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Another Month, Another Set of Legal Settlements, Deferred Prosecution Agreements, and Jury Findings Adverse to Large Health Care Corporations

Another month, another series of adverse legal rulings suggesting misbehavior by large health care organizations.  In alphabetical order,... Baxter, McKesson, Teva Pay Punitive Damages As <a href="http://www.businessweek.com/news/2011-10-11/teva-jury-awards-162-5-million-in-damages-over-anesthetic.html">reported</a> by Bloomberg, <blockquote>A jury said Teva Pharmaceutical Industries Ltd. unit and two other drugmakers must pay $162.5 million in punitive damages for selling the anesthetic Propofol in a way that led three colonoscopy patients to develop Hepatitis C. Jurors in state court Las Vegas ordered Teva Parenteral Medicines Inc., Baxter Healthcare Corp. and McKesson Corp. to pay so-called punishment damages over sales of the anesthetic in vials large enough to be reused by doctors. Anne Arnold, Richard Sacks and Anthony Devito contend they contracted Hepatitis C from reused vials during colonoscopy procedures. They had sought more than $700 million in damages. It’s the second punitive award against Baxter and the unit of Petach Tikva, Israel-based Teva over a 2008 hepatitis outbreak in Nevada tied to Propofol. The first case resulted in a punitive verdict of more than $500 million against the drugmakers. Teva has agreed to cover all damage awards arising from the Nevada cases on behalf of Baxter and McKesson.</blockquote> In particular, <blockquote>The patients’ lawyers allege Teva intentionally sold Propofol in jumbo-sized vials to encourage doctors to reuse them, even with the risk of spreading blood-borne diseases such as hepatitis, an incurable liver disease.</blockquote> So the allegations are that the company intentionally put financial gain ahead of the safety of patients. Boston Scientific Settles Over-Billing Allegations Again <a href="http://www.businessweek.com/news/2011-09-26/boston-scientific-to-pay-9-25-million-in-whistleblower-case.html">per</a> Bloomberg: <blockquote>Boston Scientific Corp.’s Guidant LLC unit will pay $9.25 million to settle a whistleblower’s claim that the company over-billed the U.S. and private hospitals for heart pacemakers and defibrillators.</blockquote> The details: <blockquote>Guidant allegedly reneged on credits owed to the U.S. Department of Veterans Affairs for replacement of units still under warranty and is accused of over-charging hospitals for the devices, causing them to over-bill Medicare, according to an e-mailed statement from the Justice Department.</blockquote> Note that we have quite a extensive files on <a href="http://hcrenewal.blogspot.com/search/label/Boston%20Scientific">Boston Scientific</a>, and on <a href="http://hcrenewal.blogspot.com/search/label/Guidant">Guidant</a>, now its subsidiary. Hil-Rom Settles Fraud Allegations <a href="http://www.knoxnews.com/news/2011/sep/27/feds-announce-418-million-settlement-in-fraud">Reported</a> by the Knoxville News-Sentinel: <blockquote>Federal prosecutors announced Tuesday a $41.8 million civil fraud settlement in a 'whistle-blower' lawsuit against international medical equipment supply company, Hill-Rom Company Inc.</blockquote> The results also were that <blockquote>As part of the settlement, Hill-Rom has entered into a five-year 'corporate integrity agreement,' in which the firm will face close scrutiny by federal officials, Killian said.</blockquote>The allegations were: <blockquote>'Hill-Rom submitted false claims for medical equipment for patients who did not qualify for the equipment, including patients who had died, were no longer using the equipment or had been moved to nursing homes,' [US Attorney Bill] Killian said.</blockquote> In particular, <blockquote>The lawsuit alleged the firm was ripping off Medicare with its faulty billing practices. According to the lawsuit, unsealed Tuesday, Hill-Rom offered its sales representatives $200 gift certificates and 42-inch televisions as reward for boosting billings and, in 2001, laid off the lion's share of staff dedicated to ensuring compliance with Medicare rules.</blockquote> Note that this suggests a pattern of providing incentives to employees who "make their numbers," no matter how they do so. We have seen how making the financial numbers seems to take precedence over all else, including patients' well-being, in many contemporary health care organizations. Maxim Healthcare Settles Fraud Allegations In a <a href="http://www.baltimoresun.com/business/bs-bz-maxim-healthcare-settlement-2-20110912,0,4024222.story">story</a> in the Baltimore Sun, <blockquote>A Columbia-based health care firm has agreed to a $150 million settlement with the federal government and 43 states to resolve criminal and civil charges that it submitted claims for millions of dollars of work that it did not perform and operated offices that were not properly licensed, officials said Monday. A five-year federal investigation found that Maxim Healthcare Services Inc., one of the country's largest providers of home healthcare services, submitted $61 million in false claims for services to the federal government's Medicaid and Veterans Affairs health programs over an 11-year period from 1998 to 2009. Investigators said managers and workers at Maxim repeatedly modified time sheets and documents to cover up the fraud, creating a culture in which submitting false claims became 'common practice.'</blockquote> The settlement was of criminal as well as civil charges: <blockquote>The settlement includes a $20 million criminal fine and $130 million in civil settlements.</blockquote> It will also involve a deferred prosecution or corporate integrity agreement: <blockquote>In addition to the fines, Maxim also has been charged criminally with conspiracy to commit health care fraud. But the company could avoid conviction if it meets requirements outlined in the settlement.</blockquote> Unlike many such cases, this one involved criminal charges for and guilty pleas by some people involved in the wrong-doing, in this case, middle managers: <blockquote>Several regional account managers, a home health aid and a clinical services director also pleaded guilty to criminal charges, government officials said. They could face as much as $250,000 in fines and jail time for their roles in the fraud.</blockquote> Another atypical result was that the CEO who presided over the misbehavior actually suffered some consequences, although he did not have to pay fines for face criminal charges, <blockquote>Maxim officials said they take full responsibility for the violations. The company said it hired a new CEO in 2009 and changed its business practices to protect against a repeat.</blockquote> ProPublica published an <a href="http://www.propublica.org/article/troubled-health-care-staffing-chain-settles-with-government-for-150-million">article</a> at the same time which noted that Maxim's practices had come into question before, <blockquote>A different set of problems involving Maxim came up during a ProPublica investigation into the oversight of registered nurses in 2009. We identified several nurses who were hired by the Maryland-based company despite having a record of problems.</blockquote> Although that previous article did not mention the company's name: <blockquote>The articles focused on how regulators across the country did little to scrutinize troubled nurses who crossed state lines to continue working. Our earlier stories did not identify Maxim by name. </blockquote> We have noted that organizations which misbehave once are likely to misbehave again. This may stem from an organizational culture that puts revenue ahead of ethics and patients' and the public's health, and the lack of negative consequences that people who respond to the resulting positive financial incentives are likely to suffer. Medicis Settles Shareholder Class-Action Lawsuit <a href="http://www.azcentral.com/business/news/articles/2011/09/28/20110928medicis-auditor-will-pay-18-million-settle-suit.html">Noted</a> by the Arizona Republic, <blockquote>Medicis Pharmaceutical Corp. and its auditing firm, Ernst & Young, have agreed to pay $18 million to settle a shareholder class-action lawsuit stemming from the pharmaceutical company's financial statements.</blockquote> The shareholders alleged that Medicis was not honest about its financial affairs: <blockquote>The shareholders' lawsuit stems from Medicis' announcement in September 2008 that it would restate earnings from 2003 through the first half of 2008. Shareholders alleged that Medicis offered its wholesale customers generous return policies for prescription drugs as part of an effort to inflate the company's revenue. Medicis would accept returned products that were expired or about to expire at either no cost or substantial discounts to the wholesale customers, according to the lawsuit.</blockquote> Summary The constant march of <a href="http://hcrenewal.blogspot.com/search/label/legal%20settlements">legal settlements </a>by, jury verdicts against, and in some cases <a href="http://hcrenewal.blogspot.com/search/label/crime">criminal convictions </a>of or guilty pleas by large health care corporations indicate how common misbehavior by such organizations has become. Since it is likely that much misbehavior does not lead to publicly announced legal actions, what is published can only provide a floor for an estimate of how common it is. The march, which we have been documenting since starting Health Care Renewal, shows how sleazy and often corrupt health care has become, and how that sleaziness and corruption is prevalent not just among small players, but among the biggest and richest health care organizations, and their top leaders. One reason the situation continues to be so bad is that while the unethical behavior does sometimes result in pontificating by the civil authorities, and fines that may only be costs of doing business, it rarely leads to meaningful negative consequences for those who authorized, directed or implemented it. This was noted in the reporting of the Maxim Healthcare case above. For example, in the Baltimore Sun <a href="http://www.baltimoresun.com/business/bs-bz-maxim-healthcare-settlement-2-20110912,0,4927923,print.story">article</a> we found, <blockquote>One watchdog group called the penalty a drop in the bucket for a company that had $2 billion in reimbursements from 2003 to 2009. 'That is hardly crippling,' said Joe Newman, a spokesman for the Project on Government Oversight, which tracks government contractors. 'It is certainly something that stings Maxim's pocketbook, but they will be fine after that.' 'They won't be barred from the Medicaid program. That would hurt them.'</blockquote> Also, Sun columnist Jay Hancock <a href="http://www.baltimoresun.com/business/bs-bz-hancock-prmc-accountability-20110919,0,1446559.column">wrote</a>: <blockquote>Corporations are happy to be treated as people under the law, as we know from recent court decisions. They can own property. They can seek redress in Congress and the courts. They can make huge political contributions. But when it comes to being penalized for cheating the government, corporations quickly abandon their personhood and go back to being abstract blobs. 'I don't know about you, but if I hired a contractor to work on my house and he charged me a ton of extra money for work he didn't do, I wouldn't use that contractor again,' Minnesota Sen. Al Franken said in Congress a few months ago. 'And I would make sure my friends knew not to use them either. It seems like the same should be true of government contractors.'</blockquote> But that is often not the case. For years, government agencies have not vigorously enforced the law when doing so might inconvenience big corporations and their well-paid executives. Maybe this lenience stems from the loony philosophy of former Chairman of the Federal Reserve Alan Greenspan, who was once regarded as some sort of economic genius, who seemed to think that fraud cannot occur in his idealized idea of a free market, because somehow all bad actors would become widely known and therefore all counter-parties would avoid them. In an <a href="http://www.stanfordalumni.org/news/magazine/2009/marapr/features/born.html">article</a> in Stanford Magazine, <blockquote>The influential Greenspan was an ardent proponent of unfettered markets. Born was a powerful Washington lawyer with a track record for activist causes. Over lunch, in his private dining room at the stately headquarters of the Fed in Washington, Greenspan probed their differences. 'Well, Brooksley, I guess you and I will never agree about fraud,' Born, in a recent interview, remembers Greenspan saying. 'What is there not to agree on?' Born says she replied. 'Well, you probably will always believe there should be laws against fraud, and I don’t think there is any need for a law against fraud,' she recalls. Greenspan, Born says, believed the market would take care of itself. For the incoming regulator, the meeting was a wake-up call. 'That underscored to me how absolutist Alan was in his opposition to any regulation,' she said in the interview.</blockquote> It is a measure of the insanity of recent years that one of the chief leaders of government economic policy did not believe there was any need for laws against fraud. It appears that this daft idea has carried over to and still influences how many in government and out deal with health care. However, as we have d<a href="http://hcrenewal.blogspot.com/2010/08/how-fallacy-of-perfect-health-care.html">discussed</a>, health care is not and probably cannot ever be an ideal free market. Also, in health care, most of the bad actions remain <a href="http://hcrenewal.blogspot.com/search/label/anechoic%20effect">anechoic</a>, and in many cases it may be hard for counter-parties to avoid bad actors because they may dominate the market. Also, it may be those that make decisions about whether to deal with particular organizations may be executives, and sometimes health care professionals who have become indifferent to the ethical issues. As I have said again and again, 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.

Another Month, Another Set of Legal Settlements, Deferred Prosecution Agreements, and Jury Findings Adverse to Large Health Care Corporations

Another month, another series of adverse legal rulings suggesting misbehavior by large health care organizations. In alphabetical order,......

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"24", This Computer Project Was Not

A fascinating case study of IT failure in another life-critical domain has come to my attention. I think if the words "FBI" were replaced with "hospitals" and "healthcare IT", this could be a study of IT failure in the latter organizations. Many of the <a href="http://www.ischool.drexel.edu/faculty/ssilverstein/cases/">familiar issues</a> are there: <blockquote> <a href="http://pminit.blogspot.com/2009/11/failure-of-virtual-case-file-and-fbi.html">The Failure of Virtual Case File and the FBI</a> Background The FBI first sought to embrace technology in the 1980s during the onset of computer availability and hoped to have a paperless office where agents could quickly pull up case files, information, and photographs at the comfort of their desks without having to sift and sort through numerous paper files. The infrastructure in that time was limited to text based search engines and there were no provisions for photo storage or the ability to scan written reports. As a result, the FBI found its agents decided not to rely on the existing technology and were reverting back to paper. After the attacks on September 11, 2001, the FBI was placed under scrutiny for being ineffective and inefficient in its operations due to the time it would take to share information with other law enforcement agencies, locate reports, and transmit them from one location to another (usually done via fax or by mailed CDs). To combat this, the FBI developed a plan known as Trilogy, which aimed for three primary goals: A new computer network, personal computers for most agents, and an online criminal database that would be titled Virtual Case File (VCF). An external contractor by the name of Science Applications International Corp. (SAIC) was contracted in June 2001 to begin the project with an estimated schedule of three years for completion and a first year budget of $14 million. The project continued until early 2005 (7 months over schedule), at which time the project scope had expanded by 80% with costs of $170 million and was riddled with issues. Ultimately, in early 2005, the project was cancelled but not after escalation and persistence on the part of the FBI.<div class="post-body entry-content" id="post-body-7895894529226453236"> The Problems and Failure of VCF The FBI wanted SAIC to create the database from scratch instead of using off-the shelf Oracle programs that could have been customized. A study by the National Research Council (NRC) after the planned 3-year period in late 2004 was conducted to gauge the success of the program, and while the first two goals had been achieved (personal computers for most agents and the creation of a new network), VCF was found to be problematic and incomplete. The project plan was incomplete and there were no monitoring controls regarding finances or the schedule. The FBI threw quality out the window by wanting to bypass testing and release the product upon its ready date. However, VCF failed the most basic functionality tests under the NRC and had not included network management, security, and storage systems, or basic sorting capabilities. The study also found that most of the FBI's skilled managers had left for the private sector and there were little to no individuals who had the IT experience or knowledge to interact effectively with contractors to achieve what was needed. The definition and scope of operations and processes were ultimately entrusted to SAIC who were outsiders. In an attempt to salvage the project, the FBI immediately hired a federally funded R&D firm (Aerospace Corp.) costing $2 million to conduct an assessment of the project who concluded that the project needed to be scrapped and shut down due to the severity of the software issues. Upon investigation by Congress, there was a lack of financial controls and safeguards on the part of the FBI, enabling SAIC to continue to develop a program which was lacklustre and failed to meet objectives. 200 programmers from SAIC were used on the project when only a dozen were required and SAIC was not being properly monitored by the FBI. They felt as long as money was being funnelled to them by the government on the project, they did not need to be responsible for the effectiveness or viability of the program [was there a "hold harmless" clause as in health IT? - ed.] they were building and fired staff who expressed concerns over the direction of the program. [They must have been Luddites and IT skeptics who just refused to change the way they do things - ed.] Further, the FBI took a trial by error approach to the project without truly understanding their end goal and without setting benchmarks for evaluating the progress of the project and took a nearly hands off approach by entrusting SAIC entirely. SAIC claimed the FBI were indecisive in what they wanted and there had been 19 government personnel changes over the project tenure which brought on scope creep and the focus of the project in a state of flux, in addition to a clear lack of leadership. A further $17 million was then spent by the FBI to perform more rigorous testing to try to salvage the project once more, which was another missed opportunity to cancel the project. It was only in early 2005 that the decision was made by Congress to terminate the project. Source: Eggen, Dan; Witte, Griff. 'The FBI Upgrade that wasn't'. August 8, 2006. Website: http://www.washingtonpost.com/wp-dyn/content/article/2006/08/17/AR2006081701485.html (accessed on November 7, 2009).</div></blockquote> "<a href="http://en.wikipedia.org/wiki/24_%28TV_series%29">24</a>" this was not. <div style="text-align: center;"><a href="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEg1y2WJpcRz-UF-syhZUPwyArrMHDGGoWmK7Ao4D-_rHYC0vWVfczNjoNBdK56HfyJ4PH6f6OnJvKYrmI8-fiyKlomJ8Q19JQeJDZDLw6-qPqDHuHp7MxHpYsbs4y8InkCqbRrk-DGUJ9nA/s1600/Chloe.jpg"><img alt="" border="0" id="BLOGGER_PHOTO_ID_5662968216287927170" src="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEg1y2WJpcRz-UF-syhZUPwyArrMHDGGoWmK7Ao4D-_rHYC0vWVfczNjoNBdK56HfyJ4PH6f6OnJvKYrmI8-fiyKlomJ8Q19JQeJDZDLw6-qPqDHuHp7MxHpYsbs4y8InkCqbRrk-DGUJ9nA/s320/Chloe.jpg" style="display: block; margin: 0px auto 10px; text-align: center; cursor: pointer; width: 246px; height: 178px;" /></a>Chloe O'Brian, where were you? </div> In the FBI's case, the failure exposes us to potential crime. In a hospital's case, the stakes are even more personal. Even worse, at least here Congress intervened; health IT is a virtually unregulated industry and nobody is minding the store. The UK's National Programme for IT (NPfIT) in the NHS <a href="http://hcrenewal.blogspot.com/2011/09/npfit-programme-going-pffft.html">paid the price of failure</a> through problems such as above. Will the "NPfIT in the HHS" meet a similar fate? -- SS Oct. 13, 2011 Addendum: where have we seen SAIC before? How about <a href="http://hcrenewal.blogspot.com/2011/10/still-more-ehr-chaos-pandemonium-bedlam.html">here</a>? <blockquote> Case 3: Bedlam Meanwhile, Science Applications International Corporation disclosed that computer backup tapes containing medical data for 4.9 million military patients [that number also amounts to almost 2% of the total U.S. population - ed.] had been stolen from an employee’s car in San Antonio. The data included Social Security numbers, clinical notes, laboratory test results and prescriptions. </blockquote> -- SS

"24", This Computer Project Was Not

A fascinating case study of IT failure in another life-critical domain has come to my attention. I think if the words "FBI" were r...

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Health Care's "99 Percenters"

As Occupy Wall Street has gone from an obscure protest covered only on blogs and social media to a national phenomenon, the apparent parallels between the issues it is raising and the issues we have been raising in health care grows. 99 Percenters A growing number of protesters are calling themselves the "99 Percenters," (Alter, Jonathan.  Why Occupy Wall Street Should Scare Republicans.  Bloomberg, October 6, 2011.  Link <a href="http://www.bloomberg.com/news/2011-10-07/occupy-wall-street-should-scare-republicans-commentary-by-jonathan-alter.html">here</a>) referring to those who are not in the top 1% of earners.  (The top 1% of income is clearly greater than $250,000/ year [see 2009 census data on US household income <a href="http://www.census.gov/compendia/statab/2012/tables/12s0693.pdf">here</a>], and likely around $380,000 a year [based on the distribution of income reported on tax returns <a href="http://www.financialsamurai.com/2011/04/12/how-much-money-do-the-top-income-earners-make-percent/">here</a>.])  In health care, nearly all who are paid more than $380K/ year are either proceduralists (some medical sub-specialist physicians, and some surgeons, again mainly sub-specialist), or managers and executives of health care organizations. Health Care's 1%  We have been discussing since 2007 how the inequality among physicians' incomes favoring those who do procedures over primary care and other "cognitive" physicians has been driven not by the market, but by regulatory capture.  The fees paid for all physicians services by Medicare, a fee schedule adopted without question or major changes by nearly all insurers, are set through the Resource Based Relative Value System (RBRVS) by the US Center for Medicare and Medicaid Services (CMS).  CMS, in turn, gets virtually all its input on these fees from the <a href="http://hcrenewal.blogspot.com/search/label/RUC">RBRVS Update Committee (RUC),</a> a private committee of the American Medical Association (AMA), made up largely of proceduralists, whose deliberations are secret, and whose membership has been secret until recently.  See here for most recent posts.  Note that the CMS' peculiar relationship with the RUC is now subject of a lawsuit that accuses this relationship of violating the Federal Advisory Committee Act (Klepper B, Kibbe D. A legal challenge to CMS' reliance on the RUC.  Health Affairs Blog, August 9, 2011.  Link <a href="http://healthaffairs.org/blog/2011/08/09/a-legal-challenge-to-cms-reliance-on-the-ruc">here</a>)  The real top earners in health care, however, are not physicians, but executives of big corporations, non-profit and especially for profit.  We have <a href="http://hcrenewal.blogspot.com/search/label/executive%20compensation">discussed</a> endlessly how huge their compensation may be, and how it seems unrelated to any aspect of their own or their organizations' performance, especially not to how much they benefit patients' or the public's health.  Furthermore, we have noted how executives have prospered even when their management seems overtly <a href="http://hcrenewal.blogspot.com/search/label/mission-hostile%20management">hostile to the health care mission</a>, when it leads to ethical missteps requiring <a href="http://hcrenewal.blogspot.com/search/label/legal%20settlements">legal settlements</a>, or even guilty pleas or verdicts to <a href="http://hcrenewal.blogspot.com/search/label/crime">criminal charges</a>.  So health care's "99 percenters" ought to be angry at the top 1%. The Power of Finance Furthermore, the Occupy Wall Street protesters are not merely upset with the upper 1%, but particularly outraged by those in the financial sector, which "with regulators and elected officials in collusion, inflated and profited from a credit bubble that burst, costing millions of Americans their jobs, incomes, savings and home equity."  Then, "the initial outrage has been compounded by elected officials' hunger for campaign cash from Wall Street, a toxic combination that reaffirmed the economic and political power of banks and bankers, while ordinary Americans suffer.  Extreme income inequality is the hallmark of a dysfunctional economy, dominated by a financial sector that is driven as much by speculation, gouging and government backing as by productive investment." (Anonymous. Protesters against Wall Street.  NY Times, October 8, 2011. Link <a href="http://www.nytimes.com/2011/10/09/opinion/sunday/protesters-against-wall-street.html">here</a>) In another report, the protesters "unite around a common theme: bankers are ripping off America.  Two secondary themes also emerge....  One is that the super rich own the politicians.  The other is that the news media, almost across the board, view events through the eyes of the super rich." (Johnston DC. Occupy Wall Street.  Reuters Blogs, October 7, 2011.  Link<a href="http://blogs.reuters.com/david-cay-johnston/2011/10/07/occupy-wall-street/"> here</a>.) Finance's Links to Health Care We have <a href="http://hcrenewal.blogspot.com/2011/08/now-mainstream-notion-profit-seeking.html">noted</a> parallels between the effects of Wall Street and health care on the economy.  Furthermore, we have noted active ties among Wall Street and health care organizations. (Look <a href="http://hcrenewal.blogspot.com/search/label/finance">here</a> for examples.)  Top executives and board members of some of the financial firms most obviously responsible for the global economic collapse/ great recession have served on boards of trustees of top medical schools and academic medical centers, and their parent universities.  The top leaders of medical schools, academic medical centers, and their parent universities have served on the boards of such financial firms.  There are also board interlocks among Wall Street firms and all sorts of health care corporations.  The corporate culture of Wall Street and health care have long overlapped.  We have further noted how the leadership of big health care organizations has deceptively influenced policy, particularly through <a href="http://hcrenewal.blogspot.com/search/label/stealth%20health%20policy%20advocacy">stealth health policy advocacy</a>.  Meanwhile, until the last few years, much of health care dysfunction has been <a href="http://hcrenewal.blogspot.com/search/label/anechoic%20effect">anechoic</a>.  Now the media is beginning to report some of the abuses.  Little about them appears, however, in the medical and health care literature that health care professionals are likely to trust more than news media.  Summary We have frequently suggested that true health care reform requires reform of health care leadership and governance.  We need leaders who understand the health care context, uphold health care professionals' values, and put patients first.  We do not need leaders who are ill-informed, incompetent, self-interested, conflicted, or corrupt.  We need governance that is accountable, honest, transparent, ethical, and again puts patients first.  Maybe to do that we will have to "occupy health care." In any case, it is time for health care's "99 percenters" to stand up for their patients and the integrity of their values.

Health Care's "99 Percenters"

As Occupy Wall Street has gone from an obscure protest covered only on blogs and social media to a national phenomenon, the apparent paralle...

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Still More Electronic Medical Data Chaos, Pandemonium, Bedlam, Tumult and Maelstrom: But Don't Worry, Your Data is Secure

Case 1. Tumult <blockquote>October 5, 2011 New York Times <a href="http://www.nytimes.com/2011/10/06/us/stanford-hospital-patient-data-breach-is-detailed.html?_r=1">Patient Data Landed Online After a Series of Missteps</a> By KEVIN SACK Private medical data for nearly 20,000 emergency room patients at California’s prestigious Stanford Hospital were exposed to public view for nearly a year because a billing contractor’s marketing agent sent the electronic spreadsheet to a job prospect as part of a skills test, the hospital and contractors confirmed this week. The applicant then sought help by unwittingly posting the confidential data on a tutoring Web site. [Got all that? - ed.] In an e-mail sent to a victim of the breach, the billing contractor, Joe Anthony Reyna, president of Multi-Specialty Collection Services in Los Angeles, explained that his marketing vendor, Frank Corcino, had received the data directly from Stanford Hospital, converted it to a new spreadsheet and then forwarded it to a woman he was considering for a short-term job. The position was with Mr. Corcino’s one-man shop, Corcino & Associates, Mr. Reyna wrote in the e-mail, which was authenticated by his lawyer, Ellyn L. Sternfield. The job applicant apparently was challenged to convert the spreadsheet — which included names, admission dates, diagnosis codes and billing charges — into a bar graph and charts, Stanford Hospital officials said. Not knowing that she had been given real patient data, the applicant posted it as an attachment to a request for help on <a href="http://studentoffortune.com/">studentoffortune.com</a> [I wrote about that earlier <a href="http://hcrenewal.blogspot.com/2011/09/new-way-to-get-kids-interested-in.html">here</a> - ed.], which allows students to solicit paid assistance with their work. First posted on Sept. 9, 2010, the spreadsheet remained on the site until a patient discovered it on Aug. 22 and notified Stanford. </blockquote> My, how electronic data can travel when mishandled. Try that trick with 20,000 paper charts ... <blockquote> The hospital, located on the campus of Stanford University in Palo Alto, demanded that the spreadsheet be removed, and the Web site quickly complied. Pressed for time, the job prospect wound up completing the assignment herself and, in the end, did not get hired, Ms. Sternfield said. </blockquote> Ironically, this was all for naught. <blockquote>Mr. Corcino, in his first public statement, attributed the breach to “a chain of mistakes which are far too easy to make when handling electronic data.” </blockquote> Far too easy to make - especially by the dyscompetent. <blockquote>... Breaches of private medical data have become distressingly commonplace, with two substantial ones disclosed in the last week alone. [We don't know the details of those yet; that's for next week - ed.] </blockquote> Case 2: Pandemonium (from same NYT article) <blockquote>In Orlando, officials with Florida Hospital reported that three employees had improperly combed through emergency department records of 2,252 patients, apparently to forward information about accident victims to lawyers. The employees were fired, and law enforcement officials are investigating. </blockquote> Trolling for Torts - is this a new EMR TV game contestant show? Perhaps it could be followed by "<a href="http://hcrenewal.blogspot.com/2011/02/what-was-this-medical-resident-looking.html">Trolling for Tarts?</a>" Case 3: Bedlam (from the same NYT article) <blockquote>Meanwhile, Science Applications International Corporation disclosed that computer backup tapes containing medical data for 4.9 million military patients [that number also amounts to almost 2% of the total U.S. population - ed.] had been stolen from an employee’s car in San Antonio. The data included Social Security numbers, clinical notes, laboratory test results and prescriptions. The company said the risk of harm was low because retrieving data from the tapes would require specialized knowledge, software and hardware. [Who's to say the theft was not by someone with that specialization, or someone paid by same to steal the tapes? - ed.] The Texas breach is by far the largest since September 2009, when a new federal law began requiring disclosures of medical privacy violations involving at least 500 people. Some 330 such episodes have been tallied, including four others that affected more than one million people each. </blockquote> We'd all be buried in stray clinical paper by now if it weren't for computers. Thank god for them! <blockquote>Officials at the Department of Health and Human Services said the new reporting requirements had exposed deep vulnerabilities and encouraged renewed vigilance. </blockquote> Exposed to whom? The blind, deaf and dumb? <blockquote>“We’re moving in the right direction in terms of a culture of compliance,” said Leon Rodriguez, director of the department’s Office for Civil Rights, which investigates medical privacy cases. “Are there still a lot of problems out there? Yeah, my sense is there are still a lot of problems.” </blockquote> The Titanic was moving in the right direction - towards New York Harbor, in fact, when it met a little unexpected obstacle. Perhaps a culture of brains would be better than a culture of compliance... <blockquote>The Stanford breach was notable for the duration of public exposure, and for spotlighting the vulnerability created by a medical provider’s business relationships with outside parties. Last week, lawyers filed suit in state court in Los Angeles, seeking certification as a class action and $20 million in damages from Stanford Hospital & Clinics and Multi-Specialty Collection Services, which is known as MSCS. </blockquote> $20 million might hurt a bit, and might help motivate the organization to hire better and/or more appropriate clinical information management expertise - in house where it belongs (see below). <blockquote>The threat of liability set off a predictable round of finger-pointing. In written responses to questions, Lisa Lapin, Stanford University’s assistant vice president for university communications, said, “MSCS bears the complete and sole responsibility for the breach.” </blockquote> It's their fault, not ours. <blockquote>Ms. Lapin said the hospital had sent the data in encrypted form to Mr. Corcino, who requested it on behalf of MSCS to analyze a strategy for improving billing collections. She said Mr. Corcino had regularly represented himself as MSCS’s executive vice president and had been Stanford’s “primary contact” during a seven-year relationship. MSCS, a five-person firm that audits hospital accounts to maximize reimbursement, possessed the passwords to unencrypt the data, she said. </blockquote> It was all about money and outsourcing. <blockquote>“This mishandling of private patient information was in complete contravention of the law and of the requirements of MSCS’s contract and is shockingly irresponsible,” the hospital said in a statement. </blockquote> It is foolish to believe that someone else can run critical aspects of your business, and it is even more foolish to believe that it is OK for someone else to run critical aspects of your business. <blockquote>Ms. Sternfield, Mr. Reyna’s lawyer, said Mr. Corcino had never been an MSCS employee, but rather was paid a monthly fee to drum up business, typically in face-to-face meetings with health care executives. Mr. Reyna, she said, had no knowledge that the Stanford data had been sent to Mr. Corcino, or that he had passed it on. Mr. Corcino was not authorized to use an MSCS title, Ms. Sternfield said, but she declined to say whether Mr. Reyna was aware of the practice. She acknowledged that Mr. Corcino sometimes used an MSCS e-mail account. In his e-mail to the breach victim, who shared it with The Times, Mr. Reyna wrote that Stanford had sent the file to Mr. Corcino “for a potential MSCS project that would audit paid accounts to verify that the reimbursement was correct.” For his part, Mr. Corcino said in a statement that he was an independent contractor but was “the marketing face of the company,” and that MSCS “allowed me to use the title of executive vice president.” He wrote: “Stanford sent the file to me at MSCS, and I imported the data into a spreadsheet that was forwarded to the job applicant as part of a skills test. I did not intend to provide any personal health information in the file. This was a marketing project.” Without explaining how or why he sent the data to the applicant, Mr. Corcino said MSCS had not trained him properly and faulted Stanford for sending him private information that he did not need. That, he said, was the “first link in a chain of mistakes.” “I regret that Stanford released a file containing unnecessary information,” Mr. Corcino said, “that MSCS did not have an appropriate training and audit system for the handling of electronic data and that I was not more careful with the file. While Stanford and MSCS left the information in the file I received, it was my mistake to not catch its inclusion and remove the data.” ... The hospital has terminated its relationship with MSCS, and Mr. Reyna has done the same with Mr. Corcino. </blockquote> Even I can't follow all that. This will be one convoluted court case... <blockquote>Stanford Hospital has reassured affected patients that the posted spreadsheet did not contain Social Security numbers, birthdates or credit card numbers, and has offered free identity theft protection services. The hospital said it had not uncovered any misuse of the exposed data. </blockquote> Yet, that is. (Is it no wonder that sedatives are among the most highly-prescribed medications?) Moving from the NYT article: Case 4: Tumult (I'm running out of descriptors) <a href="http://newsandinsight.thomsonreuters.com/California/News/2011/06_-_June/Health_Net%E2%80%99s,_IBM%E2%80%99s_negligence_compromised_medical_data,_suit_says/"></a><blockquote><a href="http://newsandinsight.thomsonreuters.com/California/News/2011/06_-_June/Health_Net%E2%80%99s,_IBM%E2%80%99s_negligence_compromised_medical_data,_suit_says/">A large class action lawsuit again Health Net and IBM</a>: California Legal Westlaw Journal Insurance Coverage Health Net’s, IBM’s negligence compromised medical data, suit says June 7 (Westlaw Journals) - Health Net Inc. and IBM face a class-action lawsuit seeking $5 million in damages over the loss of computer storage devices that held the medical histories, financial data and Social Security numbers of 2 million people. Health Net Policyholder Alana Bournas’ class-action complaint in the U.S. District Court for the Eastern District of California alleges that the insurer and IBM breached their duty of confidentiality and negligently allowed the release of highly personal and confidential information of millions of Health Net employees and policyholders. The complaint alleges violation of California’s Confidentiality of Medical Information Act, Cal. Civ. Code § 56; Cal. Civ. Code § 1798.2, which concerns the unauthorized disclosure of customer records; Cal. Bus. & Prof. Code § 17200, the state’s unfair-competition law; and public disclosure of private facts. </blockquote> Companies will either pay the going price for competent employees, or pay for the mistakes of incompetent ones. It would probably be better for society, however, to do the former habitually. <blockquote>The suit says IBM agreed to manage Health Net’s information technology database for five years beginning in 2008. IBM informed Health Net Jan. 21 that it had lost nine disk drives containing the confidential information of 2 million people, including Health Net policyholders and employees. Health Net failed to alert the victims of the breach until March 14, the complaint says. IBM allegedly also failed to encrypt the data, thereby enabling anyone who possesses the hard drives to easily access the confidential information. This puts the victims at an increased risk of identity theft and “other unauthorized uses of plaintiff and class members’ personal information” the suit says. </blockquote> Encryption, a feature now built into mainstream OS's by Microsoft and Apple? (Oh wait...IBM...) <blockquote> Health Net’s attempt to compensate the victims by providing two years of free credit monitoring services through TransUnion is an inadequate remedy for the defendant’s conduct, Bournas says. This “remedy” fails to address unauthorized disclosures of medical information, and the monitoring services only protect against new account fraud but do not address fraudulent activity with existing accounts, the suit says.</blockquote> These executives apparently can't even get the fix straight. <blockquote>Moreover, the complaint says, Health Net has previously been accused of a similar breach of confidential information. In 2009 it lost the same types of records of nearly 1.5 million people and waited six months before notifying the victims. In settling the state of Connecticut’s lawsuit stemming from that security breach, the company promised “to enhance security procedures and training,” the suit says. </blockquote> What can I say? <blockquote>The current breach could have been avoided had Health Net and IBM taken proper precautions and implemented security policies to maintain consumers’ confidential data, according to Bournas. Therefore, the protections granted under California law require that Health Net be penalized for its negligence, she says. The plaintiff notes that millions of people entrusted Health Net with their private data. “At best, defendants’ actions allowed this private information to go astray. At worst, the private information is being viewed, sold, resold, and used for illegitimate and illegal purposes,” the complaint says. The suit is seeking injunctive relief, compensatory damages, declaratory relief, and attorney fees and costs. Bournas v. Health Net Inc., No. 2_11-CV-01262, complaint filed (E.D. Cal. May 11, 2011).</blockquote> I would revise that to say "The current breach could have been avoided had Health Net and IBM hired personnel in adequate numbers with the qualifications and true gravitas (and not laid them off, of course) to maintain consumers’ confidential data." Case 5: Maelstrom (I am reaching to the bottom of the barrel for such descriptors). <a href="http://www.ama-assn.org/amednews/2011/08/01/bisc0801.htm"></a><blockquote><a href="http://www.ama-assn.org/amednews/2011/08/01/bisc0801.htm">Wellpoint recently settled class-action suit in CA</a>. AMA news By Pamela Lewis Dolan, amednews staff. Posted Aug. 1, 2011. WellPoint reaches tentative accord in data breach suit It is the second settlement to come from lawsuits claiming that the company failed to protect the privacy of individual insurance applicants online. WellPoint has reached a preliminary settlement that will, if approved, bring an end to a class-action lawsuit filed more than a year ago. The lawsuit, filed in the Superior Court of the State of California, involves the potential exposure of data belonging to more than 600,000 individual health insurance applicants on a company-run website that allowed insurance applicants to track their applications. The situation came to light when an applicant to WellPoint-owned Anthem Blue Cross of California sued the company in March 2010. The applicant was able to manipulate the web address within the site to gain access to other applicants' information, including names, addresses, dates of birth, Social Security numbers and health and financial information. </blockquote> In other words, probably changing a simple number in the URL brought up someone else's records. Good going there, Wellpoint. What were the programmers thinking? (Were they thinking?) <blockquote>When the suit was filed, the company said an upgrade to the system caused the information to become exposed. The company said a third-party vendor validated that all security measures were in place when, in fact, they were not. Changes were made to the system soon after the situation was discovered.</blockquote> Blame someone else, yet again. <blockquote>In addition to the class-action suit, the company was sued by Indiana Attorney General Greg Zoeller in July 2010. The suit, filed in Marion County Civil Superior Court, alleged that the company violated the Indiana Disclosure of Security Breach Act by failing to notify Zoeller, and the 32,051 Indiana residents affected by the incident, in a timely manner. That suit was settled in early July, when WellPoint agreed to pay a $100,000 fine. As part of the settlement, WellPoint admitted it had a security breach and failed to properly notify the attorney general's office as required by law.</blockquote> <a href="http://www.urbandictionary.com/define.php?term=oy%20gevalt">Gevalt</a>. <blockquote> Under the preliminary settlement in the California class-action matter, WellPoint agreed to offer credit monitoring for two years to all affected individuals. Class members are eligible to receive reimbursement for identity theft losses of up to $50,000 per incident, as well as additional time to file identity theft claims until May 31, 2016. Those making identity theft claims are eligible for an additional five years of credit monitoring. The company also will donate a total of $250,000 to two nonprofit organizations whose efforts are directed at protecting consumers' privacy on the Internet.</blockquote> It might have been cheaper and better for goodwill not to outsource a vital function...those third-party vendors can really hurt you. (I'd really like to know - was this "third party vendor" domestic, or overseas?) <blockquote>WellPoint did not admit wrongdoing in the case, nor was it found guilty. A fairness hearing is scheduled for November, and the courts then will decide whether to approve the settlement.</blockquote> Large corporations are immune from such formalities as admitting wrongdoing or being found guilty. ----------------------- But don't worry. <a href="http://hcrenewal.blogspot.com/search/label/medical%20record%20privacy">Your medical data's safe.</a> Sort of. See also: <ul><li>"<a href="http://hcrenewal.blogspot.com/2010/02/networked-emrs-and-healthcare.html">Networked EMR's and Healthcare Information Security: Practical When Massive IT Security Breaches Continue</a>?",</li></ul><ul><li>"<a href="http://hcrenewal.blogspot.com/2010/02/networked-interoperable-secure-national.html">Networked, Interoperable, Secure National Medical Records a Castle in the Sky?</a>",</li></ul><ul><li>"<a href="http://hcrenewal.blogspot.com/2010/01/it-flaws-and-coverups-of-same-why-i.html">Operation Aurora And a Widespread Reluctance to Discuss IT Flaws: Is Universal Healthcare IT Really a Good Idea in 2010?</a>",</li></ul><ul><li>"<a href="http://hcrenewal.blogspot.com/2010/10/medical-data-breach-of-week-but-your.html">Medical data breach of the week - but your EMR data is secure, trust us, we're IT experts</a>", </li></ul><ul><li>"<a href="http://hcrenewal.blogspot.com/2010/11/insurers-test-data-profiles-to-identify.html">Insurers Test Data Profiles to Identify Risky Clients</a>",</li></ul><ul><li>and <a href="http://hcrenewal.blogspot.com/search/label/medical%20record%20confidentiality">others</a></li></ul> -- SS

Still More Electronic Medical Data Chaos, Pandemonium, Bedlam, Tumult and Maelstrom: But Don't Worry, Your Data is Secure

Case 1. Tumult October 5, 2011 New York Times Patient Data Landed Online After a Series of Missteps By KEVIN SACK Private medical data for ...

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Enabled by the Revolving Door, Corporatistic US Trade Policy Seems to Put US Drug Companies Ahead of Global Public Health

We just <a href="http://hcrenewal.blogspot.com/2011/10/exporting-us-health-ecosystem-and-its.html">discussed</a> how leaders of big health care corporations with histories of ethical and legal missteps want to export our supposedly "wonderful technology, wonderful approaches" to the rest of the world.  A <a href="http://www.huffingtonpost.com/2011/09/28/bill-daley-big-pharma-trans-pacific-partnership_n_981973.html">story</a> on the Huffington Post showed how big health care corporations, partnering with the US government, have already been doing that with not very pretty results.  The article discussed two cases, connected by a single person who transited the revolving door from government to the pharmaceutical industry and then back to government. The US Dispute with Brazil, on Behalf of Merck and Pfizer, About HIV Drugs <blockquote>When [William] Daley was commerce secretary in the later years of the Clinton administration, Brazil rankled U.S. drug companies by opting to provide its citizens with a generic version of another HIV drug. Like Thailand, Brazil declared a public health emergency in an effort to lower the cost of treating roughly a half-million HIV infections. The U.S. government responded by sending Daley to Brazil with executives from U.S. pharmaceutical giants Merck & Co. and Pfizer to try to pressure the Brazilian government into reversing its decision.</blockquote>Thus the US government appeared to be putting the revenues of US corporations ahead of the public health, at least in Brazil. Daley soon made the transition to the private sector: <blockquote>In a speech at Johns Hopkins University before leaving for Brazil, Daley encouraged students to enter the revolving door between big business and public policy-making. 'Let me say this: As one of the only members of the president's Cabinet to come from business, it's good when you mix both government and business in your careers,' he said. 'It makes better public servants, and it makes better businesspeople.' It has certainly been good for Daley's career. His effort to twist arms in Brazil failed, but drug companies apparently took note. It was after leaving the Clinton administration that Daley was hired by Abbott, where he raked in more than $1.3 million as a board member from 2004 to 2010, according to Securities and Exchange Commission filings. Over the same period, he served on Boeing's board and was a top lobbyist for JPMorgan Chase.</blockquote>Abbot's Dispute, Supported by the US Government, with Thailand About Kaletra Soon Abbot was involved in a similar dispute. The background is: <blockquote>[HIV drug] Kaletra costs more than $10,000 a year for a patient living in the United States, a price that is reflective of the highly protective American patent system. The U.S. is the only country that grants long-term monopolies on life-saving medicine without regulating the price of monopolized drugs. </blockquote> In addition <blockquote>In countries that negotiate with companies on drug prices, the cost of medicine is often far lower. But though American pharmaceutical companies do supply drugs to developing nations at rates below those charged in the U.S., those discounted prices are still too high for many poor or hard-hit nations to afford. 'In many developing countries, it's a death sentence,'said Nobel Prize-winning economist Joseph Stiglitz, referring to high drug prices.</blockquote> The core of the dispute: <blockquote>In 2007 negotiations with the Thai government, Abbott Labs wouldn't budge below a price of $2,200 per person, per year for Kaletra. At the time, Thailand was classified as a 'lower-middle income' country by the World Bank -- the second lowest of four categories. With more than a half-million citizens living with HIV, Thailand considered that price beyond its budgetary capacity. So it declared a public health emergency and began importing a vastly cheaper generic version of Kaletra from India. And then, by international trade standards, all hell broke loose. 'When countries declare the health emergency, they face a huge backlash, particularly from the USTR [US Trade Representative] and the drug companies,'said Tim Boyd, policy research coordinator with the AIDS Healthcare Foundation, a U.S. nonprofit dedicated to eradicating HIV. Abbott responded by withdrawing pending applications to register drugs in Thailand, cutting its citizens off from other medications. The move was unprecedented: Never before had an American drug company attempted to punish a country during drug price negotiations by cutting off the supply of other medicines. At the time, Brook Baker, a law professor at Northeastern University and a member of the board at the Health Global Access Project, called the move a 'ruly appalling example of corporate hubris'that 'irectly violates any conceivable norm of corporate responsibility.'</blockquote> At that time, the US government went along with Abbott: <blockquote>As for the USTR, it seemed to support the company, placing Thailand on its 'Priority Watch List 'of nations that do not respect U.S. intellectual property rights. 'In late 2006 and early 2007, there were further indications of a weakening of respect for patents, as the Thai Government announced decisions to issue compulsory licenses for several patented pharmaceutical products,' wrote the agency in its report announcing that Thailand had been added to the priority list. Although the USTR blacklist is little known domestically, it is a major economic indicator abroad and can affect a country's ability to import everything from software to DVDs to automobiles. Thailand's new status as an international rogue sparked concern among the country's economic policy officials and corporate leaders. And 35 members of Congress wrote to the USTR to protest Thailand's blacklisting, noting, 'The move is being interpreted in the public health community as a warning and a threat to other countries.'</blockquote> Note that: <blockquote>Abbott Labs declined to detail Daley's involvement in the Thailand episode, but as a member of the board, he should have been well informed about the strategy.</blockquote> US Government Pressure to Protect Drug Companies' Patents William Daley has transitioned the revolving door again in the other direction: <blockquote>As commerce secretary under Bill Clinton, William Daley worked with U.S. pharmaceutical giants to curb the use of cheaper generic drugs abroad. As a board member for Abbott Laboratories, he had a front-row seat on a brutal clash between a major drug company and a developing nation over access to life-saving medication. And as White House chief of staff today, Daley has President Barack Obama’s ear.</blockquote> In his new government job, <blockquote>Add up Daley’s power and experience, and experts who follow public health policy suspect his influence in the U.S. stance in negotiations over a major international trade deal -- a stance with hugely profitable implications for giant American drugmakers. The United States is in talks with eight other Pacific nations to establish the Trans-Pacific Partnership, which the administration hopes will serve as a template for other trade pacts. According to leaked documents from the negotiations, the Obama administration is using the deal to push hard-line intellectual property standards that could drive up medicine prices overseas, boosting the bottom line for U.S. drugmakers like Abbott Labs at the expense of public health. Public health advocates are worried. 'If the point of the trade policy is not just to protect the interests of our companies, but the public health benefit and burden of research, then [the United States] is doing this all wrong,' said James Love, director of Knowledge Ecology International, a nonprofit that focuses on how patent laws affect the poor. A White House spokesman said only that the negotiations -- which are being conducted behind closed doors with input from corporate lobbyists -- are being 'ably led' by the United States Trade Representative (USTR) and that Daley is 'not directing or participating in those negotiations.'</blockquote> Note that the USTR leadership includes other travelers through the revolving door: <blockquote>Daley's personal history with drug access is not unique among top-tier government officials with trade responsibilities. McCoy lobbied on intellectual property issues at the influential D.C. law firm Covington & Burling before moving to the USTR in 2006. His top deputy, Kira Alvarez, was a lobbyist for drugmaker Eli Lilly before joining the agency.</blockquote> Summary Per Zach Carter, the author of the Huffington Post article: <blockquote>Daley, who previously lobbied for JPMorgan Chase, is a prominent examplar of a bipartisan phenomenon in American government in which corporate insiders, and the profit-driven perspective of the boardroom, have come to dominate formal and informal debate over public policy.</blockquote> Another way to describe this is corporatism. The corporatism in this case is partly enabled by the continuation of the revolving door, the free transit of individuals from leadership positions in top corporations and in government. The government and big corporations have teamed up to produce solutions that may seem beneficial to the people making the decisions, and may benefit their long term career strategies, but may not be good for the US public, for patients' and the public's health in this case, and for the ability of the country to conduct foreign policy based on some ethical and moral principles. By the way, note that combined with other cases we have discussed, this shows that the revolving door pheonomenon, and other aspects corporatism affecting health care are not linked with any one political party. So, <blockquote>There is no evidence that any of these players, including Daley, have done anything illegal or explicitly corrupt during the Trans-Pacific trade negotiations. But public health doesn’t seem to be their first priority. 'The real concern is that the U.S. is using its international power and prestige to force poor countries to enforce our intellectual property standards, and the result of that is that access to medicine is denied and people are dying,' said Joseph Stiglitz.</blockquote>Until we dispel the fog of corporatism that has spread over the government that was once supposed to be of the people, by the people, and for the people, expect no real health care reform, and expect continuing rising costs, declining access, and worsening patient care. Obviously, true health care reform would start with the government and its officials putting patients' and the public's health first, way ahead of the financial comfort of corporate leaders. xx

Enabled by the Revolving Door, Corporatistic US Trade Policy Seems to Put US Drug Companies Ahead of Global Public Health

We just discussed how leaders of big health care corporations with histories of ethical and legal missteps want to export our supposedly ...

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Spend Billions More on HIT When Public-Health Services Get Crunched by Budget Woes?

I have the answer to these cutbacks of pubic health services. In the midst of economic chaos, let's spend tens of billions or even better, hundreds of billions of dollars more on experimental healthcare IT. (It <a href="http://hcrenewal.blogspot.com/2011/09/npfit-programme-going-pffft.html">worked out so well for the UK's NPfIT</a>, we should follow the NHS's example of how to wisely spend our crucial healthcare billions.) I will comment no further: <blockquote>Wall Street Journal Health Blog October 5, 2011, 10:00 AM ET <a style="font-weight: bold;" href="http://blogs.wsj.com/health/2011/10/05/public-health-services-get-crunched-by-budget-woes/">Public-Health Services Get Crunched by Budget Woes</a> By Betsy McKay Immunizations, emergency preparations for hurricanes, and restaurant inspections are among local public-health services being cut back or eliminated amid budget constraints. Some 55% of the nation’s county and city health departments reduced or eliminated at least one program between July 2010 and June 2011, and the public-health workforce continued to shrink, according to a new survey by the National Association of County and City Health Officials. The cuts hit maternal and child health services (at 21% of the departments reporting cuts), personal health services (20%), emergency preparedness (20%), chronic disease screenings (17%), and food safety (11%), among other programs. Health departments lost 5,400 jobs in the first half of this year, after losing 6,000 in all of 2010. There are currently about 120,600 local health department employees across the country after those cutbacks. While the workforce has been shrinking since 2008, the downsizing “is now eating into program capacity,” says Robert Pestronk, NACCHO’s executive director. Particularly worrying are the cutbacks in emergency-preparedness programs, he says. “It’s troublesome given what we’re seeing in terms of weather conditions and threats in communities,” he tells the Health Blog. Health-department employees help plan for emergencies such as hurricanes, make sure supplies are in place and work as responders. Meantime, cutbacks in immunization programs are making it harder for some children to get needed polio, tetanus and other preventive vaccinations, while reductions in food-safety programs mean fewer restaurant inspections or staff to interview people sickened in a food-borne illness outbreak, Pestronk says. These woes aren’t limited to local health departments. The Centers for Disease Control and Prevention has seen its budget for preparedness and response fall by more than $350 million since 2005, to about $832 million in fiscal 2011. That challenges the CDC’s ability to respond to a pandemic like the type featured in the recent bio-thriller “Contagion,” Rear Admiral Ali Khan, the CDC’s chief of public health preparedness and response, <a href="http://blogs.wsj.com/health/2011/09/09/contagion-screening-a-busmans-holiday-for-cdc-staffers/" target="_blank">told the Health Blog at a screening of the film</a>.</blockquote> Also see my March 2010 post "<a href="http://hcrenewal.blogspot.com/2010/03/hospitals-under-knife-sacrificing.html">Hospitals Under the Knife: Sacrificing Hospital Jobs for the Extravagance of Healthcare IT?</a>" where I observed: <blockquote>... In effect, NY hospital physicians, nurses and support staff will lose their job due to budget shortfalls, at the same time the NY hospitals have been spending hundreds of millions of dollars on the extravagance of experimental clinical IT systems whose benefit is still an unknown. Perhaps some of those millions could have been better spent on human beings, such as employees or better yet, patient care.</blockquote> -- SS

Spend Billions More on HIT When Public-Health Services Get Crunched by Budget Woes?

I have the answer to these cutbacks of pubic health services. In the midst of economic chaos, let's spend tens of billions or even bette...

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Exporting the US "Health Ecosystem" and its "Wonderful Technology, Wonderful Approaches," or Exporting "A Parasite Eating Its Host?"

Last week, an <a href="http://www.startribune.com/business/130604608.html">article </a>in the Minneapolis Star-Tribune suggested that our US corporate health care giants think they are doing such a good job they want to export the "world's best health care system" overseas: <blockquote>A coalition of U.S. health care businesses, including Minnesota-based UnitedHealth Group and Medtronic, proposes to rebuild America's battered economy by selling the country's 'health ecosystem' internationally. The Alliance for Healthcare Competitiveness (AHC) wants the U.S. government to build its foreign free-trade policy around the health care industry, noting that the sector has been a significant jobs creator since the recession began in 2008. Breaking down tariffs and other forms of international discrimination against America's 'health ecosystem' will allow developing countries such as China, India and Brazil to improve medical care while allowing U.S. companies to rescue the American economy by hiring more people, AHC leaders said Monday. The worldwide need for health care in aging populations will lead to a demand for goods and services that can drive sales of American insurance, medical devices and record-keeping technology, said Simon Stevens, UnitedHealth's president of global health and an AHC member.</blockquote> AHC members seem really convinced of the value of what they have to sell: <blockquote>'We've got a lot of wonderful technologies, wonderful approaches,' said Alex Gorsky, Johnson & Johnson's vice chairman. </blockquote> The Star-Tribune did note that our "health ecosystem" is <blockquote>beset with skyrocketing costs and inefficiencies. Americans currently pay more for health care and rank lower in life expectancy and infant mortality than much of the developed world.</blockquote> The article also managed to find one slightly dissenting expert, <blockquote>'It seems ironic, at best,' said Jean Abraham, a professor of health policy and management at the University of Minnesota</blockquote> Let me add a little more irony. The AHC advocates are top leaders at UnitedHealth and Johnson and Johnson. UnitedHealth Group's Sorry Record UnitedHealth would be the company whose CEO once was worth over a billion dollars due to back dated stock options, some of which he had to give back, but despite all the resulting legal actions, was still the ninth best paid CEO in the US for the first decade of the 21st century (look <a href="http://hcrenewal.blogspot.com/2010/08/despite-scandal-former-unitedhealth-ceo.html">here</a>). UnitedHealth would be the company whose current CEO made a cool $106 million in 2009 (look <a href="http://hcrenewal.blogspot.com/2010/08/can-1-billion-group-of-babies-provide.html">here</a>). Howver, UnitedHealth would also be the company known for a string of ethical lapses: - as <a href="http://www.courant.com/business/hc-natbizdigbrf0530.art2may30,0,109447.story">reported</a> by the Hartford Courant, "UnitedHealth Group Inc., the largest U.S. health insurer, will refund $50 million to small businesses that New York state officials said were overcharged in 2006." - UnitedHalth promised its investors it would continue to raise premiums, even if that priced increasing numbers of people out of its policies (see post <a href="http://hcrenewal.blogspot.com/2008/05/commercial-managed-care-organizations.html">here</a>); - UnitedHealth's acquisition of Pacificare in California allegedly lead to a "meltdown" of its claims paying mechanisms (see post <a href="http://hcrenewal.blogspot.com/2008/01/bungled-not-brilliant-results-of.html">here</a>); - UnitedHealth's acquisition of Sierra Health Services allegedly gave it a monopoly in Utah, while the company allegedly was transferring much of its revenue out of the state of Rhode Island, rather than using it to pay claims (see post <a href="http://hcrenewal.blogspot.com/2007/03/unitedhealth-declares-health-care.html">here</a>) - UnitedHealth frequently violated Nebraska insurance laws (see post <a href="http://hcrenewal.blogspot.com/2007/01/on-performance-on-one-supposedly.html">here</a>); - UnitedHealth settled charges that its Ingenix subsidiaries manipulation of data lead to underpaying patients who received out-of-network care (see post <a href="http://hcrenewal.blogspot.com/2009/01/unitedhealth-and-ingenix-settles.html">here</a>). - UnitedHealth was accused of hiding the fact that the physicians it is now employing through its Optum subsidiary in fact work for a for-profit company, not directly for their patients (see post <a href="http://hcrenewal.blogspot.com/2011/07/here-comes-your-new-doctor-brought-to.html">here</a>). Johnson and Johnson's Sorry Record Johnson and Johnson also would be the company known for recalling heroic numbers of products, 26 different recalls since 2009, the latest, of Eprex, two weeks ago (see the WSJ Health blog recall watch <a href="http://blogs.wsj.com/health/2011/09/23/jj-recall-watch-eprex-anemia-drug-pulled-on-potency-worries/">here</a>.). Johnson and Johnson also has an amazing recent record of ethical lapses and guilty pleas, including: -  Convictions in two different states in 2010 for misleading marketing of Risperdal -  A guilty plea for misbranding Topamax in 2010 -  Guilty pleas to bribery in Europe in 2011 by J+J's DePuy subsidiary -  A guilty plea for marketing Risperdal for unapproved uses in 2011 (see <a href="http://hcrenewal.blogspot.com/2011/08/why-cultivate-weldons-confidence-ceo.html">this link</a> for all of the above) -  Accusations that the company, which makes smoking cessation products,  participated along with tobacco companies in efforts to lobby state legislators (see post <a href="http://hcrenewal.blogspot.com/2011/09/smart-alecs-strange-bedfellows.html">here</a>) -  A guilty plea to misbranding Natrecor by J+J subsidiary Scios (see post <a href="http://hcrenewal.blogspot.com/2011/09/johnson-and-johnson-pleads-guilty.html">here</a>) With the justification that "he met expctations," so despite, or maybe because of all this, Johnson and Johnson paid its CEO $29 million in 2010 (see post <a href="http://hcrenewal.blogspot.com/2011/03/despite-recalls-legal-settlements.html">here</a>). Summary   So maybe UnitedHealth Group and Johnson and Johnson want to quickly export their brilliance before someone else realizes how bad their corporate records are, and takes action in response.  Note that the "international discrimination" against such companies noted above could simply be another description of better regulatory systems in other countries which are more able to defend against the sorts of sleazy behavior that has plagued US health care.  If US "free-trade" policy succeeds in challenging such regulation, other developed countries, which provide generally better health care at lower costs, could become more susceptible to catching the US health care dysfunction syndrome.   For more pithy comments, Minneapolis Public Radio published a <a href="http://minnesota.publicradio.org/display/web/2011/09/30/durenberger/">commentary</a> by David Durenberger in which he noted: <blockquote>A physician I know read a story in Tuesday's newspaper at about the same time I did, 6 a.m. By 8 we'd found that we were having identical reactions to this absurdity. But he had a better way of expressing it: 'It's like a parasite eating its host.' 'They have bankrupted our culture, so now they want to try and bankrupt China and India,' he said. </blockquote> Of course, if maybe we could export all of Johnson and Johnson, UnitedHealth Group, and other corporations with similarly bad records of crimes, legal settlements, ethical missteps, and bad leadership to India and China, maybe our health care system would start recovering from its dysfunction (but then pity the poor Chinese and Indians). Maybe the corporate leaders quoted above suffer from the same apparently complete lack of insight that another health care CEO (actually former CEO) exhibited recently (look <a href="http://hcrenewal.blogspot.com/2011/09/do-health-care-leaders-realize-they-do.html">here</a>). However, such glaring inability to perceive one's own problems surely will lead them to grief in the near future. Our corporate health care giants have already lead our dysfunctional health care system to enough grief. True health care reform would favor leaders of health care organizations who understand the health care context, and uphold health care professionals' values, and have enough insight to realize when they are falling short of these standards. Meanwhile, rest assured that US health care is the system where nothing can go wrong, go wrong, go wrong.

Exporting the US "Health Ecosystem" and its "Wonderful Technology, Wonderful Approaches," or Exporting "A Parasite Eating Its Host?"

Last week, an article in the Minneapolis Star-Tribune suggested that our US corporate health care giants think they are doing such a good j...

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