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ONC's "Health Data Palooza" - A Title of Exceptionally Bad Taste, For a "See No Evil" Meeting

The Office of the National Coordinator of Health IT has sent out this announcement: <div style="color: #16588b; font-family: Arial, Helvetica, sans-serif; font-size: 20px;">Subject: HEALTH DATA PALOOZA III: Unleashing the Power of Data to Improve Health From:    ONC Health IT <onchealthit .="." service.govdelivery.com="service.govdelivery.com"> Date:    Thu, May 10, 2012 10:36 am </onchealthit></div><div style="color: #16588b; font-family: Arial,Helvetica,sans-serif; font-size: 20px;"> </div><div style="color: #16588b; font-family: Arial,Helvetica,sans-serif; font-size: 20px;">HEALTH DATA PALOOZA III: Unleashing the Power of Data to Improve Health</div><div style="text-align: center;"> June 5-6th, Washington DC Health Data and Innovation Week <a href="http://links.govdelivery.com/track?type=click&enid=ZWFzPTEmbWFpbGluZ2lkPTIwMTIwNTEwLjc0NDU0MDEmbWVzc2FnZWlkPU1EQi1QUkQtQlVMLTIwMTIwNTEwLjc0NDU0MDEmZGF0YWJhc2VpZD0xMDAxJnNlcmlhbD0xNjk4NDczMyZlbWFpbGlkPXNjb3RzaWx2QGFvbC5jb20mdXNlcmlkPXNjb3RzaWx2QGFvbC5jb20mZmw9JmV4dHJhPU11bHRpdmFyaWF0ZUlkPSYmJg==&&&101&&&http://www.hdiforum.org" target="_blank">www.hdiforum.org</a> | #healthdata CONFIRMED SPEAKERS Kathleen Sebelius, Secretary of Health and Human Services Marc Bertolini, CEO Aetna Thomas Goetz, Execuitve Editor of WIRED Atul Gawande, surgeon and author Bill Frist, former Republican Majority Leader Dominique Dawes, two time gold medal winner Todd Park, US Chief Technology Officer Hear from Farzad Mostashari, National Coordinator for Health IT on data liberation ONC will host breakout sessions on Consumer e-Health, HealthData.gov, and Uses of Data by ACOs ONC will release nine challenges during this year’s event! </div><div style="text-align: center;"> </div><div style="text-align: left;"> </div><div style="text-align: left;">This title for a government-sponsored meeting is bizarre and tasteless in my opinion.  What is deemed by ONC to be the major source of this data?  Health IT.</div><div style="text-align: left;"> </div><div style="text-align: left;">"Palooza?"</div><div style="text-align: left;"> </div><div style="text-align: left;">From Urban Dictionary:</div><div style="text-align: left;"> </div><blockquote dir="ltr" style="margin-right: 0px;"><div>Palooza - <a href="http://www.urbandictionary.com/define.php?term=palooza">http://www.urbandictionary.com/define.php?term=palooza</a></div><div class="definition"></div></blockquote><blockquote dir="ltr" style="margin-right: 0px;"><div class="definition">An all-out crazy party; partying at one place with a ton of people like there's no tomorrow; The art of throwing a very drunken extravagant party with a plethora of friends</div></blockquote><div></div><div></div><div> "Data Liberation?"    </div><div></div><div> What about "patient liberation" -- from risk? </div><div></div><div> Considering it unlikely that issues in the bulleted points below, commented on in detail in past posts on this blog, will be discussed at this meeting, the title of the meeting is especially tasteless:</div><div></div><div style="font-family: Arial,Helvetica,sans-serif;"><ul><li>There is a markedly unscientific "irrational exuberance" pushing clinical IT into wide use at a dangerously rapid pace. This exuberance is contradicted by a growing body of literature that shows the benefits are likely far less than stated, e.g., by way of example, the ad-hoc set at <a href="http://www.ischool.drexel.edu/faculty/ssilverstein/cases/?loc=cases&sloc=readinglist">http://www.ischool.drexel.edu/faculty/ssilverstein/cases/?loc=cases&sloc=readinglist</a>  </li><li>The technology remains experimental, its rollout is a human subjects experiment on a massive scale lacking nearly all the protections of other human subjects experimentation and for IT in mission critical settings (e.g., informed consent, formal quality control/validation/regulation, formal postmarket surveillance and reporting) due to extraordinary legal and regulatory special accommodations afforded the technology and its purveyors; </li><li>Defects of in-use systems are rampant, inappropriately turning patients and clinicians into software alpha and beta testers (e.g., as in the voluntary FDA MAUDE database, <a href="http://hcrenewal.blogspot.com/2011/01/maude-and-hit-risk-mother-mary-what-in.html">http://hcrenewal.blogspot.com/2011/01/maude-and-hit-risk-mother-mary-what-in.html</a> which contains information for just one HIT vendor, Cerner, who voluntarily reports such issues); </li><li>The technology is unsupportive of clinician cognitive needs (2009 National Research Council study, which also stated that accelerating interdisciplinary research in biomedical informatics, computer science, social science, and health care engineering will be essential to perfect this technology); </li><li>The roles of <a href="http://hcrenewal.blogspot.com/2011/08/from-senior-clinician-down-under.html" target="_blank">scientific discovery and anecdote</a> have been turned on their heads. RCT's of clinical IT are nearly non-existent and lower-level evidence (e.g., weak observational, pre-post, qualitative, and other study types) are cited as "scientific proof" of efficacy and safety justifying hundreds of billions of dollars of taxpayer (or is it Chinese loan?) expenditures.  Yet, risk management-relevant case reports of harmful events and near misses, crucial to help organizations and regulatory agencies understand risks are dismissed as "anecdotal" (e.g., Blumenthal: "The [ONC] committee [investigating FDA reports of HIT endangement] said that nothing it had found would give them any pause that a policy of introducing EMR's could impede patient safety," he said, while ONC issued an article based on questionable research methods entitled "<a href="http://content.healthaffairs.org/content/30/3/464.full.html">The Benefits Of Health Information Technology: A Review Of The Recent Literature Shows Predominantly Positive Results</a>" extolling the virtues of HIT, written about at <a href="http://hcrenewal.blogspot.com/2011/03/benefits-of-health-information.html">http://hcrenewal.blogspot.com/2011/03/benefits-of-health-information.html</a>). </li><li>Risks are definite, with known patient injury and death, but the magnitude is admittedly unknown by JC (2008 Sentinel Event Alert), FDA (2010 Internal memo on HIT risks and statements of Jeffrey Shuren MD JD about known harms likely being "the tip of the iceberg"), IOM (2011 report on HIT risk), ECRI Institute (Top ten healthcare technology hazards for 2011 and 2012), NORCAL Mutual Insurance Company 2009 report on EHR risks, others; </li><li>Existence of severe impediments to information diffusion about risks explicitly admitted by FDA (2010 memo), IOM (2011 report), others; </li><li>Usability of commercial products in real world settings is often poor (e.g., NIST 2011 study on usability), promoting "use error" (user interface designs that engender users to make errors of commission or omission, where many errors are due not to user error per se but due to designs that are flawed, e.g., poorly written messaging, misuse of color-coding conventions, omission of information, etc.) </li><li>These systems promote capture and display of clinically irrelevant information in the interest of charge capture, and result in <a href="http://hcrenewal.blogspot.com/2011/02/electronic-medical-records-two-weeks.html" target="_blank">reams of "legible gibberish"</a> with many negative characteristics that make it difficult for other clinicians and reviewers to establish a cohesive, definitive narrative of clinical events and timelines.</li></ul></div><div></div><div> Health IT and health data issues are not 'partying' affairs. An un-seriousness about anything related to health IT seems in vogue of late. Finally, I ask:  does this "Health Data Palooza" bring my <a href="http://hcrenewal.blogspot.com/2012/02/health-it-ddulites-and-disregard-for.html" target="_blank">Ddulite</a> term to life?</div><div></div><div> <blockquote>Ddulite: Hyper-enthusiastic technophiles who either deliberately ignore or are blinded to technology's downsides, ethical issues, and repeated local and mass failures. </blockquote> A Ddulite Palooza.  How charming. Like the recent extravagances of other government agencies such as <a href="http://www.cnn.com/2012/04/16/politics/gsa-hearing/index.html" target="_blank">GSA in Las Vegas</a> and the <a href="http://worldnews.msnbc.msn.com/_news/2012/05/07/11575731-prostitute-at-center-of-secret-service-scandal-agents-were-stupid-brutes?lite" target="_blank">Secret Service in Colombia</a>, let's hope this Data Palooza is a Palooza in name only. In light of those recent scandals, calling a government sponsored meeting a "Palooza" seems inappropriate on that basis as well. -- SS 5/13/12  Addendum: A commenter pointed this flyer out: <div class="separator" style="clear: both; text-align: center;"><a href="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEiTPbMy_j7ie4KaNq3KWvaVvz0U-dCbEJ6UFSqTSyAmbRjMgptx5t_RbH8VRoBEsC_HQnKX-0E0NlppsCpdARzpzgLCAXPfRFN5WhNbiifkKQBMqONs_ORtXBGiny-6_XxVVycRVkTM8CG1/s1600/Health_Datapalooza_Poster_4.25_large.jpg" imageanchor="1" style="margin-left: 1em; margin-right: 1em;"><img border="0" height="320" src="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEiTPbMy_j7ie4KaNq3KWvaVvz0U-dCbEJ6UFSqTSyAmbRjMgptx5t_RbH8VRoBEsC_HQnKX-0E0NlppsCpdARzpzgLCAXPfRFN5WhNbiifkKQBMqONs_ORtXBGiny-6_XxVVycRVkTM8CG1/s320/Health_Datapalooza_Poster_4.25_large.jpg" width="247" /></a></div><div style="text-align: center;">(click to enlarge)</div><div style="text-align: center;"> </div><div style="text-align: left;">I post it here with no additional comments.</div><div style="text-align: left;"> </div><div style="text-align: left;">-- SS</div></div>

ONC's "Health Data Palooza" - A Title of Exceptionally Bad Taste, For a "See No Evil" Meeting

The Office of the National Coordinator of Health IT has sent out this announcement: Subject: HEALTH DATA PALOOZA III: Unleashing the Power o...

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Abbott Pleads Guilty, Settles for $1.6 Billion, but No Individuals Suffer Negative Consequences

Once again, another big US health care organization is set to make a (monetarily) huge <a href="http://hcrenewal.blogspot.com/search/label/legal%20settlements">legal settlement</a>.  As <a href="http://www.businessweek.com/news/2012-05-07/abbott-to-pay-1-dot-6-billion-to-settle-depakote-marketing-claims">reported</a> by Bloomberg, Abbott Laboratories will settle allegations about its marketing of Depakote (valproic acid), nominally an anti-seizure medication: <blockquote>Abbott Laboratories (ABT) (ABT) said it will pay $1.6 billion to settle federal and state claims resulting from an investigation into its epilepsy medication Depakote, the second-largest drug-marketing settlement in U.S. history. The company will pay $800 million to resolve civil allegations split among federal and state governments, $700 million for a criminal penalty, the Justice Department said in a statement. Abbott marketed the drug, approved for epilepsy, bipolar mania and migraine prevention, for unapproved uses including dementia, the U.S. said. </blockquote> Note that we discussed preliminary reports of this settlement <a href="http://hcrenewal.blogspot.com/2011/11/abbott-laboratories-to-settle-for-13.html">here</a>. Huge, but not Compared to Sales The story included all the obligatory pieces. The settlement is huge, the second largest such financial settlement made by a drug company. However, compared to the money made by the product in question, it was not so large, as <a href="http://online.wsj.com/article/SB10001424052702304451104577390182002017146.html">noted</a> by the Wall Street Journal, <blockquote>Depakote was once one of Abbott's best-selling drugs, racking up $1.6 billion in sales for 2007, before patent expirations cleared the way for cheaper generic copies.</blockquote> A Guilty Plea, of Sorts The settlement did require the company to <blockquote>plead guilty to a criminal misdemeanor violation of a federal drug law</blockquote>per the WSJ, but not to a felony. Nor did it appear that any individual would be charged with anything in connection with this settlement. Admitting to Deception, Covering Kickbacks This was so even though the allegations involved more than "misbranding." In fact, the Bloomberg story stated that the company admitted to active deception of physicians and health professionals, <blockquote>'Abbott admits that from 1998 through 2006, the company maintained a specialized sales force trained to market Depakote in nursing homes for the control of agitation and aggression in elderly dementia patients, despite the absence of credible scientific evidence that Depakote was safe and effective for that use,' the Justice Department said in its statement today. Abbott also marketed the drug to be used with certain antipsychotic drugs to treat schizophrenia, 'even after its clinical trials failed to demonstrate that adding Depakote was any more effective than an atypical antipsychotic alone for that use,' the Justice Department said. </blockquote> In addition, the settlement also "covers" allegations of what amounts to bribery. <blockquote>The settlement also covers allegations that Abbott paid kickbacks to health-care professionals and long-term care pharmacy providers to induce them to promote or prescribe Depakote, the Justice Department said in its statement today. </blockquote> We Promise Not to Do Such Bad Things for Five Years Yet despite these implications of massive deception and bribery of health care professionals, the only other punishment is a sort of probationary period during which the company promises not to do such things, per the WSJ. <blockquote>Under the settlement, Abbott agreed to a five-year probationary period. During this term, Abbott will report any probable violations of the Food, Drug and Cosmetic Act to the probation office, according to the Justice Department. Also, its chief executive will certify compliance with this reporting requirement, and its board will report annually on the effectiveness of the company's compliance program. In addition, Abbott agreed not to compensate sales reps for off-label sales and take other steps during the probationary period. </blockquote> A Bland Admission of Nothing As is customary, an Abbott spokesperson provided a bland, positive statement that admitted no wrong-doing, per the WSJ, <blockquote>'We are pleased to resolve this matter and are confident we have the programs in place to satisfy the requirements of this settlement,' Abbott General Counsel Laura Schumacher said in a news release. 'The company takes its responsibility to patients and health care providers seriously and has established robust compliance programs to ensure its marketing programs meet the needs of health care providers and legal requirements.'</blockquote> Previous Misbehavior Apparently not taken account into stories about or the crafting of the current settlement was Abbott's previous record of legal misadventures: Obstructing Justice - In 2003, an Abbott subsidiary settled civil allegations and pleaded guilty to obstructing a federal criminal investigation of its marketing practices, resulting in fines of $614 million (mentioned in <a href="http://hcrenewal.blogspot.com/2010/12/abbott-laboratories-and-pig-roasts.html">this post</a>, and see <a href="http://articles.latimes.com/2003/jul/24/business/fi-abbott24">the Los Angeles Times</a>.) Suppressing Reports of Drug Contamination - In 2009, the FDA charged that an Abbott subsidiary failed to report bacterial contamination of an optic product (see post <a href="http://hcrenewal.blogspot.com/2009/06/original-excuse.html">here</a>). Blocking Generic Competition - In 2010, Abbott settled with the New York state Attorney General allegations that the company conspired to block generic competition for its lipid lowering drug TriCor (see <a href="http://www.reuters.com/article/2010/01/07/abbott-tricor-idUSN0720003720100107">Reuters</a> and our post <a href="http://hcrenewal.blogspot.com/2010/01/abbott-laboratories-settles.html">here</a>). Inflating Charges - In 2010, Abbott also settled with the US Justice Department for $421 million charges that it defrauded Medicare and Medicaid (see post <a href="http://hcrenewal.blogspot.com/2010/12/abbott-laboratories-and-pig-roasts.html">here</a>). Paying Kickbacks to Doctors - In 2010, an Abbott subsidiary also settled with the US government charges it paid kickbacks to physicians to prescribe other cholesterol lowering drugs (see post <a href="http://hcrenewal.blogspot.com/2010/12/abbott-laboratories-and-pig-roasts.html">here</a>). Anti-Competitive Pricing Practices - In 2011, Abbott settled lawsuits alleging that its anti-competitive practices inflated prices of anti-viral drugs (see post <a href="http://hcrenewal.blogspot.com/2011/04/abbott-laboratories-settles-again.html">here</a>). More Richs for the CEO Despite this now long record of ethical missteps, the Abbott CEO gets richer every year. In 2009, his total compensation was over $26 million (see <a href="http://hcrenewal.blogspot.com/2010/12/abbott-laboratories-and-pig-roasts.html">this post</a>). According to the company's <a href="http://media.corporate-ir.net/media_files/irol/94/94004/Proxy_Page/Proxy2012.pdf">2012 proxy statement</a>, his pay has gone down ever so slightly, from $25,564,283 in 2010 to $24,010,902 in 2011, but still approximately 480 times the median earning of a US family. Summary The <a href="http://hcrenewal.blogspot.com/search/label/legal%20settlements">march of legal settlements</a> progresses. Despite its showy finery of legal language, it fails to include meaningful negative consequences for any individuals, and particularly for those who authorized, directed or implemented unethical actions. It provides the illusion of financial punishment of the organizations involved. However, the amounts paid, albeit large, never approach how much money was brought in by the bad behavior. Furthermore, the costs are diffused among many employees, and for publicly held for-profit corporations, among the nominal owners, the stock-holders. Yet the top executives who personally gained the most almost never have had to answer for the misbehavior, and despite of, or perhaps because of the misbehavior continue to collect voluminous compensation. Despite promises of tougher action, nothing seems to be changing in this parade. However, without real penalties for individuals involved in bad behavior, expect to deterrent of future bad behavior. So once more,.... if we really want to reform health care, we must make the leaders of health care organizations accountable for their organizations' effects on patients' and the public's health, and make sure they get reasonable, not royal compensation reasonably related to their organizations' performance, including ethical performance.

Abbott Pleads Guilty, Settles for $1.6 Billion, but No Individuals Suffer Negative Consequences

Once again, another big US health care organization is set to make a (monetarily) huge legal settlement . As reported by Bloomberg, Abbott...

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From Serving the Poor to Paying Executives Millions - Carolinas HealthCare System

A striking contrast between a large health care organization's historic mission and its current practices appeared in a series published by the Charlotte News-Observer called "<a href="http://www.newsobserver.com/prognosisprofits/">Prognosis: Profits</a>" about the Carolinas HealthCare System. A Historical Mission to Serve the Poor The system evolved from a public hospital meant to serve the poor.  In particular,(1) <blockquote>Only 30 years ago, it was a charity hospital called Charlotte Memorial – a crowded, dreary place that lost money every year because most of its patients couldn’t pay their bills.</blockquote>The hospital system is actually "a public, tax-exempt entity called a hospital authority". Because of this special status, it has the power of eminent domain, the ability to seize property albeit with compensation, and its employees have "more privacy protection that those of other public agencies." However, in the "greed is good" 1980s, the hospital began a transformation, <blockquote>The board hired [Harry] Nurkin in 1981 to revamp Charlotte Memorial’s image, attract paying patients and avoid the fate of struggling public hospitals in Atlanta and Chicago. Until then, patients with insurance mostly chose Presbyterian Hospital or Mercy Hospital, with stately buildings at the edge of Myers Park. With a vision of building one of the Southeast’s finest medical centers, Nurkin paid attention to details, such as wallpaper, plants and furniture. And he put the hospital in the black by improving collections from patients and insurers. In 1983, when Nurkin unveiled the hospital’s first long-range plan, some board members sat in wonder at a slide show that accompanied his bold outline, according to 'A Great Public Compassion,' a book by writer Jerry Shinn. The plan called for a heart institute, a doctors’ building and an 11-story, $40 million tower that would replace a 1940s wing. All of that came true – and more.</blockquote> Now a Huge Hospital System From those humble origins, Carolinas HealthCare System has now become(2) <blockquote>a juggernaut. It’s now the country’s second-largest public hospital system, behind only the nationwide system of Veterans Affairs hospitals. One of the benefits of that growth is access to quality medical care. Carolinas HealthCare offers one of five organ transplant programs in the state and operates the region’s most comprehensive trauma center, where accident victims frequently arrive via medical helicopter. Five-year-old Levine Children’s Hospital has brought new pediatric specialties to Charlotte, and Levine Cancer Institute has recruited specialists from such respected institutions as the Cleveland Clinic. With nearly $7 billion in annual revenue, Carolinas HealthCare runs about 30 hospitals and owns more than $1 billion worth of property in Mecklenburg County alone. It has more than $2 billion in investments. In the five-year period ending in 2011, it spent $1.8 billion on capital projects.</blockquote> Forgetting the Mission: Suing Poor Patients However, as the system grew, its mission seems to have been forgotten. In particular, Carolinas HealthCare seems to now have a penchant for suing poor patients who cannot pay its bills. A Charlotte Observer article documented that while the hospital does not refuse poor patients care, it may later pursue them if they cannot pay. The article noted the case of a woman who was assured that the hospital had funds to pay for patients like her, but who then faced a lawsuit for $34,000 and a lien on her house. In general(3) <blockquote>most N.C. hospitals are tax-exempt – a distinction that saves them millions each year. In exchange, these nonprofits are expected to provide financial help to those without the means to pay. But thousands of times a year, hospitals are suing patients instead, an investigation by the Charlotte Observer and The News & Observer of Raleigh found. An in-depth look at some of those cases suggests most of the patients were uninsured, and that a significant number of them should have qualified for free hospital care. Critics contend those hospitals are financially ruining people they could afford to help. Carolinas HealthCare System, the multibillion-dollar public enterprise that owns CMC-Mercy, has generated average annual profits of more than $300 million over the past three years. During the five years ending in 2010, N.C. hospitals filed more than 40,000 lawsuits to collect on bills. Most of those suits were filed by just two entities: Carolinas HealthCare and Wilkes Regional Medical Center in North Wilkesboro. Each filed more than 12,000 suits over the five-year period, according to state courts data. Wilkes Regional, which is managed by Carolinas HealthCare, appears to be the state’s most litigious individual hospital.</blockquote> In addition, <blockquote>Often, the lawsuits hit people who are among those paying the highest rates for hospital care: the uninsured. Bills for uninsured patients are usually higher because they don’t have insurance companies to negotiate discounts on their behalf. It’s unclear how many of the patients sued in North Carolina lacked health insurance and substantial income or assets. But in interviews with 25 of those patients, the newspapers found 17 of them were uninsured; 10 said they were never told about the hospitals’ financial assistance programs.</blockquote> An editorial summarized the contrast between Carolinas HealthCare historic mission and its current practices(4) <blockquote>Carolinas HealthCare, once a small, struggling operation, has become one of the top hospital systems in the country. Novant Health, owner of Presbyterian Hospital, has grown into a powerful and respected health care provider. Their successes have come thanks to an aggressive philosophy of accumulation and growth, which has led to patients in the Charlotte region having access to the latest in medical technology and research, as well as top doctors in a diversity of medical fields. But that accumulation has contributed to the high cost of health care in North Carolina, and that growth has caused the hospitals to stray at times from their non-profit charitable mission. A Charlotte Observer and News & Observer investigation that begins today details how a hunger for money and power has caused the two hospitals to sometimes lose their way, contributing to the region’s health care cost woes and leaving thousands of patients with financially crippling bills.</blockquote> Opaque, Unaccountable Governance While the Charlotte Observer did not provide opinions about the reasons that this large health care organization appears to have forgotten its raison d'etre, its reporting suggests some familiar elements. The governance of the organization may have been appropriate for a small, struggling public hospital, but as the system grew, lack of accountability and transparency may have become more important. It is easier to lose one's way when no one is observing one's actions.(1) <blockquote>Most hospital business gets done quietly – until there is a well-planned announcement. The system’s self-perpetuating board includes top community and business leaders whose nominations get approval from the Mecklenburg commissioners’ chairman. Quarterly hospital system board meetings, at 7 a.m., are polite and scripted. Votes are unanimous on everything from building new hospitals to borrowing millions of dollars. Questions are worked out in private discussions, closed-door committee meetings or executive sessions. Meetings aren’t widely publicized. Except for a couple of newspaper reporters, only board members and hospital officials attend. Future meeting dates are provided to those who attend board meetings or call the system’s main office. State law requires public organizations with websites to post meeting times. Carolinas HealthCare had not been doing that until last week, after an Observer reporter asked about it. The board’s agenda sets no time for public comment.</blockquote> While operating so quietly, the board appears to have become a very cozy little group, <blockquote>The 1943 hospital authority law intentionally kept elected officials and politics out of operations. The link is that the commissioners’ chairman must sign off on hospital board nominees. It has been a rubber stamp. County officials remember once in 30 years that a proposed board member was rejected. That was in 2008 when nominees included Gloria Pace King, who had been ousted as CEO of the United Way of the Central Carolinas because of public outcry over her $2 million pension package. In December 2008, the board renominated King for a new term. But hospital officials say Roberts, then commissioners’ chairwoman, objected, and King wasn’t reappointed. Over the years, the board has included city leaders, such as bank CEOs Hugh McColl and Ed Crutchfield, and Stuart Dickson, the retired head of the company that owns Harris Teeter. His father, Rush S. Dickson, was an original board member whose name is on the entrance to what is now Carolinas Medical Center.</blockquote> Lavish CEO Compensation As noted earlier, not only are the actions of the hospital system's governing body kept secret, but up to recently, compensation paid to all employees, including top executives was also secret.(1) <blockquote>State law gives its employees more privacy protection than those of other public agencies. For example, salaries of all state, county and city government employees are public. That’s not true for public hospital employees. Until a 2009 change in state law, Carolinas HealthCare had for years refused to make public the total compensation for top executives. They said state law precluded them from disclosing more than basic salary. As a result, the public hospital system wasn’t disclosing as much detail as its private counterpart, Novant Health, does in publicly available reports to the IRS. At the urging of the Observer and other state newspapers, legislators broadened the law in 2009 to require disclosure of total compensation for top executives at public hospitals.</blockquote> So it should not be any surprise that an opaque, unaccountable board run by a cozy group of insiders saw fit to allow its friends in the management make some money, a lot of money. The Charlotte Observer reported that there were nine hired managers with total compensation greater than $1 million in 2011.(5) <blockquote>Michael Tarwater CEO, Carolinas HealthCare System Total 2011 compensation: $4,236,305 Percentage increase over prior year: 14.10% Joseph Piemont President/Chief Operating Officer, Carolinas HealthCare System Total 2011 compensation: $2,536,792 Percentage increase over prior year: 19.70% Greg Gombar CFO, Carolinas HealthCare System Total 2011 compensation: $1,751,798 Percentage increase over prior year: 8.90% Laurence Hinsdale Executive Vice President, Carolinas HealthCare System Total 2011 compensation: $1,693,314 Percentage increase over prior year: 44.10% Paul Franz Executive Vice President, Carolinas HealthCare System Total 2011 compensation: $1,575,927 Percentage increase over prior year: -1.30% Dennis Phillips Executive Vice President, Carolinas HealthCare System Total 2011 compensation: $1,351,138 Percentage increase over prior year: 12.20% John Knox Chief Administrative Officer, Carolinas HealthCare System Total 2011 compensation: $1,197,528 Percentage increase over prior year: 11.80% Roger Ray Chief Medical Officer, Carolinas HealthCare System Total 2011 compensation: $1,080,159 Percentage increase over prior year: No data for prior year Russ Guerin Executive Vice President, Carolinas HealthCare System Total 2011 compensation: $1,060,931 Percentage increase over prior year: 3.00%</blockquote> Should it be surprising that executives who can become so rich, and who are subject to so little oversight, are more interested in preserving the hospital system's operating margin which supports their wealth than in providing the care to poor people that was the hospital system's original reason to exist? Summary As the local NAACP pointed out, the hospital system should better uphold its mission(6) <blockquote>'The Bible says we’re not supposed to burden the poor and the sick and the afflicted. We’re supposed to lift them and help them and heal them,' NAACP President the Rev. William Barber said during the Charlotte stop of a statewide tour designed to bring attention to the struggles of low-income people. '(Carolinas HealthCare) is a group with money hounding people who are just trying to make it.'</blockquote> However, I submit that restoration of this organization's mission will require more than exhortation. The governance of this organization, like that of many others we have discussed, needs to regain accountability, transparency, integrity, and ethics. It must insist that the leaders it hires uphold the mission ahead of other concerns, particularly personal enrichment. It must provide these leaders with realistic incentives based on how well they uphold this mission, not on revenue or operating margin. Until such changes are accomplished, expect this hospital system, like many other health care organizations, to contribute only to our ever rising prices, declining access, and stagnating health care quality. References 1.  Garloch K, Alexander A. Carolinas HealthCare System's evoluation: public hospital with private attitude.  Charlotte Observer, April 21, 2012.  Link <a href="http://www.charlotteobserver.com/2012/04/21/3189730/public-hospital-with-private-attitude.html">here</a>. 2. Alexander A, Garloch K, Neff J. Nonprofit hospitals thrive on profits. Charlotte Observer, April 21, 2012. Link <a href="http://www.charlotteobserver.com/2012/04/21/3189821/nonprofit-hospitals-thrive-on.html">here</a>. 3. Alexander A, Raynor D. Hospital suits force new pain on patients. Charlotte Observer, April 23, 2012. Link <a href="http://www.charlotteobserver.com/2012/04/23/3193509/hospital-suits-force-new-pain.html">here</a>. 4. Anonymous. Money over mission at non-profit hospitals. Charlotte Observer, April 22, 2012. Link <a href="http://www.charlotteobserver.com/2012/04/22/3189118/money-over-mission-at-non-profit.html">here</a>. 5. Anonymous. Million-dollar hospital executives in North Carolina. Charlotte Observer, April 21, 2012. Link <a href="http://www.newsobserver.com/2012/04/22/2019568/million-dollar-hospital-executives.html">here</a>. 6. Alexander A. Stop suing patients, NAACP tells Carolinas HealthCare System. Charlotte Observer, May 2, 2012. Link <a href="http://www.charlotteobserver.com/2012/05/02/3211943/stop-suing-patients-naacp-tells.html">here</a>.

From Serving the Poor to Paying Executives Millions - Carolinas HealthCare System

A striking contrast between a large health care organization's historic mission and its current practices appeared in a series published...

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A Conference on the Psychology of Deception and Unethical Behavior

The <a href="http://rady.ucsd.edu/dib-symposium/">Deception, Incentives and Behavior Conference</a> at the Rady School of Management, University of California - San Diego, was attended by <a href="http://rady.ucsd.edu/dib-symposium/participants/">over 100 people</a>, including me, indicating that there is real interest in studying deception and unethical behavior in the real world.  Several presentations had implications for health care, summarized below by theme (titles of presentations follow entries in parentheses). Context Several presentations discussed how context affects peoples' inclination to be honest or dishonest.  Alexander Cappelan,  Norwegian School of Economics, showed evoking a market context, that is, asking people to think about buying or selling something, increased dishonesty, while a personal or intuitive context decreased dishonesty (When do people tell white lies?). John List, University of Chicago, USA, gave the first plenary talk, suggesting that simply reminding charity fund raisers about the mission of their organization decreased their likelihood of stealing contributions. Shahar Ayal, Interdisciplinary Center Herzliya, Israel, suggested that when people can present themselves as ethical, sometimes extremely, maybe harshly ethical in one context, they may then act unethically in another context. (Moral cleansing strategies for ethical dissonance.) Erin Krupka, University of Michigan, suggested that the availability of voluntary regulation may increase cheating: those who do not cheat may volunteer for regulation, while those who do cheat may point to the availability of regulation. (License to cheat: voluntary regulation and ethical behavior.) Chen-Bo Zhong, University of Toronto, Canada suggested that being able to delegate increases the likelihood of deception (Deception: an unintended consequence of delegation.) Keith Murningham, Kellogg School of Management, suggested that priming people by asking them to perform mathematical calculations increases lying, while priming them by reminders about social awareness or family values does not. (The social and ethical consequences of a calculative mindset.) Incentives Several  presentations suggested various ways in which incentives may affect honesty. David Cooper, Florida State University, USA, suggested that the need for long-term credibility may decrease lying.  (Managing credibility: an experiment in leadership and coordination.) Jan Potters, Tilburg University, Netherlands, suggested that increasing size of incentives to advisors increases the likelihood of their dishonesty when giving advice. (Disclosing advisors' interests neither helps nor hurts.) Anastasia Danilov, University of Cologne, Germany, suggested that people who get incentives as part of a team who identify most strongly with the team are more likely to lie.  (The dark side of team identity: expermiental evidence from financial service professionals.) Bill Nielson, University of Tennessee, USA, suggested that people will respond to short-term incentives even at the cost of long-term outcomes. (Temptation, learning and backward induction in sequential decision tasks.) Michael Vlassopoulos, University of Southampton, UK, suggested that people who get random bonuses, that is, whose incentives are not clearly tied to particular outcomes, are more likely to cheat employers.  (The impact of bonuses on effort provision and cheating.)  Lisa Ordonez, University of Arizona, USA, suggested that basing incentives on achievement of short-term goals (pay for performance) increases lying about performance. (The impact of goals on ethical behavior.) Conflicts of Interest Two presenations discussed conflicts of interest and its effects. Jan Potters (see above) also found that disclosure of payments to advisors did not not lead them to give more honest advice. Miriam Mezger, University of Cologne, Germany, presented a poster that suggested that when people must make decisions based on a mixture of advice from unbiased lay-people and conflicted individuals who do not disclose their conflicts, addition of advice from unbiased experts leads to better decisions.(Can experts reduce the impact of deceptive ratings on the internet? - an experiment on product choice with recommendations by managers and experts.) Summary The enthusiasm and level of intellectual engagement at the meeting suggested the importance of this field.  However, it was disappointing, but not surprising that the attendance at this meeting did not suggest this topic is yet of concern in health care.  Although the opening remarks by the Dean of the Rady School included a call for participation by people from health care, and other fields such as environmental science, I may have been the only person attending with a health care affiliation.  Health care could benefit from increased attention to deception, dishonesty and unethical conduct in the field, how it happens, and what can be done to prevent it.  However, as we have often suggested, discussion of such topics is often anechoic because its capacity to offend or threaten those who most benefit from the status quo in health care.  It was striking that presentations suggested that many practices in our current US commercialized, business-focused health care system may be leading to increased dishonesty and other unethical behavior.  These include thinking about health care in business and quantitative contexts, not in the context of the health care mission to help patients and the public, focus and incentives based on short-term goals, often revenue, and acceptance of conflicts of interest as inevitable and necessary to increase innovation. Of course, these particular ideas may not make many of our current health care leaders happy. They do suggest that we could improve honesty and ethics in health care by reminding peole with decision-making authority of the centrality of the health care mission, and the need to improve patients' and the public's health, and to de-emphasize focus and incentives on short-term goals, particularly financial ones.  We also ought to try to minimize, not just tolerate and "manage" conflicts of interest.

A Conference on the Psychology of Deception and Unethical Behavior

The Deception, Incentives and Behavior Conference at the Rady School of Management, University of California - San Diego, was attended by o...

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Why non-medical amateurs need to be kept away from authority roles in health IT ... lest their ignorance kill people

This example of a disaster waiting to happen, in the form of an error-promoting CPOE, is a poster example of why the net of litigation needs to be cast far wider than just clinicians when EHR-related errors result in injury or death: <div class="separator" style="clear: both; text-align: center;"><a href="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEhErcAOGFgPHwF2RhkSw7AgRGtg9SRiSYR38-RwttcRs36NMMjonVFNJRoXgN887gCIJmThItvDT3Z3yBkir_ApP62Hq71gnlmW9Eqsbqsh3Vp85q-CpGPL31o4FIWtisxSAlYfzCeOVn9j/s1600/warfarin.jpg" imageanchor="1" style="margin-left: 1em; margin-right: 1em;"><img border="0" height="216" src="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEhErcAOGFgPHwF2RhkSw7AgRGtg9SRiSYR38-RwttcRs36NMMjonVFNJRoXgN887gCIJmThItvDT3Z3yBkir_ApP62Hq71gnlmW9Eqsbqsh3Vp85q-CpGPL31o4FIWtisxSAlYfzCeOVn9j/s400/warfarin.jpg" width="400" /></a></div><div class="separator" style="clear: both; text-align: center;">CPOE selection screen for crucial blood thinner, coumadin (Warfarin).  Click to enlarge.</div> This order entry screen, from a production system (of a vendor whose stock price has recently <a href="http://hcrenewal.blogspot.com/2012/04/allscripts-shares-plunge-on-weak.html" target="_blank">taken a dive</a>) shows the following.  In all fairness, I do note it's unclear if the vendor or the customer's configuration "experts" were responsible for this: <div style="text-align: center;">COUMADIN (warfarin) tablet 2 mg Oral daily once. CAUTION: Potential look-Alike or Sound-Alike medication - this product is COUMADIN</div><div style="text-align: center;"> </div><div style="text-align: left;">with similar entries for other doses. Below and not indented as is the selection, where the clinician is liable not to look very carefully, is the helpful interpretation:  "warfarin (COUMADIN) Tablet 2 milligram Oral daily for 1 Times." "Oral daily for 1 Times?"</div><div style="text-align: left;"> </div><div style="text-align: left;">This drug needs to be given daily, generally for a very long term.  Its effect on blood clotting varies for numerous reasons in an individual over time, and needs to be checked frequently via a blood test (International Normalized Ratio or INR) to ensure the level of effect is neither too little (which could result in clots) or too much (which could result in serious or fatal bleeding).</div><div style="text-align: left;"> </div><div style="text-align: left;">In this case, the clinician wanted Coumadin to be administered "daily", as in "each and every day", but this was the default - daily, but only once.  "Oral daily for 1 Times." Brilliant!  </div><div style="text-align: left;"> </div><div style="text-align: left;">Daily Coumadin (i.e., daily EVERY DAY), the clinician related, could be ordered only with "painstaking difficulty."</div><div style="text-align: left;"> </div><div style="text-align: left;">"X mg Oral daily once" is an unimaginably absurd and bizarre dosing selection to have on a CPOE system for such a critical drug - or any drug.  "Daily - once?"  </div><div style="text-align: left;"> </div><div style="color: red; text-align: left;">It should not, and does not, take a rocket scientist to realize this selection could quite easily lull the busy clinician into believing they have selected a dose to be continued every day - i.e., "once daily" - as per the standard usage of this drug.</div><div style="text-align: left;"> To order this drug for (true) daily administration, a user must find a "repeat" icon and click the number of days the drug is to be administered.  The "repeat" icon is not readily apparent amidst screen clutter. For other drugs, the order choices are "## mg oral daily" or similar.  This semantic and human-computer interaction ineptitude is truly a disaster waiting to happen, especially with the medical/nursing/trainee staff turnaround that goes on in hospitals, and with the reality that clinicians are working at various hospitals with different CPOE/EHR systems. Is this some sort scheme to prevent endless-administration Coumadin errors when the drug is actually deliberately discontinued, I ask?  If so, it's ill-conceived and dangerous at best. By way of further information, this drug is a common anticoagulant whose use is often protective of injurious or fatal blood clots that can cause strokes or death in people with common conditions such as atrial fibrillation or prosthetic heart valves:</div><blockquote class="tr_bq"><div style="text-align: left;"> </div><div style="text-align: left;"><a href="http://en.wikipedia.org/wiki/Warfarin" target="_blank">Warfarin</a> is used to decrease the tendency for thrombosis or as secondary prophylaxis (prevention of further episodes) in those individuals that have already formed a blood clot (thrombus). Warfarin treatment can help prevent formation of future blood clots and help reduce the risk of embolism (migration of a thrombus to a spot where it blocks blood supply to a vital organ). The type of anticoagulation (clot formation inhibition) for which warfarin is best suited, is that in areas of slowly-running blood, such as in veins and the pooled blood behind artificial and natural valves, and pooled in dysfunctional cardiac atria. Thus, common clinical indications for warfarin use are atrial fibrillation, the presence of artificial heart valves, deep venous thrombosis, and pulmonary embolism (where the embolized clots first form in veins).</div></blockquote> This is an example of the kinds of mission hostility (other equally bizarre examples presented <a href="http://www.tinyurl.com/hostileuserexper" target="_blank">here</a>) that results when amateurs attempt to play doctor. I add that this type of "errorgenicity" is inexcusable.  If patients suffer harm from this type of "feature", the net of liability needs to go further than just the clinician who was caught in a web of cybernetic clinical toxicity. -- SS 5/1/2012 Addendum: More EHR madness and another physician, a cardiologist and electrophysiologist, who also believes these should be considered medical devices. From DrWes blog (excerpts, and emphases mine; see entire post at link below): <blockquote class="tr_bq"><a href="http://drwes.blogspot.com/2012/04/why-electronic-medical-record-needs-to.html" target="_blank">The Electronic Medical Record Should be Viewed as a Medical Device</a>  Apr. 30, 2012 </blockquote><blockquote class="tr_bq"> This week I received a medical record from a large academic medical center somewhere in the United States (the details were are unimportant) that has one of these new pioneering EMR systems manufactured by $13 billion-dollar company, <a href="http://www.cerner.com/" target="_blank">Cerner Corporation</a> ... what I saw was one of the better examples of how EMRs are contributing to misinformation and confusion when health care is delivered. I received a copy of an internal medicine consult that was performed on a patient at this outside hospital. I have extracted the "medications" portion of the internist's note exactly as it was displayed in the note below ... Needless to say, I was terrified at what the system had listed as the patient's medications: In this example, we see multitudes of medications listed more than once. We see drugs of similar classes (antihistamines, beta blockers) on the same list. We see warfarin, one of our most dangerous drugs dispensed, without a dose included. We see what seems to be outpatient meds listed with inpatient meds, I'm not sure. Honestly, we really have no idea what medications are actually being taken from this list. And yet this list of medications is listed by the EMR as the patient's "Active Medications." <div class="separator" style="clear: both; text-align: center;"><a href="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEiLVg_K31W2k2woo4cxzkEWNEyihdGXVwcOQYD7QWdf9oACrepD14SekHK0sTSlMhvk2GPWFcPERiVcHdpflBjtzZtbQHJFDPdOw_wB9_TLUmhMP69VNLQg8tQKL_Bdc9nZXs_dkD_4e5ss/s1600/Medlist1.jpg" imageanchor="1" style="margin-left: 1em; margin-right: 1em;"><img border="0" height="320" src="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEiLVg_K31W2k2woo4cxzkEWNEyihdGXVwcOQYD7QWdf9oACrepD14SekHK0sTSlMhvk2GPWFcPERiVcHdpflBjtzZtbQHJFDPdOw_wB9_TLUmhMP69VNLQg8tQKL_Bdc9nZXs_dkD_4e5ss/s320/Medlist1.jpg" width="176" /></a></div>Med list (page 1).  Click to enlarge; see original post for part 2. ... What the heck have we created?  </blockquote><blockquote class="tr_bq">Certainly, any capable physician who cares for patients would describe this medication list as worthless. </blockquote> This "med list" is similar to the list I showed at <a href="http://hcrenewal.blogspot.com/2009/02/are-health-it-designers-testers-and_26.html" target="_blank">part 4 of my multi-part series on the mission hostile user experience</a> of most commercial EHR's, from yet another system, redrawn by me in redacting the vendor ID.  These lists reflect a mercantile computing person's view of a med list as an inventory of pills: <div class="separator" style="clear: both; text-align: center;"><a href="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEgfk6_NvuGu6WBIr_QdltCZ-jdeiAxOhYdSGxhovKJWdBkByUuK3QQLblfOgxBLUhHyXiXALUrdOO_L3Mpmo0MVK0uVv9ogJKnjRU5xWhvQJV125qgLBvIipD6pBDOZJ49s3EPjoCe_AL3-/s1600/meds.jpg" imageanchor="1" style="margin-left: 1em; margin-right: 1em;"><img border="0" height="188" src="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEgfk6_NvuGu6WBIr_QdltCZ-jdeiAxOhYdSGxhovKJWdBkByUuK3QQLblfOgxBLUhHyXiXALUrdOO_L3Mpmo0MVK0uVv9ogJKnjRU5xWhvQJV125qgLBvIipD6pBDOZJ49s3EPjoCe_AL3-/s320/meds.jpg" width="320" /></a></div><div style="text-align: center;"> Another "what the heck have we created?" EHR med list, on screen. Click to enlarge.</div><div style="text-align: center;"> </div><div style="text-align: left;"> Dr. Wes also asks:</div><div style="text-align: left;"> </div><blockquote class="tr_bq">... So how will we measure problems with EMRs? It seems industry representatives would rather not address these concerns. We should ask ourselves, is anyone thinking about this?</blockquote><div style="text-align: left;"> </div>Yes, they are.  And we are spreading our thinking to one place where action might actually occur sooner rather than later:  to the Plaintiff's Bar. -- SS

Why non-medical amateurs need to be kept away from authority roles in health IT ... lest their ignorance kill people

This example of a disaster waiting to happen, in the form of an error-promoting CPOE, is a poster example of why the net of litigation needs...

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The 2011 Best Paid US CEO's Company's Latest Legal Settlement

Yet another legal settlement illustrates the contrast between rewards given to the hired managers of large health organizations and their organizations' performance.  The New Settlement The legal settlement in question was simple, as <a href="http://www.reuters.com/article/2012/04/26/mckesson-settlement-idUSL2E8FQ5KJ20120426">reported</a> by Reuters, <blockquote>McKesson Corp, one of top U.S. drug wholesalers, has agreed to pay more than $190 million to settle claims that it had violated the federal False Claims Act by reporting inflated pricing information for many prescription drugs, causing Medicaid to overpay for them. The settlement was announced Thursday by U.S. Attorney Paul Fishman in New Jersey. According to the government, McKesson reported inflated pricing data to First DataBank, a publisher of drug prices that most state Medicaid programs use to set payment rates for pharmaceutical products. The government accused McKesson of marking up prices on a variety of drugs by 25 percent between Aug. 1, 2001, and March 31, 2005. It said McKesson's conduct had caused the United States and individual states to pay inflated reimbursements on Medicaid claims submitted between Aug. 1, 2001 and Dec. 31, 2009. 'We have no tolerance for those who take advantage of that system to bring in more business by falsely increasing reimbursements to retailers,' Fishman said in a statement.</blockquote> As is typical, the company denied doing anything wrong: <blockquote>McKesson was not immediately available to comment. According to settlement papers, McKesson 'expressly denies' the government's charges, as well as those of a whistleblower, David Morgan, in a related civil lawsuit filed in New Jersey federal court. The San Francisco-based company did not admit liability or wrongdoing in agreeing to settle.</blockquote>It was hardly McKesson's first ethical problem. McKesson's Track Record This is just the latest in a long series of legal problems for this company. The Depression-Era Scandal Way back in 1938, there was the McKesson & Robbins scandal, one of the major scandals of the depression era. The company had been taken over by one Philip Musica, an accused bootlegger, who committed suicide before a trial (see <a href="http://hcrenewal.blogspot.com/2010/10/history-repeats-and-repeats-mckesson.html">this post</a>). In this century, there were: The Securities Fraud Case As we <a href="http://hcrenewal.blogspot.com/2009/11/former-mckesson-ceo-and-board-chairman.html">posted</a> in 2009, five former executives pleaded guilty, the former CEO and Chairman Charles McCall was convicted of fraud in 2009. The company settled investor lawsuits in 2005 for $960 million. The First Pharmaceutical Pricing Case As the Wall Street Journal <a href="http://online.wsj.com/article/SB122731205016649381.html">reported</a> in 2009, <blockquote>McKesson Corp., a giant drug-wholesale and -distribution company, agreed to pay $350 million to settle cases in which it was accused of helping to increase drug prices in 2001 and 2002. The money will go to health plans that pay for drugs and consumers who paid co-pays for their medicines. The San Francisco-based company said the settlement, which is subject to court approval, includes 'an express denial of liability of any kind' but that it decided to settle the cases to avoid the uncertainty of litigation</blockquote> In addition, as we noted <a href="http://hcrenewal.blogspot.com/2010/10/history-repeats-and-repeats-mckesson.html">here</a>, the company settled with the state of Connecticut for "illegal and deceptive" pricing practices for a mere $15 million. These settlements appear to be precursors of the just announced one. The Propofolol Punitive Damages As we noted <a href="http://hcrenewal.blogspot.com/2011/10/another-month-another-series-of-adverse.html">here</a>, McKesson was one of three companies to collectively pay $162 million in punitive damages in a case involving allegations that the companies sold propofolol, an injectable anesthetic, in reusable containers that were susceptible to contamination with the hepatitis C virus. The Best-Paid CEO in America All these legal issues notwithstanding, late in 2011, McKesson leadership made headlines for a different reason. Based on one method of computation, the company's CEO was the best-paid of an exceedingly well-paid 2011 CEO class. An <a href="http://www.thedailybeast.com/articles/2012/01/02/he-s-one-of-the-nation-s-highest-paid-ceos-and-you-ve-never-heard-of-him.html">article</a> in the Daily Beast noted: <blockquote>John Hammergren, [is] the CEO of the McKesson Corp., a giant medical-supply company in California. Hammergren is the $145 million man, top dog on the latest listing of the country’s highest-paid chief executives.</blockquote> The details of the compensation package included, <blockquote>Yet last year McKesson contributed more than $13 million just to Hammergren’s pension, according to company documents. Among the other perks he enjoys: a chauffeur to drive his company car, free use of the corporate jet for personal travel, and an extra $17,000 a year to pay for a financial planner because handling all those hundreds of millions is no doubt complicated stuff.</blockquote> Also, <blockquote>Then there are the assorted perks he gets each year at an annual cost of $1 million or so. Choose the perk that makes you the most jealous. Maybe it’s this line found in McKesson’s most recent proxy statement: 'For security, protection, and privacy reasons, the Board has directed our CEO to use the corporate aircraft for both business and private travel.' Or maybe it’s the bounty that awaits Hammergren on the other side of his retirement. The company discontinued its pension program for ordinary employees in 1997 but not for top executives. If Hammergren quit tomorrow, according to company filings, he would receive a pension valued at $125 million. The party won’t stop once the 52-year-old Hammergren retires. Among his lifetime benefits: a personal assistant and office, which the company figures will cost more than $200,000 a year, and the services of a financial counselor—a perk that will eat up $350,000 in profits, according to company estimates. The goodies keep coming even after he dies. If his wife survives him, she will continue receiving his base salary for six months and will also get $2 million in cash. That cash bonus would actually cost the company nearly twice that amount, as it's promised to cover the widow’s cost of paying taxes on that money. And then there’s a provision so outsize it’s drawn the attention of corporate-governance watchdogs like GMI, the research group that put Hammergren in the top spot of its latest survey of CEO salaries. If Hammergren loses his job due to a change in ownership, he receives an immediate $469 million payout, GMI found—giving him perverse incentive to see it happen.</blockquote> Although Mr Hammergren has not been the best paid CEO every year, the Daily Beast article showed how much he has made over the years: <blockquote>Hammergren’s annual total compensation payouts, taken from the company’s public filings with the Securities and Exchange Commission: $46 million in 2011; $55 million in 2010; $37 million in 2009; another $41 million in 2008. Hammergren hadn’t founded the company. Wall Street analysts covering McKesson can tell you of the disappointments and miscues that have marked his tenure. But his haul in the 13 years he has been running McKesson? More than $500 million, according to data provided by Equilar, an executive-compensation data firm.</blockquote> It then contrasted this consistent largess, spiced with the 2011 results, with the company's long-term financial performance. After the scandal that eventually resulted in crimincal convictions for some McKesson executives: <blockquote>'They had to give the CEO job to somebody, and basically he was the last man standing,' said an analyst who has been covering McKesson and its competitors since the 1990s. Many in the industry had never heard of Hammergren when he took over as president and co-CEO in 1999, this analyst said, 'but I guess it’s better to be lucky than good.' Hammergren became sole CEO in 2001. McKesson’s stock had hit a high of just under $95 a share but fell below $20 after the scandal broke. Hammergren deserves credit for stabilizing the company—some might even say he rescued McKesson—but a long-term shareholder could be forgiven for feeling that the company’s board of directors has been overly generous to its chief executive. As of Friday, the stock was trading at $78 a share—still off its 1998 high. Factoring in the regular dividends the company has paid over the years, a shareholder’s investment would be worth slightly more than it was 13 years ago.</blockquote>Summary So Mr Hammergren's corpulent compensation is vastly out of proportion not only to the company's woeful ethical performance, but also to the long-term wealth created for its owners, that is, its shareholders. So McKesson provides just the latest example of how the top hired leaders of health care organizations seem to monumentally prosper no matter how badly their organizations fare in terms of ethical performance, good done for patients and health care, or long-term financial performance. (See recent examples <a href="http://hcrenewal.blogspot.com/2012/04/another-legal-settlement-for-tenet.html">here</a> and <a href="http://hcrenewal.blogspot.com/2012/04/spoils-of-scorched-earth-defense-merck.html">here</a>, and our posts on executive compensation <a href="http://hcrenewal.blogspot.com/search/label/executive%20compensation">here</a>.)  As we <a href="http://hcrenewal.blogspot.com/2009/12/compensation-madness-insiders-hijacking.html">quoted</a> a McGill economics professor who was writing about the global financial collapse, "all this compensation madness is not about markets or talents or incentives, but rather about insiders hijacking established institutions for their personal benefit." To truly reform health care, we must stop this compensation madness. We must make health care leaders accountable for their organizations' effects on patients' and the public's health, and make sure they get reasonable, not royal compensation reasonably related to their organizations' performance, including ethical performance.

The 2011 Best Paid US CEO's Company's Latest Legal Settlement

Yet another legal settlement illustrates the contrast between rewards given to the hired managers of large health organizations and their or...

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Insurers' diversification creating monopoly power and conflict of interest - quoted in the Washington Post

I am quoted in a Washington Post article today on potential conflicts of interest when medical payers/insurers acquire the firms that hospitals and doctors use to challenge medical payment denials: <blockquote class="tr_bq"> <a href="http://www.washingtonpost.com/health-insurance-companies-push-to-diversify-raises-concerns/2012/04/27/gIQAWoSkoT_story.html" target="_blank">"Health insurers’ push to diversify raises ethical concerns" </a> Washington Post Jay Hancock, Sunday, April 29 Like hospitals and doctors everywhere, Banner Health fights a daily battle to get paid by insurance companies and government agencies for the care it delivers.  So the hospital system hired a company called Executive Health Resources to fight back against the likes of Medicare and UnitedHealthcare when they deny claims or pay bills for less than what Banner thinks it is owed.</blockquote> Fair enough. <blockquote class="tr_bq">But Banner executives began to worry about EHR’s independence when the firm was acquired in 2010 by UnitedHealth Group, UnitedHealthcare’s parent. </blockquote> Issues can get a bit sticky under such an arrangement. I put it this way: <blockquote class="tr_bq"> Critics call United’s ownership of EHR a troubling conflict of interest that could give it confidential information about rivals as well as patients and limit EHR’s power to demand payment from its much larger corporate sister. “How is that ownership going to affect the mission of a company whose business is to extract more money from payers?” said Scot Silverstein, a physician and specialist in medical software and patient records at Drexel University. “Imagine going to a plaintiff’s lawyer to take your malpractice case and not knowing that plaintiff’s lawyer actually works for the hospital that you’re suing.”</blockquote> When payers acquire those who would challenge their payment denials, I worry about the consolidation of power being too great for the public good. As we learn, the relationship is somewhat stealthy: <blockquote class="tr_bq">... There is no mention of EHR’s ownership in the “Corporate Overview” section of its Web site or elsewhere on the site. Nor did the American Hospital Association identify EHR as a United subsidiary in September when it renewed its exclusive endorsement of EHR’s denial-fighting services. EHR pays the hospital association a fee for the endorsement. The group declined to disclose the amount.  </blockquote> The plot thickens: <blockquote class="tr_bq">Claims consultants such as EHR typically gain access to millions of patient records and confidential contracts between hospitals and insurers, industry officials say. If UnitedHealthcare, United’s insurance wing, gained access to that data, it would obtain “a huge business advantage” over insurance rivals as well as the hospitals, Kofman said.</blockquote> In today's healthcare business environment, "if" seems to me to be optimistic. Hancock goes further in the article: <blockquote class="tr_bq"> As insurers eager to add revenue streams convert themselves into diversified health-services companies, they often buy traditional business adversaries, including physician groups and hospital consultants such as EHR. They’re also buying technology companies and research firms that serve medical-care providers, raising questions not only about independence but about the privacy of patient information. </blockquote> A Georgetown professor, formerly a state insurance superintendent, gets to the heart of the matter, using United as but one example: <blockquote class="tr_bq"> “I am not convinced that, even with proper disclosure, that an entity owned by United could aggressively advocate against United’s interests,” said Mila Kofman, a Georgetown professor who was Maine’s insurance superintendent.</blockquote> This factoid is eye-opening: <blockquote class="tr_bq"> Appealing claims denials has become a huge, high-tech business, reflected in the more than $1 billion that United reportedly paid for EHR [Executive Health Resources].</blockquote> You might think there were better things to do with $1 billion besides administrative bloat - such as taking care of patients. We probably need new laws to catch up with the flurry of M&A's going on in healthcare between payers, the healthcare delivery sector, and the "referees" that mediate between them when disputes arise. Read the entire article at the WaPo link above.  The examples get even more convoluted. -- SS Addendum: Roy Poses notes: <blockquote class="tr_bq">This appears to be a newly recognized type of conflict of interest that contributes to the concentration of power in the US commercialized health care system.  While many people tout how our health care system is "competitive" and a "free market," it is ever more dominated by a decreasing number of enlarging organizations.  True health care reform would break up health care oligopolies. </blockquote> -- SS

Insurers' diversification creating monopoly power and conflict of interest - quoted in the Washington Post

I am quoted in a Washington Post article today on potential conflicts of interest when medical payers/insurers acquire the firms that hospit...

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