healthy4u

Two More Settlements, One More Corporate Integrity Agreement for Novo Nordisk

And the legal settlements for health care organizations keep right on marching along.  Here are the basics, <a href="http://online.wsj.com/article/SB10001424052702304259304576377430323510242.html">per</a> the Wall Street Journal, starting with the outline of the first settlement for Novo Nordisk: <blockquote>Drug maker Novo Nordisk A/S's U.S. affiliate has agreed to pay more than $25 million to end investigations by U.S. authorities related to the marketing of NovoSeven and several diabetes drugs. In one settlement, Novo Nordisk Inc., the U.S. affiliate, agreed to pay $25 million to end a probe and settle a civil lawsuit related to alleged improper marketing practices regarding Novo Seven, which is used to treat patients suffering from rare bleeding disorders. The complaint had alleged that Novo Nordisk promoted NovoSeven for unapproved uses. </blockquote>Here is the outline of the second settlement: <blockquote>Separately, the U.S. affiliate also agreed to pay $1.73 million in a settlement with the U.S. government to resolve allegations that its sales representatives accessed confidential patient information and submitted false Medicaid claims related to the marketing of diabetes drugs, including Novolin and Novolog. Federal prosecutors in Brooklyn, N.Y., had alleged Novo Nordisk representatives made payments to pharmacists in exchange for recommendations for Novolin and Novolog products. As part of their activities, the pharmacists, or Novo Nordisk sales representatives, accessed confidential patient information, according to the settlement agreement. </blockquote>Here is the usual pro forma denial by a company spokesperson that the company had done anything wrong: <blockquote>'We are committed to running our business according to high legal and ethical standards and have been cooperating with the government since the investigation began,' said Jim Shehan, corporate vice president and U.S. general counsel for Novo Nordisk Inc. 'With this settlement, we avoid the distraction and costs of a lengthy legal battle, which would not have been in the best interest of the company or its stakeholders.' Novo Nordisk denies any wrongdoing related to NovoSeven marketing....</blockquote>Also, <blockquote>Novo Nordisk didn't admit wrongdoing in the Novolin pact. </blockquote>By the way, here is the brief mention of the corporate integrity agreement: <blockquote>[Novo Nordisk] agreed to enter a five-year corporate integrity agreement with the U.S. Department of Health and Human Services in which it will add additional reporting and other procedures to its compliance program. </blockquote>Why would a company that professes "high ethical and legal standards" not contest allegations that it engaged in improper marketing, paid health care professionals to recommend its products, and instigated breaches of patient confidentiality?  Setting that aside, however, the coverage of this story <a href="http://articles.baltimoresun.com/2011-06-10/news/bs-md-factor-vii-20110610_1_factor-vii-novoseven-novo-nordisk">in the Baltimore Sun </a> raises further questions. First, how Novo Nordisk allegedly promoted Novo Seven, and the uses for which it was promoted are disturbing: <blockquote>the government [did not] back down from its charge that the company engaged in unlawful marketing that helped persuade the Army to treat combat casualties with a largely experimental drug that was not approved for such use by the Food and Drug Administration. Beginning in 2000, according to the government's claims, Novo Nordisk promoted the drug, also known as NovoSeven, to military doctors and entered into research agreements with Army hospitals. It provided funding for trials in which military officers participated, and gave 'donations and other gifts' to nonprofit foundations on behalf of military physicians. Those practices 'caused the military to use NovoSeven in its trauma patients,' the agreement states.</blockquote> There was no evidence that Novo Seven decreased the morbidity and mortality of battlefield trauma, but there were reasons to believe the drug increased thrombosis risk: <blockquote>Numerous clinical studies have since shown, however, that Factor VII is ineffective at controlling traumatic bleeding and can potentially cause blood clots that lead to heart attacks and strokes. </blockquote>This was not just paying physicians and institutions to market an expensive, but innocuous drug.  It was paying US military physicians and institutions to market a drug that put injured soldiers at risk, but gave them no benefit.  Given the degree of deference public officials give to the brave soldiers that serve the country on the battlefield, one would think that putting them at risk, and putting the honor of their officers and military institutions at risk ought to be a big deal, maybe a big deal requiring more than even a $25 million fine. On the other hand, although $25 million seems like a lot of money, it pales beside the amounts Novo Nordisk were making from Novo Seven: <blockquote>Last year Novo Nordisk reported annual sales of NovoSeven of almost $1.6 billion — mainly for treatment of hemophilia. Company officials say roughly 15 percent of its sales are for unapproved uses, or as much as $250 million last year.</blockquote> So while the settlement seems expensive compared to the cost of defending the suit in court, and it trades the distraction of a corporate integrity agreement for avoiding the "distraction" of further legal action, maybe a settlement equal to only one-tenth of the yearly sales of the relevant drug seemed a good deal for the company. Since the company was already laboring under a deferred prosecution agreement in the US related to charges of illegal foreign kickbacks (see <a href="http://hcrenewal.blogspot.com/2009/05/novo-nordisk-accepts-deferred.html">this post</a>), maybe adding a corporate integrity agreement did not seem like all that much distraction. On the other hand, the big question is: why was this deal a good one for the US government, or the people which it is supposed to protect? The amount involved only seems like a cost of doing business, and seems disproportionately small given that the allegations involved unlawful marketing that apparently threatened to corrupt US military doctors and hospitals, and were made against a company already under a deferred prosecution agreement for illegal kickbacks. Finally, since the impact of even the relatively small financial payment could be spread among all corporate employees and stockholders, and the deal involved no negative consequences for any individual who authorized, directed or implemented the bad behavior, why would it defer corporate insiders from authorizing or directing future bad behavior?  . We have heard a series of threats from US government officials that they are about to crack down on big health care companies that misbehave, and, in particular, actually try to impose some negative consequences on the people in those companies that authorized, directed, or implemented bad behavior (see <a href="http://hcrenewal.blogspot.com/2011/05/fresenius-fined-82-million-for-false.html">this post</a>). However, we continue to see settlements like this, involving relatively small financial penalties imposed on rather large corporations, and corporate integrity agreements and/or deferred prosecution agreements that do not obviously seem to change how the companies operate. 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. The continuing <a href="http://hcrenewal.blogspot.com/search/label/legal%20settlements">march of legal settlements</a> now seems to have included most of the previously well reputed commercial health care firms in the US. The length of this march is an indication of how pervasive is bad behavior by such health care organizations, especially when the marchers were accused of behavior that appeared clinically, not just financially unethical. I assert again that pervasive bad behavior by large health care organizations has got to be a major cause of our ongoing health care dysfunction. So, to really deter bad behavior, those who authorized, directed or implemented bad behavior must be held accountable.    As long as they are not, expect the bad behavior to continue.

Two More Settlements, One More Corporate Integrity Agreement for Novo Nordisk

And the legal settlements for health care organizations keep right on marching along. Here are the basics, per the Wall Street Journal, st...

Đọc thêm »

The First Contaminated Heparin Case Verdict: Making Money by Giving Patients "the Cheap Stuff"

In February, 2008, we first <a href="http://hcrenewal.blogspot.com/2008/02/in-middle-of-all-those-pigs-in-china.html">posted</a> about the case of the deadly adulterated heparin.  (A case summary is appended to the end of this post, and nearly all our posts are <a href="http://hcrenewal.blogspot.com/search/label/heparin">here</a>.)  The case is of fundamental importance because it involves the failure of pharmaceutical companies to fulfill their core mission, to supply pure, unadulterated drugs.  It is also of fundamental importance because it may be about how this failure to fulfill core mission was not due to accident, or even simple incompetence, but due to putting financial goals ahead of patient safety.  The latest event in the very slowly unfolding aftermath of this case was the first verdict against the sellers of the heparin in a civil trial in a US court room.  As <a href="http://www.chicagotribune.com/business/breaking/chi-baxter-loses-first-heparin-case-20110609,0,1020947.story">reported</a> by the Chicago Tribune, <blockquote>A Cook County Circuit Court jury Thursday awarded $625,000 to the estate of a man who his attorneys say was given a dosage of a blood thinner made by Baxter International Inc. that contained a contaminated ingredient found in the company's supply chain in China. The verdict is the first from a case against Baxter and its supplier, Wisconsin-based Scientific Protein Laboratories, from hundreds of lawsuits filed against the Deerfield-based medical product giant. A mountain of litigation has been leveled against the companies after U.S. regulators determined in 2008 that Baxter's heparin was contaminated, from fake ingredients sourced in China.</blockquote> A statement by the (winning) plaintiff's attorneys underscored that this case may have been about cutting costs winning out over patient safety: <blockquote>'The active pharmaceutical ingredient in the contaminated heparin received by Mr. Johansen and other Americans was obtained from Baxter (and its supplier Scientific Protein Laboratories') Changzhou SPL,' Johansen estate attorneys Don Nolan of Chicago and David Zoll of Toledo, Ohio said in a statement this afternoon. 'This crude heparin was referred to in the companies' own internal records as 'the cheap stuff.' The contaminant was determined to be a man-made 'fake heparin' called over-sulfated chondroitin sulfate, causing among other effects, potentially fatal allergic-like reactions.'</blockquote> As explained in <a href="http://postscript.communitycatalyst.org/?p=2770">this post</a> in the Postscript blog: <blockquote>Baxter and its ingredient supplier, Scientific Protein Laboratories (SPL), announced in 2008 that the OSCS contaminant was introduced intentionally by their suppliers in China. Financial motives are presumed, because Heparin costs 100 times more to make than OSCS. In addition, Heparin which is harvested and purified from the intestines of pigs, was even harder to obtain in 2007-08 because a global pig disease epidemic had created an unexpected shortage in China and elsewhere. The timing was right, and seems the chemistry was, too. The OSCS contaminant was not initially discovered because it mimics some chemical properties of Heparin, suggesting that it was introduced by suppliers in China who possessed the biochemical savvy to fool the standard chemical purity tests then in use by Baxter and the FDA. (The assay test has since been improved by the US Pharmacopeia.)</blockquote>So it appeared in their haste to cut costs, Baxter International, and its US based supplier, Scientific Protein Laboratories, failed to consider that heparin chosen because it was "the cheap stuff" might not turn out to be safe. In particular, they seemed to be wilfully blind to the prospect that pushing for the cheapest price without inquiring too deeply into the details of the supply chain might tempt those down the chain to cheat, and in doing so, to disregard the safety of those patients (in another country) who would be infused with the resulting adulterated product.  This thus appears to be a vivid, and fatal case of mission-hostile management. Meanwhile, we still await the result of the investigation that was supposed to have started in February, 2011 (see <a href="http://hcrenewal.blogspot.com/2011/02/three-years-later-congressional.html">this post</a>.) To reiterate, as long as the leaders of health care organizations are not held accountable for the results of their decisions on health care quality, cost, and access (even in such extreme quality violations as those resulting in multiple patient deaths), we can expect continuing decisions that sacrifice quality, increase costs, and worsen access, but that are in the self-interest of the people making them. To really reform health care, we must hold health care organizations and their leaders accountable (and not blame all the problems on doctors, other health care professionals, patients, and society at large). Case Summary - We have posted several times, recently <a href="http://hcrenewal.blogspot.com/2011/02/fda-to-scientific-protein-laboratories.html">here</a>, about the tragic case of suddenly allergenic heparin. Although heparin, an intravenous biologic anti-coagulant, has been in use for over 70 years, serious allergic reactions to it had heretofore been rare. Starting late last year, hundreds of such reactions, and now 21 deaths were reported in the US after intravenous heparin infusions.All the heparin related to these events in the US was made by Baxter International. - We then learned that although the heparin carried the Baxter label, it was not really made by Baxter. The company had outsourced production of the active ingredient to a long, and ultimately mysterious supply chain. Baxter got the active ingredient from a US company, Scientific Protein Laboratories LLC, which in turn obtained it from a factory in China operated by Changzhou SPL, which in turn was owned by Scientific Protein Laboratories and by Changzhou Techpool Pharmaceutical Co. Changzhou SPL, in turn, got it from several consolidators or wholesalers, who in turn got it from numerous small, unidentified "workshops," which seemed to produce the product in often primitive and unsanitary conditions. None of the stops in the Chinese supply chain had apparently been inspected by the US Food and Drug Administration nor its Chinese counterpart. - We found out that the Baxter International labelled heparin was contaminated with over-sulfated chondroitin sulfate, a substance not found in nature, but which mimics heparin according to the simple laboratory tests used in the Chinese facilities to check incoming heparin. (See post <a href="http://hcrenewal.blogspot.com/2008/03/fake-heparin-then-sick-and-dead.html">here</a>.) Further testing revealed that the contamination seemed to have taken place in China prior to the provision of the heparin to Changzhou SPL. (See post <a href="http://hcrenewal.blogspot.com/2008/03/who-was-responsible-for-purity-of.html">here</a>.) It is not clear whether Baxter International or Scientific Protein Laboratories had inspected most of the steps in the supply chain, or even knew what went on there. - The Baxter and Scientific Protein Laboratories CEOs did not seem aware of where they got the heparin on which the Baxter International label was eventually affixed. But one report in the New York Times alleged that Scientific Protein Laboratories would not pay enough for heparin to satisfy any sources other than the small "workshops." - Leaders of all organizations involved, Baxter International, Scientific Protein Laboratories, Changzhou SPL, the Chinese government, and the US Food and Drug Administration, and the US Congress assigned blame to each other, but none took individual or organizational responsibility. (See post <a href="http://hcrenewal.blogspot.com/2008/05/blaming-some-dude-for-contaminated.html">here</a>.)  Note that SPL was recently bought out and taken private, making its current leadership even less transparent (see post <a href="http://hcrenewal.blogspot.com/2010/10/more-contaminated-heparin-but-who-leads.html">here</a>).  A 2010 inspection of an SPL facility by the FDA revealed ongoing manufacturing problems (see post <a href="http://hcrenewal.blogspot.com/2011/02/fda-to-scientific-protein-laboratories.html">here</a>). - Researchers (who turned out to have financial ties to a company which is developing an anti-coagulant drug that could compete with the heparin made by Baxter International) investigated the biological mechanisms by which the contamination of the heparin lead to adverse effects, but no one investigated further how the contamination occurred, or who was responsible. (See post <a href="http://hcrenewal.blogspot.com/2009/08/who-investigated-case-of-deadly.html">here</a>.) - Hundreds of lawsuits against Baxter have now been filed, so far without resolution. (See post <a href="http://hcrenewal.blogspot.com/2010/01/blog-post.html">here</a>.)  Efforts to make documents to be used in these cases public so far have not succeeded (see post <a href="http://hcrenewal.blogspot.com/2010/08/proprietary-information-confidentiality.html">here</a>). - A government report which attracted little attention warned of the dangers of pharmaceutical ingredients made in China and subject to virtually no oversight. (See post <a href="http://hcrenewal.blogspot.com/2010/04/another-echo-of-case-of-deadly-heparin.html">here</a>.) -  Despite requests from the US, the Chinese government did not investigate the production of the heparin that lead to the deaths (see post <a href="http://hcrenewal.blogspot.com/2010/07/more-about-what-we-dont-know-about.html">here</a>.) -  In February, 2011, a congressional investigation of the case was announced, but results are so far unavailable (see post <a href="http://hcrenewal.blogspot.com/2011/02/three-years-later-congressional.html">here</a>.)

The First Contaminated Heparin Case Verdict: Making Money by Giving Patients "the Cheap Stuff"

In February, 2008, we first posted about the case of the deadly adulterated heparin. (A case summary is appended to the end of this post, ...

Đọc thêm »

BLOGSCAN - Care and Feeding of Key Opinion Leaders

BLOGSCAN - Care and Feeding of Key Opinion Leaders

On the Hooked: Ethics, Medicine and Pharma blog, Dr Howard Brody looked further into how cultivating "key opinion leaders" has no...

Đọc thêm »

Covert's Anechoic Misadventures

We have frequently discussed how health care leaders' compensation seems to reflect the opposite of the pay for performance they often tout.  One example we discussed recently turns out to be even more vivid than we first discovered. Last week we <a href="http://hcrenewal.blogspot.com/2011/06/should-phenomenal-1-million-ceo-be.html">discussed</a> the case of Mr Michael Cover, the CEO of the small, public Palomar Pomerado Health system in southern California, whose total compensation increased to over $1 mllion a year, while his hospital system was cited for severe, life-threatening medical errors.  The current and previous system board chairmen called his work "excellent, and " phenomenal," and asserted Mr Covert was "one of the nation's leading health administrators." It turns out that a local weekly newspaper, the Community Paper,<a href="http://www.thecommunitypaper.com/archive/2008/03_20/index.php"> investigated</a> Mr Covert's background in 2008, and what they found was not exactly the story of one of the nation's leading health administrators.  Let us summarize his record over 25 or so years. 1980s - Failure to Investigate the Michael Swango Case As reported by the Community Paper: <blockquote>Michael J Swango had received a surgical internship at Ohio State University in 1983. Nurses began noticing that apparently healthy patients on floors where Swango worked began dying mysteriously with an alarming frequency. One nurse caught him injecting some 'medicine' into a patient who later became strangely ill. The nurses reported their concerns to the administrators, headed by Michael Covert, but were met with accusations of paranoia. Only a perfunctory investigation was conducted. In response to the board's inquiries, Surgery Director Dr. Larry Carey expressed misgivings about Swango, citing run-ins with hospital personnel and, specifically, the episode with several patients who became ill after treatment by Swango, one of whom died (and for whom Swango would later plead guilty to having killed). At no time did Mike Covert, as executive director of the Ohio State University Hospital system, call in either University Police or Columbus, Ohio Police to investigate the matter, even though patients of Dr. Swango had died, even though documented observations and evidence had been submitted to the proper internal authorities. </blockquote> Later, after Swango had been arrested in Illinois, the Ohio authorities got involved, however: <blockquote>'It was only then,' says Dick Harp, Lead Investigator for the Ohio State University police department on the Michael Swango case, 'when the Quincy, Illinois, police department called us and told us they had this guy who had been a doctor at Ohio State and he had poisoned some people, that we got involved.' Harp said he contacted the Ohio State Hospital University staff and there appeared to be a collective effort to resist the investigation. They were not terribly cooperative, he said.</blockquote> Eventually, <blockquote>The Columbus Dispatch, Columbus, Ohio’s, daily newspaper, reported in a June 1985 article that as a result of the controversial fallout caused by this failure to notify police authorities, a new hospital policy was implemented. This, following an internal report concerning the allegations against Swango as well as a highly critical internal report against Dr. Swango.</blockquote> Swango was convicted of aggravated battery for attempting to poison co-workers in Illinois, and in 2000 pleaded guilty to killing three patients, and is in jail for life. In retrospect, Covert's resistance to investigating complaints about Swango does not seem to have exemplified excellent leadership. The 1990s - Jury Findings of Illegal Revocation of Privileges Mr Covert then moved to Kansas, and then to Sarasota, Florida to become CEO of Sarasota Memorial Hospital. The Community Paper noted that Mr Covert and the Hospital lost a multi-million dollar lawsuit that alleged the they had illegally revoked a physicians' hospital privileges: <blockquote>Dr. Flynn and his attorneys alleged, and proved, that Michael Henri Covert, president and CEO of Sarasota’s Memorial Hospital, and the Sarasota County Public Hospital Board, doing business as Sarasota Memorial Hospital, unlawfully and without just cause, revoked or terminated the medical privileges of a doctor at the hospital who specialized in pain management, and that they did so because the doctor had earlier (in 1994) filed and pursued a federal lawsuit. Secondly, the jury also found that the Hospital Board had additionally executed the revocation and termination of medical privileges for other than the filing of the federal lawsuit. Under Section II of the jury verdict they also found that the Sarasota County Public Hospital had terminated or revoked the doctor’s privileges as as a result of the doctor having exercised his freedom of speech rights. Called to the witness stand, Michael Covert was clearly and thoroughly impeached by Plaintiff’s attorney, Tony Leon. Impeachment is a lawyer’s fancy word that simply means the witness and his veracity is questioned. The witness is accused of not being honest in his actions and statements. Based on his testimony while being impeached, the jury then made their judgment, ruling against Michael R. Covert and the Sarasota Memorial Hospital, finding the Defendant had violated 28 U.S.C., Section 1983 (depriving the plaintiff of his constitutional rights of free speech) and the Plaintiff was entitled to damages.</blockquote> The Community Paper story also alleged that Sarasota Memorial lost millions of dollars through an ill-advised subsidiary set up by Mr Covert to buy physicians practices. Losing the trial and losing the money again hardly seem to be the mark of an outstanding leader. 21st Century - Alleged Misrepresentations to Secure Government Funding Mr Covert became CEO of Palomar Pomerado in 2003. In 2007, the Community Paper reported: <blockquote>Mike Covert, the president and CEO of the Palomar Pomerado Health District, was quite active in promoting Proposition BB which would deliver $496 million dollars to the district to aid in building a new hospital. It suggested further that Mr. Covert was so active that he and his minions may have, in fact, made substantial misrepresentations in order to persuade the electorate to pass the bond issue. We also documented how the cost overruns had run up to $1.2 billion dollars (from an original projected cost of $753 million). This figure was later trimmed back to $990 million. Further, the downtown business community was concerned that a major promise that was made about importing the administrative staff to the existing downtown Palomar Hospital campus might not be kept. If that promise was broken then downtown Escondido might well become a ghost town.</blockquote> That story lead the paper to inquire further.  Further, misrepresentations are not the mark of an excellent leader. 2008 - Alleged Dictatorial Management Style Reporters found: <blockquote>Talking with medical staff, newspaper reporters from Columbus, Ohio, and Sarasota, Florida, and with medical staff here in North San Diego County, a picture of an energetic, eager, impatient, egotistical, demanding, and often angry chief executive emerges. It was interesting that a parallel term was used by medical staff in Sarasota and in Escondido to describe Mr. Covert’s management style. 'He’s a Little Hitler,' was the common expression used by both medical communities. According to several medical staffers at Sarasota Memorial Hospital, Covert was not well liked, was described as manipulative and that he would do anything to get his way. Former board member Catherine Bowles, who had been at odds with the board and Covert testified at Dr. Flynn’s trial that 'people who complained about patient care were not warmly received by a majority of the board.' Nor, it is said, by Mr. Covert. A number of others who know him, both within the medical community as well as within the Escondido community at large, agree that he is a highly egotistical man. He has to have things done his way. He is very good at playing politics and is also very good at playing hardball with contracted medical service suppliers. Yet another doctor gave a somewhat contrasting view: 'He’s affable on one hand . . . a very good salesman; in front of a group he’s almost evangelical in his passion . . he almost bowls you over. Makes me kinda question someone who has so much zeal like . . 'I’m right.'' 'Like all CEO’s, he’s very egotistical. He wants to have total control over everything, including the doctors.' It is said he wields departmental administrative assignments as a tool and dangles the financial remuneration of them, ranging from as little as $10,000 to as much as $150,000 a year, as an incentive to fall in step with his wishes. A number of doctors who practice at the Escondido campus of Palomar Medical Center confided to us, off the record, that they feared Covert. One doctor complained, 'Covert is trying to take over as dictator of the hospital. There is supposed to be a separation between the hospital, the medical staff and the administrator. If you have the administrator making all the decisions then all decisions are made on money issues rather than what is best for the patient or the patient population. This poses a threat to the medical population and harms the quality of medical care. Covert is simply Hitler reborn.' Another doctor agreed, saying, 'At most hospital districts, administrators don't normally show up at Medical Executive Meetings unless invited . . . but here, administrators are present at closed meetings. They should not be privy to private medical meetings/discussions and they tend to dominate the meetings.'</blockquote>Again, a "brilliant" leader who is manipulative, rebukes criticism, and dictatorial? 2008 - Contrasting Praise from the Board While the physicians questioned his management style, just as we noted this year, the then board chairman was effusive: <blockquote>You and your readers need to know that Covert is one of the most highly regarded executives in the industry. He has received a number of very prestigious awards. Some of them puts him in the company of surgeon generals, such as C. Everett Koop. He has held high executive and board membership in national organizations. </blockquote> At that time, the board chairman claimed that when Mr Covert was hired, after having been recommended by a national search firm, none of the issues noted above had come to light.  2008 - The Temporary End of the Story The Community Paper story ended on a disquieting note, suggesting that even the extensive results of their investigation recounted above were not complete, and that there might be grounds for a criminal investigation: <blockquote>There are many other comments from physicians, other leads to follow in pursuit of the rest of this story. However, we, as a weekly newspaper, have neither the time nor resources to explore the labyrinthine depths of hospital administration committees, subcommittes, advisory councils, etc. Side financial agreements, whether or not their are 'kickback' arrangements within the hospital structure. That additional research and reporting would be better left to someone who has the resources, such as a Grand Jury.</blockquote> I could find nothing to suggest any further investigation ensued. There appears to have been no local reaction to the Community Paper story. As we noted above, instead Mr Covert got a raise, and is currently getting over $1 million a year in total compensation. Summary A more complete look at the record of one CEO of one small, public hospital system suggests even more discrepancies between his ever increasing remuneration, justified by ongoing effusive support by his board, and a record that at best suggests multiple questionable management decisions and multiple bad results. Note that even though considerable information was available on the public record that should have lead to questions about his leadership, this information remained relatively anechoic, and the questions were not repeated.  We have found that very few have been willing to question or investigate the powers that be in health care, and that direct or implied concerns about how health care is lead tend to be <a href="http://hcrenewal.blogspot.com/search/label/anechoic%20effect">anechoic</a>. This case demonstrates the sorts of problems in health care governance and leadership that we started Health Care Renewal to discuss. Perverse incentives and poor oversight seem to encourage leadership by the wrong people, hired for the wrong reasons, to do the wrong thing. There is again an ongoing discussion in the US about the costs of health care. Bad leadership of health care organizations is not only directly costly, but leads to huge indirect costs as the results of bad, if not sometimes corrupt decisions. As Matthew Holt pointed out in a comment on our earlier post on Palomar Pomerado, it is not that the case above is an outlier. It is likely just a better documented version of what is going on throughout health care. Yet outside of a few lonely bloggers, not many people talk about bad leadership and bad governance as fundamental, major causes of our ongoing health care crisis. We say again, true health care reform will require having health care leadership and governance that displays accountability, integrity, transparency, and honesty.  But first, we have to be willing to openly discuss bad, that is unaccountable, opaque, dishonest, and corrupt leadership.  Hat tip to our own Health Care Renewal blogger Dr Scot Silverstein for finding the 2008 Community Paper story (see his comment <a href="http://hcrenewal.blogspot.com/2011/06/should-phenomenal-1-million-ceo-be.html">here</a>).

Covert's Anechoic Misadventures

We have frequently discussed how health care leaders' compensation seems to reflect the opposite of the pay for performance they often t...

Đọc thêm »

My mother passed away

My mother, affected catastrophically by an EHR-related medical error last year, passed away yesterday evening. In her memory, a photo of her and me from 1957 I found in her possessions. <div style="text-align: center;"><a href="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEiv-E3wO13rdXP7VzcB7xfF8bJSRNCs87Mpc9QmZglwi3woZ1SilAhwXpRhBzAWW1SFZQRMaXwxfvUMb2zF0p37acBz7lo60qbCd8ezupYmhR9b8zvSsZHODJLGQ5hOX_wCj3_E7Fx7kwit/s1600/mom_scot_nov_1957.jpg"><img alt="" border="0" id="BLOGGER_PHOTO_ID_5615469594730285570" src="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEiv-E3wO13rdXP7VzcB7xfF8bJSRNCs87Mpc9QmZglwi3woZ1SilAhwXpRhBzAWW1SFZQRMaXwxfvUMb2zF0p37acBz7lo60qbCd8ezupYmhR9b8zvSsZHODJLGQ5hOX_wCj3_E7Fx7kwit/s320/mom_scot_nov_1957.jpg" style="cursor: pointer; display: block; height: 214px; margin: 0px auto 10px; text-align: center; width: 209px;" /></a>Betty Silverstein, 1925-2011</div> Her children were always Number One. May she rest in peace, and may my efforts result in others not having to suffer similar mistakes at the hands of IT. -- SS Nov. 2011 addendum: Here is a memorial bench I had erected for my parents at their grave last month, near where they ran a small community pharmacy for almost four decades. My father, a pharmacist, was a go-to source for health information in the <a href="http://articles.philly.com/1986-03-25/business/26081235_1_kelsey-hayes-city-material-manufacturer/2">once-bucolic</a> community of Somerton, in far Northeast Philadelphia, long before chain drugstores appeared in the region. The inscription atop the bench reads "Owners of Lumar Pharmacy. Served This Community 1954 -1991." They, like I, also toiled to safeguard and improve the health of the public. <div style="text-align: center;"><a href="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEjcv16diXLcbUohXLgr0_aYm9nSQGQC35iuw6azshW7cz6uh1YPqAYRMECSlFEYvf6UC5aicbz0diRKK6vlYVcKWEMxz2H6gmTREMs_mCjOHcv3PoWMOmrLXH7SGL81Ny9rI9r01qVQiYLg/s1600/Bench.jpg"><img alt="" border="0" id="BLOGGER_PHOTO_ID_5676763765660102866" src="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEjcv16diXLcbUohXLgr0_aYm9nSQGQC35iuw6azshW7cz6uh1YPqAYRMECSlFEYvf6UC5aicbz0diRKK6vlYVcKWEMxz2H6gmTREMs_mCjOHcv3PoWMOmrLXH7SGL81Ny9rI9r01qVQiYLg/s320/Bench.jpg" style="cursor: pointer; display: block; height: 200px; margin: 0px auto 10px; text-align: center; width: 267px;" /></a>Click to enlarge</div> May they rest in peace. -- SS

My mother passed away

My mother, affected catastrophically by an EHR-related medical error last year, passed away yesterday evening. In her memory, a photo of her...

Đọc thêm »

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...

Đọc thêm »

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...

Đọc thêm »