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The Corporate Psychopaths Theory of Health Care Dysfunction

A new article in the Journal of Business Ethics suggested that the global financial crisis, or great recession, was primarily due to a fundamental flaw in the leadership of financial organizations, one that has important implications for health care organizations.  The article, Boddy CR. The corporate psychopaths theory of the global financial crisis.  J Bus Ethics 2011; 102: 255-259 is <a href="http://www.springerlink.com/content/9072633443675517/">here</a>.  Its premise was: <blockquote>The Corporate Psychopaths Theory of the Global Financial Crisis is that Corporate Psychopaths, rising to key senior positions within modern financial corporations, where they are able to influence the moral climate of the whole organisation and yield considerable power, have largely caused the crisis.</blockquote> Note that in 2004 we first <a href="http://hcrenewal.blogspot.com/2004/12/snakes-in-suits.html">posted</a> about the possibility that a proportion of corporate managers, including those in health care, could be psychopaths, raised then by two experts on psychopathy, Paul Babiak and Robert Hare. In 2006, they published Snakes in Suits, about the dangers of psychopaths as executives and managers (see post <a href="http://hcrenewal.blogspot.com/2006/06/snakes-in-suits-book.html">here</a>). However, the issue got scant attention in those days of letting the good times roll. Defining Corporate Psychopaths Boddy described psychopaths as: <blockquote>the 1% of people who have no conscience or empathy and who do not care for anyone other than themselves. Some psychopaths are violent and end up in jail, others forge careers in corporations. The latter group who forge successful corporate careers is called Corporate Psychopaths.</blockquote>Corporate Psychopaths as Leaders Such people do not make good leaders: <blockquote>Although they may look smooth, charming, sophisticated, and successful, Corporate Psychopaths should theoretically be almost wholly destructive to the organizations that they work for. The probable mal-effects of the presence of psychopaths in the workplace have been hypothesized about in recent times by a number of leading experts and commentators on psychopathy. Researchers report that such malevolent leaders are callously disregarding of the needs and wishes of others, prepared to lie, bully and cheat and to disregard or cause harm to the welfare of others. Corporate Psychopaths are also poorly organized managers who adversely affect productivity and have a negative impact on many different areas of organizational effectiveness.</blockquote>How Corporate Psychopaths Could Have Become Prevalent Despite the dangers posed by such leadership, corporate psychopaths may rise quickly in management: <blockquote>Psychologists have argued that Corporate Psychopaths within organizations may be singled out for rapid promotion because of their polish, charm, and cool decisiveness. Expert  ccommentators on the rise of Corporate Psychopaths within modern corporations have also hypothesized that they are more likely to be found at the top of current organisations than at the bottom.</blockquote> The nature of current corporate culture may facilitate the rise of corporate psychopaths: <blockquote>These Corporate Psychopaths are charming individuals who have been able to enter modern corporations and other organisations and rise quickly and relatively unnoticed within them because of the relatively chaotic nature of the modern corporation. This corporate nature is characterized by rapid change, constant renewal and quite a rapid turnover of key personnel. These changing conditions make Corporate Psychopaths hard to spot because constant movement makes their behaviour invisible and combined with their extroverted personal charisma and charm, this makes them appear normal and even to be ideal leaders.</blockquote> The destabilization of modern corporations likely lead to the ascendancy of the corporate psychopath: <blockquote>However, once corporate takeovers and mergers started to become commonplace and the resultant corporate changes started to accelerate, exacerbated by both globalisation and a rapidly changing technological environment, then corporate stability began to disintegrate. Jobs for life disappeared and not surprisingly employees’ commitment to their employers also lessened accordingly. Job switching first became acceptable and then even became common and employees increasingly found themselves working for unfamiliar organisations and with other people that they did not really know very well. Rapid movements in key personnel between corporations compared to the relatively slower movements in organisational productivity and success made it increasingly difficult to identify corporate success with any particular manager. Failures were not noticed until too late and the offending managers had already moved on to better positions elsewhere. Successes could equally be claimed by those who had nothing to do with them. Success could thus be claimed by those with the loudest voice, the most influence and the best political skills. Corporate Psychopaths have these skills in abundance and use them with ruthless and calculated efficiency. In this way, the whole corporate and employment environment changed from one that would hold the Corporate Psychopath in check to one where they could flourish and advance relatively unopposed.</blockquote>The Harms Caused by Corporate Psychopaths as Executives Thus, Boddy hypothesized the rise of management by corporate psychopaths lead directly to the global financial crisis or great recession: <blockquote>As evidence of this, senior level remuneration and reward started to increase more and more rapidly and beyond all proportion to shop floor incomes and a culture of greed unfettered by conscience developed.  </blockquote><blockquote>Corporate Psychopaths are ideally situated to prey on such an environment and corporate fraud, financial misrepresentation, greed and misbehaviour went through the roof, bringing down huge companies and culminating in the Global Financial Crisis that we are now in. Writing in 2005, this author commentating on Corporate Psychopaths predicted that the rise of Corporate Psychopaths was a recipe for corporate and societal disaster. This disaster has now happened and is still happening.</blockquote>What Could be Next Worse, if this hypothesis is true, as long as it is not addressed, things will get worse: <blockquote>The very same Corporate Psychopaths, who probably caused the crisis by their self-seeking greed and avarice, are now advising governments on how to get out of the crisis. That this involves paying themselves vast bonuses in the midst of financial hardship for many millions of others, is symptomatic of the problem. Further, if the Corporate Psychopaths Theory of the Global Financial Crisis is correct then we are now far from the end of the crisis. Indeed, it is only the end of the beginning.</blockquote>Some Agreement The plausible theory that corporate psychopaths ascending to top management positions in finance caused the global financial crisis has been noticed by a few prominent financial pundits. <a href="http://www.bloomberg.com/news/2012-01-03/did-psychopaths-take-over-wall-street-asylum-commentary-by-william-cohan.html">Writing in Bloomberg</a>, William D Cohan agreed with Boddy's suggestion that "anyone who makes decisions that affect significant numbers of other people, concerning issues of corporate social responsibility or toxic waste, for example, or concerning mass financial markets or mass employment, should be screened to make sure that they are, at the very least, not psychopaths and at most are actually people who care about others." Brian Besham, writing <a href="http://www.independent.co.uk/news/business/comment/brian-basham-beware-corporate-psychopaths--they-are-still-occupying-positions-of-power-6282502.html">in the Independent</a>, suggested that Richard Fuld, former CEO of Lehman Brothers, whose bankruptcy kicked off public awareness of the global financial collapse, saying he wanted to eat the hearts of those selling his company's stock short (see <a href="http://hcrenewal.blogspot.com/2012/01/new-york-presbyterian-hospital-trustee.html">this post</a>), was a "terrifying" example of corporate executive psychopathy. Worse, Besham noted that he had discovered an case of an investment bank which "psychometric testing to recruit social psychopaths because their characteristics exactly suited them to senior corporate finance roles."  It may be that corporate psychopaths are actively recruiting their fellows. Implications for Health Care This is chilling. It also unfortunately is highly relevant to health care. As we noted, most recently <a href="http://hcrenewal.blogspot.com/2011/12/they-think-we-are-imbeciles-and-they.html">here</a>, leaders of big finance firms, including those whose failures were most spectacular, now often sit on boards of trustees of hospitals, academic medical centers, medical schools, and their parent universities. Thus, the likelihood that a good proportion of the stewardship of our most prominent not-for-profit health care organizations may be in the hands of psychopaths is not negligible. Furthermore, health care organizations have become as unstable and chaotic, in the way these terms were used by Boddy, as finance firms. This would suggest that their current nature would make it as easy for psychopaths to rise to positions of power in them as they may have in financial firms. In health care we certainly have seen the consequences he suggested were due to psychopathic managers, including - <a href="http://hcrenewal.blogspot.com/search/label/intimidation">intimidation</a> (per Boddy, corporate psychopaths are "prepared to lie, bully and cheat and to disregard or cause harm to the welfare of others"); - self-interest ("pursuit of self-enrichment and self-aggrandizement") leading to outrageous <a href="http://hcrenewal.blogspot.com/search/label/executive%20compensation">executive compensation</a> ("senior level remuneration and reward started to increase more and more rapidly and beyond all proportion to shop floor incomes") - <a href="http://hcrenewal.blogspot.com/search/label/fraud">fraud</a> and other <a href="http://hcrenewal.blogspot.com/search/label/crime">crime</a> ("corporate fraud, financial misrepresentation, greed and misbehaviour went through the roof,... ") So as we <a href="http://hcrenewal.blogspot.com/2006/06/snakes-in-suits-book.html">noted</a> in 2006, "a high prevalence of psychopathic managers could explain the prevalence of mismanagement, conflicts of interest, and corruption in the leadership of health care organizations that we have often discussed on Health Care Renewal." Boddy's first suggestion to deal with the problem in finance was: <blockquote>Measures exist to identify Corporate Psychopaths. Perhaps it is time to use them.</blockquote> However, it is as hard to imagine top health care leaders willingly and honestly submitting to the use of instruments designed to identify psychopaths as it is to imagine finance leaders doing so. Furthermore, it is easy to imagine how corporate psychopaths in positions of leadership would ruthlessly deploy their legions of public relations personnel and lawyers to quash any challenge should the notion that they are so dominant gain any credibility. However, if there is any significant prevalence of corporate psychopaths among the leaders of health care, woe will be unto us until we identify and remove them.

The Corporate Psychopaths Theory of Health Care Dysfunction

A new article in the Journal of Business Ethics suggested that the global financial crisis, or great recession, was primarily due to a funda...

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Just Say "No" to the Term "Anecdotes"; and HIT as a Medical Metadevice

A New Year's thought: there needs to be a push in healthcare for dropping of the word "anecdote" to describe case reports of health IT-related errors. This word even appears in the late 2011 <a href="http://www.ischool.drexel.edu/faculty/ssilverstein/Patient%20Safety%20and%20Health%20IT%20prepub.pdf">IOM report on HIT safety</a> (PDF), e.g., the preface: <blockquote style="margin-right: 0px; font-style: italic; font-family: arial;font-family:arial;" dir="ltr"> ... We found that specific types of health IT can improve patient safety under the right conditions, but those conditions cannot be replicated easily and require continual effort to achieve. We tried to balance the findings in the literature with anecdotes from the field but came to the realization that the information needed for an objective analysis and assessment of the safety of health IT and its use was not available.</blockquote> The "A" word needs to be dropped from the healthcare IT lexicon, since such reports from reliable sources are in fact incident reports purposed for risk management activities.Incident reports do not need peer review for consideration for that purpose.Of note, I do not believe the incident reports filed in hospitals when something awry occurs are labelled "anecdotes", either. See the Aug. 2011 post "<a style="font-weight: bold;" href="http://hcrenewal.blogspot.com/2011/08/from-senior-clinician-down-under.html">From a Senior Clinician Down Under: Anecdotes and Medicine, We are Actually Talking About Two Different Things</a>" for more on this topic. And on another vein, the issue of HIT being a medical device: As the good State Rep. Marino of my home state of Pennsylvania and <a href="http://hcrenewal.blogspot.com/2011/11/emr-defects-that-injure-and-kill-and.html">others</a> oddly proffer - that 'certification' of health IT, having nothing to do with safety or usability, relieves HIT from being a device [1] - and as the IOM itself debates exactly what to call HIT and under what guidelines to regulate it, another term/category for HIT devices is needed. In the spirit of the naming of the <a href="http://www.nlm.nih.gov/pubs/factsheets/umlsmeta.html">UMLS Metathesaurus</a>, and in consideration of HIT's informational governance/orchestration of other medical devices and personnel (including the 'carbon units' known as clinicians and patients) -- I suggest the term "metadevice" for HIT. Healthcare metadevices need their own specific regulation, apart from traditional medical devices.-- SSNote: [1] As in line 21- 24 on page 6 of the "<a href="http://www.gpo.gov/fdsys/pkg/BILLS-112hr3239ih/pdf/BILLS-112hr3239ih.pdf">Safeguarding Access For Every Medicare Patient Act</a>" Bill (PDF) that I wrote about <a href="http://hcrenewal.blogspot.com/2011/10/cybernetik-uber-alles-computers-have.html">here</a>. The Bill states: "CLARIFICATION OF AUTHORITY. Certified EHR’s shall not be considered a device for purposes of the Federal Food, Drug, and Cosmetic Act." (This proposal, of course, raises the question of whether Rep. Marino believes non-certified HIT shall be considered a medical device, a topic for another time.)

Just Say "No" to the Term "Anecdotes"; and HIT as a Medical Metadevice

A New Year's thought: there needs to be a push in healthcare for dropping of the word "anecdote" to describe case reports of ...

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SELF INFLICTED DAMAGE

SELF INFLICTED DAMAGE The American Psychiatric Association (APA) is in the news again for bad public relations: worse than bad, actually – appalling. Locked in a bunker mentality, they have moved to stifle advance criticism of their flagship initiative, DSM-5 (Diagnostic and Statistical Manual of Mental Disorders, 5th edition), which is a work in progress. Lawyers for the APA have threatened the owner of a UK blog that served as a discussion forum for issues affected by DSM-5 and other, international psychiatric classifications. The blog, named <a href="http://dsm5watch.wordpress.com/">dsm5watch</a> was considered authoritative and accurate. If you go to this site now you will find that it has been deleted. As <a href="http://www.psychologytoday.com/blog/dsm5-in-distress/201201/is-dsm-5-public-trust-or-apa-cash-cow">recounted</a> this week by Allen Frances, MD, the editor of the last published DSM edition, the blog’s owner, Suzy Chapman, told him, ”On December 22, I was stunned to receive two emails from the Licensing and Permissions department of American Psychiatric Publishing, claiming that the domain name my site operates under was infringing upon the DSM 5 trademark in violation of United States Trademark Law and that my unauthorized actions may subject me to contributory infringement liability including increased damages for willful infringement. I was told to cease and desist immediately all use of the DSM 5 mark and to provide documentation within ten days confirming I had done so." "Given my limited resources compared with APA's deep pockets, I had no choice but to comply and was forced to change my site's domain name to <a href="http://dxrevisionwatch.wordpress.com/">dxrevisionwatch</a>. Hits to the new site have plummeted dramatically and it will take months for traffic to recover - just at the time when crucial DSM 5 decisions are being made." In effect, the APA, acting not through its medical or scientific officers but through its wholly owned publishing house, has attempted a SLAPP maneuver. SLAPP is the acronym for strategic lawsuit against public participation. What kind of leadership does this signal in a major professional organization? The normal remit of professional medical societies is stewardship of professional values and ethics. That is why these societies are accorded deference and respect on matters of clinical guidelines, health policy and public education. Even when, like the Institute of Medicine of the National Academy of Sciences, they <a href="http://hcrenewal.blogspot.com/2009/04/institute-of-medicine-report-on.html">tolerate compromised members</a>, they can generally hope to retain the public trust. One reason for this assurance is that they are expected as a matter of professional duty to avoid conflicts of interest – personal and financial. The APA, however, has an enormous conflict in this case: it counts on millions of dollars in revenue from sales of the DSM volumes and it is under siege currently for perceived scientific and clinical weaknesses of the DSM-5 that is due to be released next year. Professional criticism is running so high that over 10,000 interested parties have signed a petition for the APA to reconsider planned changes. There is even talk of abandoning DSM-5 in favor of the ICD system (International Classification of Diseases), which is a WHO initiative. The APA doesn’t own psychiatric classification and diagnostic criteria. When the field allows the APA to take the initiative for revisions of the DSM, it is with the understanding that the work will be conducted in the public interest rather than in the commercial interest of the APA itself, which is said to derive over $5 million annually in profits from DSM sales. The public interest and the public trust are served by transparency and open discussion, not by contrived SLAPP threats. It is bad enough that the APA resorts to this legal artifice to stifle public discussion. When they do it through their lawyers and business entities rather than through their medical and scientific officers, they sink to a lower level yet. The parallels with corporate sleaze that we have discussed so often on this blog are obvious. For shame.

SELF INFLICTED DAMAGE

SELF INFLICTED DAMAGE The American Psychiatric Association (APA) is in the news again for bad public relations: worse than bad, actually – a...

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New York - Presbyterian Hospital Trustee Advocated Novel Cardiac Procedure - "Reach In, Rip Out Their Heart, and Eat It Before They Die"

The dominant theme of <a href="http://hcrenewal.blogspot.com/">Health Care Renewal</a> has been how problems with the leadership of health care organizations have lead to our current state of health care dysfunction.  We have discussed examples of <a href="http://hcrenewal.blogspot.com/search/label/ill-informed%20management">ill-informed,</a> <a href="http://hcrenewal.blogspot.com/search/label/mission-hostile%20management">mission-hostile</a> leadership rewarded with <a href="http://hcrenewal.blogspot.com/search/label/executive%20compensation">excess compensation</a>, exhibiting <a href="http://hcrenewal.blogspot.com/search/label/impunity">impunity</a> in the face of alleged misbehavior, and at times descending into <a href="http://hcrenewal.blogspot.com/search/label/health%20care%20corruption">corruption</a>.  The cause of these problems is doubtless multi factorial.  However, one possible cause is that rather than exercise stewardship and hold leadership accountable, those in charge of <a href="http://hcrenewal.blogspot.com/search/label/governance">governance</a> of health care organizations, that is, boards of directors or <a href="http://hcrenewal.blogspot.com/search/label/boards%20of%20trustees">trustees</a>, have instead infected the organizations with the amoral culture now dominant in much of the business world, especially <a href="http://hcrenewal.blogspot.com/search/label/finance">finance</a>.  We have discussed, most recently <a href="http://hcrenewal.blogspot.com/2011/12/they-think-we-are-imbeciles-and-they.html">here</a> and <a href="http://hcrenewal.blogspot.com/2011/10/health-cares-99-percenters.html">here</a>, how the <a href="http://hcrenewal.blogspot.com/search/label/boards%20of%20trustees">boards</a> of health care corporations often include heavy representation of leaders of finance, including many of those who seemed responsible for the global financial collapse, great recession, or whatever we will end up calling it.  I recently stumbled upon a particularly graphic example of the sort of predatory culture that now exists on the boards of health care organizations.  (More on how I did so later.)  Below is an embedded YouTube video of a speech made by a current <a href="http://nyp.org/about/board-trustees.html">Trustee of New York - Presbyterian Hospital</a> (who has been on the board since 2007).  He is Richard Fuld, the former CEO of Lehman Brothers, whose continuing role on the hospital board, despite his failed leadership of one of the financial firms whose bankruptcy ushered in the global financial collapse, we discussed first <a href="http://hcrenewal.blogspot.com/2008/09/failed-masters-of-universe-running.html">here</a>. <iframe allowfullscreen="" frameborder="0" height="315" src="http://www.youtube.com/embed/x93EHs627GI" width="560"></iframe> Just to underline it once more, Mr Fuld, referring to short sellers of his company's stock, said he "what I really want to do is I want to reach in, rip out their heart, and eat it before they die."  Can there be a more stark reminder of what has gone wrong with the governance of health care?  Can anyone watch this video and argue that Mr Fuld ought to be on the board of a hospital system?  Why is he still on the board in January, 2012, when this video was released in October, 2011? While I suspect not many other hospital system board members have been videographed displaying equally brutal sentiments, there are likely others with similarly barbaric tendencies. So, on a more positive note.... The boards of hospitals, hospital systems, medical schools, and their parent universities ought to be populated with people who take their stewardship roles seriously.  They ought to be people who understand, agree with, and support the organizations' mission, and their dedication to patient care and teaching.  They ought to understand what good leadership of health care organizations entail.  Needless to say, they ought to be of good character and above any ethical reproach.  In short, they ought to be the opposite of the sort of person displayed in the video above. It should now be obvious that grievous problems with the leadership and governance of health care organizations are principle causes of the dysfunction in our health care system.  True health care reform will require wholesale changes in health care leadership and governance. PS - In case the video above seems too short on context, see the one below: <iframe allowfullscreen="" frameborder="0" height="315" src="http://www.youtube.com/embed/GZCmWkQuyPc" width="420"></iframe>

New York - Presbyterian Hospital Trustee Advocated Novel Cardiac Procedure - "Reach In, Rip Out Their Heart, and Eat It Before They Die"

The dominant theme of Health Care Renewal has been how problems with the leadership of health care organizations have lead to our current s...

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They Think We are "Imbeciles," and They Run Health Care Organizations

Arrogance seems to fuel many of the problems with health care leadership that we discuss, particularly <a href="http://hcrenewal.blogspot.com/search/label/mission-hostile%20management">hostility to the mission</a>, often driven by self-interest; a sense of entitlement to <a href="http://hcrenewal.blogspot.com/search/label/executive%20compensation">lavish compensation</a> out of proportion to any measure of performance; and a lack of <a href="http://hcrenewal.blogspot.com/search/label/accountability">accountability</a> shading into <a href="http://hcrenewal.blogspot.com/search/label/impunity">impunity</a>.  Some recent stories hint at some of the origins of such arrogance.  The Occupy Wall Street movement drew attention to the plight of the poor and middle class, who had lost income, retirement benefits, jobs, houses, and access to health care while the richest, especially corporate executives, got richer.  The less fortunate's anger was not directed indiscriminately at the successful or the rich, but those who got wealthy by gaming the system, or flaunting the rules that lesser mortals had to obey.  Perhaps not surprisingly, some of those most vulnerable to such criticism have responded with contempt.  Anonymous or Indirect Defenses of the One Percent The initial defense of the plutocrats came from some of their political supporters, who denounced their "demonization" (see this <a href="http://www.washingtonpost.com/opinions/rich-people-demonized-for-flaunting-their-wealth-are-under-attack/2011/09/28/gIQAcJn4AL_story.html">opinion piece</a> by Barbara Ehrenreich in September, 2011) or decried the rise of "mob rule" (see <a href="http://www.nytimes.com/2011/10/10/opinion/panic-of-the-plutocrats.html">this</a> by Paul Krugman in October).  Then several articles documented the anonymous complaints of finance insiders about: <blockquote>a bunch of whiny people who are lazy and incompetent and have nothing to do with their time</blockquote>from a Reuters <a href="http://www.reuters.com/article/2011/10/11/us-usa-wallstreet-bankers-idUSTRE79A4LF20111011">article</a> in October. <blockquote>a ragtag group looking for sex, drugs and rock 'n' roll</blockquote>from a NY Times <a href="http://www.nytimes.com/2011/10/15/business/in-private-conversation-wall-street-is-more-critical-of-protesters.html">article</a> in October. The Plutocrats Strike Back However, increasingly those in the one percent are willing to be open. In late December a Bloomberg <a href="http://www.businessweek.com/news/2011-12-28/bankers-join-billionaires-to-debunk-imbecile-attack-on-top-1-.html">article</a> documented the sentiments of a number of finance and other corporate leaders. - Jamie Dimon, CEO of JP Morgan Chase, complained: <blockquote>Acting like everyone who's been successful is bad and because you're rich you're bad, I don't understand it.</blockquote> - Bernard Marcus, founder of Home Depot: <blockquote>Who gives a crap about some imbecile? Are you kidding me?</blockquote> - John A Allison IV, Chairman of BB&T: <blockquote>'Instead of an attack on the 1 percent, let’s call it an attack on the very productive,' Allison said. 'This attack is destructive.'</blockquote> - Stephen Schwarzman, CEO of the Blackstone Group: <blockquote>'You have to have skin in the game,' said Schwarzman, 64. 'I’m not saying how much people should do. But we should all be part of the system.'</blockquote> - John Paulson, President of hedge fund Paulson & Co: <blockquote>has also said the rich benefit society. 'The top 1 percent of New Yorkers pay over 40 percent of all income taxes,...'</blockquote> - Tom Galisano, founder of Paychex Inc: <blockquote>If I hear a politician use the term ‘paying your fair share’ one more time, I’m going to vomit</blockquote> - Ken Langone, founder of Home Depot: <blockquote>I am a fat cat, I’m not ashamed</blockquote> Considering how <a href="http://www.nytimes.com/2011/10/10/opinion/panic-of-the-plutocrats.html">Paul Krugman explained </a>the generation of the global financial collapse by <blockquote>people who got rich by peddling complex financial schemes that, far from delivering clear benefits to the American people, helped push us into a crisis whose aftereffects continue to blight the lives of tens of millions of their fellow citizens. Yet they have paid no price. Their institutions were bailed out by taxpayers, with few strings attached. They continue to benefit from explicit and implicit federal guarantees — basically, they’re still in a game of heads they win, tails taxpayers lose. And they benefit from tax loopholes that in many cases have people with multimillion-dollar incomes paying lower rates than middle-class families. </blockquote>Thus the responses by the very rich above only represent some or more arrogance. The Plutocrats as Health Care Leaders One wonders how much this arrogance carried over into health care. We have <a href="http://hcrenewal.blogspot.com/2011/10/health-cares-99-percenters.html">noted previously</a> how the leadership of finance has increasingly overlapped the leadership of health care, and how top executives increasingly seem to identify more with each other than with their employees, customers, or other stakeholders. Therefore, it should be no surprise that all but one of the group above also had or have leadership roles in health care organizations. - Jamie Dimon is on the <a href="http://www.med.nyu.edu/about-us/who-we-are/medical-center-leadership/trustees">board of trustees of the New York University Langone Medical Center</a>.  - Bernard Marcus formerly served as the chair of the <a href="http://www.cdcfoundation.org/who/board">board of the CDC Foundation</a>. - John A Allison IV is a member of the board of visitors of Wake Forest University Baptist Medical Center, per <a href="http://bbt.mediaroom.com/index.php?s=18&item=94">his BB&T Corp official biography</a>. - Stephen Schwarzman's Blackstone Group includes the Blackstone Healthcare Group, which invests in various health care corporations (as of 2010, Nycomed, Gerresheimer, Stiefel Laboratories, and Catalant per <a href="http://www.blackstone.com/cps/rde/xchg/bxcom/hs/news_pressrelease_6354.htm">this press release</a>), and all of whose members serve on one or more boards of directors of health care corporations (per the <a href="http://www.blackstone.com/cps/rde/xchg/bxcom/hs/news_pressrelease_6354.htm">press  release</a>, Arthur Higgins serves on the boards of Zimmer, Eco Labs, and Resverlogix Corp; Lodewijk J R de Vink serves on the <a href="http://www.roche.com/about_roche/management/board_of_directors/board_of_directors-devink.htm">board of Roche</a>; Doug Rogers serves on the <a href="http://www.codevax.com/n/who.html">boards of Codevax</a>, Charles River Laboratories, and Computerized Medical Systems.) - John Paulson is on the <a href="http://www.nyu.edu/about/leadership-university-administration/board-of-trustees.html">board of trustees of New York University</a>, - Kenneth G Langone, is vice chair again of the board of trustees of New York University, and chair of the board of trustees of the NYU Langone Medical Center. I submit that linking their sentiments above to their leadership roles in health care should be highly disconcerting.  Do we want people running medical centers who are proud to be "fat cats?"  Do we want people running medical centers who do not understand why people who have lost income, retirement funds, jobs or their homes might be upset?  Do we want people running health care corporations who do not think the poor and middle-class have any skin in the economic game?   Do we want people running health care foundations who think that those who complain about the current economic situation are "imbeciles?" Summary The problems of health care increasingly seem to be a part of the larger problems with the global political economy.  The problems we have been discussing that affect health care leadership seem to have come out of the culture of what now many are calling the larger plutocracy.  So it now seems that true health care reform will require a larger reform of the political economy.  However, we still 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.

They Think We are "Imbeciles," and They Run Health Care Organizations

Arrogance seems to fuel many of the problems with health care leadership that we discuss, particularly hostility to the mission , often driv...

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IT Malpractice? Yet Another "Glitch" Affecting Thousands of Patients. Of Course, As Always, Patient Care Was "Not Compromised."

At my Nov. 2011 post "<a href="http://hcrenewal.blogspot.com/2011/11/lifespan-rhode-island-yet-another.html">Lifespan (Rhode Island): Yet another health IT glitch affecting thousands - that, of course, caused no patient harm that they know of - yet</a>" I wrote: <blockquote>There's been yet another health IT "glitch" that, of course, caused no patients to be harmed. See other "glitches" <a href="http://hcrenewal.blogspot.com/2011/05/twelve-hour-health-it-glitch-at.html" style="font-weight: bold;">here</a>, <a href="http://hcrenewal.blogspot.com/2011/01/orderless-in-seattle-software-glitch.html" style="font-weight: bold;">here</a>, <a href="http://hcrenewal.blogspot.com/2010/03/will-it-take-luminosity-of-dozen.html" style="font-weight: bold;">here</a> and at other posts which can be found by searching this blog on the banal term 'glitch'.</blockquote><span class=" down" id="formatbar_CreateLink" onmousedown="CheckFormatting(event);FormatbarButton('richeditorframe', this, 8);ButtonMouseDown(this);" onmouseout="ButtonHoverOff(this);" onmouseover="ButtonHoverOn(this);" onmouseup="" style="display: block;" title="Link"> Add another case to the health IT glitch file, under the "do we feel lucky today?" patient risk category.<span class=" down" id="formatbar_CreateLink" onmousedown="CheckFormatting(event);FormatbarButton('richeditorframe', this, 8);ButtonMouseDown(this);" onmouseout="ButtonHoverOff(this);" onmouseover="ButtonHoverOn(this);" onmouseup="" style="display: block;" title="Link"> From the Pittsburgh Post-Gazette (I am quoted): <blockquote><a href="http://www.post-gazette.com/pg/11358/1199140-53-0.stm?cmpid=news.xml" style="font-weight: bold;">Computer outage at UPMC called 'rare'</a> Systemwide disruption potentially dangerous, expert warns Saturday, December 24, 2011 By Jonathan D. Silver, Pittsburgh Post-Gazette UPMC's electronic medical records system for inpatients went offline for more than 14 hours at nearly all its hospitals in the region, marking what the health system called a "rare" outage, but one that it claims did not harm patients.</blockquote> First, as my aforementioned Nov. 2011 post and its contained links point out, these events are not as "rare" as they should be. (The asteroid colliding with Earth that caused the extinction of the dinosaurs - now that's a "rare" event.) Second, as multiple posts on this blog have pointed out, the claims that "no patients were harmed" is both misleading and irrelevant: Such claims of 'massive EHR outage benevolence' are misleading, in that medical errors due to electronic outages might not appear for days or weeks after the outage, depending on what information was corrupted/lost/misindentified/or otherwise mishandled after it is 'backloaded' once the system is up. All it takes is one med lost to cause misery and death. (I can speak about that from unfortunate personal experience. Claims of 'massive EHR outage benevolence' are also irrelevant in that, even if there was no catastrophe directly coincident with the outage, their was greatly elevated risk. Sooner or later, such outages will maim and kill. <blockquote>The outage affected a system designed by Cerner Corp., a global electronic records company, and customized by UPMC that doctors and nurses rely on for communication about patient records, medical orders and prescriptions. It was unavailable from about 8:45 p.m. Thursday to 11 a.m. Friday at almost all of UPMC's hospitals except for Children's and UPMC Hamot in Erie, spokeswoman Wendy Zellner said. "This is rare. This kind of widespread, extensive downtime would be rare," Ms. Zellner said. Doctors and nurses continued to have access to patients' electronic records through backup systems, she said. They also had to resort to using old-fashioned paper records for documentation and orders. "These things happen. They have really well spelled-out procedures for what to do when something goes down," Ms. Zellner said. She acknowledged that doctors and nurses faced some challenges.</blockquote> Faced 'some challenges?' In other words, care was compromised by the outage and the 'challenges' were to avoid medical error (and, of course, to make sure billing was unaffected): <a href="http://www.thefreedictionary.com/compromised" style="font-style: italic;">Compromised</a> - <div class="sds-list" style="font-style: italic;">a. To expose or make liable to danger, suspicion, or disrepute</div><div class="sds-list" style="font-style: italic;">b. To reduce in quality, value, or degree; weaken or lower. </div>Thousands of patients were affected, again reinforcing my point about how IT can and does greatly amplify the risks of paper -- as in my Rhode Island post -- such as errors and confidentiality breaches. I cannot, for example, think of a single instance where thousands of paper records went unavailable simultaneously (unless, that is, someone lost the key to the Medical Records department), were made available to identity thieves en masse, or where thousands of medical orders were scrambled or truncated in a relatively short period of time as in Rhode Island. These amplified risks could wipe out any advantages of EHR's over paper in a microsecond. A partial list of facilities apparently affected in this latest episode of EHR mayhem, from <a href="http://www.upmc.com/HOSPITALSFACILITIES/HOSPITALS/Pages/default.aspx">this list</a>: <blockquote><ul><li><a href="http://www.upmc.com/HospitalsFacilities/Hospitals/Magee/Pages/Home.aspx" target="_blank" title="Visit the Magee-Womens Hospital of UPMC website in a new window.">Magee-Womens Hospital of UPMC</a> </li><li><a href="http://www.upmc.com/HospitalsFacilities/Hospitals/upmcbedfordmemorial/Pages/default.aspx" title="Use this link to visit the UPMC Bedford Memorial website.">UPMC Bedford Memorial</a> </li><li><a href="http://www.upmc.com/HospitalsFacilities/Hospitals/east/Pages/east.aspx" title="Visit the UPMC East website. ">UPMC East</a> </li><li><a href="http://www.upmc.com/HospitalsFacilities/Hospitals/horizon/Pages/default.aspx" title="Use this link to visit the UPMC Horizon website.">UPMC Horizon </a> </li><li><a href="http://www.upmc.com/HospitalsFacilities/Hospitals/mckeesport/Pages/default.aspx" title="Use this link to visit the UPMC McKeesport website.">UPMC McKeesport</a> </li><li><a href="http://www.upmc.com/HospitalsFacilities/Hospitals/Mercy/Pages/default.aspx" title="Use this link to visit the UPMC Mercy website.">UPMC Mercy</a> </li><li><a href="http://www.upmc.com/HospitalsFacilities/Hospitals/upmc-montefiore/Pages/default.aspx" title="Use this link to visit the UPMC Montefiore website.">UPMC Montefiore</a> </li><li><a href="http://www.upmc.com/HospitalsFacilities/Hospitals/Northwest" title="Use this link to visit the UPMC Northwest website.">UPMC Northwest</a> </li><li><a href="http://www.upmc.com/HospitalsFacilities/Hospitals/UPMCPassavant/Pages/passavant.aspx" title="Use this link to visit the UPMC Passavant website.">UPMC Passavant </a> </li><li><a href="http://www.upmc.com/HOSPITALSFACILITIES/HOSPITALS/PRESBYTERIAN/Pages/default.aspx" title="Use this link to visit the UPMC Presbyterian website.">UPMC Presbyterian</a> </li><li><a href="http://www.upmc.com/HospitalsFacilities/Hospitals/Shadyside/Pages/default.aspx" title="Use this link to visit the UPMC Shadyside website.">UPMC Shadyside</a> </li><li><a href="http://www.upmc.com/HospitalsFacilities/Hospitals/stmargaret/Pages/default.aspx" title="Use this link to visit the UPMC St. Margaret website.">UPMC St. Margaret</a> </li><li><a href="http://www.upmc.com/HospitalsFacilities/Hospitals/wpic/Pages/default.aspx" title="Use this link to visit the Western Psychiatric Institute and Clinic website.">Western Psychiatric Institute and Clinic of UPMC</a></li></ul></blockquote> That accounts for several thousand active patients, I am sure. (12/28 Addendum: Bed counts of PA hospitals are <a href="http://www.ahd.com/states/hospital_PA.html">here</a>. Searching on "University of Pittsburgh Medical Center", it can be seen that thousands of beds were indeed involved.) <blockquote>"Whenever people aren't working in their native system and workflow I have to believe that is more cumbersome for the clinicians, but these folks are well-trained in what to do when these things happen."</blockquote> This seems at best an insensitive and perhaps even inhumane bit of P.R. More "cumbersome" for the clinicians? What about the poor patients? How would Ms. Zellner feel, I wonder, if it were her mother, child or significant other on the Operating Room table or having an acute MI when the EHR/CPOE systems went down? <blockquote>Ms. Zellner said UPMC's public relations staff was unaware of the outage until contacted by a reporter.</blockquote> It appears P.R. is not very high on the list for receiving information when a crisis arises. I may have known of the outage before they did. <blockquote>The outage was caused by a "bug" or glitch in software designed by a vendor affiliated with Cerner, Ms. Zellner said. She refused to identify the company. "We're not trying to point fingers at different vendors. It's a database bug, that's all I can tell you."</blockquote> (That is, it's not our fault, it's the fault of the database vendor. Hospitals, I regret to inform you - you are responsible for unapproved medical devices used in your facilities, no matter what the source.) And there's that word "glitch" again, accompanied by the equally banal "bug." <div style="text-align: center;"><a href="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEi_I5WmFxtz7xMx_bhF3SbRrbCCxpaC8XWJz9sXOCfM8T3XN2iIIW7-qLzHhpbK7TTB5cgMeauukXNEObD-6khVlq4EYm098U-ifHnCkwDhmT8DmCkdz0r9NrBbItcIjfxY8fcFvlMspf_p/s1600/happybug.bmp"><img alt="" border="0" id="BLOGGER_PHOTO_ID_5691264547995216018" src="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEi_I5WmFxtz7xMx_bhF3SbRrbCCxpaC8XWJz9sXOCfM8T3XN2iIIW7-qLzHhpbK7TTB5cgMeauukXNEObD-6khVlq4EYm098U-ifHnCkwDhmT8DmCkdz0r9NrBbItcIjfxY8fcFvlMspf_p/s320/happybug.bmp" style="cursor: pointer; display: block; height: 94px; margin: 0px auto 10px; text-align: center; width: 76px;" /></a></div><div style="text-align: center;">It's just a "bug." Cute little critter!</div> Me again in the Post-Gazette: <blockquote>Scot M. Silverstein, a doctor and assistant professor Healthcare Informatics at Drexel University in Philadelphia, disagreed with the use of the terms "bug" and "glitch." "What occurred here was a disruptive, potentially dangerous major malfunction of a life-critical enterprise medical device," he said.</blockquote> Somehow, when a clinician makes a mistake, the terms "bug" and "glitch" are never used. In fact, when clinicians fail to meet accepted professional standards of healthcare practice, it is called "malpractice." I think we can all agree that a major near-full-day outage of an enterprise EHR affecting multiple hospitals and thousands of patients does not meet accepted professionals standard of life-critical computing practice. Yet, all this merits is the word "glitch." It seems to me that if patients are harmed by, in reality, what is (on its face) IT malpractice during such events, not only the clinicians affected should be held liable. <blockquote> Ms. Zellner said the problem was not a "crash" of the system because there were alternate methods used to cope that prevented patient care from being compromised.</blockquote> The usual refrain. Let me repeat my definition of "compromised:" <a href="http://www.thefreedictionary.com/compromised" style="font-style: italic;">Compromised</a> - <div class="sds-list" style="font-style: italic;">a. To expose or make liable to danger, suspicion, or disrepute</div><div class="sds-list" style="font-style: italic;">b. To reduce in quality, value, or degree; weaken or lower.</div> A simple question - if extended EHR outages like this never seem to "compromise" care, then why not eliminate health IT entirely and spend the hundreds of millions saved on patient care? <blockquote>"This is not a crash of Cerner either," Ms. Zellner said. "I think a crash is, 'Oh my God, the sky is falling,' nobody can get anything."</blockquote> I leave it to the readers to ascertain the computer expertise levels and reasonableness of what Ms. Zellner thinks a "crash" is. <blockquote>Technicians from UPMC, Cerner and the third company [the 'mystery' database company? - ed.] worked together on-site to identify and fix the problem. Ms. Zellner said she did not know why it took 14 hours to fix and the underlying cause was still unclear. "They know what the problem is and I believe it's been fixed, but we really don't know what triggered it," Ms. Zellner said. "I think the next step would be some actual software upgrades."</blockquote> They "don't know what triggered the 'problem'" - is a proper translation that they have no idea what went wrong? In fact, regarding another Cerner EHR system which was extensively studied (see "A Study of an Enterprise Information System" <a href="http://sydney.edu.au/engineering/it/%7Ehitru/index.php?option=com_content&task=view&id=91&Itemid=146">at this link</a>), Dr. Jon Patrick came to the conclusion that one of the sources of catastrophic failures is poor software engineering that has made the behavior of the studied system "non-deterministic." Further, software upgrades are not protected from incremental changes made by maintenance and customization staff, and may introduce even more instability. A software upgrade without clearly understanding "what triggered the problem" is simply asking for more trouble. (My bet, however, is that they attempt it anyway.) <blockquote>A Cerner representative could not be reached for comment.</blockquote> What's to say? How about this: <blockquote>Dr. Silverstein said based on what he was told about the computer outage, it means that hospital medical staff would have been unable to update patient charts and probably would not have been able to issue any orders through the system during the time it was off line. He also questioned how up-to-date the hospital's redundant records were.</blockquote> Repeating UMPC's statement from the article that appeared after I gave my quotes to the reporters: "Doctors and nurses continued to have access to patients' electronic records through backup systems, [the UPMC spokesperson] said. They also had to resort to using old-fashioned paper records for documentation and orders." My stated fears of disruption and increased risk due to compromised care seem well-grounded. <blockquote> In May, Allegheny General Hospital had to shut its electronic medical records computer system down because of problems with the vendor's hardware. The hospital used backup procedures to continue care for patients, including using paper orders and record-keeping.</blockquote> Wait ... I thought I'd heard these events were "rare." Two in the same city within six months? --------------------------- Truth be told: The primary rule in computing is: <blockquote> Either you are in control of your information systems, or they are in control of you. </blockquote> Clearly the latter was the case here. The following questions arise: <ul><li>Was the software containing the "bug" properly vetted before being used on live patients? This is not just the vendor's obligation.</li><li>If it was not vetted properly, why not? </li><li>Was it an "upgrade" or patch? (If so, the same vetting rules apply.)</li></ul> Further, the soft-selling of these incidents must end. The use of terms such as "bug" and "glitch" must also end. What occurred here, echoing my newspaper quote, was a disruptive, potentially catastrophic major malfunction of a life-critical enterprise medical device. System-wide EHR crashes are not merely ‘glitches’ or ‘bugs.’ They need to be considered, as in medicine itself, as 'never events.' From <a href="http://psnet.ahrq.gov/primer.aspx?primerID=3">AHRQ</a>: <blockquote> The term "Never Event" was first introduced in 2001 by Ken Kizer, MD, former CEO of the National Quality Forum (NQF), in reference to particularly shocking medical errors (such as wrong-site surgery) that should never occur. Over time, the list has been expanded to signify adverse events that are unambiguous (clearly identifiable and measurable), serious (resulting in death or significant disability), and usually preventable.</blockquote> Further, re: "patient care was never compromised." How do they know that? In fact, this is 'spin' and word games on its face. By definition, if CPOE and chart updating was unavailable, patient care was compromised, where "compromised" means "increased levels of risk for error were created, requiring workarounds." Further, as mentioned earlier, harms might not show up for some time. Lost orders, corrupted data, errors of omission or commission transcribing backup paper records into the computer ("backloading"), etc. can take their toll later. Post-outage vigilance is essential, putting even more stress on clinicians that increases likelihood of further error and that they certainly do not need. Clinicians are stressed enough already. Finally: IT personnel have not only deliberately inserted themselves into clinical affairs (e.g, via the HITECH Act of 2009), they have also done so with a stunning arrogance and unproven braggadocio about their systems "<a href="http://hcrenewal.blogspot.com/2010/01/yet-another-service-profession-to-be.html">revolutionizing</a>" medicine (whatever that means). Indeed, they need to accept the medical responsibility and obligations this territorial intrusion entails. On its face, this massive outage was the result of issues that did not meet accepted professional standards of IT practice for life-critical environments. <a href="http://en.wikipedia.org/wiki/Res_ipsa_loquitur">Res ipsa loquitur</a>. Something was not vetted properly, there was a lack of redundancy, the IT personnel were NOT in control of their systems. Just as when physicians don't provide care that meets accepted professional standards of healthcare, this incident and others like it are, by definition, a result of IT malpractice. If patients are harmed, IT personnel and their management (often non-IT C-level officers) involved in this system need to be held accountable. If they can't take the clinical heat (as clinicians do daily since the time they enter medical or nursing school), then they need to get out of the clinical kitchen. -- SS Note: see <a href="http://histalk2.com/2011/12/27/news-122811/">this take</a> on these matters at the HIStalk blog: <blockquote>UPMC’s Cerner systems <a href="http://www.post-gazette.com/pg/11358/1199140-53-0.stm" target="_blank">go down</a> for 14 hours at most campuses last Thursday and Friday, forcing them to go back to paper. The PR person blamed “a database bug,” which makes the <a href="http://www.oracle.com/us/corporate/press/422644">above Oracle press release</a> from this past summer a particularly fun read. Cerner and UPMC have an atypical vendor-customer relationship since they’ve invested big money together in innovation projects and UPMC runs a Cerner implementation business overseas. </blockquote> Now we know who the unnamed "mystery database vendor" is... -- SS Dec. 29, 2011 Addendum: Was UPMC acting as a "proving ground" for some Oracle-Cerner-UPMC experimental health IT technology that resulted in the crash? The claim of being an IT "proving ground" has been made in the past: <blockquote> Pittsburgh Tribune May 2, 2006<a href="http://www.pittsburghlive.com/x/pittsburghtrib/news/s_449506.html" style="font-weight: bold;">UPMC partners with technology provider</a> The University of Pittsburgh Medical Center is taking another step in a quest to commercialize new medical technology. UPMC on Monday signed a three-year deal with health care information technology provider Cerner Corp. to develop and market medicine-related technological advances. Both parties will contribute $10 million in cash, services and intellectual property to the effort. The deal is a smaller version of an April 2005 deal between UPMC and information technology behemoth IBM. As is the case in the IBM deal, UPMC will serve as a built-in proving ground for jointly developed technologies and products, with Cerner marketing the products and UPMC awarded a share of profits.</blockquote> As I wrote at <a href="http://hcrenewal.blogspot.com/2009/04/upmc-pioneers-in-health-it-or-pioneers.html">"Proving Ground for IT Tests On Children: Pioneers in Health IT, or Pioneers in Ignoring the Past?"</a>: "A hospital and patients are not a learning lab for HIT vendors. The appropriate "proving ground" for new medical technology is the controlled clinical trial where participants (in this case, patients and healthcare professionals alike) have freedom of choice whether or not to participate, and a chance to give (or deny) consent after being fully informed of potential risk."This is a fundamental human rights issue. -- SS

IT Malpractice? Yet Another "Glitch" Affecting Thousands of Patients. Of Course, As Always, Patient Care Was "Not Compromised."

At my Nov. 2011 post " Lifespan (Rhode Island): Yet another health IT glitch affecting thousands - that, of course, caused no patie...

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Legal Settlements Have Become So Common that They are Barely News

<a href="http://hcrenewal.blogspot.com/search/label/legal%20settlements">Legal settlements</a> by big health care organizations have become so common that those of less than blockbuster size barely seem to qualify as news.  They have become "dog bites man" stories.  For example, the following stories barely got noticed in the media (presented chronologically). Novartis Settles Price Misrepresentation Suit for $150 Million This story was mentioned as an aside in a a <a href="http://www.businessweek.com/news/2011-09-15/watson-sandoz-pay-145-million-to-settle-drug-price-case.html">news story</a> covering a settlement by Watson Pharmaceuticals in September.  In slightly more detail, it has only appeared <a href="http://www.pharmalot.com/2011/11/novartis-pays-150m-to-settle-pricing-fraud">in PharmaLot</a> in November.  In a very small nutshell, <blockquote>the Sandoz unit of Novartis earlier this week agreed to pay $150 million to settle lawsuits filed by the states of Florida and California, as well as a whistleblower, to settle charges that it deliberately misreported pricing information in order to hike reimbursements from Medicaid.</blockquote> By the way, per <a href="http://freepdfhosting.com/0885cf397f.pdf">the settlement document</a>, the allegations were that Novartis' subsidiary knowingly maintained, set or reported "false, fraudulent, and/or inflated Reported Prices," yet, as is typical of nearly all settlements, the settlement "shall not constitute or be construed as an admission of fault, liability, or unlawful conduct." Roche Settles Off-Label Promotion, Physician Kickback Suit for $20 Million This story was reported briefly in some blogs, including again PharmaLot, and in the most detail <a href="http://www.bizjournals.com/sanfrancisco/blog/biotech/2011/12/genentech-roche-rituxan-whistleblower.html">in the San Francisco Business Times</a>. The basics of it were: <blockquote>Genentech Inc. will pay $20 million to settle a whistleblower lawsuit around off-label marketing of the cancer-fighting drug Rituxan.</blockquote> It only took eight years since a whistle-blower raised the issue: <blockquote>John Underwood, ... was a senior manager of sales development from the start of Genentech’s oncology franchise in 1997. When Underwood filed the suit in July 2003 in U.S. District Court for the Eastern District of Pennsylvania, he was a senior hospital systems specialist for Genentech.</blockquote> This suit is actually of particular interest because it was not just about off-label promotion, <blockquote>Genentech, the suit claimed, retained doctors to act as independent speakers on behalf of Rituxan and its off-label uses, paid kickbacks to doctors that were disguised as consulting payments, 'exerted significant pressure' on sales reps to increase off-label uses of Rituxan, and devised and conducted 'selling skills workshops' for sales reps devoted to non-label uses, What’s more, the suit claimed, Genentech invited doctors to attend “medical education seminars” at 'luxurious locations' and gave financial incentives to sales reps to get doctors who sold the most Rituxan to attend the events.</blockquote> These were serious allegations, involving allegedly direct efforts by the company to subvert physicians' ethics by tying their decisions for individual patients to payments for prescribing specific products whatever the benefits and risks of those products for those patients.  The allegations suggested that "consulting payments" to physicians may be nothing more than disguised bribes, and that the companies making these payments may be quite conscious of this.  Nonetheless, as usual, <blockquote>Genentech, the South San Francisco-based U.S. subsidiary of Swiss drug giant Roche, did not admit wrongdoing....</blockquote> So, as in the famous recent Citigroup case (see <a href="http://hcrenewal.blogspot.com/2011/11/will-citigroup-ruling-challenge-health.html">this post</a>), the settlement obfuscates the crucial question, did the corporation involved commit illegal acts? It seems likely that what they did was in some sense unethical, since they were willing to pay millions not make the matter go away. By the way, one member of the Executive Committee of Genentech at the time these events were allegedly occurring is now the <a href="http://ucsfchancellor.ucsf.edu/leadership/susan-desmond-hellmann-md-mph">Chancellor of the University of California - San Francisco</a> (See our post <a href="http://hcrenewal.blogspot.com/2009/05/bio-tech-u.html">here</a>). Maybe concerned students or faculty might ask her what really went on. CVS Caremark Settles Fraud Suit for about $20 Million As <a href="http://latimesblogs.latimes.com/money_co/2011/12/cvs-caremark-to-pay-20m-to-three-states-over-fraud-allegations.html">reported</a> briefly in the Los Angeles Times, <blockquote>Pharmacy and prescription drug management company CVS Caremark Corp. has agreed to pay nearly $20 million to settle three lawsuits involving allegations that the company defrauded pension systems in three states, including California’s giant pension fund, attorneys said. The whistleblower lawsuits, filed by two former CVS Caremark pharmacists, accused the company of reselling returned drugs, changing prescription orders to make them more expensive and submitting false reports about how long it took to fill prescriptions.</blockquote> Not the least bit surprisingly, the company did not admit liability in the settlement, and had no comment for the Times. Ho, hum, another big company paying millions to make allegations of fraud go away... nothing to see here, so we will just move on. Merck Settles Fraud Suit for $24 Million This story was picked up by AP, so a very brief version of it did appear in a variety of locations. A longer version was <a href="http://bostonglobe.com/business/2011/12/21/merck-pay-overcharging-case/05zJqmztpJGuD3elBs0HkM/story.html">published</a> by the Boston Globe, At this point, it should be no surprise that it took a long time to get to this settlement, eight years in fact, just as in the case above, <blockquote>Merck & Co. has agreed to pay $24 million to the state Medicaid program to settle long-running civil charges that it charged too much for some drugs, in the largest single-case Medicaid fraud settlement in Massachusetts history. The agreement, unveiled yesterday by Attorney General Martha Coakley’s office, closes out a 2003 lawsuit....</blockquote> Again, the allegations were of fraud, <blockquote>Coakley said her office’s Medicaid fraud division wanted to hold accountable drug companies that defraud taxpayers. </blockquote> Again, "hold accountable" did not translate into establish the allegations as true, <blockquote>Ron Rogers, a spokesman at Merck corporate headquarters, said the drug company did not admit liability or wrongdoing in the settlement. He said Merck agreed to resolve the claims to put the matter behind it.</blockquote>Nothing more to see here, so we will move on again. Summary Every month, it seems that<a href="http://hcrenewal.blogspot.com/search/label/legal%20settlements"> more settlements</a> are announced of cases alleging all sorts of wrongdoing by major health care organizations. Very often, the allegations are of wrongdoing that appears serious to the uninitiated. For example, most of the above cases involved allegations of fraud, and one involved allegations of kickbacks, that is, bribes to doctors. Yet, in every one of these cases - - The monetary penalties were barely more than pocket change for the corporations involved. - The payments were made by the organization as a whole, and hence would disadvantage many people who were not involved in and did not benefit from the specific actions alleged. Such de facto victims of the settlement included company shareholders, employees, and probably patients (who may have paid prices raised to pay for settlements), and the public (who may have indirectly paid these higher prices through insurance premiums or taxes.) - The organization did not have to admit any facts, leaving the record foggy, and clouding the chances for any people who might have been hurt by the actions to take legal action. - No people who actually authorized, directed, or implemented the apparent bad behavior suffered any negative consequences. Thus, these settlements, like many others we have discussed, did not appear to be any major deterrent of future bad behavior. These settlements do provide a public, if largely ignored, record that suggests how a miasma of sleazy behavior, if not outright corruption has settled over health care. These settlements do provide the context for many pithy questions that could be asked of health care organizational leaders, if anyone dared to do so. The settlements do suggest a need for wholesale, real health care reform that would make health care leaders accountable for what their organizations do, particularly when these organizations misbehave.

Legal Settlements Have Become So Common that They are Barely News

Legal settlements by big health care organizations have become so common that those of less than blockbuster size barely seem to qualify as...

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