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Market Fundamentalism and the Denial of Conflicts of Interest, and of Worse Offenses

While we often point out the pervasiveness of <a href="http://hcrenewal.blogspot.com/search/label/conflicts%20of%20interest">conflicts of interest</a> in medicine and health care, and the likely ill effects of this state of affairs, it seems that the powers that be in health care tend to airily dismiss conflicts of interest as at most a minor problem that needs management (e.g., look <a href="http://hcrenewal.blogspot.com/2012/02/logical-fallacies-in-defense-of.html">here</a>.)  How Market Fundamentalist Ideology Nullifies the Concept of Conflicts of Interest On the Hooked: Ethics, Medicine and Pharma blog, Dr Howard Brody <a href="http://brodyhooked.blogspot.com/2013/09/why-theres-no-such-thing-as-conflict-of.html">discussed</a> how application of the reigning orthodoxy in economics, sometimes called neoliberalism, market fundamentalism, or <a href="http://hcrenewal.blogspot.com/search/label/economism">economism</a>, can be used to dismiss the concept of conflicts of interest. Basically, supporters of market fundamentalism et al seem to assume that all markets are idealized free markets, and that free markets are like a super computer combining all human thought to provide wisdom in the form of price information.  Furthermore, since the market is based on supposedly rational choices made by free individuals, one cannot go back to question such choices.  So when, for example, an academic physician makes the "free choice" to accept thousands of dollars from a drug company as a "market consultant," and then also gives talks about clinical topics that happen to favor that drug company's products, such choices cannot be questioned.  Therefore, the notion that these choices constitute a conflict of interest, and that the choice to accept the drug company money in particular might increase the likelihood of abuse of the physician's entrusted responsibility to make the best decisions for individual patients, and to teach other physicians honestly and without bias, essentially makes no sense within this framework. Dr Brody further enlarged on the internal contradictions within the ideology of neliberalism/ market fundamentalism/ economism, in <a href="http://theeconomismscam.blogspot.com/2013/09/more-on-inherent-contradictions-of.html">another post</a> on his Economism Scam blog. Of course, the ideology seems to ignore the possibilities that 1) people's choice may not be free, may not be rational, and may not be based on coldly rational cognition and the best possible knowledge; and 2) one person's economic choice may limit another person's choices, or directly harm another person.  By Extension, Fraud and Corruption Denialism Furthermore, not only does neoliberalism et al seem to deny the existence of meaningful conflicts of interest, it also could be used to deny the meaningful existence of deceptive marketing, of market domination through oligopoly or monopoly, and then of outright fraud, bribery, and extortion.  See for example how former US Federal Reserve chairman Alan Greenspan seemed to deny the existence of fraud, which he asserted would always be nullified by the ideal market.  As we posted <a href="http://hcrenewal.blogspot.com/2011/10/another-month-another-series-of-adverse.html">here</a>, according to an <a href="http://www.stanfordalumni.org/news/magazine/2009/marapr/features/born.html">article</a> in Stanford Magazine,  Greenspan told Ms Brooksley Born, the federal regulatory agency head who tried to develop some effective regulation of financial derivatives, <blockquote class="tr_bq">'Well, you probably will always believe there should be laws against fraud, and I don’t think there is any need for a law against fraud,' she recalls. Greenspan, Born says, believed the market would take care of itself.</blockquote> By further extension, market fundamentalism could be used to deny the evils of chattel slavery. The Conflicted as Defenders of Conflicts of Interest Finally, notice that neoliberalism/ market fundamentalism/ economism ideology seems to have conveniently been adopted by pundits, both in economics and in medicine and health policy who may be personally profiting from conflicts of interest on one hand, and whose conflicts seem to arise from payments from large corporations whose management seem to be personally profiting even more so.  For example, we have discussed examples of how defenders of existing financial relationships - which in my humble opinion are actually conflicts of interest - employ logical fallacies to make their points.  Some of these defenders seem to have obvious conflicts of their own (for example, <a href="http://hcrenewal.blogspot.com/2013/03/doctors-dubious-excuses-for-taking.html">this post</a> included examples of physicians rationalizing their financial ties to drug companies,  and <a href="http://hcrenewal.blogspot.com/2012/02/logical-fallacies-in-defense-of.html">this post</a> included fallacies employed by a current medical school leader, but former extremely well paid biotechnology company executive.).  On the other hand, I have yet to find a logical, reality-based defense of these conflicts of interest made by anyone who demonstrably does not have such conflicts of their own.   Summary Human beings have been wrestling with corruption since the dawn of history.  There are ancient arguments against bribery in the Bible  (e.g., in the Old Testament, in Exodus and Deuteronomy), and fraud (e.g., in Leviticus, the Proverbs, and the Gospel of Mark).  One can argue that a fundamental purpose of civilization is to reduce self-serving misbehavior such as bribery, fraud, and extortion, and other varieties of corruption.  The notion that free markets make the concepts of fraud, and of conflicts of interest (that are risk factors for corruption - look <a href="http://hcrenewal.blogspot.com/2012/03/another-cautionary-tale-about-conflicts.html">here</a>) meaningless is nothing more than school playground sophistry. To truly reform health care, we need to return it from its current Wild West mentality to a state more resembling civilization.  We need to reject silly notions that free markets erase the concepts of conflict of interest, or of fraud, or of other aspects of corruption.

Market Fundamentalism and the Denial of Conflicts of Interest, and of Worse Offenses

While we often point out the pervasiveness of conflicts of interest in medicine and health care, and the likely ill effects of this state o...

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Study Explains Errors Caused by EHR Default Values - With Only Four Reports of "Temporary" (By the Grace of God) Patient Harm

From Health Data Management and the <a href="http://patientsafetyauthority.org/Pages/Default.aspx">Pennsylvania Patient Safety Authority</a>: <blockquote class="tr_bq"><a href="http://www.healthdatamanagement.com/news/ehr-electronic-health-records-default-values-errors-46559-1.html">Study Explains Errors Caused by EHR Default Value</a> <div id="article-meta"><div class="name">Joseph Goedert </div><div class="date">Sept. 5, 2013 </div></div> <div id="article-teaser">A new study analyzes errors related to “default values” which are standardized medication order sets in electronic health records and computerized physician order entry systems.</div><div id="article-teaser"> </div>The Pennsylvania Patient Safety Authority, an independent state agency, conducted the study. “Default values are often used to add standardization and efficiency to hospital information systems,” says Erin Sparnon, an analyst with the authority and study author. “For example, a healthy patient using a pain medication after surgery would receive a certain medication, dose and delivery of the medication already preset by the health care facility within the EHR system for that type of surgery.” These presets are the default value, but safety issues can arise if the defaults are not appropriately used. Sparnon studied 324 verified safety reports, noting that 314, or 97 percent, resulted in no harm. Six others were reported as unsafe conditions that caused no harm and four reports caused temporary harm involving some level of intervention.</blockquote><div id="article-content"> One might ask:  how many unreported or yet-to-be-reported EHR/CPOE cases involved, or will involve, permanent harm? <blockquote class="tr_bq">Sept. 9, 2012 Addendum:  We learn this from Healthcare IT News (<a href="http://www.healthcareitnews.com/news/ehr-adverse-events-data-cause-alarm">http://www.healthcareitnews.com/news/ehr-adverse-events-data-cause-alarm</a>):  "Sparnon said two of the reports involved temporary harm that required initial or prolonged hospitalization."  I note that hospitalization, especially prolonged hospitalization, exposes the patient to still more risk. </blockquote> Regarding the "temporary harms", one which includes "default times" as opposed to doses: <blockquote class="tr_bq">The four cases requiring intervention involved accepting a default dose of a muscle relaxant that was higher than the intended dose, giving an extra dose of morphine [keep playing with 'extra doses' of drugs like morphine enough, and you're going to kill someone  - ed.] because of an accepted default administration time that was too soon after the last dose, having a patient’s temperature spike after a default stop time automatically cancelled an antibiotic [do this enough, and you're going to get sepsis and septic shock to deal with - ed.] and rising sodium levels in a patient because confused wording made nurses believe that respiratory therapy was administering an ordered antidiuretic. [Apparently the 'default'- ed.]</blockquote> More on the errors: <blockquote class="tr_bq">The most common types of errors in the study were wrong time (200), wrong dose (71) and inappropriate use of an automated stopping function (28). </blockquote> Any of these, especially the latter two, could have caused harm depending on degree...and to those Risk Management majors out there, eventually will. <blockquote class="tr_bq"> “Many of these reports also showed a source of erroneous data and the three most commonly reported sources were failure to change a default value, user-entered values being overwritten by the system and failure to completely enter information which caused the system to insert information into blank parameters,” Sparnon says. </blockquote> Hence my claim that the term "EHR" is anachronistic, and that these systems now are really cybernetic command-and-control mediators and regulators of care (via cybernetic proxy). <blockquote class="tr_bq">“There were also nine reports that showed a default needed to be updated to match current clinical practice.”</blockquote> The need for a constant, rigorous updating process (which will in the real world likely always be 'behind'), among many others, is a factor that makes the idealistic belief/promise that "health IT will save money and increase safety" (let alone "revolutionize" medicine) unpersuasive. I note that the "default values" risk is only one of many, many "features" of EHRs and other clinical IT that cause risk and error.  This issue is but one layer of a very, very large and multi-layered onion (cf. AHRQ Health IT Hazards Manager, <a href="http://healthit.ahrq.gov/sites/default/files/docs/citation/HealthITHazardManagerFinalReport.pdf">http://healthit.ahrq.gov/sites/default/files/docs/citation/HealthITHazardManagerFinalReport.pdf</a>, for example). And this, at the same time that the The HIT Policy Committee, a body of industry stakeholders who advise federal officials, on Sept. 4 adopted final recommendations on health IT risk consistent with an attitude of health IT exceptionalism that included: <blockquote class="tr_bq">"HIT should not be subject to FDA [or any - ed.] premarket requirements" and "Vendors should be required to list products which are considered to represent at least some risk if a non-burdensome approach can be identified."  </blockquote> If not, no list? ... And what, exactly, is a "non-burdensome" approach, one might ask?  (See <a href="http://www.healthdatamanagement.com/news/health-information-technology-regulation-fda-onc-fcc-46557-1.html">www.healthdatamanagement.com/news/health-information-technology-regulation-fda-onc-fcc-46557-1.html</a>)</div>  ------------------ Perhaps the penalty for health IT hyperenthusiasts**, short of the Biblical penalty of one of their loved ones suffering the fate of a guinea pig in a medical experiment, should be to be compelled to fly some third rate air carrier with a safety record of "we only had a few near-crashes last month." -- SS ** [See definition of health IT hyperenthusiast at Doctors and EHRs: Reframing the 'Modernists v. Luddites' Canard to The Accurate 'Ardent Technophiles vs. Pragmatists' Reality' at <a href="http://hcrenewal.blogspot.com/2012/03/doctors-and-ehrs-reframing-modernists-v.html">http://hcrenewal.blogspot.com/2012/03/doctors-and-ehrs-reframing-modernists-v.html]</a>

Study Explains Errors Caused by EHR Default Values - With Only Four Reports of "Temporary" (By the Grace of God) Patient Harm

From Health Data Management and the Pennsylvania Patient Safety Authority : Study Explains Errors Caused by EHR Default Value Joseph Goedert...

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Setback for Sutter after $1B EHR crashes (in followup to post "RNs Say Sutter’s New Electronic System Causing Serious Disruptions to Safe Patient Care at East Bay Hospitals")

At my July 12, 2013 post "RNs Say Sutter’s New Electronic System Causing Serious Disruptions to Safe Patient Care at East Bay Hospitals" (<a href="http://hcrenewal.blogspot.com/2013/07/rns-say-sutters-new-electronic-system.html">http://hcrenewal.blogspot.com/2013/07/rns-say-sutters-new-electronic-system.html</a>) I reproduced a California Nurses Association warning about rollout of an EHR at Sutter: <blockquote class="tr_bq">RNs Say Sutter’s New Electronic System Causing Serious Disruptions to Safe Patient Care at East Bay Hospitals Introduction of a new electronic medical records system at Sutter corporation East Bay hospitals has produced multiple problems with safe care delivery that has put patients at risk, charged the California Nurses Association today. Problems with technology are not unique to health care ...  [What is unique to healthcare IT is the complete lack of regulation - ed.] In over 100 reports submitted by RNs at Alta Bates Summit Medical Center facilities in Berkeley and Oakland, nurses cited a variety of serious problems with the new system, known as Epic. The reports are in union forms RNs submit to management documenting assignments they believe to be unsafe. Patient care concerns included computerized delays in timely administration of medications and contact with physicians, ability to properly monitor patients, and other delays in treatment.  Many noted that the excessive amount of time required to interact with the computer system, inputting and accessing data, sharply cuts down on time they can spend with patients with frequent complaints from patients about not seeing their RN.  [Note: patients are not given the opportunity for informed consent about the risks, nor opt-out of EHR use in their care - ed.]</blockquote> In related posts I'd observed such concerns being ignored by hospital management.  See header of the aforementioned post. Now we have this:  a major system crash. <blockquote class="tr_bq">Healthcare IT News <a href="http://www.healthcareitnews.com/news/setback-sutter-after-1b-ehr-system%20crashes">Setback for Sutter after $1B EHR crashes</a> <div class="top">'No access to medication orders, patient allergies and other information puts patients at serious risk'</div><div class="top">SACRAMENTO, CA | August 28, 2013</div><div class="top"></div><div class="top">The nearly $1 billion electronic health record system at Sutter Health in Northern California crashed early this week, leaving nurses and clinical staff unable to access any patient information for a full day. he Epic EHR was down Aug. 23 due to a planned upgrade for eight hours during which nurses and other clinical users could read medication orders and patient histories but had to record new data on paper to then be re-entered into the system later, according to reports from the California Nurses Association, part of National Nurses United, the largest nurses union in the U.S. Then, on the morning of Aug. 26 at approximately 8 a.m., the system crashed completely, at which time nurses, physicians and hospital staff had no access to patient information, including what medications patients were taking or required to take and all vital patient history data.    The Epic EHR went dark at several Sutter Health locations, including Alta Bates Summit Medical Center, Eden Medical Center, Mills-Peninsula Hospital, Sutter Delta, Sutter Tracy, Sutter Modesto and numerous affiliated clinics. "This incident is especially worrisome," said Bonnie Castilla, RN, CNA legislative director, in a news release. "No access to medication orders, patient allergies and other information puts patients at serious risk.  These systems should never be relied upon for protecting patients or assuring the delivery of the safest care."  [This is no exaggeration.  My mother was nearly killed by such a problem when caused by an EHR defect (<a href="http://www.accessdata.fda.gov/scripts/cdrh/cfdocs/cfmaude/detail.cfm?mdrfoi__id=1729552">link</a>) that I averted at the last minute by happenstance of showing up at the right time, while she recuperating from another EHR-related disaster - ed.]   </div></blockquote><blockquote class="tr_bq"><div class="top">Some RNs also reported that Sutter failed to provide adequate support during the blackout and didn't implement adequate backup planning.   "All information such as medication administration records and patient histories was outdated by two to three days," said Mike Hill, Alta Bates Summit RN, in a news release. "There were no orders that could be seen of any kind through the day so nurses called for what they needed." Kevin Sweat, an emergency room RN at Eden Medical Center, a Sutter affiliate, also weighed in on the blackout, saying that in his 12 years as an RN he has never seen a system crash like this.     </div></blockquote>Worse, clinicians must now serve their Cybernetic Master to perfection, or be whipped (apparently to improve morale): <blockquote class="tr_bq">... "We have been on Epic for 5 months now, and we can no longer have incorrect orders, missing information or incorrect or missing charges. Starting on September 1st, errors made in any of the above will result in progressive discipline," according to another hospital memo sent to staff. </blockquote> In the setting of dire warnings by the nurses of EHR dangers several months back that were likely largely ignored, if any patient was harmed or killed as a result of this latest fiasco, the corporate leadership has literally begged to be sued for negligence, in my view. However I'm sure a press release soon will claim that "<a href="http://hcrenewal.blogspot.com/search/label/Patient%20care%20has%20not%20been%20compromised">patient care has not been compromised</a>." Of course this includes now and moving forward, even with informational gaps all over the place. -- SS Aug. 29, 2013 additional thought: The punishment for not being a 'perfect' user of this EHR is the ultimate "blame the user" (blame the victim?) game, considering the pressures of patient care in hospitals in lean times - partly due to EHR expense! - and EHRs that have not been formally studied for usability and are poorly designed causing "use error" (that is, a poor user experience promotes even careful users to make errors).  Cf. definition of bad health IT: <blockquote class="tr_bq"> Bad Health IT ("BHIT") is defined as IT that is ill-suited to purpose, hard to use, unreliable, loses data or provides incorrect data, causes cognitive overload, slows rather than facilitates users, lacks appropriate alerts, creates the need for hypervigilance (i.e., towards avoiding IT-related mishaps) that increases stress, is lacking in security, compromises patient privacy or otherwise demonstrates suboptimal design and/or implementation.</blockquote> The study of usability is getting underway only now via NIST but will likely be done in an industry-friendly way due to health IT politics. -- SS Aug. 29, 2013 addendum There have been numerous comments over at HisTalk (at <a href="http://histalk2.com/2013/08/27/news-82813/">http://histalk2.com/2013/08/27/news-82813/</a>) defending the outage as not EPIC's fault.   From the point of view of clinicians - and more importantly, patients - it doesn't matter what component of the hospital's entire "EHR" (an anachronistic term used for what is now a complex enterprise clinical resource and clinician command-and-control system) went down.  Aside from all the EPIC issues the nurses have been complaining about (see earlier July 12, 2013 post linked above), the larger problem is that IT malpractice occurred.  The term "malpractice" is used in medical mishaps; I see no reason why it does not apply to major outages of mission critical healthcare information technology systems. IT malpractice in healthcare kills. These are the types of nurses I'd want caring for me and mine.  Letting this kind of snafu go "anechoic" does not promote proper management remedial education on Safety 101 and on health IT risk, two areas of education that management appears to desperately need in hospitals. -- SS

Setback for Sutter after $1B EHR crashes (in followup to post "RNs Say Sutter’s New Electronic System Causing Serious Disruptions to Safe Patient Care at East Bay Hospitals")

At my July 12, 2013 post "RNs Say Sutter’s New Electronic System Causing Serious Disruptions to Safe Patient Care at East Bay Hospitals...

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Calling Dr. Moe, Dr. Larry and Dr. Curly: Advocate Medical Breach of Four Million Patient Records, and No Encryption

At my Oct. 2011 post "Still More Electronic Medical Data Chaos, Pandemonium, Bedlam, Tumult and Maelstrom: But Don't Worry, Your Data is Secure" (<a href="http://hcrenewal.blogspot.com/2011/10/still-more-ehr-chaos-pandemonium-bedlam.html">http://hcrenewal.blogspot.com/2011/10/still-more-ehr-chaos-pandemonium-bedlam.html</a>) I thought I'd seen the worst. Yet another post to add to the category of medical record privacy/confidentiality/security (<a href="http://hcrenewal.blogspot.com/search/label/medical%20record%20privacy">http://hcrenewal.blogspot.com/search/label/medical%20record%20privacy),</a> however: <blockquote class="tr_bq"><a href="http://www.healthcareinfosecurity.com/advocate-medical-breach-no-encryption-a-6021">Advocate Medical Breach: No Encryption?</a> Computer Theft Raises Questions About Unencrypted Devices By Marianne Kolbasuk McGee, August 27, 2013. The recent theft of four unencrypted desktop computers from a Chicago area physician group practice may result in the second biggest healthcare <a href="http://www.healthcareinfosecurity.com/breach-response-c-324">breach</a> ever reported to federal regulators. But the bigger issue is: Why do breaches involving unencrypted computer devices still occur? According to the Department of Health and Human Services' "wall of shame" website listing 646 breaches impacting 500 or more individuals since September 2009, more than half of the incidents involved lost or stolen unencrypted devices. Incidents involving data secured by encryption do not have to be reported to HHS. ... The four unencrypted but password-protected computers [passwords on PC's are bypassable by smart teenagers - ed.] stolen during a burglary in July from an office of <a href="http://www.healthcareinfosecurity.com/breach-may-affect-4-million-patients-a-6018">Advocate Medical Group</a> in Illinois may have exposed information of about 4 million patients, according to an Advocate spokesman. </blockquote> 4 million is about 1.3 percent of the entire U.S. population (about <a href="https://www.google.com/search?q=us%20population">313.9 million</a> in 2012) ... on just four desktop computers. Try that with paper ... As to the subtitle of the article, "Computer Theft Raises Questions About Unencrypted Devices", I've written on that issue before.  I'd noted questions like that are remarkable considering both MacOS and Windows have built-in, readily available encryption, the latter for a few extra $ for the "deluxe version" (see  <a class="" data-reactid=".r[2a5gp].[1][4][1]{comment10200246430313520_4728545}.[0].{right}.[0].{left}.[0].[0].[0][2].[0].[1]" href="http://en.wikipedia.org/wiki/FileVault" rel="nofollow" target="_blank">http://en.wikipedia.org/wiki/FileVault</a> and <a class="" data-reactid=".r[2a5gp].[1][4][1]{comment10200246430313520_4728545}.[0].{right}.[0].{left}.[0].[0].[0][2].[0].[3]" href="http://en.wikipedia.org/wiki/Bitlocker" rel="nofollow" target="_blank">http://en.wikipedia.org/wiki/Bitlocker</a>).   Perhaps the best explanation in 2013 for unencrypted desktop PC's containing millions of confidential medical records is this picture, symbolic of the apparent attitudes of corporate and IT management on health IT security: <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/AVvXsEjnAsw6PW67gX6YJJIVtd1hEp5nCpuf5Re_XG0rDd2AJELzlw8B5pV9bvBxHPXa6DhmesPxvPoc8c_n3Y3u2s3Ki1GxEUgZ_jzbex53lu7i4-pc6eS4SKXr6axDPCCVSmKPpHg_UAPThsnN/s1600/stooges+police300px.jpg" imageanchor="1" style="margin-left: auto; margin-right: auto;"><img border="0" src="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEjnAsw6PW67gX6YJJIVtd1hEp5nCpuf5Re_XG0rDd2AJELzlw8B5pV9bvBxHPXa6DhmesPxvPoc8c_n3Y3u2s3Ki1GxEUgZ_jzbex53lu7i4-pc6eS4SKXr6axDPCCVSmKPpHg_UAPThsnN/s1600/stooges+police300px.jpg" /></a></td></tr><tr><td class="tr-caption" style="text-align: center;">Encryption?  We don't need no encryption.  We got triple protection already!</td></tr></tbody></table> -- SS

Calling Dr. Moe, Dr. Larry and Dr. Curly: Advocate Medical Breach of Four Million Patient Records, and No Encryption

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

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What Sorts of People are "Most Influential in Healthcare?"

Modern Healthcare just put out their list of the <a href="http://www.modernhealthcare.com/article/20130824/INFO/130829987/100-most-influential-people-in-healthcare-2013-text-list">"100 Most Influential People in Healthcare"</a> for 2013.  A look at what sorts of people are on this list says a lot about who runs US health care, and raises questions about who should. Some Health Care Professionals, Lots of Hired Managers I did some quick descriptive categorizations. (Counts were double checked but I am not guaranteeing accuracy.  Categorizations were sometimes difficult for highly diversified organizations.) First, less than one third of list members are physicians (31% by my count).  I did not see any other health professionals on it (although I confess I did not look up the biographies of all 100). Of these physicians, most are now functioning as hired managers, usually at the CEO level, of big health organizations.  I found only a few who could be characterized as somewhat academic: Dr Atul Gawande, professor at Harvard Medical School, Dr Eric Topol, chief academic officer at Scripps Health, Dr Harvey Fineberg, President, Institute of Medicine, Dr Brent James, chief quality officer and executive director, Institute for Health Care Delivery Research, Intermountain Healthcare,  and probably Dr Jeffrey Drazen, editor-in-chief of the New England Journal of Medicine.  My counts of hired managers on the list included CEOs of For-Profit Health Insurers - 5% CEO of For-Profit Hospital Systems - 8% CEOs of Non-Profit Hospital Systems - 21% CEOs of Other For-Profit Care Delivery Corporations - 7% CEOs of Drug/ Device/ Medical Supply Corporations - 2% CEOs of Health Care Information Technology Corporations - 1% CEOs of Non-Profit Trade Associations - 14% CEOs and other Leaders of Professional or Medical Association - 5% CEOs of Health Care Charities - 4% CEOs of Other Non-Profit Organizations - 15% Elected Government Leaders - 6% Leaders of Government Agencies, Departments - 10% Union Leaders - 2% People Whose Organizations Have Issues The list included quite a few people who lead organizations which have had issues of the sort we discuss on Health Care Renewal.  For example, the list included the following among its top 10 most influential, in order of listed influence - 4.  Stephen Hemsley, CEO of <a href="http://hcrenewal.blogspot.com/search/label/UnitedHealth">UnitedHealth Group</a> - We have discussed concerns about his executive compensation and how it does not fit his organization's stated mission, or his organization's long list of ethical misadventures (most recently summarized <a href="http://hcrenewal.blogspot.com/2013/05/unitedhealth-ceo-continues-to-prosper_3.html">here</a>) 6. Mark Bertolini, CEO, Aetna - We most recently discussed how Aetna's leaders' pontifications on health policy seem mainly based on self-interest (<a href="http://hcrenewal.blogspot.com/2012/07/fool-us-once-shame-on-you-fool-us-twice.html">here</a>)  We also <a href="http://hcrenewal.blogspot.com/search/label/Aetna">discussed</a> various other management, ethical and legal issues. 7.  Richard Bracken, CEO, HCA - A long time ago, HCA was one of the first big health care corporations to have to make a billion dollar plus settlement for fraud, among other issues (look <a href="http://hcrenewal.blogspot.com/2010/05/how-did-ceo-who-presided-over-company.html">here</a>).  The company has had legal, ethical, and management issues <a href="http://hcrenewal.blogspot.com/search/label/HCA">since</a>. 8.  Joseph Swedish, CEO, WellPoint - He is new as CEO, but under previous leadership, the company amassed a record of misadventures while making its leadership very rich (summarized <a href="http://hcrenewal.blogspot.com/2013/04/wellpoints-former-manager-queen-got-206.html">here</a>, and look <a href="http://hcrenewal.blogspot.com/search/label/WellPoint">here</a> for details.) The list also included many other people whose organizations have been frequent fliers on Health Care Renewal.  For example, the CEOs of <a href="http://hcrenewal.blogspot.com/search/label/EPIC">Epic Systems</a> (ranked 13),  <a href="http://hcrenewal.blogspot.com/search/label/Tenet">Tenet Healthcare</a> (18), <a href="http://hcrenewal.blogspot.com/search/label/CIGNA">Cigna</a> (20), <a href="http://hcrenewal.blogspot.com/search/label/McKesson">McKesson Corp</a> (24), <a href="http://hcrenewal.blogspot.com/search/label/Sutter%20Health">Sutter Health</a> (42), <a href="http://hcrenewal.blogspot.com/search/label/Johnson%20and%20Johnson">Johnson & Johnson</a> (46), <a href="http://hcrenewal.blogspot.com/search/label/PhRMA">Pharmaceutical Research and Manufacturers of America (PhRMA)</a> (48), <a href="http://hcrenewal.blogspot.com/search/label/HealthSouth">HealthSouth</a> (59),  <a href="http://hcrenewal.blogspot.com/search/label/UPMC">UPMC</a> (69), and  <a href="http://hcrenewal.blogspot.com/search/label/Steward%20Health%20Care">Steward Health Care System</a> (86). There are many other people on the list who lead organizations that have gotten unfavorable notice on this blog, and a few whose own extreme <a href="http://hcrenewal.blogspot.com/search/label/executive%20compensation">executive compensation</a> garnered comment.  As my science professors used to say, I leave their identification as an exercise for those interested. Who Is Not on the List It is interesting who is not on the list.  There are no physicians in private practice.   I would argue there are no physicians who are "pure" academics at the moment.  There are no other health care research, health policy research, or public health academics. I saw only one person on the list (Senator Charles Grassley - R, Iowa) who has been identified with the sorts of real health care reforms we discuss here.  (Senator Grassely has investigated many instances of alleged conflicts of interest and fraud, and sponsored the Sunshine Bill to disclose better physicians' conflicts of interest.)  I do not see anyone else who in my humble opinion is identified as a dissident within the current environment.  Many of the media accounts we have noted include people identified as experts who decried such issues as excessive <a href="http://hcrenewal.blogspot.com/search/label/executive%20compensation">executive compensation</a>, <a href="http://hcrenewal.blogspot.com/search/label/mission-hostile%20management">mission-hostile management</a>, <a href="http://hcrenewal.blogspot.com/search/label/conflicts%20of%20interest">conflicts of interest</a>, ethical issues leading to <a href="http://hcrenewal.blogspot.com/search/label/legal%20settlements">legal settlements</a>, or <a href="http://hcrenewal.blogspot.com/search/label/crime">crime</a> and <a href="http://hcrenewal.blogspot.com/search/label/health%20care%20corruption">corruption</a> in health care.  None of them save Senator Grassley  are on this list.  Summary The Modern Healthcare list of 100 most influential people in health care demonstrates the enormous influence of hired managers in modern health care.  The vast majority of list members were hired managers.  While the list did include some physicians, most of them were currently working as hired managers. It also demonstrates the influence of the for-profit, industrial part of health care.  It included 5 for-profit insurance CEOs, 8 for-profit hospital corporation CEOs, 7 for-profit health care delivery corporation CEOs, 2 for-profit drug/device company CEOs, and 1 for-profit health care IT CEO, a total of 23.  It also included CEOs of multiple trade associations, some of which represent the for-profit side of health care (e.g., PhRMA, America's Health Insurance Plans).  While it included leadership of many <a href="http://hcrenewal.blogspot.com/search/label/non-profit%20organizations">non-profit organizations</a> as well, some of these organizations have clear financial links to the for-profit industrial side.  These ties may include significant financial support from industry, significant holdings of health care corporate stock, or managers or board members with their own relationships to industry.  (For example,  see <a href="http://hcrenewal.blogspot.com/2011/04/third-rail-that-no-one-wishes-to.html">this discussion </a>of conflicts of interest affecting the Gates Foundation, whose co-chair is 76 on the Modern Healthcare list.)  Many of the large, non-profit hospital systems, 21 of whose CEOs are on the list, have major<a href="http://hcrenewal.blogspot.com/search/label/institutional%20conflicts%20of%20interest"> institutional conflicts of interest</a>, and have many people with individual <a href="http://hcrenewal.blogspot.com/search/label/conflicts%20of%20interest">conflicts of interest</a> among their leadership and on their <a href="http://hcrenewal.blogspot.com/search/label/boards%20of%20trustees">boards of trustees</a>. As opposed to the influence of the for-profit industrial part of health care, the influence of government seems muted.  The list included only 6 politicians and 10 government managers.  Some of the politicians are notable proponents of smaller government, e.g. Senator Grassley, and specifically of a smaller role of government in health care, e.g., Governor Bobby Jindal, R, Louisiana.    Nor do unions have much influence.  Only two union leaders were on the list.  There was little counterweight provided to industrial influence from academia, and an almost complete absence of those who might question the current US status quo of dominance of health care by commercial interests.  So here is the latest evidence that US health care is dominated by commercial interests (in an era of <a href="http://hcrenewal.blogspot.com/search/label/regulatory%20capture">regulatory capture</a>, <a href="http://hcrenewal.blogspot.com/search/label/revolving%20doors">revolving doors</a>, and <a href="http://hcrenewal.blogspot.com/search/label/financialization">financialization</a>) and professional, if often generic managers.  This suggests why our health care system seems more about revenue (and thus is very expensive), and less about improving patients' and the public's health.  True health care reform would require increasing the influence of people who have different priorities than the currently most influential.

What Sorts of People are "Most Influential in Healthcare?"

Modern Healthcare just put out their list of the "100 Most Influential People in Healthcare" for 2013. A look at what sorts of p...

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A Good Way to Cybernetically Harm or Kill Emergency Department Patients ... Via An ED EHR "Glitch" That Mangles Prescriptions

Yet another healthcare IT "glitch" - that banal little word used for potentially life-threatening software defects.  (See the query link <a href="http://hcrenewal.blogspot.com/search/label/glitch">http://hcrenewal.blogspot.com/search/label/glitch</a> for more examples.) An EHR/command and control system (including ordering, results reporting, etc.)  for hospital Emergency Departments, Picis Pulsecheck, was recalled by FDA. Reason?  "Notes associated with prescriptions are not printed to the prescription or to the patient chart."  The data apparently is not being sent to the printer or being stored for future visits.  Instead, data input by clinical personnel, in one of the most risk-prone medical settings, the Emergency Department, is simply going away. This is reminiscent of the truncation of prescription drug "long acting" suffixes, apparently by a Siemens system, that led to thousands of prescription errors (perhaps tens of thousands) over more than a year's time.  I wrote about that matter, as reported by the news media, at "Lifespan (Rhode Island): Yet another health IT "glitch" affecting thousands - that, of course, caused no patient harm that they know of - yet" at <a href="http://hcrenewal.blogspot.com/2011/11/lifespan-rhode-island-yet-another.html">http://hcrenewal.blogspot.com/2011/11/lifespan-rhode-island-yet-another.html</a>.  Regarding the current Picis recall, notes connected with prescriptions can be crucial to the pharmacist or the patient.  Loss of those notes - apparently due to a computer glitch and most likely in this case without the prescribing clinician knowing about it - likely have been going on for some time now, since two software versions (5.2 and 5.3) are affected. The solution for now? <blockquote class="tr_bq">"Consignees were provided with recommended actions until they receive the necessary update."</blockquote> In other words, a workaround adding more work to clinicians who now not only have to take care of patients, but in the unregulated health IT market need to (as if they don't already have enough work to do in the ED where chaos often occurs) babysit computer glitches as well - and pray they catch potential computer errors 100% of the time. Below is the FDA MAUDE recall notice at "Medical & Radiation Emitting Device Recalls", from <a href="http://www.accessdata.fda.gov/scripts/cdrh/cfdocs/cfRes/res.cfm?ID=119832">http://www.accessdata.fda.gov/scripts/cdrh/cfdocs/cfRes/res.cfm?ID=119832</a>. <a href="http://www.accessdata.fda.gov/scripts/enforcement/enforce_rpt-Product-Tabs.cfm?action=select&recall_number=Z-1814-2013&w=08072013&lang=eng">At this additional link</a> we find that this FDA recall was "Voluntary: Firm Initiated."  They apparently informed the FDA of the "glitch." My question is - how did the company become aware of this "glitch"?  Also, were any patients put in harm's way, or injured, as a result of the prescription data loss? <a href="https://www.blogger.com/null" id="main" name="main"></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/AVvXsEh9P8LdAz5mRrOdrPBe9rkYWKhLdAuDrte6fxAO8peB0pBq7OJZbKHtwkwveUP0nsVxmBA2GKX-3R-bY8xq_4vc_-svQqadoh2lFek-y6VPNTzUca-ytPmktoeEQQ1AJptfBjAqitxv-ARC/s1600/picis_recall2.jpg" imageanchor="1" style="margin-left: auto; margin-right: auto;"><img border="0" height="400" src="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEh9P8LdAz5mRrOdrPBe9rkYWKhLdAuDrte6fxAO8peB0pBq7OJZbKHtwkwveUP0nsVxmBA2GKX-3R-bY8xq_4vc_-svQqadoh2lFek-y6VPNTzUca-ytPmktoeEQQ1AJptfBjAqitxv-ARC/s1600/picis_recall2.jpg" width="351" /></a></td></tr><tr><td class="tr-caption" style="text-align: center;">FDA Device Recall Notice.  Click to enlarge; text below.</td></tr></tbody></table> <blockquote class="tr_bq"> <table cellpadding="0" cellspacing="0" style="width: 100%px;"><tbody><tr><td width="33%"> </td><td align="left" style="color: #23238e; font-family: arial; font-size: 11pt; font-weight: bold;" width="34%">Class 2 Recall ED PulseCheck</td><td align="right" width="33%"><a href="http://www.accessdata.fda.gov/scripts/cdrh/cfdocs/relateditems.cfm?page_title=medical%20device%20recalls&item1_text=medical%20device%20recalls%20&item1_url=www.fda.gov/medicaldevices/safety/recallscorrectionsremovals/listofrecalls/default.htm&item2_text=fda%20enforcement%20report%20index&item2_url=www.fda.gov/safety/recalls/enforcementreports/default.htm"></a> </td></tr></tbody></table><table cellpadding="2" cellspacing="14"><tbody><tr> <th align="left" valign="top">Date Posted</th> <td align="left" valign="top">July 29, 2013</td> </tr><tr> <th align="left" nowrap="nowrap" valign="top">Recall Number</th> <td align="left" valign="top">Z-1814-2013</td> </tr><tr> <th align="left" valign="top">Product</th> <td align="left" class="hardbreak" valign="top">Picis ED Pulsecheck - EMR Software Application - 2125, Software Versions: 5.2 and 5.3. The application stores patient information in a database, and it may analyze and/or display the data in different formats for evaluation by healthcare professionals for informational purposes.</td> </tr><tr> <th align="left" valign="top">Code Information</th> <td align="left" valign="top">Software Versions 5.2 and 5.3</td> </tr><tr> <th align="left" valign="top">Recalling Firm/ Manufacturer</th> <td align="left" valign="top">Picis Inc. 100 Quannapowitt Parkway Suite 405 Wakefield, Massachusetts 01880</td> </tr><tr> <th align="left" valign="top">For Additional Information Contact</th> <td align="left" valign="top">Support Representative 781-557-3000 </td> </tr><tr> <th align="left" nowrap="nowrap" valign="top">Reason for Recall</th> <td align="left" valign="top">Notes associated with prescription are not printed to the prescription or to the patient chart. </td> </tr><tr> <th align="left" nowrap="nowrap" valign="top">Action</th> <td align="left" valign="top">Initial customer notifications were sent via email on June 21, 2013 informing consignees of the recall and providing further instruction regarding the software solution. Consignees were provided with recommended actions until they receive the necessary update.</td> </tr><tr> <th align="left" nowrap="nowrap" valign="top">Quantity in Commerce</th> <td align="left" valign="top">35</td> </tr><tr> <th align="left" nowrap="nowrap" valign="top">Distribution</th> <td align="left" valign="top">Nationwide Distribution, including the states of: AK, AR, AZ, CA, CO, DC, DE, FL, GA, ID, IN, MA, MD, MO, NH, NJ, OH, OR, SC, TN, WA, and WV.</td></tr></tbody></table></blockquote>Finally, I ask - how did this "glitch" escape the notice of the company before the software was put into production not in just one, but through two sequential versions? I propose that the lack of health IT regulatory controls due to special accommodation makes thorough software testing less "desirable" by a company (largely due to costs). Compare that to, say, software regulation in the Federal Aviation Administration: <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="http://www.faa.gov/documentLibrary/media/Order/8110.49%20Chg%201.pdf"><img border="0" height="320" src="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEijSv2nvIBYRtaq5Pv325j8_DLtIo_gReEvwpmezb_m6og2xIqMvpBwN4YxpERbCWff43VUyGuLrwOugZ4TLqYXVAMru4DCjbzBtf9j3cTDxUb8GNtB_YKT18MQFj_CqKKurXiG18YHpXML/s1600/faa_approval.jpg" width="247" /></a></td></tr><tr><td class="tr-caption" style="text-align: center;">FAA Aircraft Software Approval Guidelines - available at <a href="http://www.faa.gov/documentLibrary/media/Order/8110.49%20Chg%201.pdf">http://www.faa.gov/documentLibrary/media/Order/8110.49%20Chg%201.pdf</a>.  Click to access.</td></tr></tbody></table> The FAA document begins: <blockquote class="tr_bq">"This order establishes procedures for evaluating and approving aircraft software and changes to appropriate approved aircraft software procedures."</blockquote> Software regulation in other mission critical industries like aviation and pharma make the health IT industry and its lack of regulation look pathetic. -- SS

A Good Way to Cybernetically Harm or Kill Emergency Department Patients ... Via An ED EHR "Glitch" That Mangles Prescriptions

Yet another healthcare IT "glitch" - that banal little word used for potentially life-threatening software defects. (See the que...

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The Long Con - "Charitable" Hospitals Make Multimillionaires out of Their CEOs

The CEOs of ostensibly charitable hospitals founded to serve the poor continue to become rich.   The latest reminders are in two articles from Maryland, f<a href="http://www.delmarvanow.com/article/20130812/WIC01/308110024/Inside-Maryland-hospital-CEO-pay">rom DelMarVaNow,</a> and <a href="http://articles.baltimoresun.com/2013-08-17/health/bs-hs-health-compensation-20130817_1_hospital-ceos-health-care-executives-compensation">from the Baltimore Sun</a>,.and one <a href="http://www.bostonglobe.com/business/2013/08/15/top-executives-earned-million-boston-teaching-hospitals-according-filings/story.html">from the Boston Globe.</a> All this diligent reporting showed multimillion dollar <a href="http://articles.baltimoresun.com/2013-08-17/health/bs-hs-health-compensation-20130817_1_hospital-ceos-health-care-executives-compensation">executive compensation</a>,  as usual not justified by evidence or logic, but also how executive compensation is becoming divorced from the ostensible charitable mission of non-profit hospitals.   Most Hospital CEOs are Paid a Lot So jin Maryland, we found via DelMarVaNow, <blockquote class="tr_bq">Peninsula Regional Medical Center paid its top executive and her immediate predecessor a total of $2.37 million in compensation in 2011 as the nonprofit hospital gained millions of dollars in profit.</blockquote> In particular, <blockquote class="tr_bq"> The analysis shows that R. Alan Newberry was the third-highest paid hospital chief in Maryland, even though he has not run PRMC since 2009. In the year after formally stepping down from the hospital’s top job, Newberry received $1.57 million, about $600,000 more than he had while still working full time.</blockquote> The Baltimore Sun summarized compensation given to multiple executives, <blockquote class="tr_bq"> Eleven executives earning seven-figure compensation packages including salary, bonus, retirement and other pay saw their total pay rise from as little as 0.13 percent to as much as 308 percent in the fiscal year that ended in 2012, according to tax filings. Another executive earning more than $1 million saw a pay cut.</blockquote> In particular, <blockquote class="tr_bq"> The state's highest-compensated hospital executive that fiscal year was Kenneth A. Samet, the CEO of the 10-hospital MedStar Health system, who earned $6.3 million. More than half — $3.5 million — was money earned in a supplemental retirement plan during his 23 years of service. He won't get the money until he retires. His base pay was $1.2 million, and he received $1.5 million as a bonus and incentives. The other top five highest-paid executives in Maryland are James Xinis, CEO at Calvert Memorial Hospital in Prince Frederick; Ronald A. Peterson, CEO of the Johns Hopkins Health Center Corp.; Robert A. Chrencik, CEO of the University of Maryland Medical System; and Thomas Mullen, CEO of Mercy Medical Center. Xinis saw his compensation package jump 307.8 percent to $3.5 million, $2.8 million of which was a required distribution of vested retirement funds from a plan he begin contributing to in 2003, the hospital said in a statement. Xinis has served as CEO for 26 years and plans to retire in the next 18 months, the hospital said. His base salary in fiscal 2012 was $309,557. <div class="mod-baltsunarticletext mod-articletext" id="mod-a-body-first-para">Peterson, who oversees six hospitals, earned a $3.5 million compensation package. Peterson's 86.5 percent pay increase largely reflected pension benefits he'd earned during 40 years at Hopkins. His annual base salary increased about $49,500 to $1.1 million in fiscal 2012. Chrencik, whose system has 12 hospitals, earned about $2.3 million. Chrencik's total pay grew 23.4 percent. Mercy's Mullen saw his pay rise 24 percent to $1.6 million for the fiscal year ending in 2012.</div><div class="float" style="clear: both; height: 1px; line-height: 1px;"><img alt="" height="1" src="http://articles.baltimoresun.com/images/pixel.gif" width="1" /></div><div class="float" style="clear: both; height: 1px; line-height: 1px;"><img alt="" height="1" src="http://articles.baltimoresun.com/images/pixel.gif" width="1" /></div> The one CEO earning more than $1 million who saw his compensation fall was Edward D. Miller, who retired in June 2012 as CEO of Johns Hopkins Medicine and dean of the university's medical school. His reported pay dropped to just over $1 million in fiscal 2012 from nearly $2.3 million the prior year, when he took a one-time retirement payout.</blockquote> Also, <blockquote class="tr_bq">According to Saint Agnes tax filings, [CEO Bonnie] Phipps received $1.9 million in the 2012 fiscal year, 4.4 percent more compensation than a year earlier.</blockquote>  Per the Boston Globe, local hospital executives also did really well <blockquote class="tr_bq">Chief executives at the Boston area’s largest nonprofit teaching hospitals drew pay packages of $1 million to $2.1 million in 2011, including salaries, bonuses, and compensation such as health and life insurance and retirement benefits. Topping the list locally was Gary L. Gottlieb, chief executive of Partners HealthCare System, the state’s largest hospital and physicians organization, who received total compensation of $2.1 million in 2011, according to federal tax documents released Thursday by the nonprofits.</blockquote> And, <blockquote class="tr_bq">The presidents of Partners-owned Massachusetts General and Brigham and Women’s hospitals also drew seven-figure packages in 2011, with Peter L. Slavin at Mass. General receiving a total of $1.7 million and Elizabeth G. Nabel at Brigham and Women’s a total of $1.9 million.</blockquote> Also, <blockquote class="tr_bq">Tufts Medical Center reported that Ellen M. Zane, who served as chief executive through September 2011, had total pay of $1.6 million that year. Eric J. Beyer, who took over from Zane in October, had total compensation of $744,722 that included pay for work as chief executive and at his previous job as president of the Tufts Medical Center Physicians Organization. James Mandell, chief executive at Boston Children’s Hospital, was paid a total of $1.5 million in 2011. That was down from the $2 million he earned the prior year when he received two separate incentive awards, according to a hospital spokeswoman. Mandell plans to retire next month and will be succeeded by Sandra Fenwick, the hospital’s president and chief operating officer. Total compensation for Boston Medical Center chief executive Kate Walsh was listed at nearly $1.4 million in 2011, an increase from $1.3 million in 2010. At Dana-Farber Cancer Institute, chief executive Edward J. Benz Jr. received total compensation of nearly $1.3 million in 2011, up from $1.1 million in 2010. Beth Israel Deaconess Medical Center paid three different top executives in 2011. Eric Buehrens, who served as interim chief executive from February to October, drew total compensation of just over $1 million for that role and other executive jobs. </blockquote> The Justification for this Pay is Stereotyped (and not Supported by Logic or Evidence) The Usual Talking Points The articles in combination provided the usual talking points as justification.  It seems nearly every attempt made to defend the outsize compensation given hospital and health system executives involves the same arguments, thus suggesting they are talking points, possibly crafted as a public relations ploy.   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> <a href="http://hcrenewal.blogspot.com/2012/12/health-care-hired-managers-not-playing.html">here,</a> <a href="http://hcrenewal.blogspot.com/2013/05/executive-compensation-as-legal.html">here</a>, <a href="http://hcrenewal.blogspot.com/2013/06/no-blues-but-lots-of-green-for-st-louis.html">here,</a> and <a href="http://hcrenewal.blogspot.com/2013/08/should-we-cry-for-non-profit-hospital.html">here</a>..    They are: - We have to pay competitive rates - We have to pay enough to retain at least competent executives, given how hard it is to be an executive - Our executives are not merely competitive, but brilliant. As we have <a href="http://hcrenewal.blogspot.com/2013/08/should-we-cry-for-non-profit-hospital.html">noted before</a>, there is little evidence in support of these talking points.  What evidence there is on the topic suggests there is no real free market in interchangeable CEOs, and that CEOs are not very mobile, especially not across different kinds of organizations (look <a href="http://hcrenewal.blogspot.com/2012/10/more-reasons-to-doubt-how-ceos-are.html">here</a>).  There is little evidence that hospital (or other health care) executives are particularly brilliant, or any more brilliant than multitudes of physicians, nurses, and other health care professionals who work hard to make their institutions run. True to form, the reporting from Maryland and Boston found that defenders of executive pay cited the talking points, but without any further logic or evidence.  Competition Re PRMC (from DelMarVaNow), <blockquote class="tr_bq"> 'We’ve looked at about 17 like institutions. Eight are smaller than we are; eight are larger. Every hospital is different, so you have to always take into account there’s some variation, but we’ve always stayed in the middle. Our goal has been to stay in that 60 percent level as far as compensation goes,' said Martin Neat, chairman of PRMC’s board of directors, which oversees executives’ salaries.</blockquote>Note that in this case, no justification was provided for constantly setting the CEOs pay above the median. Re Maryland, via the Baltimore Sun <blockquote class="tr_bq"> Hospitals argue that they have to offer competitive compensation to attract talent to run a complicated business.</blockquote> Re Maryland and particularly UMMS, via the Sun, <blockquote class="tr_bq"> The medical institutions say they hire independent consultants and look at the pay of executives at comparable health systems when making their decisions. </blockquote> Also, <blockquote class="tr_bq">UMMS hospital executives are compensated in line with national benchmarks,' [UMMS spokeswoman Mary Lynn] Carver said. </blockquote> Note that there was no justification for the comparability of these institutions, or why a national versus regional comparison was made. Retention Re PRMC <blockquote class="tr_bq"> Above all, PRMC’s board of directors seeks to ensure that the hospital attracts and retains the best leaders.</blockquote> Note that there was no evidence given that current leaders might leave were their compensation reduced.  Brilliance Re PRMC, <blockquote class="tr_bq">[Board Chairman Neat]  added: 'These are high-paid positions, but these are very capable people who could go elsewhere.'</blockquote> Re Maryland, from the Baltimore Sun <blockquote class="tr_bq"> Executives need to understand everything from the latest health technologies to regulatory changes, including health reform.</blockquote>So do doctors and nurses, so why do they not not get similar pay? Also, <blockquote class="tr_bq"> [Carmela Coyle, CEO of the Maryland Hospital Association, said,] 'Hospital executives are in charge of incredibly complex organizations,' she said. 'They are organizations that are open 24 hours a day and are highly regulated. These are really difficult, difficult jobs'.</blockquote> Note again the lack of comparison with the doctors and nurses who must staff the hospitals 24 hours a day, and make difficult decisions while caring for patients with sometimes life-threatening conditions.  How often does a hospital CEO get a call in the middle of the night, and how often does it require a decision in a life-and-death situation? Re Mercy Medical Center, <blockquote class="tr_bq"> 'As a result of Mr. Mullen's leadership, vision and skillful stewardship, Mercy has been an economic engine for the city, infusing additional jobs into the local economy,' the hospital said in a statement.</blockquote> When in doubt, use the v (for visionary) word.  Note that this begs the questions of how many other people were responsible for the economic benefits, and whether such benefits, rather than, say ability to provide good care to patients, should be the main consideration. Should Brilliance be Measured by Revenue? At best, some defenders of high CEO pay seem to argue that the main measure of CEO brilliance ought to be their hospitals' financial performance. For example, the DelMarvaNow article included, <blockquote class="tr_bq">Fiscal health is one of the most important considerations in determining [new CEO Peggy] Naleppa's pay, [board chairman] Neat said. </blockquote> Also, he was quoted, <blockquote class="tr_bq">'There's no question that the financial performance of the institution is going to affect what you're going to pay', Neat said.</blockquote> While, <blockquote class="tr_bq">Nationwide, hospital boards subscribe to a similar philosophy.  Financial health was cited by 100 percent of multi-hospital organizations in a 2006 survey as a factor in determining bosses' incentive plans.</blockquote> Similarly, the Baltimore Sun quoted Dr Stephen F Jencks, "who serves on the board of the cost review commission," <blockquote class="tr_bq">executives should be judged by whether they are running cost-efficient organizations</blockquote> However, CEO pay seems to increase even at financially challenged institutions,  as the Baltimore Sun noted, <blockquote class="tr_bq">The CEO pay question — always a hot-button issue — is generating debate again this year after a state panel spurned a push by hospitals for higher rates, instead approving smaller increases and calling on them to do more to curb expenses. Hospitals have sought rate increases in each of the past three years, and this year at least one Baltimore-area hospital responded with layoffs in an effort to trim labor costs.</blockquote> So, <blockquote class="tr_bq">'If they are laying off staff and decreasing what they invest in the community and executive compensation is increasing, that is a real question,' said Jessica Curtis, project director of the hospital accountability project at Community Catalyst, a national advocacy group that promotes wider access to affordable health care.</blockquote>Even if one accepts that the compensation of leaders of organizations that take care of sick and injured patients ought to mainly depend on the brilliance of their leadership as measured by how much money the organizations make, rather than the quality of that care, it is not clear that all these leaders are brilliant in that sense. The Charitable Mission and CEO Compensation Essentially all US non-profit hospitals and hospital systems have a history of a charitable mission to improve the health of their patients and communities, even if that means taking care of poor people who cannot pay for these services.  Nearly all justify their legal status as non-profit corporations by stating this mission.  For example, Peninsula Regional Medical Center, the main subject of the DelMarVaNow article, describes its mission thus in its <a href="http://www.guidestar.org/FinDocuments/2012/520/591/2012-520591628-094036fd-9.pdf">US tax filing</a>, <blockquote class="tr_bq">Peninsula Regional Medical Center is a not-for-profit 501 (c) 3 non-stock corporation founded in 1897 to serve the health care needs of the community.  The Hospital's primary purpose is to provide the highest [sic] primary, secondary, and selected tertiary health care services to residents of and visitors to the Mid-Delmarva Peninsula in a competent, compassionate, and cost effective manner designed to elicit a high degree of consumer satisfaction.  The Hospital's mission is to improve the health of the communities we serve....</blockquote> Yet it appears that this mission is honored mainly in the breach, at least when it comes to CEO compensation.  The DelMarVaNow article emphasized that hospitals' charitable functions are not seen as relevant by hospital boards when setting CEO compensation, <blockquote class="tr_bq">Despite the nonprofit status of the organizations they oversee, hospital boards don't appear to put weight toward the amount of free medical services and community outreach activities, good deeds collectively known as charity care, [executive vice president of Integrated Healthcare Strategies Kevin] Talbot</blockquote> Also, <blockquote class="tr_bq">The head of the consulting firm that helps PRMC's board establish [current CEO] Naleppa's pay said community benefit shouldn't be part of the equation. 'In my over 25 years of consulting on hospital compensation, I have never seen community benefit used as a factor in determining executive pay,' Rian Yaffe said.  'Community benefit has nothing to do with how difficult a hospital is to manage and lead.'</blockquote> However, community benefit is the mission of the hospital, and is justification for most US hospitals' non-profit status, which allows them to escape certain kinds of taxation, and for donors to make charitable, tax-advantaged contributions to the hospitals.   The Baltimore Sun listed financial but not charitable performance as a justification for the compensation of a particular executive, the CEO of Johns Hopkins Medical Center, who is <blockquote class="tr_bq">'held responsible for stringent qualitative measures,'  in such areas as financial performance, patient safety and service excellence, [Johns Hopkins] spokeswoman Kim Hoppe said in a statement.</blockquote> When asked by the Sun to comment, the advocacy group Community Catalyst stated <blockquote class="tr_bq">One of the factors that should be considered, it says, is the role of non-profit hospitals in the community and in providing charity care.  </blockquote> Meanwhile, while the hospitals gain advantages from ostensibly focused on the mission of providing community care and benefit, not only are there leaders not given incentives to uphold this mission, they are explicitly compared to leaders of for-profit organizations who have no such missions, and who are primarily tasked with increasing short term revenue in this era of "<a href="http://hcrenewal.blogspot.com/search/label/financialization">financialization</a>."  In the Baltimore Sun, <blockquote class="tr_bq">Hospitals note that they compete with private sector businesses where their executives could choose to work instead.</blockquote>Again, as noted above, there is little evidence that top hired managers are really that mobile, and less that a manager from one sector, e.g., non-profit hospitals, would be in great demand in another, e.g., a for-profit corporation. The Boston Globe noted an argument made that implied no one should complain about how much non-profit hospital executives make, since executives of for-profit corporations make even more. <blockquote class="tr_bq"> 'In a big successful teaching hospital, it’s very rare to see anything less than $1 million in total compensation for the chief executive, and $1.5 million to $2 million is the norm,' [managing director of consulting firm Compensation Resources Paul R] Dorf said. 'Executives at publicly traded pharma or medical device companies can make 10 times as much.' </blockquote>So if there is little evidence for the mobility of top hired managers, there is less for the desirability of managers of non-profit hospitals as heads of large pharmaceutical or medical device companies.  But furthermore, in trying to justify, albeit illogically, outsize CEO compensation, the defenders of this compensation have provided evidence that the leaders and stewards of non-profit hospitals may no longer care about the hospitals' fundamental mission.  This suggests that hospitals' overt declarations of their mission, especially when used to obtain more donations and tax benefits, may amount to the ethical equivalent of a "long con," that is, a long-term confidence scheme. Summary While F Scott Fitzgerald noted that the very rich are different from you and me, it may now be more appropriate to say that top hired managers are very different from you and me.  Again and again we see that they play by very different sets of rules than do other people who work in health care.  Notably, while they often emphasize cost cutting, and may be quick to lay off or outsource other employees, their compensation increases year by year no matter how well their organizations are doing.  While other employees, increasingly now including doctors as well as other health care professionals, have to answer to the hired managers, the hired managers only answer to boards of directors or trustees who often act like their cronies, perhaps because they are often also current or retired hired managers. Hired managers are subject to incentives that seem designed not to improve patients' and the public's health, but at best to improve the short-term revenue of health care organizations, and at worst to increase the wealth of hired managers.  Such perverse incentives risk promoting ill-considered, mission-hostile, or even corrupt management.  The sorts of people who aspire to be hired managers in such conditions are likely not the sort of people one would expect to really advance the health of patients or of the population. As a first step to restoring health care leadership to some state of reasonable accountability and responsibility, we need to challenge the rules that only hired managers play by.  It would be nice to see articles in the media about health care CEO compensation that at least attempt to question the usual talking points.  All of us could think about how we could challenge our local million dollar plus hospital CEOs to justify why they should be treated so differently from all other hospital employees. Since it seems that many hospitals no longer fit at least the spirit of the definition of not-for-profit organizations, even though they use this designation for financial advantage, we need policies to encourage them to uphold their mission, and that provide negative consequences if they do not.

The Long Con - "Charitable" Hospitals Make Multimillionaires out of Their CEOs

The CEOs of ostensibly charitable hospitals founded to serve the poor continue to become rich. The latest reminders are in two articles fr...

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