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Who Really Makes Brand-Name Pharmaceuticals?

A striking illustration of the hazards to patients' and the public's health from health care organizational leaders using fashionable management techniques to maximize short-term revenue <a href="http://www.reuters.com/article/2012/08/28/us-china-pharmaceuticals-idUSBRE87R0OD20120828">appeared</a> in Reuters.  Background: The Contaminated Heparin from China The particular issue got public notice after US patients started to get sick and die after being infused with heparin, the common anti-coagulant drug. As we have discussed repeatedly starting in 2008 (look <a href="http://hcrenewal.blogspot.com/search/label/heparin">here</a>, and see the summary at the end of the post), Baxter International was selling contaminated heparin under its label which was made in unregulated workshops in China, and then transmitted through a complex chain of Chinese and US companies.  What helped to further obscure the problem was what Baxter was buying was called the active pharmaceutical ingredient (API), which actualy means it was buying the active drug from poorly documented foreign sources.  In other words, it had entirely outsourced the manufacturing of a drug it sold as if it had been made by Baxter in the US. Continued Outsourcing to Questionable Drug Manufacturers Reuters reported on a new investigation of outsourcing of drug manufacturing to China.  The main point was: <blockquote>Four years ago, Beijing promised to clean up its act following the deaths of at least 149 Americans who received contaminated Chinese supplies of the blood-thinner heparin. But an examination by Reuters has found that unregulated Chinese chemical companies making active pharmaceutical ingredients (API) are still selling their products on the open market with few or no checks. Interviews with more than a dozen API producers and brokers indicate drug ingredients are entering the global supply chain after being made with no oversight from China's State Food and Drug Administration (SFDA), and with no Good Manufacturing Practice (GMP) certification, an internationally recognized standard of quality assurance. 'There is falsification of APIs going on, we know it,' said Lembit Rago, coordinator for Quality Assurance and Safety in Medicines with the World Health Organisation (WHO).</blockquote> In fact, the article made the point that the majority of drugs sold worldwide are the product of outsourced, often unregulated, and potentially contaminated and adulterated manufacturing: <blockquote>'Illegal ingredients in bulk are a big problem, but nobody talks about it,' said Guy Villax, chief executive of Hovione, an API supplier based in Portugal with factories there and in China, the United States and Ireland. About 70 to 80 percent of all active drug ingredients - the biologically active component in medicines - originate in China and India, estimate industry experts, with China accounting for the lion's share. Its export market in these products is worth $22 billion in annual sales, according to the China Chamber of Commerce for Import and Export of Medicines and Health Products. 'If China for some reason decided to stop exporting APIs, within three months all our pharmacies would be empty,' said Villax.</blockquote>How Dodgy Manufacturers Continue to Operate Apparently, a particular problem in China is that APIs, that is, the particular drugs in question, can be made by chemical as opposed to officially designated "pharmaceutical" companies, and these chemical companies are not regulated, <blockquote>A key regulatory weakness in China is the distinction between pharmaceutical and chemical companies. While the former are regulated by the SFDA, the latter, making everything from sweeteners to solvents, are not. Yet many chemical companies also churn out drug ingredients, exploiting a loophole by describing the products as chemicals, which they are, rather than the more specific designation of APIs.</blockquote> For example, the article recounted how an unregulated chemical company was apparently a source for a well-known branded pharmaceutical sold by two big pharmaceutical companies headquartered in developed countries, <blockquote>[A]company, Jinan Hongfangde Pharmatech (JHP), of Jinan city in Shandong province, had a product list showing at least five patented products for sale. They included tiotropium bromide, a blockbuster lung drug co-promoted by Boehringer-Ingelheim and Pfizer Inc and sold under the name Spiriva,...</blockquote> Both Boehringer-Ingelheim and Pfizer spokespeople claimed that they only bought drugs from known sources, but then it would be pointless for Jinan Hongfangde Pharmatech to manufacture tiotropium bromide. The Use of Brokers More questions were raised by the pharmaceutical company's apparently common practice of buying drugs through brokers, <blockquote>The rise of the Internet has facilitated exports of drug ingredients. An online search brings up websites offering hundreds of Chinese API sellers. Those not GMP-certified or SFDA-registered are not necessarily substandard, but buyers lack independent quality assurance. The pervasive presence of brokers in the supply line is another risk. Pharmaceutical companies looking to source APIs in China typically hire middlemen to help them navigate the language, red tape and protocol. That system helps Chinese companies making substandard APIs avoid detection.</blockquote> The reason corporate executives choose to buy drugs in China rather than having their companies manufacture them themselves seems to be to reduce costs. A <a href="http://www.in-pharmatechnologist.com/Ingredients/Substandard-APIs-will-be-made-as-long-as-Pharmas-keep-buying-them-says-WHO">post</a> on the In-Pharma blog quoted Lembit Rago, the same WHO official quoted by Reuters, thus, <blockquote>There are Chinese manufacturers supplying APIs of high quality to multinational companies, but there are also companies producing APIs of poor or not defined quality.</blockquote>So, <blockquote>As long as there are customers for substandard APIs they will be produced and sold.</blockquote> The cheapest Chinese drugs, of course, come from the most questionable manufacturers, and that may not be apparent to companies who use brokers to facilitate purchases. <blockquote>'Any number of foreign pharmaceutical companies go no further than looking for API suppliers at CPhI (an international pharmaceutical fair) based only on price,' [manaing director of Samsara Biopharma Consulting Robert] Walsh said. Reuters spoke to brokers who said an API made by an unregulated chemical company would cost less than one from a company that had a GMP certificate. 'Different (API) grades have different prices. Sometimes we accept an order sheet and we happen to find a factory that can do it cheaper than our factory, we will outsource to them and make a bigger margin,' said one broker based in China who sources for a South African outsourcing firm. In China there are few legal repercussions for broker firms who relabel or misrepresent products, and tracing counterfeit and substandard APIs is extremely difficult. 'There are a lot of brokers who are relabeling (APIs) which means you can't trace where the API comes from and that adds to the risk,' said the WHO's quality assurance expert Rago. Andre, the Belgian drug detective, estimates he has uncovered fraud or misrepresentations in as many as 25 percent of cases where he has been hired to audit factories all over China. 'If you can substitute an API that is expensive to make and manufactured at a high level with something that costs much less, then that can happen,' Andre said. 'It's impossible to give an exact number, but it's not rare. It's a minority, but not tiny minority.'</blockquote>Use of Substandard Raw Materials Meanwhile, a <a href="http://www.pharmalot.com/2012/09/using-cooking-oil-to-make-antibiotics-in-china/">post</a> on PharmaLot suggested that the supposedly regulated Chinese "pharmaceutical" companies may implement questionable manufacturing practices, <blockquote>A subsidiary of the Joincare Pharmaceutical Group reportedly used reprocessed cooking oil – otherwise known as ‘gutter’ oil – to make a widely used antibiotic in China. If the term gutter oil is unfamiliar, this refers to reprocessed oil made from kitchen waste dredged from gutters behind restaurants. The State Food and Drug Administration is now investigating the charge after media reports over the past several days, China Daily reports. Why might gutter oil be purchased to produce antibiotics? The oil is cheaper than the more expensive soybean oil used to make 7-aminocephalosporinic acid, or 7-ACA, a chemical for produce cephalosporins. Joincare produces 25 percent of the total amount of the chemical, although up to a dozen other drugmakers may have purchased gutter oil from various suppliers, according to various Chinese media reports. For its part, Joincare reportedly denied using gutter oil. The companies reportedly bought the recycled cooking oil from a company called Huikang Grease Co., which is facing prosecution over its alleged processing and selling of thousands of tons of gutter oil in 2010 and 2011. The Shanghai Daily reported that Huikang received around $22.5 million for roughly 14,700 tons of gutter oil sold to Jiaozuo Joincare Biological Product, a unit of Joincare.</blockquote> Summary There is increasing evidence that a substantial proportion, probably the majority of drugs sold by big pharmaceutical companies based in developed countries were actually made by often poorly regulated firms based elsewhere, often China or India. To put it more directly, most so called pharmaceutical companies in the US and other developed countries have outsourced the actual manufacturing of drugs. Thus, most companies that appear to be pharmaceutical manufacturing companies are really just pharmaceutical marketing and development companies. (And not so much the latter, look here:  Light DW, Lexchin JR. Pharmaceutical R&D; what do we get for all that money? Brit Med J 2012; 345: 22-25.  Link <a href="http://www.bmj.com/content/345/bmj.e4348">here</a>.) Pharmaceutical companies appear to be abandoning their core essence, but are content to market drugs  under their logos without telling the patients who take them the real source of these products.  This would appear to be a big scandal, but one that stays curiously <a href="http://hcrenewal.blogspot.com/search/label/anechoic%20effect">anechoic</a>. I have yet to see any discussion with pharmaceutical executives about why their companies hardly make drugs anymore. In the absence of such discussion, I can only speculate that most likely, this is first a product of <a href="http://hcrenewal.blogspot.com/search/label/financialization">financialization</a>. Drug company executives, like most organizational leaders, have fallen under the spell that says their only goal should be to increase short-term revenues. It may be cheaper to buy drugs from perhaps dodgy outsourced suppliers rather than manufacturing them them themselves. Continuing stories like those above, and that of the contaminated Chinese heparin suggest that these outsourced drugs are cheap for a reason. It appears that to save money short-term, pharmaceutical executives may be abandoning their most central mission, to provide pure, unadulterated drugs. The continuing story of outsourced pharmaceutical manufacturing provides yet more evidence that current management dogma may be literally toxic. Once again, I suggest that true health care reform requires leadership of health care organization who put patients' and the public's health ahead of short-term revenue (and the personal enrichment that may result). It is likely that a number of policy changes will be needed to reduce the threats posed by contaminated or adulterated outsourced pharmaceuticals.  There is one simple step that ought to be taken quickly to at least make the problem more transparent.  In the US, most manufactured products have a label disclosing the country of origin.  In parallel with that, all pharmaceutical containers, and all pharmaceutical labels and marketing materials ought to disclose the country in which the active pharmaceutical ingredient was manufactured, and the name and location of the company responsible for that manufacture.  Appendix - Heparin Case Summary - We have posted several times, recently <a href="http://hcrenewal.blogspot.com/2011/06/first-contaminated-heparin-case-verdict.html">here</a> about the tragic case of suddenly allergenic heparin. Although heparin, an intravenous biologic anti-coagulant, has been in use for over 70 years, serious allergic reactions to it had heretofore been rare. Starting late in 2007, hundreds of such reactions, and 21 deaths were reported in the US after intravenous heparin infusions.All the heparin related to these events in the US was made by Baxter International. - We then learned that although the heparin carried the Baxter label, it was not really made by Baxter. The company had outsourced production of the active ingredient to a long, and ultimately mysterious supply chain. Baxter got the active ingredient from a US company, Scientific Protein Laboratories LLC, which in turn obtained it from a factory in China operated by Changzhou SPL, which in turn was owned by Scientific Protein Laboratories and by Changzhou Techpool Pharmaceutical Co. Changzhou SPL, in turn, got it from several consolidators or wholesalers, who in turn got it from numerous small, unidentified "workshops," which seemed to produce the product in often primitive and unsanitary conditions. None of the stops in the Chinese supply chain had apparently been inspected by the US Food and Drug Administration nor its Chinese counterpart. (See posts <a href="http://hcrenewal.blogspot.com/2008/02/in-middle-of-all-those-pigs-in-china.html">here</a> and <a href="http://hcrenewal.blogspot.com/2008/03/heparin-in-era-of-hogwash.html">here</a>.) - We found out that the Baxter International labelled heparin was contaminated with over-sulfated chondroitin sulfate, a substance not found in nature, but which mimics heparin according to the simple laboratory tests used in the Chinese facilities to check incoming heparin. (See post <a href="http://hcrenewal.blogspot.com/2008/03/fake-heparin-then-sick-and-dead.html">here</a>.) Further testing revealed that the contamination seemed to have taken place in China prior to the provision of the heparin to Changzhou SPL. (See post <a href="http://hcrenewal.blogspot.com/2008/03/who-was-responsible-for-purity-of.html">here</a>.) It is not clear whether Baxter International or Scientific Protein Laboratories had inspected most of the steps in the supply chain, or even knew what went on there. - The Baxter and Scientific Protein Laboratories CEOs did not seem aware of where they got the heparin on which the Baxter International label was eventually affixed. But one report in the New York Times alleged that Scientific Protein Laboratories would not pay enough for heparin to satisfy any sources other than the small "workshops." - Leaders of all organizations involved, Baxter International, Scientific Protein Laboratories, Changzhou SPL, the Chinese government, and the US Food and Drug Administration, and the US Congress assigned blame to each other, but none took individual or organizational responsibility. (See post <a href="http://hcrenewal.blogspot.com/2008/05/blaming-some-dude-for-contaminated.html">here</a>.)  Note that SPL was recently bought out and taken private, making its current leadership even less transparent (see post <a href="http://hcrenewal.blogspot.com/2010/10/more-contaminated-heparin-but-who-leads.html">here</a>).  A 2010 inspection of an SPL facility by the FDA revealed ongoing manufacturing problems (see post <a href="http://hcrenewal.blogspot.com/2011/02/fda-to-scientific-protein-laboratories.html">here</a>). - Researchers (who turned out to have financial ties to a company which is developing an anti-coagulant drug that could compete with the heparin made by Baxter International) investigated the biological mechanisms by which the contamination of the heparin lead to adverse effects, but no one investigated further how the contamination occurred, or who was responsible. (See post <a href="http://hcrenewal.blogspot.com/2009/08/who-investigated-case-of-deadly.html">here</a>.) - Hundreds of lawsuits against Baxter have now been filed, so far without resolution. (See post <a href="http://hcrenewal.blogspot.com/2010/01/blog-post.html">here</a>.)  Efforts to make documents to be used in these cases public so far have not succeeded (see post <a href="http://hcrenewal.blogspot.com/2010/08/proprietary-information-confidentiality.html">here</a>). - A government report which attracted little attention warned of the dangers of pharmaceutical ingredients made in China and subject to virtually no oversight. (See post <a href="http://hcrenewal.blogspot.com/2010/04/another-echo-of-case-of-deadly-heparin.html">here</a>.) -  Despite requests from the US, the Chinese government did not investigate the production of the heparin that lead to the deaths (see post <a href="http://hcrenewal.blogspot.com/2010/07/more-about-what-we-dont-know-about.html">here</a>.) -  In February, 2011, a congressional investigation of the case was announced, but results are so far unavailable (see post <a href="http://hcrenewal.blogspot.com/2011/02/three-years-later-congressional.html">here</a>.) -  In June, 2011, a jury returned the first verdict in a civil case about the contaminated heparin, awarding money from Baxter International and Scientific Protein Laboratories to the estate of a man who apparently died due to tainted heparin (see post <a href="http://hcrenewal.blogspot.com/2011/06/first-contaminated-heparin-case-verdict.html">here</a>).

Who Really Makes Brand-Name Pharmaceuticals?

A striking illustration of the hazards to patients' and the public's health from health care organizational leaders using fashionabl...

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"MetroHealth, Explorys use huge patient database to revolutionize medical research"

As I have written in the past, beware claims of "revolutions" where healthcare or medical research are involved.  As in a slide in my recent <a href="http://hcrenewal.blogspot.com/2012/08/my-presentation-to-health-informatics.html" target="_blank">presentation</a> to the Health Informatics Society of Australia on healthcare IT trust, I asked: <div class="separator" style="clear: both; text-align: center;"><a href="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEgZx4YeKPPlUpYdQHrz-L-Iu_RzvWcGlVYGDmgAVoiQq9tfEitVSmBehI6oQQIvzhqWY-qLj_kqUYEZUvzoy-V2DbPQdsAbN0OyQ-4ohoRVIzRPX1iXmJLhLMxk_QQCo5NeMxZnyrpn1nbJ/s1600/slide1.jpg" imageanchor="1" style="margin-left: 1em; margin-right: 1em;"><img border="0" height="240" src="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEgZx4YeKPPlUpYdQHrz-L-Iu_RzvWcGlVYGDmgAVoiQq9tfEitVSmBehI6oQQIvzhqWY-qLj_kqUYEZUvzoy-V2DbPQdsAbN0OyQ-4ohoRVIzRPX1iXmJLhLMxk_QQCo5NeMxZnyrpn1nbJ/s320/slide1.jpg" width="320" /></a></div> In that same talk, I pointed out the "revolutions" usually have downsides, and IT always produces winners and losers (per the empirical research of <a href="http://rkcsi.indiana.edu/" target="_blank">Social Informatics</a>).  I also asked "have we suffered a complete breakdown in the scientific method with regard to EHR and clinical IT?" in a 2009 post on uncontrolled EHR data and comparative effectiveness studies <a href="http://hcrenewal.blogspot.com/2009/04/have-we-suffered-complete-breakdown-in.html" target="_blank">at this link</a>.   In the Aug. 29, 2012 article "<a href="http://www.cleveland.com/healthfit/index.ssf/2012/08/metrohealth_and_explorys_are_u.html" target="_blank">MetroHealth, Explorys use huge patient database to revolutionize medical research</a>"  in The Plain Dealer (Ohio), the following claims are proffered.  I am assuming regarding this article, as in newspaper articles I make contributions to, that the researchers were involved in its provenance and content: <blockquote class="tr_bq">Large databases of electronic medical records hold great promise for medical research. In theory they can provide doctors access to huge amounts of anonymous patient data, allowing large-scale population studies without the cost and hassle of patient recruitment, review boards and staff training. Now, a team of data experts at MetroHealth Medical Center and the Cleveland Clinic Innovations spinoff company <a href="https://www.explorys.com/about-us">Explorys</a> has shown just how powerful such medical records can be: In three months, they've replicated a major medical study that took a Norwegian team 14 years to research and report. And they've done it at a fraction of the cost, with a sample about 40 times as large. The local effort, led by MetroHealth Chief Medical Informatics Officer <a href="http://www.metrohealth.org/physiciandirectory/PhysicianDetail.aspx?ID=029298">Dr. David Kaelber</a>, was possible because of Explorys' database of 14 million electronic medical records gathered from 12 major health systems. </blockquote> 14 million records gathered from 12 major health systems, which may in fact be using disparate EHR systems or versions, is almost indisputably not controlled data. A comparison to a more rigorous study was conceptualized and performed: <blockquote class="tr_bq">Most of all though, he [Kaelber] needed to prove that it worked -- that he could get exactly the same results as traditional research studies that required more time and resources. Enter the <a href="http://atvb.ahajournals.org/content/31/6/1439.abstract?sid=9212fce2-301c-4e47-9c70-545442fdc21e">Norwegian study</a>. In 1994, a group of researchers started registering 26,714 people in the northern region's largest city, Tromso. It was part of a much longer study on the population's heart disease risk. They recorded height, weight and other measures of obesity, then followed participants for 13 years, recording any blood clots they had. Their conclusion: the combination of obesity and a tall stature significantly increases risk of blood clots, especially in men. </blockquote> The same hypothesis was tested with the uncontrolled EHR data, with claims that (obviously) the time and expense were lower, at least in the instant sense (costs of EHR implementation and maintenance in 12 major health systems could be in the billions of dollars at a time when a health system can easily spend $100 million each over just a few years as Bob Wachter points our <a href="http://community.the-hospitalist.org/2012/09/03/putting-the-a-back-in-soap-notes-time-to-tackle-an-epic-problem/" target="_blank">here</a> - one hundred million dollars for UCSF): <blockquote class="tr_bq">... The sample: 959,030 patients with medical records in the Explorys platform. The method: using software to search for blood clots in the health and claims records contained in the database, and then looking for patterns in those patients' height and weight. The result: Exactly the same as the Tromso study. "And actually the statistical significance of our study was much, much higher because our sample size was 40 times greater," Kaelber said. Kaelber and his team published their results online in July in the <a href="http://jamia.bmj.com/" target="_blank">Journal of the American Medical Informatics Association</a>.</blockquote> The conclusion to the article <a href="http://jamia.bmj.com/content/early/2012/07/01/amiajnl-2011-000782.abstract" target="_blank">here</a> (subscription required) was: <blockquote class="tr_bq">With the right clinical research informatics tools and EHR data, some types of very large cohort studies can be completed [and, by implication, trusted and acted upon at local, regional or societal levels - ed.] with minimal resources. </blockquote> This data was, and I don't think this can be refuted, poorly controlled.  There are limits to what "data cleansing" and standardization can accomplish with such data. In methodologies like this, confounders are too numerous to list comprehensively, but just a few - missing data; variability in observations (inter- and intra-observer variability); data originating from different vendor systems with different terminology and definitions, input by myriad people of different backgrounds with differing interpretations of terminologies (students/MD's/RN's etc); different pressures creating bias (time, reimbursement maximization, litigation avoidance); to name just a few. Several questions:  <ul><li>What is the likelihood these results were themselves a chance outcome? Correlation is not proof, especially where n=1. </li></ul><ul><li>How do we reliably identify ante hoc the "types of very large cohort studies" that we can complete?</li></ul><ul><li>What is the likelihood that such techniques are generalizable to all studies (such as comparative effectiveness research, currently a governmental initiative), especially where issues and confounders might be subtle?</li></ul><ul><li>Related to generalizability supra, where are the scientific studies that prove methodologies like this are valid and reliable for other than, say, low-granularity epidemiological purposes?  Put more colloquially - how do we know what these efforts attempt to do, in what is almost indisputably a radical deviation from controlled-trial norms, is not "computational alchemy" (i.e., attempting to turn lead into gold)?</li></ul><ul><li>Is there rigorous data on attempted studies like this that failed to correlate with more traditional research?  Unless the latter is studied and/or attempted and some sense gained of whether a radical approach using uncontrolled data such as this does not fail to a concerning extent, then claims of "revolutions" need to be postponed.</li></ul> Worst case scenario: large dataset, radical analytics and a political agenda can lead to undesired outcomes.  We need to know what we are doing. More on these issues in a 2009 article I authored <a href="http://www.jpands.org/vol14no2/silverstein.pdf" target="_blank">here</a>.  I have invited Dr. Kaelber to comment on the questions I raise.  Note:  I am not challenging this specific study per se, which is an experiment, but am challenging the generalizability of this type of "from data rags to information riches" methodology, as I've done in other posts on similar topics. Not to mention, the overconfidence as expressed in the press, which is what the public including our lawmakers and people responsible for resource allocation read.  I think it's highly premature to write of "revolutionizing medical research." Sep. 4, 2012 Here is the reply from Dr. Kaelber - <blockquote class="tr_bq">We actually cover many of the points you raise in the discussion of the article. I think it is important if we are focusing on a scientific discussion of a scientific article to focus on the primary source - the scientific article itself, and not a secondary source - the reporting of the scientific article. One of the major points in the discussion (quoted from the published manuscript) is that we feel that there are three keys to using pooled, standardized, normalized, and de-identified EHR data, including: 1. Understanding data sources - understanding of the characteristics of the underlying EHR data sources, including a data dictionary and ontologies used. 2. Corroborating data findings - internal and/or external methods to corroborate retrospective EHR cohort study data and/or findings. For example, manual chart review of a sample of the EHR data (internal validation), or other studies demonstrating similar results (external validation), ideally coupled with a biologically plausible hypothesis. 3. Clinical data versus research data - recognizing that retrospective EHR data were typically collected for clinical and not research purposes. Therefore, depending on the type of data, the quality may not meet typical research standards. In some cases, the large quantity of clinical data may help mitigate the fact that it was not collected with the higher precision and accuracy that can occur as part of a prospective research study. As I was also quoted in the Plain Dealer article as saying this is like a new type of power drill for those who have been used to using hand drills for retrospective (electronic or paper) chart reviews. To be used appropriately, researchers need to understand the opportunities and disadvantages of using of the new tool and be trained on how to use it. I would also add that, again, as was stated in the introduction for the published paper that clinical research informatics as a field is in its infancy and we need more people involved in the field, more tools for people in the field, and more experience of people using tools in the field to really understand both the contributions and limitations for electronic health record data to advance clinical research. I hope these comments are of some interest/use. -David </blockquote> My thoughts are that use of of experimental EHR-based methodologies like this, that could have significant social implications, requires significant caution and validation.  I think we are in agreement on that point.  The methodology of use of EHR data from myriad sources needs to be shown valid, as well as proven not to be invalid, before the findings of "new" studies that are not attempting to duplicate prior ones are translated to the bedside or beyond. The disadvantages include, among other issues (and perhaps most important) the spread of premature over-optimism about health IT such as in newspapers.  That problem has, I believe, contributed greatly to the prevalent <a href="http://hcrenewal.blogspot.com/2012/03/doctors-and-ehrs-reframing-modernists-v.html" target="_blank">hyper-enthusiasm</a> and "there's little supportive data - nevertheless, we believe - so let's spend $15+ billion dollars" attitudes about current health IT as I wrote about, for instance, <a href="http://hcrenewal.blogspot.com/2012/05/oncs-health-data-palooza-title-of.html" target="_blank">here</a> (ONC's 'Data Palooza') and <a href="http://hcrenewal.blogspot.com/2012/08/the-scientific-justification-for.html" target="_blank">here</a> (on MU Stage 2 justifications). Finally, I would question whether increasing the quantity of data could ever reliably compensate for lack of quality (unless, perhaps  the additions were themselves of high quality).  Adding low quality data to already low quality data should not produce better results, it seems to me. -- SS

"MetroHealth, Explorys use huge patient database to revolutionize medical research"

As I have written in the past, beware claims of "revolutions" where healthcare or medical research are involved. As in a slide in...

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Two recent interesting settlements at Massachusetts General Hospital (MGH), both involving technology

Two recent interesting settlements at Massachusetts General Hospital (MGH), both involving technology. The first case involved a medication error (from a 'miscommunication between doctors and nurses', an infusion pump snafu, and failure to perform obvious follow up labs;  if health IT was involved it would not surprise me).  The second case involved alarm fatigue. These amounts are interesting considering the age and condition of the patients. 1.  <a href="http://www.lubinandmeyer.com/cases/medication-error.html">http://www.lubinandmeyer.com/cases/medication-error.html</a> <blockquote class="tr_bq">Medication Error Lawsuit against MGH Settles for $1.25 Million The plaintiff’s decedent was a 76-year-old woman who died on 11/24/10 from a hemorrhage. Her death occurred following a preventable medication error involving the drug Lepirudin. The patient was given over 30 times too much medication which resulted in uncontrollable internal bleeding and her subsequent death. Her past medical history included cirrhosis with well preserved hepatocellular synthetic function. She also had Type 2 diabetes, hypertension and hypercholesterolemia, and a history of splenectomy for treatment of severe thrombocytopenia.</blockquote> and 2.  <a href="http://www.masslive.com/news/index.ssf/2011/11/mass_general_hospital_alarm_fa.html" target="_blank">http://www.masslive.com/news/index.ssf/2011/11/mass_general_hospital_alarm_fa.html</a> <blockquote class="tr_bq">Mass. General Hospital 'alarm fatigue' lawsuit settled for $850,000 BOSTON (AP) — The family of an 89-year-old man who died at Massachusetts General Hospital when nurses did not respond to alarms on his cardiac monitor has settled its case against the hospital for $850,000.</blockquote> I see potential lessons for at least two healthcare stakeholders in these cases: Hospital executives:  bad technology is not your friend.  get it right before rolling it out, with robust, validated safeguards, to save lives - and to save your organizations from costly litigation and reputational damage. Clinicians:  bad technology is your enemy.  While hyper-vigilance is mentally exhausting, that's what's required to avoid the fate of the patients - and the clinicians - in the above cases. Reporting bad technology and making sure the problems are remediated promptly, not glossed over, is equally essential. Note: my interpretation is that both technology and people issues probably played a role in both these accidents, based on my own knowledge and experience, but that is of course a personal opinion.  -- SS

Two recent interesting settlements at Massachusetts General Hospital (MGH), both involving technology

Two recent interesting settlements at Massachusetts General Hospital (MGH), both involving technology. The first case involved a medication...

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Continuing Dissection of the Infamous Study 329

On the 1BoringOldMan blog, semi-anonymous blogger Mickey has been dissecting in detail the infamous Study 329 that GlaxoSmithKline used to promote Paxil (Seroxat, paroxetine) as safe and effective for children and adolescents, when the study data, rigorously analyzed, showed that was not the case.  Study 329 was an important part of the US Department of Justice case against GSK that resulted in a record $3 billion settlement (see this <a href="http://hcrenewal.blogspot.com/2012/07/giant-gsk-settlement-provides-reminder.html">post</a>).  The posts so far are: <a href="http://1boringoldman.com/index.php/2012/08/19/26298/">A Pretty Rotten Era   </a> <a href="http://1boringoldman.com/index.php/2012/08/21/a-movement/">A Movement</a> <a href="http://1boringoldman.com/index.php/2012/08/22/to-make-distortion-possible/">To Make Distortion Possible</a> <a href="http://1boringoldman.com/index.php/2012/08/24/the-lesson-of-study-329-the-basics/">The Lesson of Study 329: the Basics</a> <a href="http://1boringoldman.com/index.php/2012/08/25/the-lesson-of-study-329-efficacy-drift-to-trends-and-2s/">The Lesson of Study 329: Efficacy Drifts to Trends and 2s</a> <a href="http://1boringoldman.com/index.php/2012/08/26/the-lesson-of-study-329-conventions-and-protocols/">The Lesson of Study 329: Conventions and Protocols</a> <a href="http://1boringoldman.com/index.php/2012/08/29/the-lesson-of-study-329-uh-oh/">The Lesson of Study 329: Uh-oh</a> <a href="http://1boringoldman.com/index.php/2012/08/29/the-lesson-of-study-329-data-transparency/">The Lesson of Study 329: Data Transparency</a> <a href="http://1boringoldman.com/index.php/2012/08/30/the-lesson-of-study-329-the-authors/">The Lesson of Study 329: the Authors</a> This does not seem to be the end of the series, but the last post yesterday did have a striking conclusion: <blockquote>But, for the moment, I am stuck on the piece that is, to me, the most fundamental lesson from this story, and unfortunately many similar stories in the industry-funded clinical trial literature that fills our journals. The authors of this study did not function as physicians, clinicians, scientists, or even authors. Some were there because of their previous credentials. Others were there to build up future credentials. But they weren’t there to do what they presented themselves as doing. Researchers are practicing medicine too. I might be seen as naive to see this as the center of this story. If that’s the case, I’ll go to my grave being naive. Medicine has been my life, and this isn’t Medicine. There’s no place or tradition for physicians, particular physicians in high places, taking part in this kind of bullshit – particularly all the while claiming otherwise. The fact that it has been a widespread practice isn’t an excuse. That’s also an even stronger indictment. There are many principled neuroscientists working in this difficult area of medical science who’ve been tarnished by this kind of pseudoscience. There are many psychiatrists and other practitioners who’ve actually trusted these deceitful articles. And there are untold numbers of patients who’ve been medicated un-necessarily or even directly harmed by this and other capricious advise coming out of these studies – this one in particular. Rather than functioning as the advisers of ill people, these were physicians who actively participated in capitalizing on patients’ illness. </blockquote>However, despite the seriousness of these concerns, and their corroboration in the Justice Department document that pushed GSK to settle for so much money, my alma mater, Brown University, where Dr Martin Keller, the lead author of Study 329, was Chair of Psychiatry, has consistently refused to revisit the study, and consistently failed to publicly refute the accusations against Dr Keller, nor to accept them and take appropriate action.  The University supposedly conducted an internal investigation of the matter, but has not seen fit to make it public.  When <a href="http://chronicle.com/article/Academic-Researchers-Escape/133325/">asked again</a> about this, Brown's new President, Christina Paxson, referred the inquiry to the public relations people: <blockquote>'The recent announcement by the U.S. Department of Justice did not suggest that any further reviews of the paper by the university are immediately warranted,' Darlene Trew Crist said in a written response. 'We have no further statement to make at this time.'</blockquote> Given the seriousness of the allegations, and the <a href="http://www.brown.edu/about/mission">University's mission</a>: <blockquote>The mission of Brown University is to serve the community, the nation, and the world by discovering, communicating, and preserving knowledge and understanding in a spirit of free inquiry, and by educating and preparing students to discharge the offices of life with usefulness and reputation. </blockquote>the logic of the administration's refusal to have a public discussion of this case escapes me. As I have <a href="http://hcrenewal.blogspot.com/2008/09/brown-university-student-journalists.html">said before </a>(in 2008!), the appearance of continued stonewalling, now going on for years, can easily be interpreted to imply that the institution has something really big and bad to hide. Also see comments by Alison Bass <a href="http://alison-bass.com/blog/2012/08/why-academic-researchers-involved-in-fraudulent-paxil-study-escape-scrutiny/">on the Alison Bass blog</a>, and by Dr Howard Brody <a href="http://brodyhooked.blogspot.com/2012/08/ghostwriting-still-no-consequences-for.html">on the Hooked: Ethics, Medicine and Pharma blog</a>. ADDENDUM (4 September, 2012) - There have been two additional posts on the 1BoringOldMan blog on Study 329: <a href="http://1boringoldman.com/index.php/2012/09/02/the-lesson-of-study-329-the-hurdles/" rel="bookmark">the lesson of Study 329: the hurdles… </a> <a href="http://1boringoldman.com/index.php/2012/09/04/the-lesson-of-study-329-naked-emperors-fractious-queens/" rel="bookmark">the lesson of Study 329: naked Emperors, fractious Queens… </a> ADDENDUM (4 September, 2012) - See also <a href="http://alison-bass.com/blog/2012/09/calls-for-action-against-authors-of-fraudulent-paxil-study-are-getting-louder/">this post</a> on the Alison Bass blog. ADDENDUM (5 September, 2012) - See <a href="http://www.pharmalot.com/2012/09/controversial-paxil-study-author-retires-from-brown/">this post</a> on the retirement of Dr Keller by Ed Silverman on PharmaLot. ADDENDUM (10 September, 201) - See the final two posts in the 1BoringOldMan series: <a href="http://1boringoldman.com/index.php/2012/09/06/the-lesson-of-study-329-were-only-as-sick-as-our-secrets/" rel="bookmark">the lesson of Study 329: “we’re only as sick as our secrets”… </a> <a href="http://1boringoldman.com/index.php/2012/09/08/the-lesson-of-study-329-epilogue/" rel="bookmark">the final lesson of Study 329: epilogue… </a> His conclusion in the next to last post of the series: <blockquote>Something terrible happened in psychiatry, an alliance between the pharmaceutical industry and a number of our leaders who allowed their academic credentials to be used for commercial purposes. It happened on a large scale, and in the process shamed all of us, whether we were involved or not. Many of the people we looked to to guide us fell into the role of key opinion leaders – a marketing term that meant that they could influence what we did and how we practiced. And in that new role, medical degrees, academic positions, the methods of science, and psychiatric experience became little more than marketing tools in a commercial campaign. Such was the case with Study 329 – an article that has become exemplary because it is now so painfully well known – a symbol for the failings of an era. It needs to be retracted simply because it was wrong on purpose – and we all know it. And yet no involved person, institution, or organization highlighted in that last paragraph has swallowed their pride, or guilt, or denial, or arrogance and called for retraction.</blockquote>[Italics and bold typeface added for emphasis]

Continuing Dissection of the Infamous Study 329

On the 1BoringOldMan blog, semi-anonymous blogger Mickey has been dissecting in detail the infamous Study 329 that GlaxoSmithKline used to p...

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Is the Meaningful Use Stage 2 Final Rule invalid?

Here are a few reasonable questions I decided to elevate as a post of its own. In the face of the discovery of industry influence over comments submitted to ONC regarding Meaningful Use Stage 2, as I documented at my post earlier today "<a href="http://hcrenewal.blogspot.com/2012/08/health-it-vendor-epic-uses-clients-as.html">Health IT Vendor EPIC Caught Red-Handed: Ghostwriting And Using Customers as Stealth Lobbyists - Did ONC Ignore This?</a>" (<a href="http://hcrenewal.blogspot.com/search/label/ghost%20writing" target="_blank">ghost writing</a>, in effect, by those with obvious conflicts of interest): <ul><li> Is the MU Stage 2 Final Rule invalid due to the influence the industry had on the submitted "public" comments and opinions, supposedly by and of the submitters, which are now demonstrably tainted?</li><li> Should an investigation be opened?</li></ul> After all, as I pointed out on Aug. 29 in "<a href="http://hcrenewal.blogspot.com/2012/08/the-scientific-justification-for.html" target="_blank">The Scientific Justification for Meaningul Use, Stage 2: The NWB Methodology</a>", not only is MU2 based on an admitted "nevertheless, we believe" justification (that is, lack of scientific rigor), but now it appears the legislation is based on stealth lobbying and resultant regulatory capture, ONC in essence doing the seller's bidding. Tens of billions of taxpayer dollars are at issue here. -- SS

Is the Meaningful Use Stage 2 Final Rule invalid?

Here are a few reasonable questions I decided to elevate as a post of its own. In the face of the discovery of industry influence over comme...

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Health IT Vendor EPIC Caught Red-Handed: Ghostwriting And Using Customers as Stealth Lobbyists - Did ONC Ignore This?

<div style="text-align: left;">Note: Also see the followup Sept. 5, 2012 post "Was EPIC successful in watering down the Meaningful Use Stage 2 Final Rule?" at <a href="http://hcrenewal.blogspot.com/2012/09/from-what-i-can-tell-epic-was.html">http://hcrenewal.blogspot.com/2012/09/from-what-i-can-tell-epic-was.html</a>.</div> ----------------------- From the Histalk blog in the 8/31/12 news <a href="http://histalk2.com/2012/08/30/news-83112/" target="_blank">at this link</a>: <blockquote class="tr_bq">Epic not only submitted MU Stage 2 comments to ONC, it even helpfully distributed them to their customers so they could submit the same comments under their own names. <a href="http://dclunie.blogspot.com/2012/08/why-onc-whimped-out-annotated.html" target="_blank">David Clunie</a> noticed this and lists the hospitals who sent in the boilerplate, including University of Miami, which submitted the same comments five times without noticing the “Remove Before Submitting” headline that prefaced Epic’s explanation of why its customers should share its opinions with Uncle Sam.</blockquote> From the primary source linked in the Histalk note: <blockquote class="tr_bq"><a href="http://www.regulations.gov/#%21documentDetail;D=HHS-OS-2012-0004-0147" target="_blank">Epic via University of Michigan Health System Meaningful Use Workgroup</a> also the <a href="http://www.regulations.gov/#%21documentDetail;D=HHS-OS-2012-0004-0241" target="_blank">same Epic comments from University of Miami</a> (who liked them so much they <a href="http://www.regulations.gov/#%21documentDetail;D=HHS-OS-2012-0004-0241" target="_blank">submitted it twice</a> and then a <a href="http://www.regulations.gov/#%21documentDetail;D=HHS-OS-2012-0004-0326" target="_blank">third time</a> and then a <a href="http://www.regulations.gov/#%21documentDetail;D=HHS-OS-2012-0004-0313" target="_blank">fourth</a> and <a href="http://www.regulations.gov/#%21documentDetail;D=HHS-OS-2012-0004-0299" target="_blank">fifth</a> time) and again from the <a href="http://www.regulations.gov/#%21documentDetail;D=HHS-OS-2012-0004-0123" target="_blank">Martin Health System</a> and <a href="http://www.regulations.gov/#%21documentDetail;D=HHS-OS-2012-0004-0137" target="_blank">Metro Health Hospital</a> and <a href="http://www.regulations.gov/#%21documentDetail;D=HHS-OS-2012-0004-0306" target="_blank">The Methodist Hospitals</a> and <a href="http://www.regulations.gov/#%21documentDetail;D=HHS-OS-2012-0004-0404" target="_blank">Fairview Health Services</a> and <a href="http://www.regulations.gov/#%21documentDetail;D=HHS-OS-2012-0004-0358" target="_blank">Sutter Health</a> and <a href="http://www.regulations.gov/#%21documentDetail;D=HHS-OS-2012-0004-0338" target="_blank">Parkview Health System</a> and the <a href="http://www.regulations.gov/#%21documentDetail;D=HHS-OS-2012-0004-0284" target="_blank">Everett Clinic</a> and <a href="http://www.regulations.gov/#%21documentDetail;D=HHS-OS-2012-0004-0255" target="_blank">Dayton Childrens'</a> and <a href="http://www.regulations.gov/#%21documentDetail;D=HHS-OS-2012-0004-0254" target="_blank">UMDNJ</a> and <a href="http://www.regulations.gov/#%21documentDetail;D=HHS-OS-2012-0004-0243" target="_blank">NYU Langone Medical Center</a> and <a href="http://www.regulations.gov/#%21documentDetail;D=HHS-OS-2012-0004-0142" target="_blank">Hawaii Pacific Health</a> and finally as submitted by <a href="http://www.regulations.gov/#%21documentDetail;D=HHS-OS-2012-0004-0285" target="_blank">Epic themselves</a> - others like the <a href="http://www.regulations.gov/#%21documentDetail;D=HHS-OS-2012-0004-0158" target="_blank">Community Health Network</a> just stated they had read and agreed with Epic's comments - Imaging - concur that DICOM is not needed for that objective and PACS images do not need to be duplicated - concerned about single sign on if two systems - View, Download and Transmit to 3rd Party - images are not in the EHR but the PACS - patients would need DICOM viewers - size of the images is a problem - disks are better (also if you look at some copies of this, there are some pretty funny "remove before submitting to ONC" notes that say things like which versions support what and how much it would cost to retrofit, etc.; how embarrassing, both for Epic and their lackeys at these institutions)</blockquote> I certainly admire David Clunie's endurance at being able to slog through all of that and appreciate his shedding some sunlight on the "remove before submitting" notes, but - I don't think it's funny at all. Among other things, it represents taint of the submissions via <a href="http://hcrenewal.blogspot.com/search/label/ghost%20writing" target="_blank">ghostwriters</a> (unattributed authors) with obvious <a href="http://hcrenewal.blogspot.com/search/label/conflicts%20of%20interest" target="_blank">conflicts of interests</a>, topics often addressed at HC Renewal. Here's an example I verified, the submission to the government from Dayton Children's Hospital: <table align="center" cellpadding="0" cellspacing="0" class="tr-caption-container" style="margin-left: auto; margin-right: auto; text-align: center;"><tbody><tr><td style="text-align: center;"><a href="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEirxuPSNKvfNLmw5qDGu4JlMVP-MPi6cFKz36m3M_3lZOGY90p1U3Tw36P-mHfyXcyEVGviytPAI6tSdBcvjEgKryW9vAZbve_nooHA5H5vj4Fhdgt7Zn83CBGGrHw6qAX9nedacFQbfZxS/s1600/remove_before_submitting.bmp" imageanchor="1" style="margin-left: auto; margin-right: auto;"><img border="0" height="348" src="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEirxuPSNKvfNLmw5qDGu4JlMVP-MPi6cFKz36m3M_3lZOGY90p1U3Tw36P-mHfyXcyEVGviytPAI6tSdBcvjEgKryW9vAZbve_nooHA5H5vj4Fhdgt7Zn83CBGGrHw6qAX9nedacFQbfZxS/s400/remove_before_submitting.bmp" width="400" /></a></td></tr><tr><td class="tr-caption" style="text-align: center;">"Informational Comments for Organizations Using EPIC (remove before submitting to ONC)" - click to enlarge.  At least here they say they are "in total agreement" with EPIC's concerns and recommendations.  </td><td class="tr-caption" style="text-align: center;"> </td><td class="tr-caption" style="text-align: center;"> </td><td class="tr-caption" style="text-align: center;"> </td><td class="tr-caption" style="text-align: center;"> </td><td class="tr-caption" style="text-align: center;"> </td></tr></tbody></table> Another example - University of Miami: <table align="center" cellpadding="0" cellspacing="0" class="tr-caption-container" style="margin-left: auto; margin-right: auto; text-align: center;"><tbody><tr><td style="text-align: center;"><a href="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEgOJPENnCLi6R2iGZR_GWK9akDzTBYxtYsy5YZi0rONJsZqF8FSCNxjVeO1MUYeGQLEHOqG8vndOhgb2rUn9OWCSMUNLLXGrtAjJAE9CNRdd4WLijC4RFOjLwEvXwoV4B2pF_awkyAzyTLl/s1600/miami.bmp" imageanchor="1" style="margin-left: auto; margin-right: auto;"><img border="0" height="392" src="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEgOJPENnCLi6R2iGZR_GWK9akDzTBYxtYsy5YZi0rONJsZqF8FSCNxjVeO1MUYeGQLEHOqG8vndOhgb2rUn9OWCSMUNLLXGrtAjJAE9CNRdd4WLijC4RFOjLwEvXwoV4B2pF_awkyAzyTLl/s400/miami.bmp" width="400" /></a></td></tr><tr><td class="tr-caption" style="text-align: center;">A danger of dealing with incompetents:  they neglect to tidy up for you - click to enlarge.  (Corollary question: note the line "Our [Epic's - ed.] comments stem from the fact the we believe ..."  So - what opinions belong to the 'public commenting organization', and which to the company?  Likely the whole thing belongs to the latter's ghostwriters, but can anyone really tell?  That's the problem with tainted submissions.)</td></tr></tbody></table> Others is the links above I checked such as Martin and Methodist have the same boilerplate about the "chart search feature."  Some retain the "reminder" to remove; in others it has been erased.  However, the boilerplate remains. I actually find the "advice" from EPIC in the latter document stunning regarding a "chart search feature" (e.g., search note text, and probably also ad hoc clinical searches such as 'find my patients whose blood sugars have been > 100 in the past month').  These are "features" critical to quality care that should have been present decades ago ** [see note below].  Emphasis mine: <blockquote class="tr_bq">... Focus certification on the minimum floor set of capabilities required to complete meaningful use objectives. </blockquote> Is this a tacit admission "certification" is a sham?  Is this in patients' best interests? and <blockquote class="tr_bq">Informational Comments for Organizations Using Epic (remove before submitting to ONC) We’ve heard your requests for a chart search feature, and our desire to see this certification criterion removed does not mean we don’t want to develop such a feature. In a future version of Epic, we want to develop the best possible chart search feature based on your input. However, if this criterion stays in the Final Rule, we worry we’ll have to divert attention from future chart search features you’ve requested to focus on a simplified, less valuable version of the feature to meet certification. </blockquote> In my opinion, this translates to: "we are already overextended, so help us stymie the experts' and government's efforts to make it a criteria for certification, and to hell with your doctors and nurses who need a search feature right now." Can you imagine in 2012 a word processor, database or operating system without a search feature?  That's the kind of antediluvian IT the clinicians have to put up with.  And this industry speaks of "innovation?" It would come as no surprise - to me, at least - if other health IT sellers were engaged in similar activities. I am unable to judge whether stealth lobbying by sellers using their clients, which enables the sellers to then line their pockets through favorable government legislation based on echoed comments of clients, is legal or ethical.  My belief, however,  is that it is at best a questionable practice.  It is certainly inherently unfair e.g., anti-competitive in regard to smaller health IT companies who might be able to meet more stringent MU2 certification criteria, and unfair to private citizens who have no such captive mouthpieces at their beck and call.  While perhaps not as bad as possible 'Combination in Restraint of Trade' as in my April 2010 post "Healthcare IT Corporate Ethics 101" (<a href="http://hcrenewal.blogspot.com/2010/04/healthcare-it-corporate-ethics-101.html" target="_blank">link</a>), this situation should probably be brought to the attention of health IT watchdogs such as Sen. Grassley. This May 2012 post might also be of interest:  <a href="http://hcrenewal.blogspot.com/2010/05/did-epic-ceo-judy-faulkner-of-epic.html" target="_blank">Did EPIC CEO Judy Faulkner of Epic declare that 'healthcare IT usability would be part of certification over her dead body'?</a>  ONC never responded to the questions I raised in the post. Another question:  why did ONC apparently turn a blind eye towards these "accidental inclusions"?  Yet another question:  is the MU2 Final Rule invalid due to the influence the industry clearly had on the submitted "public" comments, which can now reasonably be viewed as tainted? -- SS Addendum: I've informed the Senator via his email and staff voicemail lines.  I've also created a short URL to more conveniently access this post:  <a href="http://www.tinyurl.com/epic-stealth">http://www.tinyurl.com/epic-stealth</a> Also see the followup Sept. 5, 2012 post "Was EPIC successful in watering down the Meaningful Use Stage 2 Final Rule?" at <a href="http://hcrenewal.blogspot.com/2012/09/from-what-i-can-tell-epic-was.html">http://hcrenewal.blogspot.com/2012/09/from-what-i-can-tell-epic-was.html</a>. -- SS Note: ** For instance, I had  implemented a robust search feature of clinical notes, all comment fields and the comprehensive clinical, genetic and genealogical dataset in the Yale-Saudi Clinical Genetics EHR - in 1995.

Health IT Vendor EPIC Caught Red-Handed: Ghostwriting And Using Customers as Stealth Lobbyists - Did ONC Ignore This?

Note: Also see the followup Sept. 5, 2012 post " Was EPIC successful in watering down the Meaningful Use Stage 2 Final Rule? " at ...

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Duchess of WellPoint Abdicates, Likely to Escape with Much Loot

A change in the leadership of one of the biggest health care organizations reveals a little more about how such leadership has become our new corporate royalty and nobility. The Departure of WellPoint CEO Angela Braly The basics of the story, as <a href="http://online.wsj.com/article/SB10000872396390444327204577617943525945430.html">reported</a> by the Anna Wilde Matthews in the Wall Street Journal, <blockquote>Under pressure from investors unhappy with the health insurer's performance and direction, WellPoint Inc. Chief Executive Angela Braly resigned Tuesday, and the company's board said it would begin a search for a permanent replacement. The abrupt shift came as the board's leadership had been meeting with major investors in the wake of a disappointing second-quarter earnings report that sharpened concerns about Ms. Braly and the company's strategy</blockquote> Note that while this change was seemingly dramatic, <blockquote>In its statement, the board signaled that WellPoint's direction might not change dramatically. Ms. Ward said that the board 'continues to believe that time will prove the wisdom of potentially transformative actions taken under Angela's leadership…But now is the right time for a leadership change.' She also said the board believes 'the remaining executive team is dynamic and strong, with great potential to drive WellPoint's future success.'</blockquote> In addition, the Indianapolis Star <a href="http://www.indystar.com/article/20120828/BUSINESS/120828060/WellPoint-investors-force-CEO-Angela-Braly-to-step-down">suggested</a> that Ms Braly would be richly rewarded for her departure: <blockquote>Details about her exit package were not released Tuesday, but under her contract, she is entitled to at least $7.7 million if terminated without cause.</blockquote> Furthermore, recall how much the board apparently thought of Ms Braly's leadership in the immediate past, as evidenced by the compensation she received. In 2011, her total compensation was a mere $13.2 million (see <a href="http://www.indystar.com/article/20120405/BUSINESS/204050363/WellPoint-s-CEO-saw-drop-compensation">this article </a>in the Indianapolis Star), just slightly less than that in 2010, $13.4 million (see this <a href="http://hcrenewal.blogspot.com/2011/03/millions-to-health-insurance-ceos-but.html">post</a>). Such compensation, of course is gargantuan compared to that received by mere mortals such as primary care physicians (actually, conservatively it is at least 66, and probably more like 100 times that of primary care physician, and over 250 times the median US family income) Such compensation, and the likelihood of a rich severance package, suggests that either the board applauded Ms Braly's leadership right up until now, or perhaps that Ms Braly, despite being a hired employee, actually had more power than the board, sufficient to virtually set her own pay. Was Financialization the Reason She Had to Go? So why get rid of her now? Aside from references to recent issues with only short-term revenue, there were few hints in the media. The WSJ article did note <blockquote>a series of stumbles over the past few years, including an unexpected earnings hit last year tied largely to problems with a Medicare plan in California. In 2010, the company scaled back a proposed rate increase in California that had become a lightning rod in the policy debate over a health overhaul, leading to a loss. </blockquote> A Forbes <a href="http://www.forbes.com/sites/brucejapsen/2012/08/30/wellpoints-braly-broke-glass-ceiling-then-shards-of-obamacare-knocked-her-down/">post</a> suggested that one problem was Ms Braly supported President Obama's health care reform legislation, the Patient Protection and Affordable Care Act (PPACA, or ACA): <blockquote>Many blame Braly and her team for putting The Affordable Care Act over the top in Congress after Wellpoint’s Anthem Blue Cross plan in California two years ago raised rates nearly 40 percent on individual policyholders before the increase was tamed. Many at the time say that provided President Obama and Sebelius political momentum and ammunition to tell the story of excessive rate increases by the loathed insurance industry.</blockquote> However, no media report so far has raised the issue of the ethics of past WellPoint behavior. In fact, as we have discussed, (most recently <a href="http://hcrenewal.blogspot.com/2012/06/huge-insurance-company-wellpoint.html">here</a>), the company has made a lengthy series of ethical missteps, to put it kindly. (The complete list appears in an appendix at the end of this post.) These problems have been going on for quite a while, and if they were not a concern before, there is no hint that they became a concern within the company recently. So, one explanation for the sudden leadership change is the dominance of financialization of for-profit health care insurance (and likely of all health care organizations.) The notion, pushed by a few economists in the 1980s, that the only thing that should matter to corporate leadership is short-term financial results may be that powerful (see this <a href="http://hcrenewal.blogspot.com/2012/04/health-care-dysfunction-explained-by.html">post</a>). Of course, that is profoundly troubling for health care organizations, since it dismisses the importance of any long-term results, especially of results that affect patients' and the public's health, and the importance of values like honesty. Corporate Leadership as Our New Royalty and Nobility Another explanation, which need not contradict the one above, was suggested by Charles Ferguson in <a href="http://www.randomhouse.com/book/213722/predator-nation-by-charles-h-ferguson">Predator Nation</a>. He wrote that the leadership of big financial corporations, which became the dominant organizations in the US and, indeed, in the world, <blockquote>became corporate royalty, with all the absurd arrogance, disconnections from reality, ego poisoning, and cults of personality thereby implied.</blockquote> If the leadership of big financial firms became royalty, then the leadership of big health care organizations became nobility. The issues above only would affect nobility slightly less. In that sense, the departure of Ms Braly likely resulted from personal and political battles among royalty. The good thing is that in this somewhat more enlightened age, the results are merely abdication, probably with a huge severance payment. In the old days, the results would likely have been imprisonment in the castle dungeon, if not beheading. Nonetheless, the notion that top corporate leaders, including leaders of for-profit and non-profit health care corporations, are becoming the new royalty and nobility should be profoundly disturbing in the US, which was founded after a revolution against royalty's excess power.  They should be no less disturbing in other countries which have overthrown their former royal leaders, or instituted constitutional monarchies in which the royals and nobles have little political or real power.  Obviously, the growing power and decreasing accountability of hired managers of large health care organizations has become a major reason, if not the major reason for health care dysfunction.  True health care reform would decrease the size and scope of health care organizations, and make their leaders accountable to ownership, when appropriate, and to the community at large for patients' and the public health.  Appendix: WellPoint's Ethical Misadventures <ul><li>settled a RICO (racketeer influenced corrupt organization) law-suit in California over its alleged systematic attempts to withhold payments from physicians (see 2005 post <a href="http://hcrenewal.blogspot.com/2005/07/wellpoint-settles-rico-law-suit.html">here</a>).</li><li>subsidiary New York Empire Blue Cross and Blue Shield misplaced a computer disc containing confidential information on 75,000 policy-holders (see 2007 story <a href="http://www.nytimes.com/2007/03/14/business/14insure.html">here</a>).</li><li>California Anthem Blue Cross subsidiary cancelled individual insurance policies after their owners made large claims (a practices sometimes called rescission).  The company was ordered to pay a million dollar fine in early 2007 for this (see post <a href="http://hcrenewal.blogspot.com/2007/03/wellpoint-fined-1-million-for-canceling.html">here</a>).  A state agency charged that some of these cancellations by another WellPoint subsidiary were improper (see post <a href="http://hcrenewal.blogspot.com/2007/07/more-than-half-of-wellpoints-policy.html">here</a>).  WellPoint was alleged to have pushed physicians to look for patients' medical problems that would allow rescission (see post <a href="http://hcrenewal.blogspot.com/2008/02/wellpoint-halts-attempts-to-have.html">here</a>).  It turned out that California never collected the 2007 fine noted above, allegedly because the state agency feared that WellPoint had become too powerful to take on (see post <a href="http://hcrenewal.blogspot.com/2008/07/wellpoint-settles-but-has-it-become-too.html">here</a>). But in 2008, WellPoint agreed to pay more fines for its rescission practices (see post <a href="http://hcrenewal.blogspot.com/2008/07/fines-re-statements-and-more-fines-just.html">here</a>).  In 2009, WellPoint executives were defiant about their continued intention to make rescission in hearings before the US congress (see post <a href="http://hcrenewal.blogspot.com/2009/06/managed-care-executives-will-not-limit.html">here</a>).</li><li>California Blue Cross subsidiary allegedly attempted to get physicians to sign contracts whose confidentiality provisions would have prevented them from consulting lawyers about the contracts (see 2007 post <a href="http://hcrenewal.blogspot.com/2007/11/physicians-and-contracts-cautionary.html">here</a>).</li><li>formerly acclaimed CFO was fired for unclear reasons, and then allegations from numerous women of what now might be called Tiger Woods-like activities surfaced (see post <a href="http://hcrenewal.blogspot.com/2008/01/more-managed-care-management-mumbo.html">here</a>).</li><li>announced that its investment portfolio was hardly immune from the losses prevalent in late 2008 (see post <a href="http://hcrenewal.blogspot.com/2008/10/if-this-is-how-wellpoint-has-managed.html">here</a>).</li><li>was sanctioned by the US government in early 2009 for erroneously denying coverage to senior patients who subscribed to its Medicare drug plans (see 2009 post <a href="http://hcrenewal.blogspot.com/2009/01/wellpoint-sanctioned.html">here</a>).</li><li>settled charges that it had used a questionable data-base (built by Ingenix, a subsidiary of ostensible WellPoint competitor UnitedHealth) to determine fees paid to physicians for out-of-network care (see 2009 post <a href="http://hcrenewal.blogspot.com/2009/02/wellpoint-settles.html">here</a>).  </li><li>violated state law more than 700 times over a three-year period by failing to pay medical claims on time and misrepresenting policy provisions to customers, according to the California health insurance commissioner (see 2010 post <a href="http://hcrenewal.blogspot.com/2010/02/argument-over-insurance-rate-hikes.html">here</a>). </li><li>exposed confidential data from about 470,000 patients (see 2010 post <a href="http://hcrenewal.blogspot.com/2010/06/wellpoint-dont-know-much-about-computer.html">here</a>) and settled the resulting lawsuit in 2011 (see post <a href="http://hcrenewal.blogspot.com/2011/10/still-more-ehr-chaos-pandemonium-bedlam.html">here</a>).</li><li>fired a top executive who publicly apologized for the company's excessively high charges (see 2010 post here).</li><li>California Anthem subsidiary was fined for systematically failing to make fair and timely payments to doctors and hospitals (see 2010 post <a href="http://hcrenewal.blogspot.com/2010/12/health-insurers-sanctioned-fined.html">here</a>).</li><li>management was accused of hiding the company's political contributions from the company's own stock-holders (see 2012 posts <a href="http://hcrenewal.blogspot.com/2012/04/some-of-wellpoints-owners-stockholders.html">here</a> and <a href="http://hcrenewal.blogspot.com/2012/05/wall-street-journal-defends-hired.html">here</a>).</li><li>settled charges that its Anthem subsidiary cheated former policy-holders out of money owed when that company was converted from a mutual insurance company (see 2012 post <a href="http://hcrenewal.blogspot.com/2012/06/huge-insurance-company-wellpoint.html">here</a>)</li></ul>

Duchess of WellPoint Abdicates, Likely to Escape with Much Loot

A change in the leadership of one of the biggest health care organizations reveals a little more about how such leadership has become our ne...

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