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A US Government Prosecutor Now Defends Health Care Corporations: No Different Than Being Traded from the Red Sox to the Yankees?

We have discussed a few examples of the <a href="http://hcrenewal.blogspot.com/search/label/revolving%20doors">revolving door</a>, involving government officials who dealt with health care issues leaving to eventually take jobs for for-profit health care corporations.  The latest, and most vivid example of the revolving door was just in <a href="http://www.nytimes.com/2011/06/05/business/05switch.html">an article</a> by Duff Wilson in the New York Times: <blockquote>Michael K. Loucks was arguably the nation’s most influential prosecutor of health care fraud. He racked up numerous convictions and mega-settlements in nearly a quarter-century, using whistle-blowers and secret grand juries to pressure major pharmaceutical and health companies into ending illegal practices like kickbacks to doctors and misuse of blockbuster drugs. Once described as a cross between a firebrand preacher and a charismatic litigator, Mr. Loucks burnished a reputation aptly captured in a Fortune magazine headline: 'Why Do Drug Companies Fear This Man? Maybe because he’s declared all-out war on cheats in the drug industry.' But a year and a half ago, Mr. Loucks, a Republican, left the United States attorney’s office in Boston after he was passed over for the top post and President Obama appointed a Democrat. Instead, Mr. Loucks joined Skadden, Arps last July, and has startled former allies by emerging in recent months as zealous a corporate defender as he was a prosecutor, complete with proposals seeking more lenient treatment for the medical companies he once vilified. In a six-page memo last month to clients in his portfolio, which may include some of the very same corporations he prosecuted repeatedly, Mr. Loucks bemoaned strategies he had embraced. </blockquote> Note that we noted what Duff Wilson called Mr Loucks "crowning achievement" <a href="http://hcrenewal.blogspot.com/2009/09/pfour-legal-settlements-for-pfizer-why.html">here</a>. This case was particularly striking because Mr Loucks was not merely involved with government health care policy.  He was prosecuting alleged wrongdoing by health care corporations while within government.  However, now he is defending the same companies whose actions he once called "evil." This generates concern that those in government charged with keeping health care corporations honest at best regard what they are doing as simply some kind of game, and at worst, as an avenue to future more lucrative corporate positions. This was reinforced at the conclusion of the Wilson article, in which Duff Wilson challenged Mr Loucks that his new job was considered by some to going "over to the dark side." Earlier in the piece, Mr Loucks made the usual response of an attorney defending an apparently unsavory client. <blockquote>While everyone calls it ‘the other side,’ I’m doing the same thing I’ve always done, which is zealously representing my clients.</blockquote> But then he added a sports analogy: <blockquote>For his part, Mr. Loucks uses a baseball reference. Johnny Damon left his beloved Boston Red Sox in late 2005 to sign with 'the evil empire, the New York Yankees,' Mr. Loucks said. Both teams won World Series with help from Mr. Damon. Asked whether the 'evil empire' analogy fit the Justice Department or Skadden, Mr. Loucks said, 'One man’s evil empire is another’s home team.' </blockquote> I do live in Red Sox Nation, and some people around here do call the New York Yankees the "evil empire." I am sure nearly all of them realize that this is just sports fans' hyperbole. So Mr Loucks, the trained lawyer and former federal prosecutor, rationalized his new, lucrative position defending the companies whose conduct he once called "evil" with a logical fallacy. As best as I can determine, that fallacy was a <a href="http://www.nizkor.org/features/fallacies/hasty-generalization.html">hasty generalization </a>with this structure: He took a sample of a single organization called an "evil empire," (the NY Yankees). He noted correctly  that this one organization is not really an evil empire, but some peoples' baseball home team. He then made the hasty generalization that because one organization popularly called an "evil empire" is not actually evil, no entities labelled "evil empires"are any  more evil than the Yankees.  One wonders if other government regulators regard what they do as having no greater ethical consequences as the decision to swing on a pitch down and in?  Again, it all has the aroma of corporatism, of government and corporate leaders who see each other as insiders with common interests, and who feel more commonality with each other than with the hicks in the general population.  In that case, can we trust such government regulators to protect the interests of the people whom they are supposed to protect? <div class="separator" style="clear: both; text-align: center;"><a href="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEjCG4On05yJGGQamPWOi-fcRC2NB0RzWegepmjiFTn729LEy6gazjf7Q1BujKF-3zegUGUQ0yAemtqT_fv-2hgqx41zhXLAVyENyRC1y8_NhRLjHi3x2RdMDzlkBGR-Ee6APC8oBzSKE89_/s1600/red+sox+yanks+picture.jpg" imageanchor="1" style="margin-left: 1em; margin-right: 1em;"><img border="0" height="240px" src="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEjCG4On05yJGGQamPWOi-fcRC2NB0RzWegepmjiFTn729LEy6gazjf7Q1BujKF-3zegUGUQ0yAemtqT_fv-2hgqx41zhXLAVyENyRC1y8_NhRLjHi3x2RdMDzlkBGR-Ee6APC8oBzSKE89_/s320/red+sox+yanks+picture.jpg" t8="true" width="320px" /></a></div>

A US Government Prosecutor Now Defends Health Care Corporations: No Different Than Being Traded from the Red Sox to the Yankees?

We have discussed a few examples of the revolving door , involving government officials who dealt with health care issues leaving to eventua...

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Should a "Phenomenal" $1 Million CEO be Accountable for "Errors that Caused Severe Injury or Death?"

A recent story with some local color once again illustrates the cognitive dissonance evoked by current patterns of compensation of health care leaders. Let me start chronologically. The Stratospheric Compensation of the CEO, and Its Justification In 2009, the compensation given to the CEO of the Palomar Pomerado Health, a public health system in the vicinity of San Diego, California, provided some headlines. As <a href="http://www.signonsandiego.com/news/2009/dec/10/hospital-ceo-gets-raise-26-percent/">reported</a> then by the San Diego Times-Union, <blockquote>Palomar Pomerado Health CEO Michael Covert has received a 26 percent — or $154,000 — pay raise. The increase, approved by the hospital district’s board of directors last month, is retroactive to July 1, the beginning of the fiscal year, board Chairman Bruce Krider said. The increase brought Covert’s pay from $582,000 a year to $736,000 a year.</blockquote> Not unexpectedly, the hospital system board chair had an explanation: <blockquote>Krider said Covert has done a 'phenomenal job' of improving the quality of care and charting the district’s future, but is underpaid compared with five California hospitals that generate gross revenues of $357 million to $457 million a year.</blockquote> By 2010, it was apparent that Mr Covert's compensation was even larger than it appeared above. As <a href="http://www.signonsandiego.com/news/2010/sep/18/public-health-exec-pay-tops-1-million/">reported</a> then by the San Diego Times-Union: <blockquote>The top official at Palomar Pomerado Health, a public agency serving health-care needs in Poway and Escondido, receives in excess of $1 million in compensation per year. Michael Covert, who has run the North County hospital district since 2003, receives a base salary of $736,000 a year. Retirement, bonuses and other benefits push Covert’s total pay past $1.1 million. The compensation package is in the median range of his private and nonprofit counterparts and places Covert among the elite among public employees.</blockquote> At that point, the system's board chairman gave a similar justification: <blockquote>Bruce Krider, the health-care district chairman, said Covert does an excellent job managing a complex enterprise that includes two major hospitals. Covert juggles the interests of staff, physicians, patients, volunteers, board members and other stakeholders, he said. 'A million dollars sounds pretty good to anybody, but my view is, pay a lot and expect a lot,' said Krider, a management consultant who also is a former hospital executive. 'You can’t have some mediocre public servant. You need somebody that has got vision, that can see the issues that are most important and put it all together.'</blockquote> Later in 2010, when it turned out that Mr Covert was the second most highly paid government official in California (and the most highly paid official was facing criminal charges), the Times-Union <a href="http://www.signonsandiego.com/news/2011/mar/16/hospital-ceo-tops-pay-list/">reported</a>: <blockquote>'We have to compete for talent with all of the for-profit and nonprofit health systems,' said Theodore Kleiter, a former hospital administrator who is now chairman of the Palomar Pomerado Health board of directors. 'If you want the top management, that’s what you have to pay.' Kleiter said Covert is one of the nation’s leading health care administrators and noted only 3 percent of the district’s $480 million budget comes from taxpayers. 'The people in our area expect the best and we’re trying to provide that,' Kleiter said</blockquote> Also, <a href="http://articles.latimes.com/2011/mar/29/local/la-me-0329-top-compensation-20110329">per</a> the Los Angelest Times a few weeks later: <blockquote>Officials at the hospital strongly defended his pay. "There's this notion that because you're a public agency you should hire less-talented people than private companies, and if we followed that idea, PPH would not be where it is today," hospital spokesman Andy Hoang said. "We must compete for the best physicians, nurses and executives to provide the highest level of care. The community deserves that."</blockquote> So, do we see a pattern here? According to one board chairman, Mr Covert had "vision," was doing an "excellent job," a "phenomenal job."  Furthermore, the chairman gave Mr Covert credit, apparently sole credit, for improving quality of care within the system, and noted how he was responsible apparently for all that was done by everyone who worked in or was associated with the hospital.  That board chairman was a "management consultant", and "former hospital executive."  The next chairman thought Mr Covert was "top management." and one of "the nation's health care administrators."  That chairman was "a former hospital administrator."  Finally, a paid hospital spokesman insisted Mr Covert is one of the "best executives." Celebrity Endorsements and Fines for Medical Errors On the other hand, once more <a href="https://www.signonsandiego.com/news/2011/apr/11/petitions-signed-protest-medical-group-expenses/">reported</a> by the Times-Union, some community residents, including hospital nurses, were not convinced that Mr Covert's performance was so unequivocally brilliant: <blockquote>More than 200 community residents signed petitions raising questions about the salary paid to the chief executive at Palomar Pomerado Health and other business practices at the medical organization. 'Your highest priorities should be improving the health of our residents ... Out of control executive pay, costly celebrity spokespeople endorsements and out-of-district clinics (are) a waste of public funds,' the petition states. The signatures were collected by nurses concerned about the compensation package and other issues over the past months. </blockquote> By the way, concerning the issue of celebrity endorsements: <blockquote>The district signed former San Diego Chargers running back LaDainian Tomlinson to a $2 million promotional contract before he signed with the New York Jets, a marketing plan that was criticized by some employees.</blockquote> And this week, there was more reason to think that all is not so "phenomenal" at Palomar Pomerado. The San Diego Union-Tribune just <a href="http://www.signonsandiego.com/news/2011/jun/02/five-san-diego-area-hospitals-cited-life-threateni/">reported</a> about California hospitals fined by the state for serious errors affecting patient care.  <blockquote>Five San Diego County hospitals were fined a total of $300,000 for errors that caused serious injury or death to patients, state regulators announced Thursday. The penalties were levied for leaving a retractor inside one patient and a 28-inch guide wire inside another after surgery, giving two deadly drug overdoses, and leaving a patient unattended who fell and then died from a fractured skull. Palomar Medical Center in Escondido, Pomerado Hospital in Poway and Scripps Memorial Hospital in La Jolla were each fined $75,000, the highest fines among 12 California hospitals penalized by the state on Thursday. All three had been cited at least twice before, prompting the higher penalty.</blockquote>Note that the previous citations came in 2010, the year in which Mr Covert's compensation exceeded $1 million. Of course, medical errors are unfortunately not rare. I suspect that while we may be able to reduce them, they cannot always be avoided. I do not mean to condemn these hospitals, nor the people who work there. In one sense, it would be silly to expect Palomar Pomerado Health to be perfect, for errors and mistakes never to be made there. It also would be silly to blame the system's CEO for everything that went wrong there.  It would be silly, except that the justifications given for the comparatively stratospheric compensation given to the CEO of this government funded health care organization implied that he was nearly perfect, and he was responsible for all the good that went on within the organization. Summary So here again we see an example of a health care leader who is nearly god-like, is responsible for all the wonderful things that his organization does, and is therefore worthy of pay sufficient to make him rich, at least according to the board of directors to whom he is supposed to report.  On the other hand, there seems to be no real evidence of the CEO's near divinity, and if he is supposed to be responsible for all the wonderful things his organization does, he also ought to be responsible for its errors and mistakes.  In fact, comparatively high executive compensation justified by hyperbole seems more likely to indicate a board that is not sufficiently independent to exert stewardship than an executive who is truly exceptionally brilliant.  Lack of such stewardship, in turn, may lead to lack of executive accountability and hence poor rather than brilliant outcomes for the health care organization.  So here is the latest example of <a href="http://hcrenewal.blogspot.com/search/label/CEO%20disease">CEO disease</a>.  As it becomes more prevalent, health care leadership becomes more disconnected, unaccountable, and self-interested.  The increasing prevalence of CEO disease in health care may explain why costs keep increasing, access keeps declining, and quality and safety are stagnant. 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.  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. We need to launch a crash program to prevent CEO disease and cure existing cases, before it kills off our health care system.

Should a "Phenomenal" $1 Million CEO be Accountable for "Errors that Caused Severe Injury or Death?"

A recent story with some local color once again illustrates the cognitive dissonance evoked by current patterns of compensation of health ca...

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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 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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