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Reason for Hope? - Novartis Rescinds Vasella's Golden Parachute

Enormous compensation of hired health care executives, out of all proportion, if related at all to whether their work had any positive effect on patients' or the public's health, has long been a <a href="http://hcrenewal.blogspot.com/search/label/executive%20compensation">concern</a> on <a href="http://hcrenewal.blogspot.com/">Health Care Renewal</a>.  For example, back in 2006, we posted repeatedly (look <a href="http://hcrenewal.blogspot.com/2006/10/another-really-big-one-bites-dust-ceo.html">here</a> for links) about the billion dollar plus fortune amassed by the then CEO of UnitedHealthcare which vividly contrasted with the company's avowal to "make health care more affordable." We have posted many such stories.  Yet maybe there is a whiff of change in the air.  For the first time that I can recall, a gigantic pay package to a top health care executives has been rescinded after public protest. Novartis' Golden Parachute for Vasella This is how the New York Times <a href="http://www.nytimes.com/2013/02/19/business/global/for-daniel-vasella-of-novartis-78-million-to-keep-secrets.html">described</a> the huge golden parachute that was initially proposed: <blockquote class="tr_bq">A plan by Novartis<a class="meta-org" href="http://topics.nytimes.com/top/news/business/companies/novartis_ag/index.html?inline=nyt-org" title="More information about Novartis A.G"></a>, one of Switzerland’s biggest drug makers, to pay its departing chairman $78 million to keep him from sharing his knowledge with competitors has added fuel to an already heated debate about executive pay. <div itemprop="articleBody">The announcement of the payment to the chairman, Daniel Vasella, was made last Friday, just two weeks before a Swiss referendum to give shareholders more power to determine executive compensation. Mr. Vasella, who had previously said that he would step down as chairman at Novartis’s annual shareholder meeting on Friday, is to receive the sum, 72 million Swiss francs, over six years. </div><div itemprop="articleBody"> </div>In a statement, Mr. Vasella said that 'it has been very important to Novartis that I refrain from making my knowledge and know-how available to competitors and to take advantage of my experience with the company.'</blockquote> Unprecedented Resistance by Shareholders, Politicians and the Public The plan to provide this "golden parachute" met stunning resistance from Swiss citizens and company shareholders.  As the Times reported, <blockquote class="tr_bq"><div itemprop="articleBody">Swiss lawmakers and shareholder activists criticized the company over the weekend for not making the amount public earlier. They also contended that the planned payment was just the latest of several bad decisions by Novartis on executive pay. </div><div itemprop="articleBody"> </div><div itemprop="articleBody">Ethos, a Swiss group of investors, on Monday called on Novartis to immediately cancel the contract with Mr. Vasella and take back any money already paid. </div><div itemprop="articleBody"> </div><div itemprop="articleBody">Christophe Darbellay, president of the Christian Democratic People’s Party, told a Swiss newspaper, SonntagsZeitung, that Mr. Vasella’s compensation was 'beyond evil.' Simonetta Sommaruga, the Swiss federal justice minister, told another newspaper, SonntagsBlick, that the payment was an 'enormous blow for the social cohesion of our country' and that such 'help-yourself mentality' was damaging confidence in the economy. </div></blockquote><div itemprop="articleBody"> </div><div itemprop="articleBody">Even Swiss identified as pro-business or right-wing joined in the criticism.  As <a href="http://www.swissinfo.ch/eng/swiss_news/Vasella_s_extra_pay_stirs_up_emotions.html?cid=35006618">reported</a> by the Swiss Broadcasting Company, </div><div itemprop="articleBody"> </div><blockquote class="tr_bq"><div itemprop="articleBody">Philipp Müller, president of the centre-right Radical Party which traditionally has close links with the business community, is quoted as saying Vasella was 'taking liberal Switzerland to the henchman'. Other politicians described the latest figure as 'disgusting' and denounced the recklessness of top managers. The director of the Swiss Business Federation, which has been leading the fight against the initiative, said he was surprised by the 'dimension of the payment' to Vasella.</div></blockquote><div itemprop="articleBody"> </div><div itemprop="articleBody">A Golden Parachute Despite a Past Record of Misadventures </div><div itemprop="articleBody"> </div><div itemprop="articleBody">Maybe there would have been even more outrage if those in Switzerland had known about Novartis' track record of misadventures, at least in the US, while Vasella had been leading it.  In particular,</div><div itemprop="articleBody">-  In 2011, as we noted <a href="http://hcrenewal.blogspot.com/2011/12/legal-settlements-have-become-so-common.html">here</a>, a company subsidiary paid $150 million to settle charges by several US states that it had misrepresented pricing information</div><div itemprop="articleBody">-  In 2010, as we noted <a href="http://hcrenewal.blogspot.com/2010/10/novartis-settles-but-wait-theres-more.html">here</a>, the company settled US federal civil and criminal charges in connection with its marketing of multiple drugs for $422.5 million.  The charges included giving kickbacks to physicians disguised as speakers' honorariums and fees for serving on advisory boards.  </div><div itemprop="articleBody">-  In 2010, as we noted <a href="http://hcrenewal.blogspot.com/2010/05/novartis-settles-again.html">here</a>, the company settled separate US charges that it made false claims to support off-label marketing of its drug tobramycin for cystic fibrosis for $72.5 million.  </div><div itemprop="articleBody">- In 2008, as we noted <a href="http://hcrenewal.blogspot.com/2008/07/bad-week-in-court-for-us-health-care.html">here</a>, the company settled charges in the US state of Alabama that it defrauded Medicaid for $33.7 million. However, these legal escapades were not mentioned in the recent media coverage of the proffered and then withdrawn parachute.  </div><div itemprop="articleBody"> </div><div itemprop="articleBody"> </div><div itemprop="articleBody">The Company Backs Down. </div><div itemprop="articleBody"> </div><div itemprop="articleBody">Nonetheless, what was really surprising was that the outrage made the company back down.  <a href="http://online.wsj.com/article/SB10001424127887323495104578313670408396876.html">Per</a> the Wall Street Journal, </div><div itemprop="articleBody"> </div><blockquote class="tr_bq"><div itemprop="articleBody">Novartis AG on Tuesday abandoned a 72-million-Swiss-franc ($78 million) exit package for its chairman, bowing to pressure from shareholders and Swiss politicians after four days of increasing criticism.</div><div itemprop="articleBody"> </div>The Swiss drug maker said its board and Chairman Daniel Vasella<a class="topicLink" href="http://topics.wsj.com/person/V/Daniel-Vasella/4329"></a> agreed to cancel a six-year noncompete and related-compensation agreement designed to prevent him from joining or advising rivals and which would have paid him 12 million francs a year. The agreement was scheduled to take effect on Friday, when Dr. Vasella, 59 years old, is planning to leave the Basel-based company at its annual shareholder meeting</blockquote> Furthermore, <blockquote class="tr_bq">In the Novartis statement on Tuesday, Dr. Vasella acknowledged that his offer hadn't soothed public opinion: 'I have understood that many people in Switzerland find the amount of the compensation linked to the noncompete agreement unreasonably high,' he said. </blockquote> In addition, as Reuters noted, Vasella actually admitted he made "mistakes," <blockquote class="tr_bq">'The fierce reaction and reproaches that were made as a consequence of the many-sided discussions about my compensation did leave its mark on me,' 59-year-old Vasella said in his opening address to 2,688 shareholders gathered at Novartis's annual general meeting in Basel. 'I made two avoidable mistakes: the first was to even negotiate this contract. And the second to believe that giving up this individual payment to charities would be considered as something positive by society.'</blockquote> Of course, it is hard to believe that Novartis had previously paid him as lavishly as it did  - the New York Times had reported that his pay just prior to resignation was 12.4 million francs, "about $13.4 million a year" -  without securing an agreement to protect trade secrets.  Many businesses routinely add confidentiality clauses, trade secret protection, and non-compete clauses to contracts of many employees.  Thus adding a $78 million golden parachute ostensibly just to protect trade secrets and defection to the competition seems like impossibly gilding the lily.  Furthermore, if Novartis really thought that Vasella was likely to run to another firm at the drop of a hat, it would have made no sense to entrust someone thought to be at risk of such disloyalty with top leadership positions. Reason for Hope At least Chairman Vasella admitted "mistakes," and at least the ridiculous pay package was rescinded. This incident does show that it is possible for public and shareholder outrage over gargantuan payments to executives to have some effect.  That seems like real progress, and a reason to hope.  Of course, executives of public for-profit corporations are supposed to be working for shareholders.  Thus their general impunity from shareholders' control up to now remains inexplicable.  Furthermore, executives of pharmaceutical companies and other health care corporations seemingly should be responsible for putting patients' and the public's health ahead of their own enrichment.  Thus their ability up to now to ignore public concern about their companies' actions, and to avoid personal responsibility for their companies' bad actions also remains inexplicable. But progress may now be possible.  In and outside of Switzerland, shareholders of publicly-held for-profit health care corporations should demand accountability from the executives who are supposed to be working for them.  In and outside of Switzerland, health care professionals, policymakers, and the public at large should demand accountability from leaders of health care organizations for the effects of their organizations on patients' and the public's health.

Reason for Hope? - Novartis Rescinds Vasella's Golden Parachute

Enormous compensation of hired health care executives, out of all proportion, if related at all to whether their work had any positive effec...

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From another happy EHR user: automatic data "corrections" that alter the past

From another happy EHR user: <blockquote class="tr_bq">One of my patients was married in late 2012.   <div> </div>Her name changed from XXXX to YYYY. <div> </div><div>Today I incidentally reviewed this patient's chart.</div><div> </div><div>Can you guess what name appears on all progress notes (on the LCD screen and in printed form)…going back to early 2007?</div><div> </div><div>You guessed it…YYYY…even though her name was XXXX until late 2012.</div><div> </div><div>I've also seen this happen with providers.  Example:  an RN received her NP.  When they updated her prof designation in the EHR, ALL of her notes were changed to NP…even though about 10 of those years she was an RN.</div><div> </div><div>That's data integrity if I've ever seen it!</div></blockquote> These "features" could create injurious clinical confusion, and credentialing issues in litigation as well. Thus are the risks of having merchant computing "experts", with little understanding of how clinical and medicolegal issues differ from selling doggie biscuits, shove their bad health IT down clinician's throats. (Or, perhaps the better metaphor would involve the distal end of the GI tract.) -- SS

From another happy EHR user: automatic data "corrections" that alter the past

From another happy EHR user: One of my patients was married in late 2012. Her name changed from XXXX to YYYY. Today I incidentally reviewe...

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EHRs and "Meaningful Use": Begging the Question in the New England Journal of Medicine

I used to have great respect for the New England Journal of Medicine. No more. That respect was reduced significantly in 2010 when I saw the following passage (as I wrote in my July 2010 post "<a href="http://hcrenewal.blogspot.com/2010/07/new-england-journal-on-meaningful-use.html" target="_blank">Science or Politics? The New England Journal and The 'Meaningful Use Regulation for Electronic Health Records</a>"):  <blockquote class="tr_bq"><div class="MsoNormal">... In the NEJM article "The 'Meaningful Use' Regulation for Electronic Health Records", David Blumenthal, M.D., M.P.P. (ONC Chair) and Marilyn Tavenner, R.N., M.H.A. (10.1056/NEJMp1006114, July 13, 2010) available <a href="http://healthcarereform.nejm.org/?p=3732&query=home">at this link</a>, the opening statement is (emphases mine):</div><div class="MsoNormal"> </div><div class="MsoNormal"> </div><div class="MsoNormal" style="margin-left: .5in;">The widespread use of electronic health records (EHRs) in the United States is inevitable. EHRs will improve caregivers’ decisions and patients’ outcomes. Once patients experience the benefits of this technology, they will demand nothing less from their providers. Hundreds of thousands of physicians have already seen these benefits in their clinical practice.</div><div class="MsoNormal"> </div><div class="MsoNormal">I think it fair to say those are grandiose statements and predictions presented with a tone of utmost certainty in one of the world's most respected scientific medical journals.</div><div class="MsoNormal"> Even though it is a "perspectives" article, I once long ago learned that in writing in esteemed scientific journals of worldwide impact, statements of certainty were at best avoided, or if made should be exceptionally well referenced. I note the lack of footnotes showing the source(s) of these statements.</div><div class="MsoNormal"> </div><div class="MsoNormal">I also note the lack of mention of literature refuting or potentially refuting these statements of certainty. I can think of more than a few examples of the latter just off the top of my head [ref. 1-15 below, certainly not a comprehensive list but merely skimming the surface].</div><div class="MsoNormal"> </div><div class="MsoNormal">... So, did the NEJM publish fact, or political platitude?</div><div class="MsoNormal"> </div><div class="MsoNormal">Can someone provide a list of peer reviewed, rigorous studies that back the assertions of certainty in 10.1056/NEJMp1006114, and override the body of literature that could cast doubt on these assertions of certainty?</div></blockquote> The negative if not bitter reader comments to yesterday's New York Times article on the health IT lobby (<a href="http://hcrenewal.blogspot.com/2013/02/nyt-digital-shift-on-health-data-swells.html" target="_blank">link</a>) certainly cast some doubt. My respect has dropped several more notches in 2013. The NEJM has served as a PR journal for health IT once again. In a correspondence piece "<a href="http://www.nejm.org/doi/full/10.1056/NEJMc1213481" target="_blank">Early Results of the Meaningful Use Program for Electronic Health Records</a>", N Engl J Med 2013; 368:779-780,  February 21, 2013 by Adam Wright, Ph.D., Stanislav Henkin, B.A., Joshua Feblowitz, M.S., Allison B. McCoy, Ph.D., David W. Bates, M.D. and Dean F. Sittig, Ph.D., the following statement is published (emphases mine): <blockquote class="tr_bq">... The downstream effects of meaningful use on quality, safety, and efficiency are not yet known, and further increases in EHR adoption, functionality for clinical decision support systems, and research are needed to ensure the effectiveness of the meaningful use program </blockquote> I note that <a href="http://www.nizkor.org/features/fallacies/begging-the-question.html" target="_blank">B</a><a href="http://www.nizkor.org/features/fallacies/begging-the-question.html" target="_blank">egging the Question</a> is a fallacy in which the premises include the claim that the conclusion is true or (directly or indirectly) assume that the conclusion is true. Further, I made the following points in my Jan. 2010 post "<a href="http://hcrenewal.blogspot.com/2010/01/meaningfully-experimental-protocols-and.html" target="_blank">Meaningfully Experimental Protocols and Interfaces to Nowhere? Nagging Questions On Healthcare IT Remain</a>": <blockquote class="tr_bq">... there is a major problem with the term "meaningful use" itself: <blockquote> This [term "meaningful use"] is an example of putting the cart before the horse, and is a semantically-based, self contained logical fallacy of sorts. If a health IT system is harmful, the term "meaningful use" is itself Orwellian. If we don't know if HIT is beneficial, or have doubts, then such as term presupposes that health IT is inherently beneficial. A better term would have been "good faith use" - use based on the faith or hope that health IT will have an overall positive effect. The term "meaningful use" jumps the gun and is more a political slogan than a "meaningful term."</blockquote> I go further. Use of a term that a priori assumes some outcome reflects the antithesis of science. The term "meaningful use" in the domain of technology implies that those following the recipe for use of some technology, as well as their subjects, will experience meaningful outcomes. A parallel is in the logical fallacy of <a href="http://www.logicalfallacies.info/presumption/begging-the-question/">begging the question or circular argument</a>, where the conclusion of an argument is among its premises.</blockquote> In this current NEJM passage, the "question" of MU effectiveness is shamelessly begged like a hungry puppy begging for a <a href="http://snausages.com/" target="_blank">Snausage doggie snack</a>. <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/AVvXsEgPmkXt5cm0oa6UEcuITsYQ0L1LBsHyz_Vk6_adzOsPcKEDK0ycg56RxordM-mcHKEyeuWFUabhhYvKD8xgrsURwRH48HHquDOG2J9_Yhx9RJlX9licuN8HOxhgEvOcXK5Q3dtt7_ze5hTo/s1600/Snausages-.jpg" imageanchor="1" style="margin-left: auto; margin-right: auto;"><img border="0" height="200" src="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEgPmkXt5cm0oa6UEcuITsYQ0L1LBsHyz_Vk6_adzOsPcKEDK0ycg56RxordM-mcHKEyeuWFUabhhYvKD8xgrsURwRH48HHquDOG2J9_Yhx9RJlX9licuN8HOxhgEvOcXK5Q3dtt7_ze5hTo/s200/Snausages-.jpg" width="200" /></a></td></tr><tr><td class="tr-caption" style="text-align: center;"> </td></tr></tbody></table> "Ensure the effectiveness?"  The inherent assumption is that MU (developed by consensus committee without supporting rigorous evidence of effectiveness), whose 'downstream effects' are admittedly unknown, WILL be effective - if only we spend MORE billions of dollars on the technology. At best, the appropriate statement to have been made is this: <blockquote class="tr_bq">... The downstream effects of meaningful use on quality, safety, and efficiency are not yet known, and further increases in EHR adoption, functionality for clinical decision support systems, and research are needed to determine if meaningful use will have any positive impact on healthcare quality, safety and efficiency."</blockquote> <div style="right: auto;">From a physician commenter overseas who excels in demolishing health IT propaganda:  <blockquote class="tr_bq">Seriously, did they proof read the last paragraph? How did the NEJM editors let that get printed?  Given the recent food scandal in the UK, it is like the PM saying we are not quite sure that there's horsemeat in the Burgers and Lasagna so we are going to need to import a lot more of this muck from France, Poland & Romania before drawing any conclusions... </blockquote></div><div style="right: auto;"></div> Shame on the New England Journal.  My respect for them is even lower than after the 2010 health IT advert as above.  This current letter's conclusion is a high school-level <a href="http://www.thefreedictionary.com/faux+pas" target="_blank">faux pas</a> and, in my opinion, should not have been published in its present form. -- SS Addendum:  Let's see if they publish my Letter to the Editor on this matter, submitted today. Second addendum:  a reader opined that MU could have a negative impact on quality, safety and efficiency (cf. yesterday's NYT article and reader comments, <a href="http://hcrenewal.blogspot.com/2013/02/nyt-digital-shift-on-health-data-swells.html" target="_blank">link</a>).  While less likely, we just don't know. Addendum Mar. 18, 2013.  I received this today from the NEJM: <blockquote class="tr_bq">Your letter referring to the Wright article of 21-Feb-2013  has been received.  Because of the limited availability of space, we can publish only a fraction of the letters we receive.  Although we will not be able to print yours, we have forwarded a copy to the authors in case they wish to reply directly to you. </blockquote>  This is why I blog. -- SS

EHRs and "Meaningful Use": Begging the Question in the New England Journal of Medicine

I used to have great respect for the New England Journal of Medicine. No more. That respect was reduced significantly in 2010 when I saw the...

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It is Harder to Run a Small Public Hospital System than California? - Deep Seated Myths and Logical Fallacies Underpinning Health Care Executive Compensation

Hospital executive compensation, the gift that keeps on giving...  A Public Hospital CEO's Current Compensation A recent, somewhat obscure news article shows how deeply rooted is the current practice of paying top hired managers of health care organizations amounts that seem outlandish given the context. The <a href="http://www.mercurynews.com/breaking-news/ci_22593751/fremont-hospital-ceo-gets-six-figure-bonus-after">article</a>, in the Argus - San Jose (CA) Mercury News, discussed the compensation given the CEO of a small public hospital district.  It opened with, <blockquote class="tr_bq"> Amid a budget crunch that has forced sweeping cutbacks at its medical facilities, the Washington Township Health Care District board of directors on Wednesday awarded its CEO $162,783 in incentive pay that raises her total annual compensation and contract perks this year to more than $800,000. The bonus pushes Farber's total 2012-13 compensation past $813,915, less than the $936,349 she made in 2011 or her $912,519 pay in 2010, when she was among the top five paid government employees statewide in a survey by the state controller's office. </blockquote> Note first that Washington Township Health Care District is a public health district.  As an <a href="http://www.mercurynews.com/breaking-news/ci_22451747/nurses-medical-director-among-jobs-cut-at-washington">article</a> from January, 2013 in The Argus - San Jose Mercury News explained, <blockquote class="tr_bq">The Washington Township Health Care District is a public agency in southern Alameda County and receives tax money from 320,000 district residents under voter-approved bond measures. </blockquote> The District is also under financial stress.  As the earlier Argus - Mercury News article stated, <blockquote class="tr_bq"> <div class="bodytext">Physician assistants, nurses and medical directors were among the 200 jobs recently eliminated by the Washington Township Health Care District to cut costs, according to new information released by the district.</div><div class="bodytext"> </div>In response to a request under the California Public Records Act, the district provided a list this week of the 75 job titles included in the approximately 132 vacant and 68 filled positions eliminated in recent months as part of a 13 percent workforce reduction. </blockquote> Furthermore, as the newer Argus - Mercury News article noted, <blockquote class="tr_bq"> Farber was overseeing a 13 percent workforce reduction that eliminated 200 mostly vacant jobs. The district had seen operating profits plummet tens of millions of dollars last year from recent years.</blockquote> So Ms Farber got a large salary plus bonus at a time when hospital "profits" were declining and many employees, including health care professionals with direct patient care responsibilities were being laid off.  A Long History of Outsize Compensation Note that this small public hospital system actually has a long history of paying its CEO a lot. In 2003, the (Fremont-Newark, CA) Argus <a href="http://nl.newsbank.com/nl-search/we/Archives?p_product=CFAB&p_theme=cfab&p_action=search&p_maxdocs=200&p_topdoc=1&p_text_direct-0=0FC40B8E714414E9&p_field_direct-0=document_id&p_perpage=10&p_sort=YMD_date:D&s_trackval=GooglePM">editorialized</a> (the full article requires payment), <blockquote class="tr_bq"> HOW MUCH is too much? We don't know the answer to that, but we're pretty sure $479,600 a year qualifies. That's how much Washington Hospital is paying CEO Nancy Farber. Farber will make a base salary of $406,000 during the 2003-04 fiscal year, a 10 percent raise from her 2002-03 salary of $368,000, plus she is getting a $73,000 bonus.</blockquote> That editorial did not seem to prevent Farber from getting raise after raise in the subsequent years. In 2011, the Los Angeles Times published an <a href="http://articles.latimes.com/2011/mar/29/local/la-me-0329-top-compensation-20110329">article</a> with the headline, "Hospital executives occupy top tier of California's public workers."  It said this about the pay given Nancy Farber, still the CEO of Washington Township Health Care District, <blockquote class="tr_bq">The hospital's chief executive, Nancy Farber, is the second-highest-paid official covered in Chiang's database [of pay to public officials] so far. She was paid about $874,000 in 2009.</blockquote> So Ms Farber's compensation has about doubled in the last 10 years, during which US cost of living has increased about 24% (look <a href="http://inflationdata.com/inflation/Consumer_Price_Index/HistoricalCPI.aspx?reloaded=true">here)</a>.  And at least one local editorialist thought she was paid too much in 2003. Justifying Large Payments with the Usual Talking Points So why should the pay of the CEO of a relatively small public hospital system keep rising so fast, despite criticism.  To some extent in 2011, and quite clearly in 2013, her supporters trotted out the usual suspect arguments. We previously have described (most recently <a href="http://hcrenewal.blogspot.com/2013/02/carolinas-healthcare-system-pays.html">here</a>) how whenever anyone bothers to try to justify extravagant executive compensation at hospitals, and for that matter, most other health care organizations throughout the US, they seem to repeat the same set of talking points.    We first listed the talking points <a href="http://hcrenewal.blogspot.com/2011/09/talking-points-sans-original-thought-to.html">here</a>, and then provided additional examples of their use <a href="http://hcrenewal.blogspot.com/2011/09/more-repeats-of-talking-points.html">here</a>, <a href="http://hcrenewal.blogspot.com/2012/03/example-of-how-complex-takes-control.html">here</a> and <a href="http://hcrenewal.blogspot.com/2012/12/health-care-hired-managers-not-playing.html">here</a>.   The talking points are: -  we pay what everyone else pays -  CEOs work hard and are brilliant, and so deserve high pay -  high pay is needed to attract and retain competent, if not brilliant people. In 2011, <a href="http://articles.latimes.com/2011/mar/29/local/la-me-0329-top-compensation-20110329">per the Los Angeles Times</a>, "officials" of the health district combined all three in a single sentence, : <blockquote class="tr_bq">Officials at the Washington Township Health Care District in Fremont, Calif., also argued that they needed to pay 'market rate' to obtain top-quality staff.</blockquote> In 2013,  the Argus - Mercury News <a href="http://www.mercurynews.com/breaking-news/ci_22593751/fremont-hospital-ceo-gets-six-figure-bonus-after">described</a> how Ms Farber's defenders used them all at length.  CEOs Work Hard and are Brilliant <blockquote class="tr_bq">Board member Bernard Stewart, a local dentist who has served for more than a decade on Washington's board, said the salary comparison with other public employees was unfair. 'It's a temptation for all of us to compare the CEOs salary with other elected officials or other public officials, but I can't stress in the strongest means possible, that is an absolute error,' Stewart said. 'We in this hospital are a public hospital. We are a publicly elected board, but we are engaged in an incredibly competitive and difficult business and we are different from any other public organization in that regard.'</blockquote> So one board member explicitly argued that being the CEO of a small public hospital system is much harder than any other kind of state government leadership position. Since the article also included a comparison of Ms Farber's pay with that of the Governor of California, <blockquote class="tr_bq">By comparison, Gov. Jerry Brown will make just over $165,000 this year.</blockquote> the board member implied that it is much harder to run a small public hospital district than the whole state.  That is breathtaking. The board also more generally praised the CEO,  <blockquote class="tr_bq"> Ahead of the vote for the bonus Wednesday, all five board members praised Farber's leadership and said that, because of the difficulties facing the hospital, experienced leadership was needed.</blockquote> In addition, note that hospital district board members suggested specific aspects of Ms Farber's performance worthy of high remuneration. <blockquote class="tr_bq">Board members credited Farber with implementing a new electronic records system, the construction of the district's new center for joint replacement on time and on budget, and for various accolades the district received last year. Among them, the district was ranked the fourth best hospital in the Bay Area by U.S. News & World Report and among the top 10 in the state for joint replacements by HealthGrades, a designation received for the last seven years. Board members said Farber's decision to reduce the workforce was evidence of her exemplary leadership. 'Making the decision to downsize, or right-size, when necessary, is as much a part of being a responsible administrator as is building, growing and improving the health care system,' Nicholson said. Board member Michael Wallace said Farber, 'has made tough and unpopular choices. The easy thing would have been to kick the can down the road, which is what we see happening all the time in Washington, but she didn't do that,'....</blockquote> So we see here that the CEO is given personal credit for all good things, even good things that obviously required considerable work by other people.  I am certain that the CEO did not personally implement the EHR, did not construct the joint replacement center, and did not directly care for patients.   All the other employees who contributed to these apparent successes implicitly got no credit, and it is likely that some employees who actually contributed were laid off. Furthermore, note that the board somehow believed that laying off employees in a time of financial stress, a hardly original business strategy in this day and age, and one presumably only undertaken due to a crisis, was somehow a sign of brilliant leadership.  Again, this is breathtaking.   I would argue that asserting the CEO has a harder job than the state governor, giving the CEO credit for numerous activities that obviously required the work of many others, while denying her responsibility for financial distress amount to a prolonged logical fallacy, a prolonged <a href="http://www.nizkor.org/features/fallacies/appeal-to-authority.html">appeal to authority</a>.  The argument that whatever the CEO does MUST be brilliant, and its assessment should not be the subject of critical thought. We Pay What Everyone Else Pays High Pay is Needed for Recruitment and Retention Admittedly, Ms Farber's defenders did not belabor these points as much, but, board member Michael Wallace said <blockquote class="tr_bq">'I don't want our leadership and management team wooed away by those monolithic systems willing to pay market compensation, which is a risk if we are not willing to do so.'</blockquote>  He provided no evidence that this supposedly brilliant group of hired managers was in any danger of being recruited elsewhere.  As we have <a href="http://hcrenewal.blogspot.com/2013/02/non-profit-hospital-executive-salaries.html">noted before,</a> the evidence suggests that most top executives are recruited from within the organization, and hence this assertion is at best another kind of logical fallacy, an appeal to common practice.   The Myth of the Divine Right of CEOs We have seen again and again how top executives of health care organization, particularly CEOs, are given credit for everything good that happens, while avoiding responsibility for everything bad, and have the ability to continually enrich themselves regardless of the evidence about their personal performance, or about the context in which they work.   Thus they are treated by those around them as some sort of aristocracy,  just short of omnipotent, minor deities.  In fact, as we wrote <a href="http://hcrenewal.blogspot.com/2012/03/golden-calf-explains-how-economism-lead.html">here</a>, there is reason to think that some trends in economic thinking, combined, as we wrote <a href="http://hcrenewal.blogspot.com/2012/03/why-health-care-leaders-remain.html">here</a>, with some trends in religious, or pseudo-religious thinking, have combined to promote something akin to the "divine right" of CEOs. Yet CEOs and other health care executives are demonstrably human, and hence flawed.  Furthermore, shielding them from all accountability is a tremendous perverse incentive that is likely to lead to ever more incompetent, self-interested, mission-hostile, and even corrupt leadership.   Somehow we need to start combating the talking points used to justify the lack of accountability and self-interest of top health care organizational leadership, and ultimately the whole notion of hired managers and executives as super human.  As a society we need to wake up from our dazed acquiescence to ideas that border on crazy.  We need to challenge rote justifications and talking points for that which makes no sense, but serve to make the powerful more powerful.

It is Harder to Run a Small Public Hospital System than California? - Deep Seated Myths and Logical Fallacies Underpinning Health Care Executive Compensation

Hospital executive compensation, the gift that keeps on giving... A Public Hospital CEO's Current Compensation A recent, somewhat obscu...

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New York Times: "A Digital Shift on Health Data Swells Profits in an Industry"

The New York Times has published an article today by Julie Creswell entitled "A Digital Shift on Health Data Swells Profits in an Industry."  It is available <a href="http://www.nytimes.com/2013/02/20/business/a-digital-shift-on-health-data-swells-profits.html" target="_blank">at this link</a>. <blockquote class="tr_bq"><div itemprop="articleBody">... While proponents say new record-keeping technologies will one day reduce costs and improve care [only when today's bad health IT is abolished - see <a href="http://www.ischool.drexel.edu/faculty/ssilverstein/cases/" target="_blank">here</a> - ed.], profits and sales are soaring now across the records industry. At Allscripts, annual sales have more than doubled from $548 million in 2009 to an estimated $1.44 billion last year, partly reflecting daring acquisitions made on the bet that the legislation would be a boon for the industry. At the <a class="meta-org" href="http://topics.nytimes.com/top/news/business/companies/cerner-corporation/index.html?inline=nyt-org" title="More information about Cerner Corporation">Cerner Corporation</a> of Kansas City, Mo., sales rose 60 percent during that period. With money pouring in, top executives are enjoying Wall Street-style paydays. </div><div itemprop="articleBody"> </div><div itemprop="articleBody">None of that would have happened without the health records legislation that was included in the 2009 economic stimulus bill — and the lobbying that helped produce it. Along the way, the records industry made hundreds of thousands of dollars of political contributions to both Democrats and Republicans. In some cases, the ties went deeper. Glen E. Tullman, until recently the chief executive of Allscripts, was health technology adviser to the 2008 Obama campaign. As C.E.O. of Allscripts, he visited the White House no fewer than seven times after President Obama took office in 2009, according to White House records. </div></blockquote> The article does not reveal anything that readers of this blog did not know already. The push for the financial incentives and profits were also written about at the The Huffington Post Investigative Fund by investigative reporter Fred Schulte, now at the Center for Public Integrity ("<a href="http://www.huffingtonpost.com/2009/11/05/stimulus-fuels-gold-rush_n_347311.html" target="_blank">Stimulus Fuels Gold Rush For Electronic Health Systems</a>"), and in the Washington Post by Robert O'Harrow Jr. (which I wrote about at this post:  <a href="http://hcrenewal.blogspot.com/2009/05/machinery-behind-healthcare-reform-how.html" target="_blank">The Machinery Behind Healthcare Reform: How the HIT Lobby is Pushing Experimental and Unsafe Technology on Unconsented Patients and Clinicians</a>). Rather than re-hash the issues, I wanted to focus on some of the current NYT reader comments: <blockquote class="tr_bq">... After a visit to a Florida hospital for suspicion of heart attack, I asked for a copy of my records to give my home (IL) physician. I was shocked to read that I had had "anal surgery." When I reviewed these records with my doctor, she told me that I had probably told the admitting ER nurse I had recently had a colonoscopy, so the closest coding information their electronic system allowed was anal surgery. So, how can these inaccuracies which will live on forever electronically be helpful toward patient care? The old acronym GIGO certainly applies here--garbage in; garbage out. ... This article highlights only one aspect of the "Failed Promise of Electronic Health Records". Through lobbying but also supported by a study from the RAND organization, the three final 2008 presidential candidates, Hillary Clinton, John McCain, and Barack Obama outbid each other with promises to spend billions to entice doctors to use electronic record systems. Unfortunately, because of unsolved documentation problems, such systems are often disliked and slow the process. Instead of creating interoperability, electronic medical record systems (EMRs) with limited functionality and benefits were created. In particular, true interoperability has been neglected and attempts to create it through networks in the form of CHINs, RHIOs, and HIEs have failed. ... Mr. Tullman's comment is priceless. “I think it’s very common with every administration that when they want to talk about the automotive industry, they convene automotive executives, and when they want to talk about the Internet, they convene Internet executives." Of course, when "they" want to radically alter the way doctors do their jobs, "they" talk to academics, lawyers, publicly traded insurance CEOs and internet executives. Today's diatribe about quality care being more important than quantity care is laugh out loud funny. Unless you're a physician. Only in America does getting paid less and less, with more clerical data entry record-keeping at every step just to get paid and protect against lawsuit, translate into an incentive to provide quality care. Somebody prescribe a dose of common sense. Oops. Too late. ... Every person needs a national health ID with up to date health information. To say that the current EMR systems are problematic would be an understatement. They take away face time with patients, the M.D.'s talents and time are wasted doing data entry and worst of all ,they are potentially dangerously flawed. An example is a recent patient I saw who was treated by a number of physicians. His medications had required significant changes which were done by 2 different M.D.'s from his main doctor. Both gave him computer generated lists from the same system. Both had a mixture of unmatching generic and proprietary names, the patient's actual medicines from the pharmacy had a mixture and different doses from the Dr.'s orders. He was trying to set up his week's supply. But didn't know which proprietary name went with which medicine. These systems should have been tried out on a small scale and approved by M.D.'s before this became law. The VA system which is time tested, physician friendly and free only the VA is using. These other systems are set up to maximize profits for the IT companies, cost the physicians huge amounts to install, cost the hospitals huge amounts esp when they are changing from one system to another due to problems when they were advertised to maximize hospital billing. This another example of our distorted legislative process where profits and politics take precedence over people. ... I am a dermatologist in private practice who teaches at a local medical school part time. Electronic records are problematic. Every doctor I know feels they take time away from being a doctor. I literally don't know a single colleague who feels their benefits are worth the extra time involved. In medical school, we learned how to record notes in medical records so that patient care is improved from visit to visit. In short, we use notes from the previous visits to assist in our decisions in subsequent examinations. In today's digital world, most doctors I know are forced to change their notation style to justify payments from insurance companies. The more detailed the note in the medical record, the lower the chance that an insurance company downgrades the fee charged to the patient. Thus, notes are now longer and more detailed than they were ten years ago. The problem with such notes is that they are filled with detritus geared to prevent payment reduction rather than aimed at improving continuity of patient care from visit to visit. The impact of this adoption of electronic medical records is that insurance company computer systems can easily sift through notes to reduce compensation to doctors who spend more time with patients and who write cleaner, more efficient notes. ... I still use pen and paper.  One requirement would fix this mess: interoperability No, NOT the "industry supported" standard. Thats a joke. Industry wants NO inter-operability because they want to lock us in to a an individual product, The government has a great EMR (the VA system). All commercial ones should be forced to be able to export data in a way that is 100% compatible with that. As such, they would then be 100% compatible with each other. Some of my colleagues are now on their third EMR product in 7 years. Why? Big company buys company B and then stops supporting it. The doctor is forced to switch to Big Company's new product. Of course the data does not transfer over so the doctor has to go through the crude data-entry mess all over. ... The folly of relying only on digital records. Without constant and costly software and hardware upgrades, your digital medical records will be rendered obsolete. Could be a matter of years or decades, but it will happen. Not only that, digital proprietary systems are at huge risk if the private for-profit company goes bankrupt. Paper records can last 1000 years. ... Another scam. Very expensive and involved for end user:ie doctor. Have had to hire an IT company to assist, have to pay annually for service contract, upgrades and what the article didn't mention was the "meaningful use" criteria that all doctors have to comply with in order to pass government inspection for a rebate. The software vendors, labs, and others are charging doctors extra for software upgrades and abilities to comply with each "meaningful use" component . This is already costing more money and aggravation than the worth of the government rebate. Who will subsidize this? Doctors are starting to lose interest. We know this is another corrupt government sponsored ploy and only the tip of the iceberg. If the government were to have spent the 19 billion with a consortium of vendors such as google apple and microsoft, the goal of free software provision capable of interexchangeable data would likely have been completed with all providers on board. ... Common sense can tell you that the real value of these systems is marginal. Much of medical treatment is "incident specific" where history is not necessary. Most PCP's already have a system that works. In larger systems and for complex diseases, perhaps EMR are beneficial but not for routine care. As has been noted, all sorts of problems arise with EMR's: destruction of MD-pt relationship, incorrect data being entered and never removed, cumbersome and expensive requirements of instituting and maintaining the system, etc. It is awful that physicians and patients are "used" in the service of politicians and EMR execs. ... As a practicing physician I have to struggle everyday with the Citrix and Quickbase electronic records. The Electronics Medical Records industry has been getting the gold promised by the government in exchange of a very poor and deficient product. The EMR industry has been selling to the healthcare providers, in need of electronic records, the equivalent of the Formaldehyde-contaminated trailer homes sold to FEMA for the Katrina homeless.</blockquote> These are just from the first page of comments.  Read the article and the comments at the link above. My observation is that it seems that as transparency increases, the public "gets it" that these systems are not the panacea the industry wants us to believe, and may impede the clinicians trying to treat them. Now, when will the government "get it" that they've been had? -- SS Addendum:  another "anecdote" just caught my eye because it sings an unfortunate familiar tune to me: <blockquote class="tr_bq">So much data, so little knowledge. My best friend's father just died because none of his who-knows-how-many physicians took the time to actually read and anaylze the reams of info they were dutifully inputting. They killed him with an overdose of one drug and not enough of another.  Useful data collection and analysis is one thing, but what we seem to have now is just institutionalized hoarding. More data doesn't make anyone safer (except the data companies), just like stacks of old magazines or cans of beans makes one safer. More is NOT better; it is just more. More time and more expense wasted on stuff and less spent on actual health care. You've got to USE anything or it is just more useless and potentially dangerous stuff. </blockquote> -- SS

New York Times: "A Digital Shift on Health Data Swells Profits in an Industry"

The New York Times has published an article today by Julie Creswell entitled " A Digital Shift on Health Data Swells Profits in an Indu...

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Are the health IT hyper-enthusiasts inept, or merely insane?

From a psychiatrist, partially in response to the <a href="http://www.kaiserhealthnews.org/Stories/2013/February/18/Scot-Silverstein-health-information-technology.aspx" target="_blank">article about me in Kaiser Health News</a>, on the travails of health IT. They write: <blockquote class="tr_bq">... In psychiatry we screen for certain medication side effects using a tool called "DISCUS."  [Dyskinesia Identification System Condensed User Scale - ed.] In a paper and pen world, we (1) reviewed a single page; (2) circled a score; (3) signed and (4) dated. In [redacted] EHR, we need to do the following to complete one DISCUS…      DISCUS Completion in [redacted] EHR: <ul><li>1.  Log in;</li><li>2.  Acknowledge to do items by choosing “ok”;</li><li>3.  Go to “my to do list.”</li></ul>Then: <ul><li>4.  Double click specific date of to do items to complete (this reveals the specific to do items)</li><li>5.  Right click specific patient’s name</li><li>6.  Choose “enter option”</li><li>7.  Review all 3 pages under “assessment” tab (click through each page)</li><li>8.  Then choose “evaluation” tab</li><li>9.  Review “evaluation” (keeping in mind the total score from last page of “assessment”)</li><li>10.  Choose your “conclusion” in item 5</li><li>11.  Add “comments” as indicated (item 6)</li><li>12.  Under “name/ID number” type in the first characters of your last name (or your ID number)</li><li>13.  Select your name</li><li>14.  Go to the bottom under “select physician to notify” and UNcheck your name</li><li>15.  Click “yes” under “is evaluation section complete and ready to be locked?”</li><li>16.  Confirm above choice by choosing “ok”</li><li>17.  Press “submit” button across the top</li><li>18.  Now go back to “my to do list” and you’ll see that the item you just processed above is still there -- double click the same to do item that you just finalized (and processed in item 5 above)</li><li>19.  Then check “reviewed”</li><li>20.  Then press “submit”</li><li>21.  Then press “refresh” and the item will be completed (refresh does not need to be done after each DISCUS)</li></ul>Finally: <ul><li>22.  For processing of additional DISCUS for a given “sign on," go back to step 3, 4 or 5 (as needed), and repeat. </li></ul></blockquote> And this is just the easy stuff. I'm not a psychiatrist, but I can opine with confidence that anyone who expects human-computer interaction such as this to "revolutionize medicine" is insane. Perhaps this helps explain city-wide debacles such as <a href="http://hcrenewal.blogspot.com/2010/11/avatar-fails-no-not-cameron-movie-but.html" target="_blank">this</a> in San Francisco. -- SS

Are the health IT hyper-enthusiasts inept, or merely insane?

From a psychiatrist, partially in response to the article about me in Kaiser Health News , on the travails of health IT. They write: ... In ...

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Another Revolving Door Variant: From Academia with Millions in Medtronic Royalties, to the White House, to the Health Care Service Corp

The revolving door spins, and where it will stop, nobody knows... In October, 2010, we noted questions about how Dr Stephen Ondra got to be a <a href="https://www.va.gov/opa/bios/docs/ondra.pdf">Senior Policy Adviser for the US Department of Veterans Affairs</a>. A veteran who was a neurosurgery professor at Northwestern University, Dr Ondra had received millions of dollars in royalties from device manufacturer Medtronic, whose CEO supported his appointment to the government position  (see this <a href="http://hcrenewal.blogspot.com/2010/10/toxic-and-dangerous-watchdog-vs.html">post</a>).  As soon as he was appointed, he publicly opposed a nominee for US Surgeon General who had been critical of the medical device industry, and its financial ties to doctors. After going to Washington, Dr Ondra apparently also served in the Executive Office of the President, in the White House, but <a href="http://triblocal.com/lake-forest/community/stories/2012/04/northwestern-memorial-hospital-names-stephen-l-ondra-chief-medical-officer/">returned</a> to Northwestern University in 2012.  However, he did not stay there for long. This month, a <a href="http://www.forbes.com/sites/brucejapsen/2013/02/07/obama-advisor-ondra-hired-as-top-doc-at-blue-cross-plan/">post</a> on Forbes indicated he is moving on again, and back to the corporate side of health care. <blockquote class="tr_bq">the nation’s fourth-largest health insurance company is naming a key former health advisor to President Obama as its top doctor. Dr. Stephen Ondra, will become senior vice president and chief medical officer at Health Care Service Corp., the Chicago-based parent company of Blue Cross plans in Illinois, Texas, Oklahoma and New Mexico. The plan has more than 13 million health plan members and is looking to grow even more, announcing last year a proposed partnership with the Blue Cross plan in Montana.</blockquote> Health Care Service Corp is a mutual insurance company, that is, a company owned by its policy-holders rather than stock holders.  However, that does apparently not make it any more ascetic than a typical for-profit insurance company, at least in terms of generosity towards its top hired executives.  As Crain's Chicago Business <a href="http://www.chicagobusiness.com/article/20120515/NEWS03/120519922/blue-cross-parents-ceo-pay-climbs-to-12-9-million">reported</a> in 2012, <blockquote class="tr_bq">New federal regulations intended to force health insurers to spend less on administration didn't keep the parent of Blue Cross & Blue Shield of Illinois from paying CEO Patricia Hemingway Hall more than $12.9 million in 2011, a 61 percent raise. The Health Care Service Corp. chief executive's total compensation last year dwarfed the $8 million she received in 2010, according to a filing with the Illinois Department of Insurance. The 2011 increase was fueled by an $11.8 million bonus, which was 69 percent above her 2010 bonus of $7 million. Ms. Hall wasn't alone in getting a big raise at Health Care Service, whose insurance business booked net income of more than $1 billion in 2011, for the second straight year. The 10 highest-paid executives at the Chicago-based mutual company — which operates Blue Cross plans in Illinois and three other states — earned a collective $41.7 million, 65 percent more than the $25.3 million they were paid in 2010.</blockquote>  If Dr Ondra's new position puts him among the latter group of executives, he too stands to make millions a year.  So to recap Dr Ondra's career so far, in 2010 he was a medical school professor who had earned millions in royalties from Medtronic.  He then went to top leadership positions in the US Veterans Department and Executive Office of the President.  He returned briefly to Northwestern University, only to leave again for a top executive position in for-profit insurance company Health Care Service Corp, where he is likely to make millions more. Thus Dr Ondra is our latest interesting example of the "<a href="http://hcrenewal.blogspot.com/search/label/revolving%20doors">revolving door</a>" phenomenon in health care.  He started as an erstwhile academic physician but with a very major financial relationship with a medical device company.  He then went through the door the first time into the US government, and then a second time from the government to a for-profit insurance company, with just a brief stop-over in academia. By the way, it appears that all of this is quite legal.  It does again raise questions about whether health care leaders in government with previous relationships with industry might still feel undue sympathy to the interests of industry, as might government leaders who can expect future jobs in industry. Moreover, this case, like previous cases we have discussed,  indicates how leadership in academic health care, corporate health care, and the government tend to blend together.  Leaders of one type of organization have more and more in common with leaders of the other types of organizations than they do with their lesser ranked colleagues, and certainly than with other health care constituencies.  So the more the revolving door revolves, the more we wonder about the <a href="http://hcrenewal.blogspot.com/search/label/corporatism">corporatism</a> of health care, about how health care seems to be increasingly run by an amorphous group of academic/ corporate/ government leaders whose loyalties may be more to each other than to academic and professional values, patients' and the public's health, and government of, by and for the people.

Another Revolving Door Variant: From Academia with Millions in Medtronic Royalties, to the White House, to the Health Care Service Corp

The revolving door spins, and where it will stop, nobody knows... In October, 2010, we noted questions about how Dr Stephen Ondra got to be ...

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