pennsylvania, said that it is because live donations are still a relatively new medical advancement compared to cadaver donations. "What has happened is that live donations in the United States have really taken off in the last decade, and there's only been a push to standardize live donation processes recently," said Dr. Blumberg. </div></blockquote>In other words you're supposed to test dead people and their organs for disease before transplanting them, but live people get a pass? This is the height of absurdity. <blockquote>One of the factors driving the push to finally address guidelines for living donor transplants is the rapid emergence of so-called paired kidney donation networks. In the networks, a willing living donor, who isn't a match to a friend or relative who needs a kidney, gives their kidney to someone else in the network. That recipient then has a friend or relative give a kidney to someone else, and so on. Over the last five years, the rise of such networks have allowed hundreds of people to get kidney transplants from people they previously did not know, including a chain involving 32 donors and recipients -- 16 of whom got new kidneys -- that UPMC was part of earlier this year. "Everybody is [testing for viruses] but it would be helpful if we could all be doing it the same way -- especially with paired donation networks," said Dr. Blumberg, who also chairs UNOS's disease transmission advisory committee. </blockquote> This seems a smokescreen for this error. Missing a positive hepatitis C test has nothing to do in my mind with "everyone testing for viruses in the same way." The issue is being aware of the results. <blockquote>Through that committee, UNOS is now beginning to craft new guidelines that are specific to live donation transplants. A conference in July in Baltimore that Dr. Blumberg is helping to organize will act as a public forum on the proposed new guidelines that will address everything from which viruses should be tested for, to which tests should be used, to how the results are communicated and other issues.</blockquote> Non-communication of results will surely be forbidden. <blockquote>The guidelines that do exist now don't spell out how information about a test is to be conveyed and confirmed by people on the transplant team, which are protocols that are left to each individual hospital to establish.</blockquote> This is entirely absurd. "Protocols" are needed to check the most fundamental of tests in a mission critical medical area? Why does this process have to be "spelled out?" In other areas such as blood transfusion, isn't the precess of someone actually looking at test results very straightforward? I did it as a medical student.... <blockquote>Those same guidelines -- which were written for the more common deceased donor transplants -- also don't explicitly require testing of living donor organs for viruses like hepatitis C, though, as a rule, transplant centers like UPMC do so anyway. "I can tell you every transplant center in the country already screens donors for things like hepatitis C or other infections that would affect our use of that organ," Dr. Blumberg said. </blockquote>That's great, as long as the information doesn't end up in '/dev/null', a.k.a. the bit bucket. The rest of the Gazette article discusses the obvious regarding a simple issue of testing and reporting prior to sticking an organ into someone else's body. I believe if this incident was indeed related to a computer error: <ul><li>UPMC needs to reveal this publicly ASAP per <a href="http://jama.ama-assn.org/cgi/content/extract/302/4/382">Joint Commission Safety Standards</a>, as similar flaws could affect other medical centers (such flaws that cause intermittent data erasure are known to exist; see Dr. Jon Patrick's study <a href="http://sydney.edu.au/engineering/it/%7Ehitru/index.php?option=com_content&task=view&id=91&Itemid=146">here</a> on a Cerner system, for example.)</li></ul><ul><li>Repeats of episodes like this could reflect criminal negligence (not of clinicians, but of the administration for installing faulty medical devices), or may already represent criminal negligence if the health IT systems in use were known to have bugs causing intermittent data loss.</li></ul>-- SS Addendum May 25, 2011: It occurs to me that hepatitis is a rather routine type of lab test. Everyone who looked at the electronic chart, usually a cornucopia of people in an academic medical center, had opportunity to review tests like that. They range from medical students, to interns and residents, to fellows to attendings, nurses, and other allied health professionals, not just a few specific people on the transplant team. In my mind the most likely explanation for so many people missing such a crucial piece of data is that it was simply not there. -- SS Addendum May 27, 2011: A reader reminded me of my 2009 post "<a href="http://hcrenewal.blogspot.com/2009/04/upmc-pioneers-in-health-it-or-pioneers.html">UPMC as Proving Ground for IT Tests On Children: Pioneers in Health IT, or Pioneers in Ignoring the Past</a>?", where UPMC made claims it was a "proving ground" for experimental health IT development. -- SS

Transplant Team at UPMC Missed Hepatitis Result - Suspicious for Health IT Failure?

A story suspicious for EMR malfunction appeared in the Pittsburgh Post Gazette: Transplant team missed hepatitis result Kidney donor, recip...

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Quest Diagnostics Settles, Version 2

And the latest entrant in the parade of legal settlements is a medical laboratory company, as <a href="http://articles.latimes.com/2011/may/20/business/la-fi-quest-settlement-20110520">reported</a> by the Los Angeles Times: <blockquote>Quest Diagnostics Inc., the biggest provider of medical lab services in California, has agreed to pay $241 million to settle a whistle-blower's lawsuit that accused it of overcharging the state Medi-Cal program.</blockquote> This was not only about financial misbehavior, but about paying physicians and health care providers to influence their decisions in favor of the payer, but not necessarily their patients: <blockquote>The lawsuit also alleged that the Madison, N.J., company paid illegal kickbacks to doctors, hospitals and clinics that sent patients their way.</blockquote> As usual, despite the allegations above, the company issued the de rigeur denials: <blockquote>Quest acknowledged the settlement in a statement but denied any wrongdoing. 'Our laboratory testing services for Medi-Cal were priced appropriately, and we deny all allegations in the complaint,' said Michael E. Prevoznik, Quest's senior vice president and general counsel. Quest said it settled 'to put the lawsuit behind us.'</blockquote> Of course, lawyers are expensive. But it is awfully hard to believe a trial would cost more than a small fraction of the amount paid out. So it is very hard to believe that the company paid nearly a quarter of a billion dollars just to avoid the expense and inconvenience of going to court. That the company paid so much to avoid contesting an action that alleged such kickbacks seems at odds with the company's earnest <a href="http://www.questdiagnostics.com/brand/company/questcares/corporate_responsibility.html">"corporate citizenship" statement</a>: <blockquote>Honesty and integrity are the cornerstones of our corporate philosophy. We strive to do the right thing when it comes to caring for our patients, dealing with our business partners and working alongside our fellow employees. We never forget that we’re in the business of caring for people. Every day, we work hard to earn your trust and maintain our reputation for providing unsurpassed diagnostic insights and innovation. </blockquote> What does not contesting allegations about kickbacks to doctors and hospitals have to do with "honesty and integrity," doing "the right thing," or "earn[ing] your trust?" That would be a particularly good question to put to certain members of the <a href="http://phx.corporate-ir.net/phoenix.zhtml?c=82068&p=irol-govboard">Quest Diagnostics board of directors </a>who have roles that ought to suggest they might have a certain level of discomfort with not  contesting allegations of giving kickbacks to physicians and hospitals, e.g.: <ul><li>John C Baldwin MD, the surgeon who is "Senior Advisor for Health Affairs to the Texas Tech University System," </li><li>Jenne K. Britell, Ph.D.,"a trustee of the Fox Chase Cancer Center," </li><li>Rosanne Haggerty, "the founder and President of Common Ground Community, a not-for-profit organization that develops strategies to end homelessness," </li><li>Surya N. Mohapatra, Ph.D., CEO and Chairman of the Board, also "a Trustee of Rockefeller University," and </li><li>Gail Wilensky Ph.D., a well-known health policy expert who has been vocal in health care reform discussions, and is "a Senior Fellow at Project HOPE."</li></ul>Of course, as the <a href="http://hcrenewal.blogspot.com/search/label/legal%20settlements">parade of legal settlements</a> continues, it has been markedly unusual for any of the board members of the organizations involved, no matter how distinguished their credentials in the health arena, to have anything to say about them. Also, as is tediously usual in such cases, I could find nothing to suggest any negative consequences for any individual who might have authorized, directed, or implemented the bad behavior, and specifically, that might have had anything to do with the kickbacks that were alleged to have occurred. The continuing march of <a href="http://hcrenewal.blogspot.com/search/label/legal%20settlements">legal settlements</a> now seems to have included most of the previously well reputed commercial health care firms in the US. The length of this march is an indication of how pervasive is bad behavior by such health care organizations, especially when the marchers were accused of behavior that appeared clinically, not just financially unethical. I assert again that pervasive bad behavior by large health care organizations has got to be a major cause of our ongoing health care dysfunction. As we have said repeatedly, even large monetary penalties paid by corporations are unlikely to do anything other than somewhat increase their costs of doing business.  (Note that this is the second settlement by Quest Diagnostics we have discussed on <a href="http://hcrenewal.blogspot.com/">Health Care Renewal</a>.  The first settlement, for over $300 million, <a href="http://hcrenewal.blogspot.com/2009/04/quest-diagnostics-settles.html">was in 2009</a> and involved felony misbranding charges by a Quest subsidiary.  In that case too no actual persons suffered any negative consequences.) So, to really deter bad behavior, those who authorized, directed or implemented bad behavior must be held accountable.    As long as they are not, expect the bad behavior to continue.  (We said that in 2009 about the first Quest Diagnostics settlement, and now it seems to have been a good prediction.  You heard it here first on <a href="http://hcrenewal.blogspot.com/">Health Care Renewal</a>.)

Quest Diagnostics Settles, Version 2

And the latest entrant in the parade of legal settlements is a medical laboratory company, as reported by the Los Angeles Times: Quest Diag...

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