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Harvard Psychiatry Fails Again

HARVARD PSYCHIATRY FAILS AGAIN About a year ago I remarked upon the ethical tone deafness that characterizes Harvard psychiatry. It is bad enough that Harvard-MGH is the home of Joseph Biederman, MD, with whom Senator Grassley had so much fun a while back. Biederman is still <a href="http://www.margaretsoltan.com/?p=34605">in the news</a>. It is also the home of Andrew Nierenberg, MD, who was rash enough to take on <a href="http://www.nybooks.com/articles/archives/2011/jun/23/epidemic-mental-illness-why/?pagination=false">Marcia Angell</a> in the New York Review over her well founded criticisms of the hyping and misuse of psychiatric drugs. In <a href="http://www.nybooks.com/articles/archives/2011/aug/18/illusions-psychiatry-exchange/">response</a>, Dr. Angell handed Dr. Nierenberg his head. Biederman and Nierenberg are not the only ones. When I <a href="http://hcrenewal.blogspot.com/2010/12/impeachment-its-about-institution-not.html">called</a> one of the senior Harvard professors, Carl Salzman, MD, to task for signing up a pair of compromised key opinion leaders as speakers in his annual Psychopharmacology Master Class last spring, I hoped the ensuing negative publicity would persuade him to go in a different direction next time. No such luck! Today I saw the <a href="http://cme.hms.harvard.edu/index.asp?SECTION=CLASSES&ID=03224280&SO=N">flyer</a> for the 2012 Harvard Psychopharmacology Master Class. The list of speakers is virtually unchanged from a year ago. There is Charles Nemeroff. There is Alan Schatzberg. Both were outed by Senator Grassley’s investigation in 2008, and both were subjected to major administrative sanctions, by Emory University and by Stanford University. Other people now occupy the departmental leadership chairs they held in 2008. There also is a group of other <a href="http://cme.hms.harvard.edu/index.asp?SECTION=CLASSES&ID=03224280&SO=N">key opinion leaders</a> who appear content to endure the taint of sharing the podium with the compromised Nemeroff and the compromised Schatzberg. What are they thinking? For that matter, what is the course director Carl Salzman thinking? A year back he said Nemeroff and Schatzberg would give great talks and that he would ensure they were objective and impartial. That’s not the point. The point is that they brought dishonor on our field, and for Harvard Medical School to give them this platform amounts to compartmentalizing information in service of their public rehabilitation. To repeat what I said a year ago, Adolph Hitler also gave a lot of speeches that received rave reviews, and compartmentalized information was widespread in the nation of Germany between 1928 and 1945. The best one can say about the upcoming course is that Biederman and Nierenberg are not on the program. The Augean stables of psychiatry, at Harvard and nationwide, will not be flushed clean by the Carl Salzmans of our field, quibbling over legal technicalities while failing to see the ethical elephant in the living room. For how long will the grownups at Harvard Medical School allow this farce to continue?

Harvard Psychiatry Fails Again

HARVARD PSYCHIATRY FAILS AGAIN About a year ago I remarked upon the ethical tone deafness that characterizes Harvard psychiatry. It is bad e...

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EHR Lowers Costs By 33% ... Oh ... Wait A Minute ... We Retract That Statement

There's this: <blockquote> <a href="http://www.beckershospitalreview.com/healthcare-information-technology/blue-cross-blue-shield-of-ri-pilot-lowered-monthly-costs-by-up-to-33-through-ehrs.html">Blue Cross Blue Shield of RI Pilot Lowered Monthly Costs By Up to 33% Through EHRs</a> December 13, 2011 Becker's Hospital Review.com Sabrina Rodak Health plan members that received care from physician practices using electronic health records had an average of 17-33 percent lower monthly healthcare costs compared to members receiving care at non-EHR physician practices, according to a news release by Blue Cross & Blue Shield of Rhode Island. BCBSRI conducted a three-year pilot program that partially funded 79 primary care physicians to purchase and use EHRs. </blockquote> Then, there's this: <a href="http://www.fierceemr.com/story/blue-cross-backtracks-claim-ehrs-lower-care-costs/2011-12-22"></a><blockquote><a href="http://www.fierceemr.com/story/blue-cross-backtracks-claim-ehrs-lower-care-costs/2011-12-22">Blue Cross backtracks on claim that EHRs lower care costs</a> December 22, 2011 FierceEMR.com Dan Bowman A week after reporting that use of electronic health records <a href="http://www.beckershospitalreview.com/healthcare-information-technology/blue-cross-blue-shield-of-ri-pilot-lowered-monthly-costs-by-up-to-33-through-ehrs.html" target="_blank">lowered the cost of care for its customers</a> between 17 and 33 percent, Blue Cross Blue Shield of Rhode Island has backtracked on those claims. In an email sent to FierceEMR, BCBS/RI says that while the program significantly improved healthcare quality, its cost data had not been risk adjusted and did not include costs related to infrastructure spending. "At this time we are unable to accurately ascertain the cost implications of the pilot and are retracting the news release," the email reads. BCBSRI updated its announcement, which can be found <a href="http://www.fiercehealthit.com/press-releases/blue-cross-blue-shield-rhode-island-electronic-health-record-program" target="_blank">here</a>. </blockquote> I note the following: <ul><li>Healthcare organizations, HIT pundits and vendors seem happy to promote EHR's as saving a great deal of money. I do not believe they ever will. (I have company, such as at <a href="http://hcrenewal.blogspot.com/2009/06/wharton-on-healthcare-it-can-i-go-home.html">Wharton</a>.)</li></ul><ul><li>One can only wonder what led to the retraction of a press release based on a curbstone data analysis, as cited above. Internal dissent, perhaps?</li></ul><ul><li>Healthcare IT, as in this pilot study, can improve healthcare quality metrics (outcomes is another matter as yet undecided as illustrated by <a href="http://hcrenewal.blogspot.com/2011/02/updated-reading-list-on-health-it.html">this reading list</a>) - but only if done well, a remarkably complex undertaking. That undertaking starts at conception and design, to production, to implementation, to customization, to maintenance of software and hardware during the system lifecycle. See <a href="http://www.nlm.nih.gov/pubs/reports/comptech_prepub.pdf">this report</a> by the U.S. National Research Council.</li></ul><ul><li>When healthcare IT is done poorly, it will neither reduce costs, nor improve outcomes, and will increase risk to patients.</li></ul><ul><li>The current <a href="http://www.ischool.drexel.edu/faculty/ssilverstein/cases/?loc=cases&sloc=ecosystem">ecosystem of commercial health IT</a> and its lack of true regulatory framework for these experimental devices can be counted upon to "do health IT poorly." </li></ul>-- SS

EHR Lowers Costs By 33% ... Oh ... Wait A Minute ... We Retract That Statement

There's this: Blue Cross Blue Shield of RI Pilot Lowered Monthly Costs By Up to 33% Through EHRs December 13, 2011 Becker's Hospital...

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"Barbarians at the Gate" - Making Private Equity Less Private, and Understanding Its Effects on Health Care

One good byproduct of the tumultuous everlasting 2012 campaign for the US presidency has been to shed light on a number of political and economic issues that had previously been ignored, especially those relating to the global financial crisis or great recession.  In turn, many of these issues may be relevant to our understanding of our ongoing health care dysfunction.  The latest issue to achieve prominence was the nature of private equity firms.  Current presidential contender Mitt Romney used to work for Bain Capital, a private equity group.  As we discussed <a href="http://hcrenewal.blogspot.com/2012/01/us-presidential-candidates-financial.html">here</a>, Bain Capital owned a variety of companies, including some important health care corporations.  More importantly, attacks on Mr Romney's record at Bain by other candidates have lead to a broader discussion of the nature of private equity.  This discussion is very relevant to health care, since private equity firms have taken over a number of important health care corporations, and more recently, have begun to take over formerly non-profit health care organizations. Therefore, we will summarize what has become known about private equity, and then consider its implications for health care. Understanding Private Equity as Re-Branded Leveraged Buy-Out Firms - Private Equity Firms are Just Re-Branded Leveraged Buyout Firms The first good statement to this effect I found was by Merrill Goozner in the Fiscal Times(1): <blockquote>Private equity is actually a misnomer, since the modus operandi of those investors is no different than the leveraged buyout firms that pioneered junk-bond financing in the 1980s. </blockquote> As reported by the Los Angeles Times(2): <blockquote>'Being known as a leveraged-buyout-deal shop wasn't the most attractive label out there,' said Colin Blaydon, director of the Center for Private Equity and Entrepreneurship at Dartmouth's Tuck School of Business. 'Private equity has a much nicer ring to it.'</blockquote> In fact, according to Forbes columnist Robert Lenzer,(3) the famed investor Warren Buffet called this re-branding <blockquote>'Orwellian': Buffett wrote that 'private equity' is a 'name that turns facts upside-down: A purchase of a business by these firms almost invariably results in dramatic reductions in the equity portion of the acquiree’s capital structure compared to that previously existing.'</blockquote> I must admit I always thought private equity firms simply collected large amounts of capital from investors, then used the pooled capital to buy out troubled firms. I assumed that because these investors therefore had a large personal stake in these firms, they would want to increase at least their financial value. I also thought that leveraged buy-out firms ceased to exist after all the bad press they got in the 1980s. It turns out I was wrong on all counts. Probably, a lot of other peoples' beliefs about private equity were similarly wrong. Once the equation of private equity and leveraged buyout firms is made, understanding what they do and its implications are easier. - Leveraging the Buy-Out The modus operandi of leveraged buyout firms is to make their purchases of troubled corporations mainly with borrowed money. As Merrill Goozner put it(1), <blockquote>Private equity firms generally finance anywhere from 60 to 90 percent of their purchases with borrowed cash. </blockquote> Note that, <blockquote>Interest payments on those debts are treated just like any other expense, and are therefore deductible from earnings.</blockquote> - Then Leveraging the Acquired Company If this leveraging were the only leveraging done in a leveraged buy-out, the implications might not be that big, except for the acquiring firm. After all, when the leveraged buy-out firm borrows the money, it then becomes obligated to pay it back. However, then comes the tricks. One important trick was described in the following example by economist Dean Baker on the Beat the Press blog(4), <blockquote>To take a simple example, suppose a public company (let's call it Gingrich Inc.), has $1 billion a year in profits. If Gingrich Inc. paid taxes at the full 35 percent rate (fat chance), it would have $650 million [thanks Robert] a year to either keep as retained earnings or to pay out as dividends to its shareholders. Now suppose that a PE company (we'll call it Romney Capital) steps in. The current price to earnings ratio in the stock market is around 14, so Gingrich Inc. would have a pre-takeover market value of approximately $9.2 billion (14*$650 million). Romney Capital then arranges for Gingrich Inc. to borrow $6 billion which it pays out as a dividend to itself. This means that the Romney Capital has just gotten back almost two-thirds of its investment.</blockquote> A somewhat less vivid description of the process appeared in a post by Robert K Lifton on the Huffington Post(5): <blockquote>Most often, in order to increase the return on capital invested by the fund, the fund will borrow a significant portion of the purchase price of the business. And sometimes, if it can, the fund will take back as a distribution immediately upon closing the purchase of the business, a portion of its investment in the purchase price, reducing its own investment and enhancing its return on the investment left in the business. This distribution may come from the company's existing cashable assets or from money that the company is caused to borrow.</blockquote> Thus, it appears that while the leveraged buy-out (or private equity) firm borrowed money to finance the purchase of a company, it can almost immediately get out of its obligation to pay off that loan, by making the acquired company its own loan, and using proceeds from that to end the LBO firm's debt. The leverage, and the obligation to pay back a debt has almost magically been transferred from the LBO or private equity firm to the acquired company. That has big implications, as Lifton wrote(5): <blockquote>This additional leverage also creates additional risk; if things don't go right the business will not be able to pay the carrying costs of the debt, the lender will take over the business and the fund will lose its investment. Sometimes, that results in the acquired company placed in bankruptcy proceedings either to liquidate its assets to pay off the debt or to restructure, a process Bain also experienced. </blockquote> - Selling Assets to Further Reduce the Private Equity Firm's Debt LBO firms have another trick up their collective sleeves. As Dean Baker continued his example(4), <blockquote>Now suppose that the Romney Capital arranges to sell off some of Gingrich Inc.'s assets, such as real estate or a highly profitable subsidiary, and then uses the proceeds to make a payment to the Romney Capital rather than leaving the money under the control of Gingrich Inc. Such sales may allow Romney Capital to recoup the rest of its investment and possibly more.</blockquote> Of course, the result is <blockquote>Gingrich Inc. is then left as a highly indebted company with few assets. In this story, Romney Capital may have earned a substantial profit on a limited investment (it recouped most of its money almost immediately when it loaded Gingrich Inc. with debt), without doing anything to improve the operation of Gingrich Inc. If Gingrich Inc. manages to stay in business and generate profits, then this will increase the return. Romney Capital may be able to resell the company and treat the whole sale price as profit. On the other hand, if Gingrich Inc. goes bankrupt, this will primarily be a problem for creditors, since Romney Capital has already gotten its investment back. In effect, Romney Capital might have secured large gains entirely by financial engineering, while creating no value whatsoever.</blockquote> Let me underscore that. The LBO model (now also the private equity model) enables the acquiring LBO firm to avoid any losses, by shifting all the risk and obligations to the acquired firms. This puts these firms at considerable jeopardy. - Tactics to Prepare Acquired Firms for Sale Of course, LBO/ private equity firms want to do more than not lose money. To make real money, they must be able to sell off the firms they acquire. To do so, they must make these firms, or their components, seem attractive, at least in the short term. To do this, they employ a standard set of tactics out of the generic management playbook. So, per the LA Times(2), <blockquote>layoffs are part of the playbook that elite investment firms use to squeeze cash out of struggling companies. </blockquote> Also, per Lifton(5), <blockquote>To increase the profits of the acquired company, the fund may reduce the number of employees, reduce pay levels or curtail work time.</blockquote> In addition, per Josh Barro writing for the Forbe blog(6), other tactics can include <blockquote>downsizing, increased automation, offshoring, and the like. </blockquote> - The Private Equity/ Leveraged Buy-Out Version of the Anechoic Effect It is striking that while Mitt Romney worked at Bain Capital in the last century, and private equity has been around, if not growing, since then, the current presidential campaign seems to be the first occasion which prompted any real public discussion about the nature of private equity, and its significance for the larger political economy. Thus private equity/ LBO seem to have been anechoic for a very long time (like much about how our current health care system operates seems to be <a href="http://hcrenewal.blogspot.com/search/label/anechoic%20effect">anechoic</a>.) This version of the anechoic effect seems to have been deliberately created by the private equity/ LBO firms. A Washington Post commentary(7) quoted Mitt Romney, <blockquote>You know I think it's fine to talk about those things in quiet rooms,...</blockquote> As a New York Times story(8) put it, these firms are lead by <blockquote>a group of Wall Street executives who prefer to operate out of the spotlight</blockquote> A story in Politico(9) called private equity/ leveraged buy-out firms <blockquote>one of the most secretive redoubts of the American economy</blockquote> The article went on to suggest that these firms may well have something to hide: <blockquote>Josh Kosman, author of 'The Buyout of America: How Private Equity Is Destroying Jobs and Killing the American Economy.' [said] 'Most private equity firms are because once you look behind the numbers, there is much they don’t want you to see.'</blockquote> Furthermore, <blockquote>Private equity companies often tend to have confidentiality agreements with their investors (Bain would not comment on what agreements it has). Several equity experts interviewed for this story thought any disclosures from Bain were likely to spook its investors. The private equity business model is based on taking companies out of the public markets, where reporting requirements are strict and investors punishing, making changes that will hopefully make them more profitable and then selling them or taking them public through an IPO. The part that happens behind the curtain is not always pretty, and private equity firms have learned over the years that it’s hard to tell a complicated story in the media. The goal of private equity is to keep things private. 'It’s had very little consciousness in the political realm until Romney came along because these guys are smart enough not to try to become Treasury secretaries,' said Bill Cohan, a former Wall Street banker-turned-investigative journalist who wrote 'Money and Power: How Goldman Sachs Came To Rule The World.'</blockquote> In addition, Dean Baker suggested that the confidentiality is used to hide how private equity/ leveraged buy-out firms remove capital from acquired companies(4), <blockquote>The sort of asset stripping described here, which harms creditors by taking away potential collateral for their loans, violates the law. However it is extremely difficult to prevent, especially with private equity companies that have to make few public disclosures.</blockquote> Thus secrecy/ confidentiality/ deception should be regarded as one of the main tactics used by private equity/ leveraged buy-out firms. Implications for Health Care Mitt Romney's candidacy has generated a surprising amount of discussion about the effects of private equity/ leveraged buy-out firms on the political economy. Many are worried that despite his claims, such firms cause more job loss than job creation. In the Huffington Post(10), Robert Creamer wrote that private equity/ LBOs have contributed to the sense that ordinary people who play by the rules suffer while well-connected insiders prosper: <blockquote>It just doesn't make sense to them that a relatively tiny number of people -- who don't build a product or create a service -- can make massive amounts of money, while ordinary people who work hard and play by the rules see their incomes flat-line. Their view is simple. They create cars, or food, or houses or computers -- or they provide police protection, or care for sick people, or teach our kids. Why should they be asked to sacrifice when guys who basically gamble for a living -- as Wall Street speculators -- make incomprehensibly large sums of money?</blockquote> There seems to be a good argument that the tactics used by private equity/ leveraged buy-out firms might be bad for the general political economy. Moreover, these firms often take over health care corporations, drug and device companies, health care information technology companies, health insurance companies, for-profit hospital chains, etc. There is reason to think that their standard tactics used on such targets are likely to be particularly bad for health care. Many health care corporations depend on a long-term view to be successes. To develop new products, drug, device, and health care IT companies must pursue research and development projects that take years. All health care companies depend on highly trained, specialized workers and professionals. To sustain these sorts of employees requires a long-term attention to their development. So private equity/ leveraged buy-out firms' short-term focus, transfer of debt and risk to the acquired companies, and emphasis on short-term generic management cutting costs techniques including lay-offs, outsourcing, etc clash with the sophisticated long-term focus these companies require. These health care organizations often require the complex interplay of many components. Private equity/ leveraged buy-out firms' efforts to sequester and sell particular assets may disturb this complex system. Health care quality, and successful research and development require transparency. Extreme emphasis on secrecy by private equity/ leveraged buy-out firms threatens such transparency. Even more pointed concerns may arise when private equity/ leveraged buy-out firms endeavor to take over non-profit health care organizations. We plan to discuss these in a subsequent post. The NY Times(g) noted that in the 1980s, leveraged buy-out firms <blockquote>were branded as 'barbarians at the gate' - the title of a book [by Burrough and Helyar, link <a href="http://www.amazon.com/Barbarians-Gate-Fall-RJR-Nabisco/dp/0060536357">here</a>] about the takeover of RJR Nabisco by Kohlberg Kravis Roberts.</blockquote> Now 30 years later we are finally having a conversation about the role of these firms in the greater political economy. We in health care should be having a parallel discusion about their role in our sphere. I submit that their role was not likely productive. Since health care should not merely be looked upon as a means to make money, but as a public good, we ought to be talking about how to restrain private equity/ leveraged buy-out firms from doing it more damage. References 1. Goozner M. Private equity's edge: buy now, deduct taxes later.  Fiscal Times, Jan 9, 2012.  Link <a href="http://www.thefiscaltimes.com/Articles/2012/01/09/Private-Equitys-Edge-Buy-Now-Deduct-Taxes-Later.aspx">here</a>. 2, Hamilton W. Private equity industry: a bad rep, but is it deserved. Los Angeles Times, Jan 12, 2012. Link <a href="http://articles.latimes.com/2012/jan/12/business/la-fi-private-equity-20120112">here</a>. 3. Lenzer R. Why Warren Buffet disdains the private equity crowd. Forbes, Jan 14, 2012. Link <a href="http://www.forbes.com/sites/robertlenzner/2012/01/14/why-warren-buffett-loathes-the-private-equity-crowd">here</a>. 4. Baker D. NPR does fluff piece for private equity. Beat the Press, Jan 13, 2012. Link <a href="http://www.cepr.net/index.php/blogs/beat-the-press/npr-does-fluff-piece-for-private-equity">here</a>. 5. Lifton RK. Mitt Romney and Bain Capital: understanding the reality. Huffington Post, Jan 13, 2012. Link <a href="http://www.huffingtonpost.com/robert-k-lifton/mitt-romney-bain-capital_b_1205157.html">here</a>. 6. Barro J. The discussion we should be having about Bain. Forbes, Jan 12, 2012. Link <a href="http://www.forbes.com/sites/joshbarro/2012/01/12/the-discussion-we-should-be-having-about-bain">here</a>. 7, Robinson E. Reexamining the myth of no-fault capitalism. Washington Post, Jan 16, 2012. Link <a href="http://www.washingtonpost.com/opinions/reexamining-the-myth-of-no-fault-capitalism/2012/01/16/gIQAvKO13P_story.html">here</a>. 8. Lattman P, Lowrey A. As Romney advances, private equity becomes part of the debate. New York Times, Jan 10, 2012. Link <a href="http://www.nytimes.com/2012/01/11/business/as-romney-campaign-advances-private-equity-becomes-part-of-the-debate.html">here</a>. 9. Hagey K. Mitt Romney's Bain Capital days: a black box. Politico, Jan 11, 2012. Link <a href="http://www.politico.com/news/stories/0112/71344.html">here</a>. 10 Creamer R. Why the Bain Capital controversy is so damaging to GOP chances this fall. Huffington Post, Jan 16, 2012. Link <a href="http://www.huffingtonpost.com/robert-creamer/why-the-bain-capital-cont_b_1208678.html">here</a>.

"Barbarians at the Gate" - Making Private Equity Less Private, and Understanding Its Effects on Health Care

One good byproduct of the tumultuous everlasting 2012 campaign for the US presidency has been to shed light on a number of political and eco...

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An "Anecdotal Complaint" About An ICU EHR

An "anecdotal complaint" (see health IT-specific definition of 'anecdotal' <a href="http://hcrenewal.blogspot.com/2011/08/from-senior-clinician-down-under.html">at this link</a>) from a practicing medical informaticist on an EMR system being rapidly rolled out - in a neonatal ICU, where a single slip is an ended life or lifelong crippling injury, and a multimillion dollar lawsuit, in the making: <blockquote>... Having just exited a 4 week “Night call” rotation of q3 nights (16 hours in house) or weekend days (16-26 hour shift in house) call / attesting/checking and signaturing horror show, my first with our “New” {#$@#**%%$@!*&!!*} charting and attesting, etc system [symbolic praise in the original - ed.], I can 100% attest that everything [another colleague -ed.] said is exactly why I’m scared to death of all the UCs [unintended consequences - ed.] of this current effort, when adult outpatient systems hit quaternary NICUs of 50-60 patients, with untested crash [i.e., artificially rushed - ed.] rollouts. Dozens and dozens>>>>thousands of examples of each and every comment [made by the other colleague on EHR problems - ed.], plus more is exactly what I’m personally suffering. The more is bilateral horrible carpel tunnel flare ups (7-10 clicks and scrolls to get an “overview” of anything) so right now both my hands are numb. Plus, one to two minute logons, is a lifetime when a baby is suddenly crashing. This is a “coding horror” and a safety nightmare. I live in constant fear of somebody screwing up something important, and perhaps uncorrectable. We do our work in real-time, most of the time. Where is the FDA when you need them? [Scared of hot potatoes as I wrote <a href="http://hcrenewal.blogspot.com/2011/04/fda-decides-regulating-implantable.html">here</a> - ed.] And we do still talk to each other – but even that doesn’t always “work out”, because we’ve lost our operational minds (collectively) – the shared-by-all compact, visually all data in one place, and temporally arranged – i.e., the shared nurse/doc/resp flowsheet [traditionally in an ICU, a long tabular scroll of paper for "at a glance" patient status overview - ed.] – where everybody was looking at the same page, which we no longer are – as the team is slowly discovering. And which required no logon for sign-over bedside rounding (~40 minutes for 20-30 babies was the allotted time). The flowsheet needed only a 10-15 second glance to spot developing problems; “the computer” is effectively inaccessible in the time allotted for the twice daily sign-n-out “rounds”. </blockquote> <div style="text-align: center;"><a href="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEi6uA-QLFCLoiBsV4YhVSz3hwqgDYVq9iP8NUlU8by4E4UOMLw-z8G47WgiGRMxX3HWJAhx3Ul2F_IEvI6b2DaEGz4CwavXQ88hU8rZwQYr_ebfSXQONfCUzFM7Ga7nlGjC5jkQQxpWdyM9/s1600/flow1.jpg"><img alt="" border="0" id="BLOGGER_PHOTO_ID_5697899238418321186" src="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEi6uA-QLFCLoiBsV4YhVSz3hwqgDYVq9iP8NUlU8by4E4UOMLw-z8G47WgiGRMxX3HWJAhx3Ul2F_IEvI6b2DaEGz4CwavXQ88hU8rZwQYr_ebfSXQONfCUzFM7Ga7nlGjC5jkQQxpWdyM9/s320/flow1.jpg" style="display:block; margin:0px auto 10px; text-align:center;cursor:pointer; cursor:hand;width: 320px; height: 172px;" /></a></div><div style="text-align: center; font-family:arial;">A traditional ICU flowsheet (click to enlarge) </div> One wonders how often this scenario - what I now call a "But ... patient safety is not compromised" scenario in the words of the typical hospital administrator - is being repeated around the country. Of course, the problem just can't be the software (as in the post <a href="http://hcrenewal.blogspot.com/2012/01/another-our-crappy-computers-screwed-up.html">at this link</a>). It's those dullard clinicians and hospital IT staff who have misconfigured the cybernetic miracle. This is certainly an example where the customs, traditions and methodologies of business IT (e.g., implement on-time and on-budget, at all costs, according to a strict timeline with benchmarks) are highly ill-suited for medicine. That assumes that there are not kickbacks or other financial 'incentives' or COI's in play, of course. In fact, it would not surprise me if the IT vendor, a major company, has insulated itself from liability through a "hold harmless " clause. If so, as I have written in 2009 in JAMA <a href="http://jama.ama-assn.org/content/302/4/382.1.extract">at this link</a> in response to an article by Koppel and Kreda [1], and at my Drexel Univ. health IT difficulties site at <a href="http://www.ischool.drexel.edu/faculty/ssilverstein/cases/?loc=cases&sloc=koppel_kreda">this link</a>, having signed such a clause would represent a breach of hospital governance's fiduciary responsibilities to their clinical employees and agents (in effect, laying the liability for EHR-induced malpractice solely on them), and to patients. I advised this doctor to 'be safe', as I would not want to have to be expert witness for a plaintiff whose child they injured or killed due to EHR-mediated obstacles to accepted professional standards of healthcare. Finally, if this doctor were to resign, perhaps a case could be made for <a href="http://en.wikipedia.org/wiki/Constructive_dismissal">constructive discharge</a>. -- SS [1] <a href="http://jama.ama-assn.org/content/301/12/1276.extract">Health Care Information Technology Vendors' “Hold Harmless” Clause Implications for Patients and Clinicians</a>. Koppel R, Kreda B. JAMA. 2009;301(12):1276-1278. doi:10.1001/jama.2009.398

An "Anecdotal Complaint" About An ICU EHR

An "anecdotal complaint" (see health IT-specific definition of 'anecdotal' at this link ) from a practicing medical infor...

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2011 Closes on a Note of Electronic Medical Record Privacy Breach Shame

At my Oct. 2011 post "<a href="http://hcrenewal.blogspot.com/2011/10/still-more-ehr-chaos-pandemonium-bedlam.html">Still More Electronic Medical Data Chaos, Pandemonium, Bedlam, Tumult and Maelstrom: But Don't Worry, Your Data is Secure</a>" and others in this query link on medical record privacy, <a href="http://hcrenewal.blogspot.com/search/label/medical%20record%20privacy">http://hcrenewal.blogspot.com/search/label/medical%20record%20privacy</a> I wrote: <blockquote>"Don't worry, your medical data's safe."</blockquote> Joseph Conn of ModernHealthcare.com apparently disagrees (with my sarcasm, that is) and states the obvious outright. I post his story with few comments and several emphases which are mine: <blockquote><a style="font-weight: bold;" href="http://www.modernhealthcare.com/article/20111222/blogs02/312229963">Year closes on a note of breach shame</a> Modern Healthcare Dec. 2012 <div style="border-width: medium; border-style: none; border-color: -moz-use-text-color; text-align: left; background-color: rgb(255, 255, 255); color: rgb(0, 0, 0); overflow: hidden; text-decoration: none;"> Three-eighty. Three-eighty. Do I hear four hundred? With 2011 winding down, there are now 380 major data breaches involving 500 or more patients' records listed on the "wall of shame" website kept by HHS' Office for Civil Rights. So far, from the first wall postings in September 2009 through the latest on Dec. 8 this year, there have been 18,059,831 "individuals affected," and even that massive number is an undercount of the breach problem. First, the civil rights office hasn't yet released the records of tens of thousands of breaches it has received under a federal reporting mandate on breaches affecting fewer than 500 patients per incident. I've been asking for electronic copies of those records since June. I hope to hear soon on an appeal of a decision last fall by HHS, claiming that the civil rights office can <a href="http://www.modernhealthcare.com/article/20111012/BLOGS02/310129999">hide those reports</a> while it "investigates" an estimated 30,000 or more breaches they describe. Second, even the OCR's posted numbers are low. A Nov. 4 public notice on a breach reported by the <a href="http://www.uclahealth.org/body.cfm?id=465">UCLA Health System</a> states that "some personal information on 16,288 patients" was stolen, but the wall of shame lists the "individuals affected" in the UCLA incident as 2,761. UCLA spokeswoman Dale Tate said in an e-mail that the nearly six-times-larger number in its notice "represents the number of individuals who had some information on the hard drive," while the 2,761 figure sent to the OCR "represents the number of people that met the specific criteria" under the federal breach notification rule. Under the federal rule, Tate says, "the information for these individuals could possibly cause more than a minimal amount of financial, reputational or other harm." Information on the rest of the individuals, Tate said, did not meet the criteria. Not to get too harpy, but this breach stuff is long past being ridiculous. The lawyers are already all over it, and maybe that's what it will take for the industry to finally start addressing the problem. Brian Kabateck, a California lawyer, thinks so. In the past three months, his Los Angeles law firm has filed a pair class-action breach suits against two of the most highly regarded healthcare systems in the state, University of California, Los Angeles and Stanford, as well as one of the latter's business associates, Multi-Specialty Collection Services. "I think this is a short blip on the radar," Kabateck said. As the settlement costs pile up, he said, "I think big institutions are going to learn—five years from now, these lawsuits are going to be obsolete." </div></blockquote>Class-action lawsuits are needed as much for health IT risk and safety issues causing near-misses, injuries and death as for security breaches, I note. I think five years is highly overoptimistic as well on the breach issue, considering the degree of "institutional learning" that's occurred on <a href="http://www.ischool.drexel.edu/faculty/ssilverstein/cases/">how to do health IT "right"</a> over the past ~ three decades, and considering that the breaches that are increasing, not decreasing, in intensity and severity across all industry sectors. That includes industry sectors far better equipped to manage IT security than hospitals. <blockquote>Right now, though, Kabateck says, "This is not to the level of being an epidemic, but it's close."</blockquote> I think it is epidemic. Rather than being a miracle that will revolutionize medicine, health IT is like any other information and communication technology (ICT): it has unintended consequences (UC's) that can dilute or even negate its advantages. The issue of damaged medical record privacy, confidentiality and security is but one UC of health IT. -- SS

2011 Closes on a Note of Electronic Medical Record Privacy Breach Shame

At my Oct. 2011 post " Still More Electronic Medical Data Chaos, Pandemonium, Bedlam, Tumult and Maelstrom: But Don't Worry, Your ...

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North Bristol Hits Appointment Problems: Another "Our Lousy IT Systems Screwed Up, But Patient Safety Was Never Compromised" Story

At my Dec. 2011 post "<a href="http://hcrenewal.blogspot.com/2011/12/yet-another-glitch-affecting-thousands.html">IT Malpractice? Yet Another "Glitch" Affecting Thousands of Patients. Of Course, As Always, Patient Care Was "Not Compromised</a>" referencing prior posts, I wrote: <blockquote>... 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></blockquote><blockquote></blockquote> Another "our clinical IT crapped out , BUT ... patient care/safety was never compromised" story just arose: <a href="http://www.ehi.co.uk/news/acute-care/7446/north-bristol-hits-appointment-problems"></a> <blockquote><a href="http://www.ehi.co.uk/news/acute-care/7446/north-bristol-hits-appointment-problems" style="font-weight: bold;">North Bristol hits appointment problems</a> E-Health Insider 11 January 2012 Rebecca Todd Clinicians working at North Bristol NHS Trust have expressed concern about disruption to patient care, which they say is caused by appointment problems following the go-live of a new Cerner Millennium electronic patient record system.</blockquote> I would have entitled the article "North Bristol hit by IT-created appointment problems." <blockquote>Reported problems include patients being booked into non-existent clinic appointments or not being told about scheduled operations, resulting in some operations being cancelled.</blockquote> No patient care compromise possible there. Who, after all, needs a timely operation? It frees up a lot of money for IT golf tournaments to let those of no value to society (i.e., the old, and those who will not admit computers in healthcare with deterministically revolutionize medicine because, well, they're magic) simply die due to delayed or cancelled surgery... <blockquote>Ehealth Insider understands that some of the problems relate to the way the trust configured the EPR system; including setting up dummy clinics for which appointment letters were subsequently sent out. </blockquote> It's never the software or computer's fault. As a matter of fact, I have not seen any official response to the work of Dr. Jon Patrick at U. Sydney on the many software engineering flaws of another product of the same company. His work is entitled "A study of an Enterprise Health information System" and is at this link: <a href="http://sydney.edu.au/engineering/it/%7Ehitru/index.php?option=com_content&task=view&id=91&Itemid=146">http://sydney.edu.au/engineering/it/~hitru/index.php?option=com_content&task=view&id=91&Itemid=146</a>. Do they have Class Action lawsuits in Australia? <blockquote>In a regional BBC news report, aired on Monday evening, anonymous hospital clinicians called the implementation a “complete shambles” and said it represented a “potential danger” to patients. According to the BBC report, the problems meant patients were being booked for impossible appointment times, such as 12.05 am, and quoted correspondence saying staff and the system were both on the “verge of meltdown."</blockquote> The clinician comments are anonymous since non-anonymous reporting would get the clinicians declared health IT apostates, and then excommunicated. Non-anonymous 'whistleblowers' could also fear being sued due to possible gag clauses - the kind of clause hospital executives sign in violation of their fiduciary responsibilities to their staff and to patients. (See my 2009 JAMA letter to the editor "Health Care Information Technology, Hospital Responsibilities, and Joint Commission Standards"at <a href="http://jama.ama-assn.org/content/302/4/382.1.extract">this link</a> and the much-expanded essay on the same themes "Health Care Information Technology Vendors' Hold Harmless and Keep Defects Secret Clauses" <a href="http://www.ischool.drexel.edu/faculty/ssilverstein/cases/?loc=cases&sloc=koppel_kreda">at this link</a>.) <blockquote>Martin Bell, director of IM&T at the trust, confirmed to EHI that North Bristol had experienced some “unexpected problems” in the past few weeks with some of the outpatient appointments and theatre lists. Bell stressed, however, that patient safety had not been compromised and that this continued to be the top priority.</blockquote> There's that line again. Perhaps it's part of some hospital administrator <a href="http://en.wikipedia.org/wiki/JournoList">JournoList-recommended</a> catchphrase for describing how safety was not compromised during a major workflow disruption? <blockquote>He said the problems were not down to the software itself, but due to “implementation and data migration difficulties in some clinics." </blockquote>Right. Quite credible. <blockquote>“Our information management and technology team, supported by our suppliers BT and Cerner, have been working very hard to sort out any initial issues as quickly as possible and we are already seeing improvements,” he said.</blockquote> Congratulations are due. They are seeing "improvements" in dangerous clinical IT malfunctions that should never have to have been seen in the first place, if the statement is true. <blockquote>“Many wards, our two minor injuries units and the Emergency Department, are successfully using the new system." The trust is one of the largest in the South of England, with more than 1,000 beds.</blockquote> Just give them time. <blockquote>EHI understands that as part of the Millennium implementation, dummy clinics were set up. Patients were then sent appointment letters for these clinics in error. EHI also understands that some patients had also not turned up for scheduled operations because they had not been informed about the booking. Bell apologised to patients who had been “inconvenienced during this transition period” and said staff had shown real dedication to continue to deliver patient care.</blockquote> What if someone had been inconvenienced into their grave, or ends up there as a result of delays? On what wavelength will the apology be transmitted? <blockquote> “We firmly believe that the new system, once fully implemented, will improve services for our patients and provide real value,” he said.</blockquote> That seems to be the mantra, but delivery on such promises are rare. See "Pessimism, Computer Failure, and Information Systems Development in the Public Sector" as <a href="http://www.ischool.drexel.edu/faculty/ssilverstein/cases/?loc=other">here</a>, Public Administration Review 67;5:917-929, Sept/Oct. 2007, Shaun Goldfinch, University of Otago, New Zealand. The article is a cautionary article on IT that should be read by every healthcare executive documenting the widespread nature of IT difficulties and failure, the lack of attention to the issues responsible, and recommending much more critical attitudes towards IT. <blockquote>A £69m contract for BT to deliver Cerner Millennium to three new, or ‘greenfield’ sites in the South of England was agreed in April 2010, under the auspices of the National Programme for IT in the NHS. </blockquote> That would not be the failed National Programme for IT in the NHS, the <a href="http://hcrenewal.blogspot.com/2011/09/npfit-programme-going-pffft.html">NPfIT what went PfffT</a>, would it? <blockquote> North Bristol was the last of these three sites to go-live with the system in December last year. It followed Oxford University Hospitals NHS Trust, which went live a week earlier, and Royal United Hospital Bath NHS Trust, which was the first to go-live in July. Cerner said it was working closely with North Bristol and BT on the recent implementation of Millennium. “In complex and large deployments, especially when migrating from two different systems, it is always anticipated that it would take time for the new system to bed-in,” it said in a statement.</blockquote> The patients are given full informed consent on this issue, right? Right? <blockquote>“Across much of the trust, the deployment has worked well. However, this is a major change management project and there have been some difficulties with outpatient appointments. “Although this is not a problem with the software, Cerner is working in partnership with BT and trust staff to resolve any issue as quickly as possible.” Link: <a href="http://www.bbc.co.uk/news/uk-england-bristol-16469728">BBC News</a></blockquote> Right. Perhaps this software and claim needs testing - in a court of law. The only thing missing is the word "glitch", though I am including that term in this posting's index, since I consider it another story in the ever-growing health IT "glitch" series. -- SS Addendum: A reader sent me this comment: <blockquote>How can anyone claim the problems at N. Bristol are unexpected. they are EXACTLY the same problems encountered in Taunton five years ago. The Somerset Trust had sixteen cancelled go live dates and when Cerner 'Millennium" (note: they never defined which Millennium...) was switched on the whole hospital went into slow-motion. Appointments could not be made at out-patient reception desks while patients waited and therefore had to be posted on. Twenty-four whole time equivalent clerks had to be employed to manage the back-up of appointment requests. So much for enhanced efficiency and cost savings. The only possible response to this news is again to remind people of Einstein's famous definition of insanity: "repeating the same thing again and again and expecting a different result." As for other Trusts, why no news of transformed performance by Cerner's systems at other Cerner implemented sites, Berkshire, Newcastle, Kingston, Oxford etc. The only 'good' news we get is that the system has been switched on. If any of this expensive activity had really produced data, efficiency or cost gains, we would be drowning in Cerner press releases, the silence can only mean one thing, that their system is performing as poorly at other sites as it has in the South West. Contrast this with the output and data produced openly by Birmingham University Hospital from its in-house created IT system. Unfortunately one can only draw one serious conclusion about the whole Cerner/ NHS debacle - to paraphrase Mr. Clinton - "It's the (imho substandard) software, stupid! This story needs serious investigation ... Recently US news items have started to discount the supposed efficiency gains for e-Health implementations and started to emphasize data capture and patient safety as the imperative for switch on. Unfortunately for Cerner supporters (and other vendors) the US Institute of Medicine's recent report stated unequivocally that there was (to everyone's apparent surprise) no quality evidence that e-Health improved patient safety. I would contend no drug, therapeutic equipment or operation would or could be implemented in secondary care in the absence of critical and peer reviewed evidence of benefit [emphasis mine - ed.] that has characterized the rush to switch-on substandard IT solutions in English NHS hospitals. </blockquote>I note that critical, peer-reviewed evidence, especially based on prospective randomized clinical trials as opposed to anecdotal, weak retrospective observational studies, have been deemed unnecessary in health IT. Yet serious case reports of risk and injury from credible sources are deemed the true "anecdotes" and discounted. As I've written before, the science of medicine is nearly entirely lacking in the domain of health IT. To put it in the words of James Le Fanu (channeling Sherlock Holmes) in his very apropos essay entitled "<a href="http://www.jameslefanu.com/research/the-case-of-the-missing-data">The Case of the Missing Data: The Dog That Didn't Bark</a>", details on contrary strands of evidence that could reasonably have been expected to appear in evidential text are absent. -- SS

North Bristol Hits Appointment Problems: Another "Our Lousy IT Systems Screwed Up, But Patient Safety Was Never Compromised" Story

At my Dec. 2011 post " IT Malpractice? Yet Another "Glitch" Affecting Thousands of Patients. Of Course, As Always, Patient C...

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Three Golden Parachutes and Some Unexpected Sequels

Golden parachutes are an always fascinating aspect of executive compensation in health care.  I have collected three relatively recently revealed stories about golden parachutes given to government and non-profit hospital system CEOs, at least two of which involve unexpected, and also fascinating sequels.  They will appear in order of the apparent size of the parachutes. Santa Clara Valley Health and Hospital System Santa Clara Health and Hospital System is a county (government) system of moderate size in California.  Last week, the compensation given its outgoing CEO in 2010 was <a href="http://www.bizjournals.com/sanjose/blog/2012/01/ex-santa-clara-county-health-chief-kim.html">revealed</a> by the San Jose Business Journal: <blockquote>Former Santa Clara Valley Health and Hospital System CEO Kim Roberts walked away with an impressive chunk of change when she abruptly left the job in February 2010. According to a city and county salary report released from the State Controllers Office, the position earned a little over $1 million that year. A county spokeswoman confirmed that the total included accrued vacation, sick leave and other payments Roberts was entitled to. The salary was the highest in the Bay Area for public employees in 2010. </blockquote> Note that <blockquote>Roberts was hired as CEO in March 2007 with a five-year contract. The agreement included a starting salary of $285,744 with annual salary adjustments, severance and other benefits.</blockquote> The issue here is that Ms Roberts was the CEO of a local government run health system. Traditionally, the pay given to people in such positions is closely scrutinized by politicians and tax payers, and hence is usually less than that given out by private, non-profit hospital systems, much less for-profit ones. Nonetheless, while it appears that Ms Roberts got something more than $700,000 worth of compensation beyond her usual salary in her last year, the nature of this compensation, and the justification for it is unclear. Erlanger Health System The <a href="http://timesfreepress.com/news/2012/jan/10/brexler-erlanger-trustees-ok-728000-severance-deal">story</a> that got my attention appeared two days ago in the Chattanooga Times-Free Press: <blockquote>After more than a month of negotiations, Erlanger trustees reversed a previous vote and approved a controversial $728,000 severance package for outgoing CEO Jim Brexler. Trustees voted 4-4 against the same severance package in December but voted 5-4 to approve it during a 30-minute meeting Monday morning.</blockquote> More detail about the package: <blockquote>The approved agreement provides 15 months of severance for Brexler, worth about $713,000. He also keeps his Erlanger health coverage for 18 months, paying his employee portion, a benefit worth about $15,000.</blockquote> This story is actually a complex sequel. We <a href="http://hcrenewal.blogspot.com/2011/01/making-their-numbers-examples-of.html">discussed</a> CEO compensation at Erlanger Health System, an academic medical center affiliated with the University of Tennesse, a year ago. At that time, we noted that a substantial bonus given to then CEO Jim Brexler was based on favorable financial results in the previous year, but did not apparently take into account the more recent decline in the system's finances. That bonus was justified by the typical paean to the leadership's "real expertise in health care" by one member of its board. By last month, however, Erlanger's finances had deteriorated dramatically. A Free Press <a href="http://timesfreepress.com/news/2011/dec/22/1222-a1-erlanger-considers-layoffs">article</a> then stated, <blockquote>Erlanger hospital employees have been asked to take 12 days off in the next two months, consider voluntary buyouts and face possible layoffs as Chattanooga's only public hospital bleeds money. The hospital has lost more $6 million in the last five months, half of that in November.</blockquote> The reason for this accelerating misfortune deterioration remain unexplained. Apparently, CEO Brexler had decided to depart, for also unclear reasons, two months earlier: <blockquote>In October, the hospital announced CEO Jim Brexler would retire at the end of the year.</blockquote> At that time, the board had voted to give him the severance package described above, but then suddenly began to reconsider after how bad things were became clear: <blockquote>The board voted earlier this month not to give Brexler a more than $700,000 severance package, but the issue may be brought back up, board members have said.</blockquote> It was unclear whether the decline in Erlanger's finances had to do with its relationship with another troubled hospital, Hutcheson Medical Center, as described in another Free Press <a href="http://timesfreepress.com/news/2012/jan/02/hutcheson-continues-to-bleed-money">article</a>: <blockquote>Despite a new board, new management and the infusion of a $20 million line of credit, a struggling North Georgia public hospital continues to lose money. Erlanger at Hutcheson, formerly known as Hutcheson Medical Center, lost more than $9 million in the first five months of the 2012 fiscal year, which began in July. It lost the most -- $2.7 million -- in September. Hutcheson board Chairman Corky Jewell could not be reached for comment last week. The hospital's administrator, Debbie Reeves, and other management personnel were not in the office the week between Christmas and New Year's, according to spokeswoman Haley Johnson. The publicly funded hospital in Fort Oglethorpe had been losing about $1 million a month, defaulted on a $35 million bond and laid off 75 employees in fiscal year 2011. In May, Erlanger Health System took over management of the hospital and extended up to $20 million in credit to it.</blockquote> Apparently inflated compensation to Hutcheson's CEO was also a subject of <a href="http://hcrenewal.blogspot.com/2011/01/more-on-hospital-executives.html">one of our posts </a>from about a year ago. At that time, we wrote, "despite a major financial loss, lay-offs and service discontinuations, and a bond default," the CEO got "bonus and incentive compensation" in 2009. So, to summarize, despite major financial problems, Hutcheson Medical Center's CEO got a bonus and incentive compensation in 2009. As its situation got worse, it was taken over in some sense by Erlanger Health System, whose CEO also got a bonus despite increasing financial problems in 2010. Thereafter, the finances of Erlanger really declined, its CEO announced his retirement, and still will collect a golden parachute. Thus Erlanger Health System's golden parachute for its outgoing CEO symbolizes the anti-gravitational powers of executive compensation. While lavish executive pay is often justified by short-term financial results, health care executives seem to be able to just keep collecting more and more until they have to flee. Health care seems to more and more be run for the benefit of self-interested insiders. Also, this case demonstrates how skeptical we ought to be of the breathless praise for health care executives and managers and the uncritical touting of their latest advances and initiatives.  (By the way, we posted <a href="http://hcrenewal.blogspot.com/2011/09/another-hospital-putting-on-ritz.html">here</a>, just before it became apparent how badly Erlanger's finances were collapsing, about its breathless advertisement of a "new service excellence program" for Erlanger employees run by the Ritz-Carlton hotel chain.  One wonders whether the attention to the peripheral ahead of core responsibilities this denoted could have been one reason for the system's decline.)  And we are just working our way up to our big case.... University of Chicago Medical Center This story actually dates back to 2009, but was first revealed briefly in late 2011, <a href="http://www.beckershospitalreview.com/compensation-issues/northwestern-memorial-ceo-dean-harrison-made-97m-in-2010.html">in Becker's Hospital Review</a>, <blockquote>The other three highest-paid hospital CEOs in Chicago in 2010 include the following: • James Madara, MD, and Ken Sharigian, University of Chicago Medical Center: $7.9 million Note: This includes severance for Dr. Madara, who resigned in Oct. 2009. Mr. Sharigian served as the interim in 2010.</blockquote> A little more detail came out in a side-bar to a <a href="http://chronicle.com/article/On-Campuses-the-Income-Gap/129980">story</a> on executive compensation in higher education by the Chronicle of Higher Education: <blockquote>James L. Madara, dean of the school of medicine and chief executive of the medical center, U. of Chicago Total compensation: $7,038,944 Mr. Madara’s base salary was $1.3-million, and he received $2.5-million in severance pay.</blockquote> There was also a hint of why this was so interesting: <blockquote>Mr. [sic] Madara stepped down after seven years as dean and three as chief executive to return to the faculty. He resigned amid controversy over his management decisions, such as a plan to redirect medical-center patients to neighboring hospitals, according to local news reports. </blockquote> A little digging shows there was more to it than that. Recall our recent <a href="http://hcrenewal.blogspot.com/2012/01/us-presidential-candidates-financial.html">post</a> that discussed the "Urban Health Initiative," a program ostensibly meant to direct some patients, allegedly mainly poor patients, to more appropriate health care venues, allegedly away from the Emergency Department of the university medical center, and again allegedly to make room for patients who need and whose insurance can pay for more lucrative services. By February, 2009, the Wall Street Journal <a href="http://online.wsj.com/article/SB123577975486997825.html">reported</a> that <blockquote>In February, two high-ranking doctors quit their administrative posts to protest the plan, saying it could lengthen already long waiting times for patients who visit the ER.</blockquote> In particular, <blockquote>The two doctors who gave up their administrative posts in Chicago were Dr. Vanden Hoek, who stepped down as interim chief of emergency medicine, and pulmonology researcher Joe G.N. Garcia, who had been chairman of medicine. The doctors still can practice medicine at the hospital. About a dozen other doctors from the emergency room and other departments had signed a letter of protest over the hospital administration's plan to reduce the number of beds available to emergency patients in the ER and other units.</blockquote> Three months later, as <a href="http://www.chicagobusiness.com/article/20090502/ISSUE01/100031705/u-of-c-docs-attack-ceos-finance-focus">reported</a> by Chicago Business, <blockquote>Some University of Chicago Medical Center faculty members are accusing CEO James Madara of putting hospital finances ahead of research and teaching. A letter delivered to Dr. Madaar last month and signed by 76 faculty members asserts that, since adding the hospital CEO title in 2006, Dr. Madara has lost focus on his role as a dean of the Hyde Park medical center's vaunted research and academic enterprise. A preocccupation with hospital profits and an 'insular management style' have 'disenfranchised' the faculty, the letter says. </blockquote> By that month, <a href="http://online.wsj.com/article/SB123681502175301913.html">according to the Wall Street Journal</a>, <blockquote>More than 190 doctors at the University of Chicago Medical Center signed a letter to trustees protesting plans to reduce the number of beds available to emergency patients as 'unnecessarily risky' and a threat to patient safety.</blockquote> The plan was put on hold by the university president a few days later. Dr Madara resigned in August. So, somewhat like the case above, this involved a hospital system CEO who got a very large golden parachute after leaving under fire, not for declining revenue, but for his role in overseeing a program of questionable ethics, one possibly bad for patients, and having lost the confidence of some important proportion of his medical faculty. He did not, however, go off quietly into the night. His next stop was Leavitt Partners (as noted in <a href="http://www.ama-assn.org/ama/pub/news/news/ama-names-new-evp-ceo.page">this AMA press release</a>), founded by former President George W Bush administration Secretary for Health and Human Services James Leavitt. As we noted <a href="http://hcrenewal.blogspot.com/2011/10/former-us-secretary-of-health-and-human.html">here</a>, <a href="http://leavittpartners.com/">Leavitt Partners</a> advertises that it "advises clients that invest in health care and food safety." It does not publicize its client list, but that list apparently includes Alliance Health Networks, whose press release noted that Leavitt Partners "will help it expand its presence in the US health industry and beyond "(look <a href="http://www.healthcareitnews.com/news/alliance-health-networks-gets-boost-leavitt-partners">here</a>); and Connextions, Inc, whose press release noted that it would work with Leavitt Partners to " refine existing health insurance exchange models for federal and state governments, as well as private sector organizations that are navigating health care reform law," (look <a href="http://www.businesswire.com/news/home/20110614005331/en/Connextions-Leavitt-Partners-Enter-Agreement-Bring-Health">here.</a>)  Mr Leavitt joined the board of Medtronic last year (look <a href="http://www.bizjournals.com/twincities/news/2011/10/17/medtronic-board-leavitt-fda.html">here</a>).  Then, however, he got back into the CEO business.  While still maintaining <a href="http://leavittpartners.com/team/dr-james-madara">a role at Leavitt</a>, in 2011, per the <a href="http://www.ama-assn.org/ama/pub/news/news/ama-names-new-evp-ceo.page">AMA release</a>, <blockquote>The American Medical Association (AMA) today named James L. Madara, M.D., as its new Executive Vice President and Chief Executive Officer. Dr. Madara will assume leadership of the nation’s oldest and largest physician group on July 1.</blockquote> That news release noted his past positions, <blockquote>the Thompson Distinguished Service Professorship and deanship at the University of Chicago Pritzker School of Medicine, where he was the longest serving Pritzker dean in the last 35 years. Subsequently, he added the responsibility of CEO of the University of Chicago Medical Center, bringing together the university’s biomedical research, teaching and clinical activities. </blockquote> Perhaps not surprisingly, it did not mention the controversies at the medical center that preceded his resignation, nor his sizable golden parachute, nor his ongoing role at Leavitt Partners. So, the American Medical Association claims to represent all US physicians and their values. It turns out that its current Executive Vice President and CEO is a former hospital system CEO who departed under fire with a golden parachute beyond any severance package a practicing or academic physician would dream about.  He also is a former and current consultant with a firm lead by one of our better recent examples of beneficiaries of the revolving door.  We have come a long, and the wrong way since the AMA asserted, "the practice of medicine should not be commercialized, nor treated as a commodity in trade." (See <a href="http://hcrenewal.blogspot.com/2007/12/relman-in-jama-on-threats-to-physicians.html">this post</a>.) This story is not just about the ridiculous compensation given to health care executives, and how this provides perverse incentives and suggests that many health care leaders have become insiders who put their self-interest ahead of the health care mission. This story is also about the connectedness of these insiders, and how they appear to control nearly every part of health care. The Moral of the Stories Maybe if I write this often enough, it will get some notice.... health care organizations need leaders that uphold the core values of health care, and focus on and are accountable for the mission, not on secondary responsibilities that conflict with these values and their mission, and not on self-enrichment. Leaders ought to be rewarded reasonably, but not lavishly, for doing what ultimately improves patient care, or when applicable, good education and good research. On the other hand, those who authorize, direct and implement bad behavior ought to suffer negative consequences sufficient to deter future bad behavior. If we do not fix the severe problems affecting the leadership and governance of health care, and do not increase accountability, integrity and transparency of health care leadership and governance, we will be as much to blame as the leaders when the system collapses.

Three Golden Parachutes and Some Unexpected Sequels

Golden parachutes are an always fascinating aspect of executive compensation in health care. I have collected three relatively recently rev...

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