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The Stealth Marketing of Medical Devices: The Biotronik Example

We have frequently discussed the use of organized, deceptive <a href="http://hcrenewal.blogspot.com/search/label/stealth%20marketing">stealth marketing</a> campaigns to influence physicians to prescribe pharmaceuticals. Now more information is coming to light about similar campaigns to influence physicians to use particular medical devices As <a href="http://www.nytimes.com/2011/06/01/health/01device.html">reported </a>in the New York Times, based on documents supplied apparently by a corporate whistleblower, here are some tactics used by a small German device manufacturer, Biotronik: Seeding Trials These are ostensibly clinical trials, but designed more to market than to discover meaningful data. We have <a href="http://hcrenewal.blogspot.com/search/label/seeding%20trials">discussed</a> them in the context of drug marketing. <blockquote>The message from cardiologists was loud and clear, according to a top executive at a heart device company. The doctors wanted implant makers to produce more clinical trials of devices to help them generate income from research fees. To compete, 'we must be able to 'answer the bell,'' wrote Thomas V. Brown, an executive vice president at the American subsidiary of Biotronik, a small German firm that makes pacemakers and defibrillators. Mr. Brown’s charge came in an e-mail last year to fellow Biotronik executives, one of scores of documents involving the company that offer a portrait of an implant industry where producers seek to influence the brand of device that patients receive long before a diagnosis. The documents show, for example, that device makers recruit not only implant specialists as consultants but also general cardiologists who refer patients. Those cardiologists, called feeders in one of the documents, can benefit by enrolling the referred patients in a company-financed study that can pay a cardiologist up to $4,800 a patient. A lawyer representing Biotronik, Christopher Myers, said Mr. Brown’s e-mail was sent around the same time that some Biotronik sales officials were asking the company to design 'unscientific studies' to compete with producers offering sham studies 'as a means of funneling money to doctors.' </blockquote> Influencing Device Choice by Making Referring Doctors Consultants The Times report stated that the company's recent increase in sales was due to <blockquote>the company’s success in developing relationships with doctors who, in turn, can influence which brand of device a patient gets.</blockquote>Here is an example of one type of such a relationship: <blockquote>The company’s relationship with a general cardiologist in Tucson, Dr. Monty C. Morales, is the subject of several memos. In mid-2008, Biotronik retained Dr. Morales as a consultant under an arrangement that paid him up to $2,000 a month, company records indicate. And about that same time, Dr. Morales, who does not implant devices, expressed strong opinions about the implant brand his patients should get, according to a report apparently written by a sales representative for a Biotronik distributor called Western Medical. In that memo, Dr. Morales is described as saying that he would not refer patients to an implant specialist in his same Tucson-area practice, Dr. Darren Peress, unless Dr. Peress started implanting Biotronik devices. 'Currently, Peress does not get any of Morales’ business,' the memo stated. 'Monty will strongly support use and send Peress business if he uses Biotronik.' </blockquote> Also, <blockquote>Among the Tucson-area implant specialists to whom Dr. Morales apparently referred his patients was Dr. Benigno F. Decena III, the Western Medical report indicates. Internal Biotronik sales data indicates that Dr. Decena’s usage of the company’s products rose sharply in 2009. During the 12-month period from February 2009 to January 2010, the monetary value of the Biotronik devices used by Dr. Decena reached $1.1 million, an eightfold increase from the previous 12-month period, data shows. </blockquote> Influencing Device Choice by Making Device Implanters Consultants Here is a more direct example of making physicians consultants to influence them to then themselves implant more product. <blockquote>The Times recently detailed in an article how four implant specialists in Las Vegas sharply increased their use of Biotronik devices in mid-2008, about the same time they became consultants. Those doctors said that it was the quality of Biotronik’s devices, not the payments they had received, that had influenced their choice of implants. Whatever the reason, Biotronik’s revenues apparently skyrocketed. By early 2010, the cumulative monetary value of company devices used by those four physicians alone reached about $16 million, internal Biotronik sales data indicates. [Note: see our post by Cetona on this <a href="http://hcrenewal.blogspot.com/2011/04/with-this-device-in-your-chest-straight.html">here</a>.] The documents point to similar outcomes elsewhere. An implant specialist in Fullerton, Calif., Duane E. Bridges, became a consultant to Biotronik in mid-2008, company records indicate. The monetary volume of company products used by Dr. Bridges from early 2008 to early 2009 reached about $360,000, then jumped to $1.6 million over the next 12-month period, a greater than fourfold rise, the company data indicates. Dr. Bridges did not respond to comment; also a lawyer, Anthony Willoughby, who said he represented Dr. Bridges could not be reached for comment. Another implant specialist who became a company consultant in mid-2008, Dr. Michael Brodsky of Irvine, Calif., increased the dollar value of Biotronik devices he used over those two periods, Biotronik data indicate. The value of company products used by another specialist who became a Biotronik consultant in mid-2008, Dr. Prash Jayaraj of Burbank, Calif., also doubled, company data indicate. </blockquote> Cultivating Nepotism Finally, here is the use of influence via creating family members' conflicts of interests. <blockquote>a widely used industry practice: the hiring by a device maker of a doctor’s spouse or other relative. For example, in plotting strategies to gain sales at one California hospital, Biotronik officials suggested that an implant specialist, whose son and wife both worked for a competitor, might be wooed if Biotronik offered him concessions 'such as studies or even the hiring of his son,' according to an internal company report. Another company document discussed how the revenues of a sales official sharply dropped after his father, an implant specialist, died unexpectedly in an airplane crash</blockquote> Summary Thus, the set of documents the Times obtained suggested that one small device company used a set of tactics to increase sales by influencing doctors to use its products.  The tactics employed included seeding trials, hiring referring doctors as consultants to influence proceduralists to whom they referred to use the company's products, hiring proceduralists directly as consultants to influence them to use the products, and hiring relatives of doctors to influence them to use the products or persuade others to use the products. There is every reason to suspect that such systematic stealth marketing campaigns are prevalent throughout commercialized health care. We have mainly discussed them in terms of the promotion of pharmaceuticals. The examples above suggest they may be used as often to promote medical devices. There is every reason to think they may also be used to promote other health care goods or services. This latest set of examples brings up two important points. Physicians, other health care professionals, and health care academics are frequently employed as consultants. These relationships seemed to be looked up on with much favor not only by those directly involved, but also by the supervisors of those involved who are academic or hospital/ health system employees. Even people who find fault with certain kinds of conflicts of interest affecting health care professionals seem less concerned about consulting relationships  For example, the often cited article by Brennan et al which called for more stringent academic policies on conflicts of interest, including banning small gifts from industry, would allow consulting as long as it were governed by a contract with "specific deliverables," (See our post <a href="http://hcrenewal.blogspot.com/2006/01/dodging-stones-thrown-from-glass.html">here</a>.) Yet we have seen repeated examples of consultancies which seem more designed to market products than actually provide specific consulting advice. We also recently have seen how consulting relationships can cloak third-party strategies used in stealth advocacy campaigns (see post <a href="http://hcrenewal.blogspot.com/2011/02/health-care-corporate-disinformation.html">here</a>). So all this would suggest that one should be very skeptical about any consulting relationships by health care professionals or academics unless the reason for and nature of the consulting is very clear, and very clearly not related to marketing or public relations. Finally, note that many apologists for conflicts of interest affecting health care professionals and academics argue that these relationships are inevitable byproducts of the collaboration with industry needed to drive innovation (e.g., see<a href="http://hcrenewal.blogspot.com/2010/11/there-you-go-again-richard-epstein-says.html"> this post</a>.) We have argued that collaboration does not require industry to pay its professional or academic collaborators. The example above shows how conflicts of interest may be created deliberately by commercial firms for marketing purposes. Such relationships do not appear to be "collaboration" necessary for "innovation." Health care professionals and educators should think again about whether accepting gifts or money from organizations which sell health care products or services is worth the doubts that such incentives create.  Even if the relationship was not designed to promote a product or service, the desire for continued payments and gifts can influence professional decisions or academic opinions.  Worse, the increasing evidence about the prevalence of stealth marketing and advocacy suggests that any gift or payment not clearly in reciprocity for a very well defined technical service is likely to be a deliberate part of such a campaign.  Is the money really worth the doubts about professionalism and trustworthiness it may create?

The Stealth Marketing of Medical Devices: The Biotronik Example

We have frequently discussed the use of organized, deceptive stealth marketing campaigns to influence physicians to prescribe pharmaceutica...

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BLOGSCAN - Another Health Care Foundation Loses Its Way

BLOGSCAN - Another Health Care Foundation Loses Its Way

From Gary Schwitzer's HealthNewsReview blog, an aggregation of stories that shows how the famous Susan G Komen For the Cure foundation h...

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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 style="font-weight: bold;" href="http://www.post-gazette.com/pg/11147/1149429-114.stm">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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