Through a Glass Darkly - How Can So Many Health Care Executives Be Visionaries?

<span style="background-color: #eeeeee;"><i><span style="font-size: x-small;">Visionary (noun)</span></i></span><br /><span style="background-color: #eeeeee;"><i><span style="font-size: x-small;"></span></i></span> <br /><div class="sblk"><div class="scnt"><span style="background-color: #eeeeee;"><i><span style="font-size: x-small;">1<span class="ssens"><b>:</b>  one whose ideas or projects are impractical <b>:</b>  <a href="http://www.merriam-webster.com/dictionary/dreamer">dreamer</a> </span></span></i></span></div></div><div class="sblk"><div class="scnt"><span style="background-color: #eeeeee;"><i><span style="font-size: x-small;">2<span class="ssens"><b>:</b>  one who sees <a class="formulaic" href="http://www.merriam-webster.com/dictionary/visions">visions</a> <b>:</b>  <a href="http://www.merriam-webster.com/dictionary/seer">seer</a> </span></span></i></span></div></div><div class="sblk"><div class="scnt"><span style="background-color: #eeeeee;"><i><span style="font-size: x-small;">3<span class="ssens"><b>:</b>  one having unusual foresight and imagination</span></span></i></span></div></div><div class="scnt"><span style="background-color: #eeeeee;"><i><span style="font-size: x-small;"><span class="ssens"><span class="vi"> </span><a href="http://www.merriam-webster.com/dictionary/visionary"><span class="vi">Merriam-Webster Dictionary online </span></a></span></span></i></span></div><div class="scnt"></div><div class="scnt"><br /><span class="ssens"><span class="vi"><b>The Visionary, or Messianic Health Care Executive </b></span></span></div><div class="scnt"></div><div class="scnt"><br /><span class="ssens"><span class="vi">In 1997, Sherif Abdelhak, the CEO of the then unusually large vertically integrated health care system based in Pennsylvania, the Allegheny Health Education and Research Foundation (AHERF) </span></span>was described in an American College of Physicians publication as a "visionary." (See the summary beginning on p 5 <a href="http://www.acponline.org/about_acp/chapters/ri/nl-fall04.pdf">here</a>.) Abdelhak had previously been called a "visionary" or a "genius" in the media. [Gaul GM. Creator of a cross-state health system despite personal and financial questions, Sherif Abdelhak has boldly expanded from Pittsburgh to Philadelphia. Philadelphia Inquirer, March 4, 1991. P. D1. Gaul GM. The new prescription for health care: Hahnemann’s merger dwarfs - and frightens - many local rivals. Philadelphia Inquirer, November 21, 1993. P. E1.]   In 1998, AHERF was bankrupt, and Abdelhak eventually pleaded guilty to misusing charitable funds and went to jail.  </div><div class="scnt"><span class="ssens"><span class="vi"><br /></span></span></div><div class="scnt"><span class="ssens"><span class="vi">Mr Abdelak was one of the earlier examples I found of the hospital leader regarded as fearless leader, visionary, even messianic, and the possible bad effects of putting so much money, power, and faith in one person.  </span></span>For more recent examples of how health care leaders may be described in messianic terms, look <a href="http://hcrenewal.blogspot.com/2011/09/more-repeats-of-talking-points.html">here</a>, <a href="http://hcrenewal.blogspot.com/2011/09/talking-points-sans-original-thought-to.html">here</a>, and <a href="http://hcrenewal.blogspot.com/2011/12/more-tales-of-hospital-ceo-compensation.html">here</a>.  For  related, and also religiously allusional theories of the "divine rights of CEOs," look <a href="http://hcrenewal.blogspot.com/2012/03/golden-calf-explains-how-economism-lead.html">here</a> and <a href="http://hcrenewal.blogspot.com/2012/03/why-health-care-leaders-remain.html">here.</a></div><div class="scnt"></div><div class="scnt"><br /><span class="ssens"><span class="vi">Modern health care, the US economy, and many developed countries have seen<a href="http://hcrenewal.blogspot.com/search/label/managers%27%20coup%20d%27etat"> increasing domination by administrators, managers and executives</a>.  In particular, US hospitals were once small non-profit institutions based in communities or universities, often threadbare, and run by dedicated if harried health care professionals.  They now have morphed into huge organizations run by professional managers who may <a href="http://hcrenewal.blogspot.com/search/label/executive%20compensation">become multimillionaires</a> in the process.  Meanwhile, US health care has become increasingly expensive, but without any obvious advantages to patients' or the public's health.  </span></span></div><div class="scnt"></div><div class="scnt"><br /><span class="ssens"><span class="vi">As we have noted, justification for the domination by professional managers and their lavish remuneration often includes paeans to their brilliance.  Most recently we<a href="http://hcrenewal.blogspot.com/2014/06/a-real-example-of-public-relations.html"> discussed</a> how the rise of the professional manager has been explained by a not very clear analogy between such managers and the "great men" of history.  </span></span></div><div class="scnt"></div><div class="scnt"><br /><span class="ssens"><span class="vi"><b>Can They All be Visionaries? </b></span></span></div><div class="scnt"></div><div class="scnt"><span class="ssens"><span class="vi"><br />The notion of every hospital CEO as a Napoleonic figure seems ridiculous, but there seems to be little public skepticism of the notion of executives, including hospital leaders as fearless leaders.  </span></span></div><div class="scnt"></div><div class="scnt"><br /><span class="ssens"><span class="vi">One reason may be that the exposure most people have to these notions is limited.  One may see the local hospital CEO extravagantly praised, but it is always possible the local CEO is brilliant.  Most people probably do not see the praises sung for the CEO of the hospital 100 miles away.</span></span></div><div class="scnt"></div><div class="scnt"><br /><span class="ssens"><span class="vi">So inspired by our most recent discussion of the public relations talking points used to justify health care CEOs often million dollar plus compensation, I set out to see if brilliant hospital leaders are really a dime a dozen.  My methods were simple.  I used Google News to search back about one month, and looked simply for hospital CEOs or other top leaders described as "visionaries." </span></span></div><div class="scnt"></div><div class="scnt"><br /><span class="ssens"><span class="vi">Here are the results, in chronological order.</span></span></div><div class="scnt"></div><div class="scnt"><span class="ssens"><span class="vi"></span></span></div><div class="scnt"><br /><span class="ssens"><span class="vi"><u>CEOs of Frederick Regional Health System, Meritus Health, and Western Maryland Health System </u></span></span></div><div class="scnt"></div><div class="scnt"><br /><span class="ssens"><span class="vi">[Maryland, June 9, 2014]</span></span></div><div class="scnt"></div><div class="scnt"><br /><span class="ssens"><span class="vi">The context was,</span></span></div><div class="scnt"></div><blockquote class="tr_bq"><div class="scnt"><span class="ssens"><span class="vi"> </span></span><span class="ssens"><span class="vi">Frederick Regional Health System, Meritus Health and Western Maryland Health System announced Trivergent Health Alliance as the name of their regional health care alliance.<br /><br /> After a national executive search, Raymond Grahe, senior vice president and chief financial officer of Meritus Health based in Hagerstown, has been named chief executive officer of Trivergent Health Alliance MSO, the management services organization that is a subsidiary of the alliance.</span></span></div></blockquote><div class="scnt"></div><div class="scnt"><br /><span class="ssens"><span class="vi">This is what Grahe said about the CEOs of the three hospitals,</span></span></div><div class="scnt"></div><blockquote class="tr_bq"><div class="scnt">It is thanks to the dedication of these <i>three <b>visionary</b> CEOs</i> that Trivergent Health Alliance exists today. </div></blockquote><div class="scnt"></div><div class="scnt"><a href="http://www.times-news.com/local/x1396882112/Meritus-official-named-CEO-for-Trivergent-Health-Alliance">From the Cumberland Times-News</a>.</div><div class="scnt"></div><div class="scnt"><br /><u>Baystate Health CEO</u></div><div class="scnt"><br /></div><div class="scnt">[Massachusetts, June 18, 2014]</div><div class="scnt"><br /></div><div class="scnt">In the course of a tribute to retiring CEO Mark R Tolosky, an attorney by training, Mary Jo Stafford, a nurse, said,</div><div class="scnt"><br /></div><blockquote class="tr_bq"><div class="scnt">He has been incredibly accessible and is a <b><i>visionary</i></b></div></blockquote><div class="scnt"></div><div class="scnt"><br /><a href="http://www.masslive.com/news/index.ssf/2014/06/baystate_health_names_building.html">From Masslive.com</a>. </div><div class="scnt"><br /></div><div class="scnt"><u>Anna Jacques Hospital CEO</u></div><div class="scnt"></div><div class="scnt"><br />[Massachusetts, June 18, 2014] </div><div class="scnt"></div><div class="scnt"><br /></div><div class="scnt">On the announcement of the retirement of Delia O'Connor, David LaFlamme, chairman of the hospital board, said,</div><div class="scnt"><br /></div><blockquote class="tr_bq"><div class="scnt">Her legacy is that of <i>a <b>visionary</b>, decisive leader</i> whose extraordinary contributions to the hospital and local area have earned her the trust and respect of the entire community.</div></blockquote><div class="scnt"></div><div class="scnt"><br /><a href="http://www.newburyportnews.com/local/x1927809729/AJH-CEO-to-retire">From the Newburyport News</a></div><div class="scnt"></div><div class="scnt"><br /><u>CoxHealth Vice President for Marketing and Public Affairs</u></div><div class="scnt"></div><div class="scnt"><br />[Missouri, June 23, 2014]</div><div class="scnt"></div><div class="scnt"><br />On the announcement of the appointment of Jim Anderson as the new Vice President for Marketing and Public Affairs, CoxHealth CEO Steve Edwards said,</div><div class="scnt"></div><blockquote class="tr_bq"><div class="scnt"> We welcome Jim Anderson, <i>a great <b>visionary</b></i> with a passion for our community</div></blockquote><div class="scnt"></div><div class="scnt"><br /><a href="http://www.ky3.com/news/local/coxhealth-hires-retired-chamber-president-for-pr-veep/21048998_26619350">From KY3</a>. </div><div class="scnt"><br /></div><div class="scnt"><u>Good Shepherd Medical Center Chief Medical Officer</u></div><div class="scnt"><br /></div><div class="scnt">[Texas, June 25, 2014]</div><div class="scnt"><br /></div><div class="scnt">Per a news report on the announcement of the appointment of Dr Lawrence T Verfurth as new Chief Medical Officer</div><div class="scnt"><br /></div><blockquote class="tr_bq"><div class="scnt">Dr. Verfurth, who joined the Good Shepherd staff earlier this month, is <i>a <b>visionary</b> physician executive</i> with a broad base of operation and clinical leadership spanning the spectrum of healthcare</div></blockquote><div class="scnt"><br /></div><div class="scnt"><a href="http://www.cbs19.tv/story/25868616/good-shepherd-medical-center-names-new-chief-medical-officer">From KYTX</a>. </div><div class="scnt"></div><div class="scnt"><br /><u>Bassett Healthcare Newtork President and CEO</u></div><div class="scnt"></div><div class="scnt"><br />[New York, June 25, 2014]</div><div class="scnt"></div><div class="scnt"><br />On the occasion of awarding the Distinguished Service Award by the Healthcare Association of New York State (HANYS) to Dr William F Struck as Bassett Healthcare Network President and CEO, HANYS President Dennis Whalen said,</div><div class="scnt"></div><blockquote class="tr_bq"><div class="scnt"> Under Dr. Streck’s <i><b>visionary</b> leadership</i>, a single hospital in Cooperstown, with 70 physicians, has grown into a network of six affiliated hospitals, with 45 community- and school-based health centers, and more than 400 providers serving eight counties</div></blockquote><div class="scnt"></div><div class="scnt"><br /><a href="http://www.hanys.org/news/index.cfm?storyid=3546">From a AHNYS press release</a>. </div><div class="scnt"><br /></div><div class="scnt"><u>Milford Hospital CEO</u></div><div class="scnt"><br /></div><div class="scnt">[Connecticut, June 26, 2014]</div><div class="scnt"><br /></div><div class="scnt">On the occasion of an article published by Milford Hospital researchers, Dr Sin Hang Lee, one of the authors and director of Milford Medical Laboratory, a Milford Hospital affiliated laboratory said,</div><div class="scnt"><br /></div><blockquote class="tr_bq"><div class="scnt">the four employees of Milford Hospital's Department of Pathology are carrying out the commitment of <i>the hospital's <b>visionary</b> president and CEO</i> Joseph Palaccia</div></blockquote><div class="scnt"><br /></div><div class="scnt"><a href="http://www.businesswire.com/news/home/20140626005650/en/Milford-Hospital-Pathology-Staff-Independent-Physicians-Discover#.U6xutEDNCic">From a Milford Medical Laboratory news release via BusinessWire</a>.</div><div class="scnt"><br /></div><div class="scnt"><u>St Jude Children's Research Hospital</u></div><div class="scnt"><br /></div><div class="scnt">[Tennessee, June 26, 2014]</div><div class="scnt"><br /></div><div class="scnt">On the announcement of the appointment of Dr James R Downing as the new CEO of St Judge Children's Research Hospital, Terry Burman, chairman of the St Jude Board of Governors, said,</div><div class="scnt"></div><blockquote class="tr_bq"><div class="scnt">Dr Downing is an exceptional scientist whose <i><b>visionary</b> approach</i> to the next era of growth and discovery at St. Jude will mirror the legacy established by Danny Thomas more than 50 years ago. </div></blockquote><div class="scnt"></div><div class="scnt"><br /><a href="http://www.memphisdailynews.com/news/2014/jun/26/st-jude-names-downing-new-ceo/">From the Menphis Daily News</a>. </div><div class="scnt"><br /></div><div class="scnt"><b>Summary</b></div><div class="scnt"><br /></div><div class="scnt">So with a very cursory search covering less than one month I was able to find eight CEOs, one vice president for marketing, and one CMO, from 10 hospitals in seven states who were called visionary or visionaries.  It is hard to believe that all these people were truly visionaries using the definition above.  </div><div class="scnt"></div><div class="scnt"><br />None of the news articles or press releases that used the v word provided any detailed justification.  In most cases, the visionary designation was made either by someone who worked directly for the leader in question, or was a member of the organization's board of trustees and hence responsible for that individual holding a leadership position. This is more evidence that there are cults of leadership surrounding most health care leaders these days.  </div><div class="scnt"><br /></div><div class="scnt">Actually, labeling a health care manager a visionary should evoke more suspicion than admiration.  As in the unfortunate case of Mr Abdelhak and AHERF, we have seen many health care leaders praised for their brilliance and paid royally despite leadership resulting in financial distress, <a href="http://hcrenewal.blogspot.com/search/label/mission-hostile%20management">threats to the organizations' health care missions</a>, poor patient care, unethical behavior, or even <a href="http://hcrenewal.blogspot.com/search/label/crime">crime</a>.</div><div class="scnt"></div><div class="scnt"><br />Yet health care CEOs are just people, sometimes smart, but almost never brilliant.  Promoting them as messianic or "great men" (or more rarely women) to bewitch key constituencies, justify the remuneration of other top managers, and the hiring of more public relations flacks is likely to lead to the sort of organizational disasters and system-wide dysfunction we discuss on Health Care Renewal.  The rise of the falsely messianic leader may allow the entry of the most dangerous false messiahs, the psychopathic ones.  (We discussed the likelihood that some health care leaders are actually psychopaths <a href="http://hcrenewal.blogspot.com/search/label/psychopaths">here</a>.)</div><div class="scnt"></div><div class="scnt"><br /><br />In the secular occupation of health care, we ought not to yearn for messiahs, or even "great men" or women, but instead hope for reasonable leadership that draws on the collective knowledge and values of health care professionals rather than dubious "visions."  True health care reform would promote leaders who show accountability, integrity, transparency, honesty, and ethics. </div><div class="scnt"></div><div class="scnt"></div>

Through a Glass Darkly - How Can So Many Health Care Executives Be Visionaries?

Visionary (noun) 1 :   one whose ideas or projects are impractical :   dreamer 2 :   one who sees visions :   seer 3 :   one having unus...

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A Real Example of Public Relations Talking Points to Justify Outsize Executive Compensation - and Why We Should No Longer be Fooled

We frequently discuss outsize <a href="http://hcrenewal.blogspot.com/search/label/executive%20compensation">executive compensation</a> in health care organizations as both a symptom and a cause of these organizations' poor leadership and governance, and hence of widespread health care dysfunction.<br /><br /><b>The Latest Stories of Huge CEO Pay </b><br /><br />Stories of gargantuan compensation appear almost daily.  For example, some headlines about pay at hospitals and hospital systems in the last few months included,<br /><br /><blockquote class="tr_bq"><a href="http://www.gjsentinel.com/news/articles/millionaire-health-care">Millionaire health care?</a><br />With high costs and insurance premiums in Garfield County, focus falls on pay of a hospital’s chief executive<br /><a href="http://www.masslive.com/politics/index.ssf/2014/05/audit_faults_umass_medical_sch.html">Audit faults UMass Medical School for improper documentation of $2 million in bonus compensation</a><br /><a href="http://www.tennessean.com/story/news/health/2014/05/25/saint-thomas-ceos-salary-benefits-soar/9556721/">St Thomas CEO's salary, benefits soar</a><br /><a href="http://bangordailynews.com/2014/06/07/news/state/mainehealth-defends-executive-pay-despite-major-cuts/">MaineHealth defends top executives' pay despite major cuts</a></blockquote><br />Then there were stories about the amazing pay given to CEOs of top for-profit health insurance companies, e.g., <a href="http://ifawebnews.com/2014/05/30/single-payer-advocate-reports-pay-increases-for-many-health-carrier-ceos-in-2013/">via IFAwebnews,</a><br /><br /><br /><blockquote class="tr_bq">According to research published by a single-payer advocacy group, <i>average compensation for nine CEOs at large health insurance companies rose by more than 19% in 201</i>3, with some chief executives seeing steep increases in pay, while others received less remuneration.<br /><br /> Healthcare-NOW!, a non-profit that says its goal of single-payer health coverage is also known as 'improved Medicare for all,' analyzed recent financial reports of the Fortune 500 health insurance carriers.<br /><br /> According to Healthcare-NOW!,<i> the highest compensation increase went to Aetna CEO Mark Bertolini, who received a <b>$30.7 million</b> compensation package in 2013. The Bertolini pay package, which included a large “special one-time performance-based retention award,” represented a 131% increase</i> over his $13.3 million compensation in 2012.<br /><br />Molina Healthcare and Centene, insurers that specialize in privately managed Medicaid plans, <i>roughly doubled CEO compensation in 2013. J. Mario Molina received <b>$11.9 million</b>, up from $5 million in 2012, while Centene’s CEO Michael Neidorff made <b>$14.5 million</b>, up from $8.5 million.</i><br /> <br />Overall, <i>average CEO pay across Fortune 500 health insurers rose from $11.6 million in 2012 to $13.9 million in 2013.</i></blockquote><br />Here we go again.  In May, 2014, I <a href="http://hcrenewal.blogspot.com/2014/05/more-stories-of-million-dollar-plus.html">summarized</a> how discussion of executive compensation, particularly in non-profit hospitals and hospital systems, seemed to follow a clear pattern. <br /><br /><blockquote class="tr_bq"><b>The Pattern </b><br /><br />Nearly all non-profit hospitals must release minimal data on the total compensation of a few of the highest paid executives.  When these reports come out, sometimes the local media take a look, either at an individual hospital or hospital system, or at a number of local hospitals.  They almost inevitably find that some, usually most executives make what appears to be lots of money.  This could be hundreds of thousands of dollars at small community hospitals, or millions of dollars at larger hospitals and hospital systems.  Sometimes the reports end there.  Sometimes the reporters ask hospital representatives or local experts to explain the apparently exalted compensation figures.  <br /><br /><b>The Talking Points </b><br /><br /> The explanations are usually very similar, and so we have called this part of The Pattern The Talking Points. <br /><br />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>, and <a href="http://hcrenewal.blogspot.com/2013/08/the-long-con-charitable-hospitals-make.html">here</a>.  <br /><br />They are:<br />- We have to pay competitive rates<br />- We have to pay enough to retain at least competent executives, given how hard it is to be an executive<br />- Our executives are not merely competitive, but brilliant (and have to be to do such a difficult job).<br /><br />The talking points are usually supplied by hospital public relations personnel, sometimes by hospital trustees or executives, sometime by various health care consultants.  The talking points are rarely questioned.</blockquote><br /><b>There Really Were Talking Points, at Least at Cigna</b><br /><br /><br />I hypothesized that perhaps public relations managers at various hospitals might actually have organized these talking points, since so many news stories of executive compensation in health care seemed to faithfully follow the pattern.  That was, however, speculation.  However, now there is anecdotal evidence that public relations executives really did use these talking points to defend their bosses' compensation.<br /><br /><br />Wendell Potter is the former head of public relations for for-profit health insurance company Cigna who defected, and now advocates for honest, fair health care.  On June 9, 2014, he <a href="http://wendellpotter.com/2014/06/skyrocketing-salaries-for-health-insurance-ceos/">wrote</a> in <a href="http://wendellpotter.com/blog/">his blog</a> about the latest revelations about outrageous executive compensation given to health insurance CEOs (as summarized above).  <br /><br /><br /><blockquote class="tr_bq">When I handled financial communications for Cigna, the day I dreaded most every year was the day we filed the company’s proxy. That’s because I knew I would get calls from reporters wanting to know <i>how we could justify paying the CEO so much when most other employees were lucky to get 3 percent raises.</i><br /><br /><i><b>I always had talking points</b> drafted with plenty of help from the company’s lawyers and HR executives.</i> They didn’t vary much from year to year. Basically, all I said was, hey, <b><i>this is a very big company, the CEO has a very big job and his pay is in line with what other firms of similar size pay their top guys.</i></b></blockquote><br />So there you are.  First, at least at this company, it appears that an important responsibility of the company public relations department was to defend the CEOs pay.  In my humble opinion, this confirms my suspicion that corporate public relations and marketing often put the personal interests of the top company executives ahead of everything else, including the interests of shareholders of for-profit companies in fair executive compensation, and the interests of patients in reasonable health care costs.<br /><br />Second, there really were talking points used at least in this company's public relations that were pretty similar to those I hypothesized:<br /><br /> - We have to pay competitive rates = <i>"his pay is in line with what other firms of similar size pay their top guys."</i><br /><br />- We have to pay enough to retain at least competent executives, given how hard it is to be an executive = <i>" this is a very big company, the CEO has a very big job"</i><br /><br />- Our executives are not merely competitive, but brilliant (and have to be to do such a difficult job) = by implication.<br /><br />You heard it here first.<br /><br /><br />So maybe we should all be a lot more skeptical about executive compensation.  Unfortunately, Mr Potter suggests we may be getting less so.<br /><br /><blockquote class="tr_bq">I made frequent use of those talking points the first couple years. But toward the end of my 15 years at the company, I would rarely get more than one or two calls. By 2008, the year I left, the phone didn’t ring at all, at least not from the media. Fewer and fewer reporters even bothered to look at the proxy statements.</blockquote><br />Of course, that may have something to do with the general decline of journalism, perhaps partially due to the transformation of journalism into a pursuit of a few big corporations, lead by overly compensated executives. <br /><br />Furthermore, instead of the talking points, consider some recent ideas about causes and effects of excess executive compensation.  We have discussed some of these frequently, but here are some recent versions.<br /><br /><b>Causes of Excess Executive Compensation</b><br /><br /><u>Cronies on the Board</u><br /><br />- from an Associated Press story <a href="http://www.usnews.com/news/business/articles/2014/05/27/the-ceo-got-a-huge-raise-you-didnt-heres-why">via US News and World Report</a>,<br /><br /><blockquote class="tr_bq">Some board members defer to a CEO's judgment on what his or her own compensation should be. There's a good reason: <i>Many boards are composed of current and former CEOs at other companies.</i> And in some cases, <i>board members are essentially hand-picked or at least vetted by the CEO</i>. Not surprisingly, the boards' compensation committees offer generous bonuses.</blockquote><br />In more detail, from <a href="http://www.startribune.com/opinion/commentaries/258379541.html">an op-ed in the Minneapolis-St Paul Star Tribune</a>,<br /><br /><blockquote class="tr_bq"> <span class="Text_BoldOff_Body">Under current practice, a nominating committee made up of current board members selects nominees to be presented to the shareholders for approval. Since there are rarely any more nominees than open positions, <i>being nominated virtually assures election</i>. These elections are the same as what you would expect in a communist country where voters vote yes or no on a single candidate. </span><br /><br /><span class="Text_BoldOff_Body">The nominating committee is <i>usually selected by the board chairman and the CEO (in too many cases, the same person)</i>. <i>The CEO and the chairman are almost always on the nominating committee</i>. It is <i>in the CEO’s interest to select board members whose loyalty can be trusted</i>. In many cases, a nominee’s <i>primary qualification is loyalty to the CEO</i> and the board chairman, with </span><span class="Text_BoldOff_Body">little knowledge of or experience in the business. Often <i>there is a prior business or personal relationship to the nominee</i> and very often the CEO and/or the chairman serves on the board of a nominee, a cozy mutual back-scratching arrangement. </span><br /><br /><span class="Text_BoldOff_Body">Serving on the board is <i>prestigious and lucrative and abounds in perks</i>. Besides cash and/or stock options or grants, perks such as company-paid travel to foreign trade shows, board meetings in posh resorts (with spouses, of course) and other company benefits make continuing on the board the first priority of most board members, with shareholder interests a distant second priority. This is akin to a politician whose first priority is to get re-elected and whose constituents’ interests come next.  <i>To maintain continuation of this bonanza of benefits, the board member must be assured of being renominated by the nominating committee. Since the CEO and the chairman are on the nominating committee, which they selected, they have great influence over the ultimate choices for nominees.</i> Now, if you are a board member and want to be assured of being renominated, it pays (literally) to be looked upon favorably by the CEO and the chairman. </span></blockquote><br /><br /><span class="Text_BoldOff_Body">Note that both of these accounts referred to for-profit corporations, but could easily apply to boards of non-profit organizations as well.   Note further that crony boards violate the expectations of their charges, which are to defend the organizations' mission and the interests of all their stakeholders, not just a few top executive cronies.</span><br /><br />T<u>he Ratchet, or "Lake Wobegon" Effect</u><br /><br />-  from an Associated Press story <a href="http://www.usnews.com/news/business/articles/2014/05/27/the-ceo-got-a-huge-raise-you-didnt-heres-why">via US News and World Report</a>,<br /><br /><blockquote class="tr_bq">Robert Solow, a Nobel Prize-winning economist, recently observed that <i>CEOs live in 'Lake Wobegon,'</i> that fabled town created by radio show host Garrison Keillor where, it is said,<i> 'all the children are above average.' </i>Solow didn't mean it as a compliment.<br /><br /><i>Corporate boards often set CEO pay based on what the leaders of other companies make. No board wants an 'average' CEO</i>. <i>So boards tend to want to pay their own CEO more than rival CEOs</i> who are chosen for benchmarking compensation packages.<br /><br /><i>This will 'naturally create an upward bias' in pay,</i> Charles Elson and Craig Ferrere of the University of Delaware concluded in a 2012 paper. '(T)he compounded effect has been to create a significant disparity between the pay of executives and what is appropriate to the companies they run.'</blockquote><br />Note that the Lake Wobegon effect is based on a logical fallacy.  All CEOs cannot be above average.  <br /><br /><u>CEOs as "Great Men"</u><br /><br />- from an <a href="http://www.washingtonpost.com/opinions/great-men-great-pay-why-ceo-compensation-is-sky-high/2014/06/12/6e49d796-d227-11e3-9e25-188ebe1fa93b_story.html">op-ed in the Washington Post</a>,<br /><br /><blockquote class="tr_bq">It is a system that rests on<i> the Great Man theory of history: a school of thought that attributes virtually all important developments through time to heroic individuals.</i><br /><br />Think back to Jack Welch’s 20-year reign as chief executive of General Electric. He was lauded as a corporate leader and management guru who, seemingly single-handedly, grew the company’s revenue and market capitalization many times over. Before long, GE had become a synonym for Jack Welch (or was it the other way around?).</blockquote><br />The theory is from the 19th century,<br /><br /><blockquote class="tr_bq"> As a historian trying to parse America’s enthrallment with superstars, I keep coming back to the Great Man theory of history. Popularized in the mid-19th century by the Scottish essayist Thomas Carlyle, this concept holds that <i>history is largely attributable to the actions of great individuals, who because of their personal (and often mysterious) qualities — such as intelligence, wisdom, deftness, goodness and energy — use their agency to make a big impact</i>. 'In all epochs of the world’s history,' <a href="http://grammar.about.com/od/classicessays/a/On-Heroes-And-Hero-Worship-By-Thomas-Carlyle.htm" title="grammar.about.com">Caryle wrote</a> in his 1841 book, <a href="http://www.amazon.com/gp/product/1461064619?ie=UTF8&camp=1789&creativeASIN=1461064619&linkCode=xm2&tag=thewaspos09-20" title="www.amazon.com">'On Heroes, Hero-Worship and the Heroic in History,''</a> 'we shall find the Great Man to have been the indispensable saviour of his epoch.'</blockquote><br />But it makes no real sense,<br /><br /><blockquote class="tr_bq"> <i>Such lionization is misplaced</i>. Operating a sustainable enterprise, as any executive, manager or employee knows well, is <i>inherently a team spor</i>t. Across companies and industries, <i>this activity depends on many people working in concert in all kinds of groups, at all levels of the organization</i>. Such interdependence means that it is hard to precisely delineate, much less quantify, any one individual’s contribution, even that of the most senior manager, to a firm’s performance.</blockquote><br />This is particularly true in health care, and particularly in organizations that provide direct patient care.  In my humble opinion, it is ridiculous to lionize managers when health care professionals actually take care of patients, using tests and treatments developed by other professionals and scientists.  <br /><br /><br /><b>Effects of Excess Executive Compensation </b><br /><br /><u>Declining Morale of all Other Employees</u><br /><br />-  from an Associated Press story <a href="http://www.theguardian.com/business/2014/may/27/us-ceo-median-package-rise-10m">via the UK Guardian</a>,<br /><br /><blockquote class="tr_bq"> 'There's this unbalanced approach, where there's all this energy put into how to reward executives, but <i>little energy being put into ensuring the rest of the workforce is engaged, productive and paid appropriately,</i>' says Richard Clayton, research director at Change to Win Investment Group, which works with labor union-affiliated pension funds.</blockquote><br /><u>The CEO Disease</u><br /><br />- per Dan Quiggle, who invented the term, <a href="http://www.exchangemagazine.com/morningpost/2014/week24/Thursday/14061910.htm">in Exchange Magazine</a>, which leads to:<br /><br /><blockquote class="tr_bq">You either hear really good things from your people…or nothing at all.<br />You don’t trust the feedback you receive.<br />You take criticism too personally. <br />In general, your employees don’t seem engaged.<br />Your best employees are unhappy or leaving. <br />You don’t connect with people in a way that leads to loyalty.</blockquote><br />That is, bad management, and hence...<br /><br /><u>Poor Organizational Performance</u><br /><br />- from a <a href="http://www.forbes.com/sites/susanadams/2014/06/16/the-highest-paid-ceos-are-the-worst-performers-new-study-says/">Forbes column by Susan Adams</a>,<br /><br /> Across the board, <i>the more CEOs get paid, <b>the worse their companies do</b> over the next three years</i>, according to extensive <a href="http://papers.ssrn.com/sol3/papers.cfm?abstract_id=1572085">new research</a>. This is true whether they’re CEOs at the highest end of the pay spectrum or the lowest. 'The more CEOs are paid, the worse the firm does over the next three years, as far as stock performance and even accounting performance,' says one of the authors of the study, Michael Cooper of the University of Utah’s David Eccles School of Business.<br /><br />Since most health care CEOs seem to know more about finance and health care, I wonder if this effect is even more pronounced on health care quality and patient outcomes?<br /><br /><u>Income Inequality and a Declining Economy</u><br /><br />- from <a href="http://www.fiercehealthcare.com/story/ceo-compensation-time-reign-skyrocketing-salaries-incentives/2014-06-19">an editorial in FierceHealthcare</a>,<br /><br /><blockquote class="tr_bq">Indeed, <i>the continual <a href="http://www.fiercehealthfinance.com/story/healthcare-ceo-pay-skewing-economy/2014-06-12" target="_blank">rise of executive paychecks may contribute to inequities in the U.S. economy</a>,</i> according to a new Roosevelt Institute paper, 'Taking Stock: Why Executive Pay Results in an Unstable and Inequitable Economy.'<br /><br />'The toxic combination of stock-based executive pay and open-market stock repurchases has contributed to not only the g<i>rowing concentration of income at the top but also the failure of the U.S. economy to sustain existing middle-class jobs and create new ones</i>,' wrote author William Lazonick, professor and director of the Lowell Center for Industrial Competitiveness at the University of Massachusetts.</blockquote><br /><u>Civil Unrest</u><br /><br />- from a <a href="http://www.washingtonpost.com/opinions/robert-j-samuelson-the-ceo-aristocracy-may-not-be-worth-all-that-money-they-get/2014/06/22/d0bbd596-f888-11e3-8aa9-dad2ec039789_story.html">Washington Post op-ed by Robert J Samuelson</a>,<br /><br /><blockquote class="tr_bq">Americans dislike aristocracies. Unless companies can find a more restrained pay system, t<i>hey risk an anti-capitalist public backlash. This is the ultimate danger.</i></blockquote><br /><b>Summary</b><br /><br />So far, the rise of executive compensation in health care has been inexorable.  Much of the public and many health care professionals have been lulled into complacency, or paralyzed by learned helplessness.  Yet the talking points used to justify outrageous executive pay are nonsense.  Rising compensation seems to be really due to crony capitalism, logical fallacies, and false historical analogies.  Rising pay may lead to poor management, poor organizational performance, worsening social inequality, a failing economy, and ultimately civil unrest.  Although the transition of executives into a new aristocracy is a society wide, if not a global problem, we in health care cannot be complacent that someone else will solve it.  True health care reform would enable accountable leadership that puts the health care mission and patients' and the public's health ahead of personal gain.    <br /><br />

A Real Example of Public Relations Talking Points to Justify Outsize Executive Compensation - and Why We Should No Longer be Fooled

We frequently discuss outsize executive compensation in health care organizations as both a symptom and a cause of these organizations'...

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GlaxoSmithKline's Marketing Firm Promised "Clinical Trials Could be Your Solution" to Poor Graduate Students

We have frequently raised concerns about the increasing domination of clinical research, particularly clinical trials, by those with vested in interests in the research producing particular results.  In particular, drug, biotechnology and device companies often sponsor trials meant to evaluate their own products.  Often it appears that commercial trial sponsors <a href="http://hcrenewal.blogspot.com/search/label/manipulating%20clinical%20research">manipulate</a> various aspects of research design, implementation, analysis, and dissemination to increase the likelihood of a result favorable to their interests.  Furthermore, when even such manipulation fails to produce the desired result, particular studies may simply be <a href="http://hcrenewal.blogspot.com/search/label/suppression%20of%20medical%20research">suppressed</a>, that is, hidden.<br /><br /><b>Clinical Trial Participation as "Your Solution" to Graduate Students' Money Woes </b><br /><br />A recent story, first told on the In-Pharma Technologist web site, gave an example of how trial recruitment could be gamed so as to produce more compliant study subjects. Since that web-site does not allow copy and pasting of even a few sentences of its content, I will quote, instead, from a subsequent <a href="http://www.theguardian.com/money/2014/jun/22/glaxosmithkline-gsk-interns-drug-trial-pitch">article in the Guardian</a>.<br /><br /><blockquote class="tr_bq">GlaxoSmithKline  the pharmaceuticals multinational, has apologised after being accused of playing on the hardship of unpaid interns to recruit them to take part in clinical trials.<br /><br /><i>A marketing firm working for the FTSE 100 company sought to place a blog on careers advice websites boasting that involvement in drug trials could help graduates to finance their way through unpaid work placements</i>.<br /><br />In a proposed 'guest blog' for the website <a href="http://graduatefog.co.uk/2014/3433/unpaid-interns-targeted-for-clinical-trials/" title="">Graduate Fog</a>, an employee at TouchPoint Digital, working on behalf of GSK, wrote: 'Clinical trials could be your solution.'</blockquote><br />The "guest blog" proposed that many graduate students "would prefer an immediate income to tide you over for the coming months."  So,<br /><br /><blockquote class="tr_bq"><i>Clinical trials could be your solution. Depending on the length of the study, you could earn up to £2,000 per trial for up to 4 trials a year</i>, plus reasonable travel expenses.</blockquote><br />This was not a one-off,<br /><br /><blockquote class="tr_bq"> Touchpoint provided examples of similar articles previously published on websites targeted at students. In an <a href="http://graduatefog.co.uk/2014/3433/unpaid-interns-targeted-for-clinical-trials/" title="">email to the founder of Graduate Fog, Tanya de Grunwald</a>, it added: 'Your readers would also benefit if there is a small link at the end of the article to the GSK website, which is the biggest pharmaceutical company in the UK, so that if they want to find out more or get answers to more specific questions they can do so.'</blockquote><br /><b>Excessive Inducement </b><br /><br />The story was <a href="http://blogs.wsj.com/pharmalot/2014/06/23/glaxo-dumps-firm-for-praying-on-college-grads-for-clinical-trials/">picked up by Ed Silverman at the PharmaLot blog</a> in the US, who pointed out how TouchPoint Digital appeared to be supplying an excessive inducement to vulnerable subjects,<br /><br /><blockquote class="tr_bq">Tanya de Grunwald, who runs the Graduate Fog website in the U.K., objected to the tone of the overture. 'Some of my readers are feeling very low, vulnerable and desperate for money,' she wrote us in an e-mail after openly questioning the recruiting tactic in <a data-ls-seen="1" href="http://graduatefog.co.uk/2014/3433/unpaid-interns-targeted-for-clinical-trials/">a note to readers</a> on her website last week. 'Many are unemployed. Others are in low-paid graduate jobs or doing unpaid internships.'<br /><br />'Suggesting that participating clinical trials is a great way to earn easy cash is not just crass – I think it’s irresponsible. Surely, <i>the more desperate someone is for money, the more likely they are to be dazzled by the financial benefits and less careful about weighing up the risks</i>.'</blockquote><br />A long time ago, that is, from 2006 - 2008, we published a series of posts about how <a href="http://hcrenewal.blogspot.com/search/label/contract%20research%20organizations">contract research organizations</a> running clinical research projects for commercial health care firms often preyed on financially and otherwise vulnerable research subjects by offering what would appear to such people to be dazzling remuneration.  For example, we discussed the trials by SFBC International (later PharmaNet Development Group, and now apparently <a href="http://www.inventivhealthclinical.com/">Inventiv Health Clinical</a>)  in Miami that enrolled immigrants, often undocumented, under questionable circumstances and in Montreal that resulted in the transmission of active tuberculosis (see post <a href="http://hcrenewal.blogspot.com/2006/03/consequences-of-sfbc-internationals.html">here</a> and links backward); and the trial by <a href="http://www.parexel.com/">Parexel International </a>in London that put most of its subjects in intensive care (see post <a href="http://hcrenewal.blogspot.com/2006/08/parexel-blues-again.html">here</a>, with links backward). In 2008, as we discussed <a href="http://hcrenewal.blogspot.com/2008/06/clinical-trials-torture-economy.html">here</a>, two articles questioning the ethics of research done under the auspices of CRO appeared in two major medical journals.  Excessively zealous recruiting designed to tempt vulnerable subjects with money appears unethical, and may be dangerous for these subjects.<br /><br /><b>How Excessive Inducement Could Lead to Invalid Trial Results</b><br /><br />Not only is such a practice apparently unethical and dangerous, it could endanger patients outside the research projects in question by producing invalid research.  Subjects who could be dazzled by such inducements might avoid disclosing conditions which would otherwise exclude them from particular research projects, or participate in multiple projects without sufficient or any wash out periods in between, meaning that one treatment's effects could confound another.  (Note that the blog post proposed by the marketer above suggested that subjects could participate in multiple trials during one year.)  Furthermore, subjects desperate to complete studies and earn their fees might avoid reporting adverse effects to avoid the risk of premature termination of their participation, or avoid protesting questionable actions by the researchers.    <br /><br />But now in the modern era of the Internet and social media, overzealous recruitment using monetary lures is still going on.  As per PharmaLot,<br /><br /><br /><blockquote class="tr_bq">One expert believes the flap is not surprising, because <i>drug makers are under pressure to maintain a steady stream of clinical trial recruits.</i><br /><br /> 'Middle class folks just sit back and wait until the drug reaches the market. <i>Poor folks are the guinea pigs in an economy that is more and more uneven, and uncertain by the day</i>,' says Roberto Abadie, a senior researcher at the Social Networks Research Group at John Jay College, City University of New York, and author of ‘The Professional Guinea Pig: Big Pharma and the Risky World of Human Subjects.' </blockquote><br /><b>A Belated Response from GSK </b><br /><br />Apparently only after the story broke did GSK notice there was a problem.  Again, per PharmaLot,<br /><br />A Glaxo spokeswoman <i>blamed the outside marketing firm</i> for the episode. In an e-mail, she wrote us that 'we would agree that the tone used in the ads… is wrong. It trivializes the role of clinical trials in developing new medicines and the part that volunteers play in that process. This isn’t acceptable and we’re looking into what happened.'<br /><br />Whether GSK was properly supervising the marketing firm, and whether GSK had provided incentives that might have lead to overzealous recruitment were not addressed. <br /><br /><b>Summary</b><br /><br />This story is yet another reminder that health care professionals, health policy makers, and the public at large should be extremely skeptical of clinical research sponsored (and controlled) by those with vested interests in the research results turning out a certain way, particularly clinical trials run by drug, biotechnology, or biotechnology companies meant to assess those companies' own products. However, note that very rarely do published clinical trial reports provide enough detail about subject recruitment to determine whether overzealous recruitment and undue inducements may have lead to enrollment of subjects who should have been excluded, under reporting of adverse effects, etc.<br /><br />In my humble opinion, we need to reassess current policies that allows organizations with such obvious conflicts of interest to run experiments on human beings (which is what clinical trials are.)<br /><br />By the way, this story is also a reminder that most big drug, device and biotechnology firms seem to be associated again and again with dodgy clinical research.   For example, see what we have previously written about GSK<a href="http://hcrenewal.blogspot.com/search/label/GlaxoSmithKline"> here</a>. <br /><br />

GlaxoSmithKline's Marketing Firm Promised "Clinical Trials Could be Your Solution" to Poor Graduate Students

We have frequently raised concerns about the increasing domination of clinical research, particularly clinical trials, by those with vested ...

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$100 million Epic install dampens Lifespan Rhode Island Healthcare's credit

Lifespan Rhode Island Healthcare System's Siemens EHR was apparently causing thousands of electronically-generated prescriptions to become scrambled, as I posted in Nov. 2011 here: <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>.<br /><br />Due to this "glitch" - and other factors, I surmise - they switched to Epic.<br /><br />Here are the current results:<br /><br /><blockquote class="tr_bq"><b>$100 million Epic install dampens Lifespan's credit</b><br /><a href="http://www.modernhealthcare.com/article/20140606/NEWS/306069948">http://www.modernhealthcare.com/article/20140606/NEWS/306069948</a><br /><br /><span class="mh_tags"><span class="mh_tags">By <a href="mailto:bherman@modernhealthcare.com">Bob Herman</a></span></span><br /><br /><div class="mh_body_12px">Posted: June 6, 2014 - 5:45 pm ET</div><br />A multimillion-dollar <a href="http://www.modernhealthcare.com/section/articles?tagID=975">electronic health-record</a> system installation is eroding the cash flow, and bond rating, of Rhode Island's largest health system.<br /><br />Moody's Investors Service downgraded the rating of <a href="http://www.modernhealthcare.com/section/articles?tagID=2479">Lifespan</a>, Providence, R.I., to Baa2—<b>only two notches away from junk-level status</b>. The ratings agency also <a href="https://www.moodys.com/research/Moodys-downgrades-Lifespan-Rhode-Island-Obligated-Group-RI-to-Baa2--PR_300980">gave the system</a>, which operates four acute-care hospitals and one children's hospital, a negative outlook.<br /><br />... <b>At the heart of the downgrade is Lifespan's new health IT system. </b>In March 2013, Lifespan chose to implement an Epic platform, a system spokeswoman said. Lifespan expects to go live with Epic's EHR by the spring of 2015. <b>Moody's analysts noted the investment will cost $35 million this year and $100 million total over the next several years.</b><br /><br />This has slammed Lifespan's operating performance, Moody's analysts wrote. Lifespan is projecting a 2.8% operating cash flow margin for fiscal 2014, which is far below the Baa2 median of 8.8%. The operating margin is predicted to hover around -1.7%. And it's not likely to get better soon—executives told Moody's they don't expect to post improved results until 2016.<br /><br />“The thin performance provides little cushion during a period of increased capital spending and the installation of a new IT system with short-term implementation risks that could disrupt cash flow,” the report said</blockquote><br />They're a year from going "live" and they've already damaged their financials.  (This does not account for the losses from abandoning an older system.)<br /><br />$100 million is not an unusual cost for a commercial EHR, as I noted elsewhere, e.g., <a href="http://hcrenewal.blogspot.com/2006/10/70-million-for-electronic-medical.html">http://hcrenewal.blogspot.com/2006/10/70-million-for-electronic-medical.html</a>.  An entire hospital or large hospital wing can be built with that much money...not to mention the hiring of quite a lot of human health information management professionals.<br /><br />Hospital executives have bought the <i>"EHRs will save massive amounts of money, eliminate medical errors, and heal the sick"</i> marketing hype hook, line and sinker (as opposed to the more sober "improve healthcare somewhat when implemented expertly").  They are so eager to have this unregulated technology, NOW, that they will place their organizations - and patients - into jeopardy to get it. (As to patient risk, see <a href="http://hcrenewal.blogspot.com/2014/04/fda-on-health-it-risk-reckless-or.html">http://hcrenewal.blogspot.com/2014/04/fda-on-health-it-risk-reckless-or.html</a> and its hyperlinks).<br /><br />I find this phenomenon stunning, and even more so the cognitive dissonance and refusal to believe the actual evidence when the starry-eyed predictions of Cybernetic Medical Nirvana just don't come true.<br /><br />-- SS

$100 million Epic install dampens Lifespan Rhode Island Healthcare's credit

Lifespan Rhode Island Healthcare System's Siemens EHR was apparently causing thousands of electronically-generated prescriptions to beco...

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Fourth Time is the (Anti)Charm? - UK NICE Highlights "Uncertainties in the Evidence Base" About Sovaldi

As we have discussed, (<a href="http://hcrenewal.blogspot.com/2014/04/knee-deep-in-hoopla-triumph-of-medical.html">here</a>, <a href="http://hcrenewal.blogspot.com/2014/05/some-authoritative-skepticism-about.html">here</a> and <a href="http://hcrenewal.blogspot.com/2014/05/sovaldi-revolution-in-clinical-care-or.html">here</a>), while anger continues to build about the $1000/ pill price sought by Gilead for its new antiviral drug for hepatitis C, Sovaldi (sofosbuvir), almost all public discussion still treats the drug as miraculous.  However, my reading of some key trials, and reviews by three groups of evidence-based medicine experts, suggested that the evidence supporting the drug is actually weak and unclear, and hardly suggests it is miraculous.<br /><br /><b>NICE Weighs In </b><br /><br />Now, as first noted by the indomitable Ed Silverman in his revived PharmaLot blog, the National Institute for Health and Care Excellence in the UK is also skeptical.    <br /><br /><blockquote class="tr_bq"> the U.K.’s National Institute for Health and Care Excellence, otherwise known as NICE, has <i>declined to endorse the use of Sovaldi, at least for now</i>, until Gilead supplies further evidence of the medication works in certain subgroups of patients. In announcing the move, NICE officials wrote there are '<i>substantial uncertainties' in the evidence from the drug maker</i>. In <a data-ls-seen="1" href="http://www.nice.org.uk/newsroom/pressreleases/NICEOnDraftGuidanceForSofosbuvirSovaldiDrugHepatitisC.jsp">a statement</a> issued about a draft guidance, NICE wrote that the agency 'is minded not to recommend' that the U.K.’s National Health Service cover the cost of Sovaldi,</blockquote><br />The actual <a href="http://www.nice.org.uk/newsroom/pressreleases/NICEOnDraftGuidanceForSofosbuvirSovaldiDrugHepatitisC.jsp">statement</a> said,<br /><br /><blockquote class="tr_bq"> The available evidence shows that sofosbuvir is an effective treatment for chronic hepatitis C in certain patients. However, evidence is lacking for some subgroups of patients with chronic hepatitis C, and there are also substantial uncertainties in the evidence base presented by the manufacturer. The Committee has therefore requested further information from the manufacturer before it can decide whether sofosbuvir is a cost-effective use of NHS resources.</blockquote><br />In the US, the only other news source that covered the NICE statement was <a href="http://www.businessweek.com/news/2014-06-16/u-dot-k-dot-cost-regulator-may-reject-gilead-s-sovaldi-treatment">Bloomberg</a>.<br /><br /><b>The Problems with the Evidence</b><br /><br />As we discussed in our previous posts, the problems with the evidence underlying Sovaldi include:<br />- Lack of a randomized controlled trial comparing Sovaldi to the previously most recommended treatment regimen<br />- The only trial trial to compare an antiviral regimen containing Sovaldi to one without it  (Sovaldi plus ribavirn versus peg-interferon plus ribavirin) used a lower dose of ribavirin in the comparator regimen, seemingly handicapping it; had a highly selected patient population whose results would be unlikely to generalize to many patients in the real world; had issues with randomization of patients; only assessed short-term "sustained" virologic response, but not any clinical outcomes; even so, did not show that the sofosbuvir containing regimen produced a better SVR than did the comparator; and appeared to show that the sofosbuvir containing regimen produced more severe adverse effects, and perhaps a higher death rate than the comparator regimen<br />-  So far, the other published trials included one versus placebo, and multiple trials that compared only sofosbuvir containing regimens to each other, and hence were effectively just case series of patients receiving sofosbuvir.  These case-series all had highly selected patient populations results from whom would be unlikely to generalize to real world patients.<br /><br />The severe problems with the evidence have now also been noted by<br />-  the <a href="https://www.iqwig.de/en/press/press_releases/press_releases/sofosbuvir_indication_of_added_benefit_for_specific_patients.6099.html">German Institute for Quality and Efficiency in Healthcare</a> (IQWiG)<br />-  the US Institute for Clinical and Economic Review (look <a href="http://archinte.jamanetwork.com/article.aspx?articleid=1867174">here</a>)<br />-  the US Center for Evidence-Based Policy (look <a href="http://hcrenewal.blogspot.com/2014/05/sovaldi-revolution-in-clinical-care-or.html">here</a>) <br />-  the<a href="http://www.nice.org.uk/newsroom/pressreleases/NICEOnDraftGuidanceForSofosbuvirSovaldiDrugHepatitisC.jsp"> UK National Institute for Health and Care Excellence</a> (NICE)<br /><br /><b>Summary - Why Does the Evidence, or Lack Thereof, Remain Anechoic? </b><br /><br />Yet none of these reviews have gotten any significant attention in the US media or medical and health care literature, and the idea that Sovaldi has hardly been proven to be a miracle drug, or even better than older drugs for hepatitis C has not informed the US debate and the US outrage about its price.  Examples of the most recent outrage include <a href="http://www.forbes.com/sites/theapothecary/2014/06/17/the-sovaldi-tax-gilead-cant-justify-the-price-its-asking-americans-to-pay/">this in Forbes</a>,<br /> <br /><br /><blockquote class="tr_bq">A cure for hepatitis C is within reach for 170 million people around the world — thanks to the charitable efforts of poor and sick Americans who are picking up the tab by paying <i>outrageous prices</i> for their own treatment. It’s like Robin Hood in reverse. </blockquote><br />Also, <br /><br /><blockquote class="tr_bq"> It also took a complete lack of self-awareness — and <i>unmitigated gall</i> — to price Sovaldi the way Gilead has.</blockquote><br />Furthermore, Democrats in the US House of Representatives are calling for an investigation (which their Republican "colleagues" will doubtless block), <a href="http://www.bloomberg.com/news/2014-06-19/democrats-want-gilead-to-explain-84-000-cost-for-therapy.html">according to Bloomberg</a>,<br /><br /><blockquote class="tr_bq">The company 'did not provide a compelling justification for the high price they are charging for most patients,' Waxman and DeGette wrote  </blockquote><br /><br />If the price is outrageous for a miracle drug, it would be even more outrageous for a drug that has not been proven to be better than previously available treatments.<br /><br />The fact that skepticism about all the hype for Sovaldi has hardly touched the public discussion in the US is a prime example that the <a href="http://hcrenewal.blogspot.com/search/label/anechoic%20effect">anechoic effect</a> lives.  (The only skepticism from an expert could [probably only] be <a href="http://blogs.wsj.com/pharmalot/2014/06/12/will-oregon-restrict-coverage-for-a-pricey-gilead-pill-for-hepatitis-c/">found again in PharmaLot</a>, and came from one of the authors of the Center for Evidence Based Policy report [see above]). <br /><br /><blockquote class="tr_bq">'For most patients with hepatitis C, they have time to make those decisions,' Valerie King, one of the physicians at the center who worked on the Sovaldi review, tells OregonLive. 'I’m certainly not saying that this is a bad drug. I’m just saying that we don’t know that it is a good drug.' [<strong>UPDATE</strong>: King later called us to say that 'the research hasn't been extensive enough or transparent enough to tell us it is a good drug or bad drug, or has limited application.' This was based solely on assessing clinical research, not cost issue.]</blockquote><br />We have endlessly discussed the anechoic effect, that information and ideas that challenge the powers that be in health care, and particularly that challenge the ability of health care leaders and well-connected insiders to personally profit, often to a tremendous extent - the CEO of Gilead, John Martin, was <a href="http://www.fiercepharma.com/special-reports/biopharma-ceos-2013-john-martin-gilead">listed by FiercePharma </a>as the eighth highest paid biotech CEO in 2013, with total compensation of $15.45 million, before sales of Sovaldi really increased -  are considered recent unpleasantness that are just not to be discussed.  However, without open honest discussion of truths, however inconvenient or unpleasant, and the ideas that they suggest, health care will continue to degenerate into a plutocratically run, often corrupt swamp with ever increasing costs, and ever worsening access and quality, causing increasing suffering of patients and worsening of public health. <br /><br />A good place to start true health care reform might be honest discussion of the evidence about sofosbuvir.    <br /><br />

Fourth Time is the (Anti)Charm? - UK NICE Highlights "Uncertainties in the Evidence Base" About Sovaldi

As we have discussed, ( here , here and here ), while anger continues to build about the $1000/ pill price sought by Gilead for its new ant...

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Yet another EHR "glitch" - insulin decreased per protocol, oops, I meant heparin

Yet another EHR "glitch" (<a href="http://hcrenewal.blogspot.com/search/label/glitch">http://hcrenewal.blogspot.com/search/label/glitch</a>):<br /><br /><blockquote class="tr_bq"><a href="http://www.labornotes.org/2013/07/electronic-medical-records-friend-or-foe">http://www.labornotes.org/2013/07/electronic-medical-records-friend-or-foe</a><br /><br />An emergency room nurse described her frustrating experience trying to accurately document a dose of <b>heparin</b>, a blood thinner for patients with chest pain. “The doctor stated he wanted 4000 units bolus [all at once] and then a 1000 unit per hour infusion,” she wrote. “The order in Paragon stated 5000 units of <u><b>heparin</b></u>. I was given the option to decrease the dose, which I manually changed.<br /><br />“However, I had to pick a reason why I decreased the dose. There was a drop-down box, and the only option was <b>‘<u>Insulin</u> decreased per protocol.’”</b></blockquote><br />In the unregulated world of health IT, there's no pre-market evaluation or QC process to find little "glitches" like this that make it onto floors of live patients.  <br /><blockquote class="tr_bq"><br />The drug was heparin, not insulin. What was she supposed to do? “I contacted the pharmacy and spoke to three different people, and the final response was,<b> ‘snapshot the screen and give it to your manager.’ </b>This was a nine-minute conversation.”</blockquote><br />That's really not very helpful to the patient needing heparin urgently.<br /><blockquote class="tr_bq"><br />The manager finally advised her to <i>select the given option for insulin</i>, <b>then separately document that heparin, not insulin, was given.</b></blockquote><br />No future mistakes are possible due to this little glitch "workaround", right?<br /><br /><blockquote class="tr_bq">That’s <b>nine extra minutes away from the bedside</b>, just to document one medication—<b>and to document it inaccurately, to boot.</b> Multiply that times the many different tasks and patients a nurse juggles every day, and you start to see the problem. </blockquote><br />I point out that this order would have taken exactly ten seconds with a pen and paper.<br /><br />I hear stories like this - odd "glitches" and "gotchas" - from medical colleagues at least weekly, and sometimes daily. <br /><br />-- SS

Yet another EHR "glitch" - insulin decreased per protocol, oops, I meant heparin

Yet another EHR "glitch" ( http://hcrenewal.blogspot.com/search/label/glitch ): http://www.labornotes.org/2013/07/electronic-medic...

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Citizen's Council for Health Freedom: "The Truth about Electronic Health Records"

The Citizen's Council for Health Freedom (CCHF) is an independent 501(c)3 non-profit organization with a mission "to protect health care choices and patient privacy" (<a href="http://www.cchfreedom.org/about.php">www.cchfreedom.org/about.php</a>).<br /><br />Its president, Twila Brase, wrote this piece about Electronic Health Records in the CCHF newsletter of June 18, 2014, observing some "inconvenient truths" and highlighting one of the most asinine statements I've ever seen about computers made by (of course) a venture capital official who happened to play a significant role in formulating the Affordable Care Act a.k.a. "Obamacare":<br /><br /><blockquote class="tr_bq"><a href="http://healthenews.cchfreedom.org/newsletter.php/148">http://healthenews.cchfreedom.org/newsletter.php/148</a><br /><br />The Truth about Electronic Health Records<br /><br />Propaganda only works for so long. Pretty soon truth catches up to it. This is exactly what's happening with electronic health records.<br /><br />If you're a doctor you know how bad the government-mandated electronic health record (EHR) is. <b>But if you're a patient, you may not realize that EHRs are endangering your life</b> and jeopardizing medical excellence.<br /><br />The EHR is nothing like what Big Government, Big Data, and Big Health said it would be. They promised convenience, coordinated care, fewer medical errors, more efficient medical practice, and portable medical records. <b>They never meant it and it hasn't happened. These data systems were created for billing, data collection and government control of doctors, not patient care.</b></blockquote><br />From all I have seen over the years, I must agree with the last two sentences above. The pioneers who explored this technology back to the 1950's warned against the nightmare that exists today, but I don't think they believed we would ever get to where we are in 2014.<br /><br />Further, while Politico did not explicitly mention risk to life and limb caused by these systems, Twila Brase did.  <b>"EHRs are endangering your life" </b>is the elephant in the living room that the industry and its well-captured (and perhaps lubricated?) "regulators"<b> simply will not address in a serious manner.</b><br /><br />It has been my belief this reflects self-serving willful blindness, gross negligence and/or pecuniary motives, but I also believe that a fundamental malevolence on the part of people and organizations who know better increasingly needs to be considered as a contributor to the recklessness in the health IT sector.  These are experimental technologies of admittedly (by the regulators) definite but unknown risk, due to impediments to that knowledge.  Demanding their rapid diffusion under threat of penalty while knowing about the risks, and the uncertainty about magnitude, certainly does not reflect a benevolent disposition.<b> </b><br /><br />For more on the above points see my April 9, 2014 post <b>"FDA on health IT risk: reckless, or another GM-like political coverup?"</b> (<a href="http://hcrenewal.blogspot.com/2014/04/fda-on-health-it-risk-reckless-or.html">http://hcrenewal.blogspot.com/2014/04/fda-on-health-it-risk-reckless-or.html</a>) and its 11 points and hyperlinks.  This post and its linked brethren represents an indictment of sorts against the health IT hyperenthusiast culture and the unprecedented regulatory accommodation enjoyed by this sector.<b><br /></b><br /><br /><blockquote class="tr_bq">Arthur Allen at POLITICO Pro eHealth (<a href="http://www.politico.com/story/2014/06/health-care-electronic-records-107881.html">http://www.politico.com/story/2014/06/health-care-electronic-records-107881.html</a>) says government-imposed EHRs are:<br /><ul><li>Driving doctors to distraction </li></ul><ul><li>Igniting nurse protests </li></ul><ul><li>Crushing hospitals under debt</li></ul>"In short," he writes, "<b>the current generation of electronic health records has about as many fans in medicine as Barack Obama at a tea party convention.</b>"</blockquote><br />I guess that's  Politco's way of saying "not very many at all."<br /><br /><blockquote class="tr_bq">Doctors forced to use these EHRs say: </blockquote><blockquote class="tr_bq"><ul><li>"They slow us down and distract us from taking care of patients."</li></ul><ul><li>"We're basically key-punch operators, transcriptionists having to input the data ourselves. It has essentially tripled the time to complete a medical record."</li></ul><ul><li>"That's why I'm retiring."</li></ul><ul><li>"Before I took notes, wrote what I wanted to say. Now I write and I click. If you just click, the person who reads the record gets no idea of what the patient was going through, your thought process."</li></ul><ul><li>"Anything that in a normal world would take at most two clicks, here it takes four or five."</li></ul></blockquote><br />In fact, doctors and nurses forced to use this technology say far worse (e.g., see my posts on candid clinician feedback at <a href="http://hcrenewal.blogspot.com/2010/01/honest-physician-survey-on-ehrs.html">http://hcrenewal.blogspot.com/2010/01/honest-physician-survey-on-ehrs.html</a> , <a href="http://hcrenewal.blogspot.com/2013/11/another-survey-on-ehrs-affinity-medical.html">http://hcrenewal.blogspot.com/2013/11/another-survey-on-ehrs-affinity-medical.html</a> , <a href="http://hcrenewal.blogspot.com/2014/02/ehrs-real-story-sobering-assessment.html">http://hcrenewal.blogspot.com/2014/02/ehrs-real-story-sobering-assessment.html</a> , and <a href="http://hcrenewal.blogspot.com/2013/07/candid-nurse-opinions-on-ehrs-at.html">http://hcrenewal.blogspot.com/2013/07/candid-nurse-opinions-on-ehrs-at.html</a>).<br /><blockquote class="tr_bq"><br />Proponents falsely promised privacy. The real goal of Big Government, Big Data and Big Health was NO privacy. Data is valued <b>as a tool of control and a means to profit. </b>And today, 2.2 million entities today have legal access to your medical records without your consent because of the so-called HIPAA "privacy rule" and the 2009 HITECH Act. In addition, untold numbers of computer thieves, identity thieves and hackers have illegal access.</blockquote><br />Not only that, but our data is sold in, in essence, data broker "back alleys" (e.g., see <b>"Health IT Vendors Trafficking in Patient Data?"</b> at <a href="http://hcrenewal.blogspot.com/2009/10/health-it-vendors-trafficking-in.html">http://hcrenewal.blogspot.com/2009/10/health-it-vendors-trafficking-in.html</a> ).<br /><br />Worse, the phenomenon of mismanagement of the "sales" is international in scope (e.g., see "<b>NHS slammed for MAJOR data blunders as scale of patient info sell-off is revealed"</b> at <a href="http://www.theregister.co.uk/2014/06/17/nhs_blamed_for_major_data_blunders_with_sale_of_patient_info_to_private_outfits/">http://www.theregister.co.uk/2014/06/17/nhs_blamed_for_major_data_blunders_with_sale_of_patient_info_to_private_outfits/</a>).<br /><br /><blockquote class="tr_bq">Every doctor and hospital must use EHRs by January 1, 2015 or face financial penalties. This was part of Obama's 2009 Recovery Act, and the foundation of Obamacare. The sheer cost of the mandate has forced many doctors to shut down private clinics and become health system employees, susceptible to being told by outsiders how to practice medicine.</blockquote><br />Regarding "crushing hospitals under debt", the EHR "mania" has led medical centers such as the University of Arizona Health System, about to undergo the stresses of mass immigration of South American children no less, to sink $30 million into the red in large part in <i>trying to fix EHR bugs</i> (see my June 2, 2014 post <b>"In Fixing Those 9,553 EHR "Issues", Southern Arizona’s Largest Health Network is $28.5 Million In The Red"</b> at <a href="http://hcrenewal.blogspot.com/2014/06/in-fixing-those-9553-ehr-issues.html">http://hcrenewal.blogspot.com/2014/06/in-fixing-those-9553-ehr-issues.html</a>).<br /><br />As another example of madness, the mania -- plus bad health IT -- led a  medical system based in Rhode Island to spend $100 million to replace Siemens health IT that caused <i><b>thousands of potentially harmful prescription errors </b></i>(<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>) with Epic, and in doing so, eroding the cash flow and bond rating of the state's largest health system (<a href="http://www.modernhealthcare.com/article/20140606/NEWS/306069948">http://www.modernhealthcare.com/article/20140606/NEWS/306069948</a>).<br /><br />Next Ms. Brase reveals a stunning fact about one of the architects of that 2009 Economic Recovery Act:<br /><br /><blockquote class="tr_bq">The arrogance of some EHR supporters is unpardonable. <b>Bob Kocher helped write Obamacare</b>, was trained as a doctor and <b>is employed as a Venrock venture capitalist in health IT</b>, but his credentials are those of a bureaucrat and profiteer (<a href="http://www.venrock.com/teammember/bob-kocher/">http://www.venrock.com/teammember/bob-kocher/</a>). </blockquote><br />Unpardonable arrogance indeed.  <br /><br />In other words, a speculator and profiteer in the health IT sector helped in the formulation of laws that pushed the technology onto physicians, nurses and hospitals with CMS penalties for non-adopters of "certified" systems.   It would be interesting to know just how far such a potential conflict of interest went in the crafting of the ACA and HITECH itself.<br /><br />Beyond that issue, this venture cap issues the following perverse statement, as cited by Politico and CCHF:<br /><br /><blockquote class="tr_bq">Per Politico pro eHealth, he says, <b>"The reason so many [computers] are inefficient is that doctors are inefficient. If they redesigned their workflows, computers would work better."</b></blockquote><br />Readers of this blog are familiar with perversity in health IT, but that statement is literally stunning.  It would make for a funny Saturday Night Live or Rowan and Martin's Laugh-In (to us 60's folks) skit if the topic were not so serious.<br /><br /><b>If they [doctors] redesigned their workflows, computers would work better?</b><br /><br />Where, exactly, is the evidence for that assertion? <b>  Exactly how should doctors "redesign" their workflows, </b>considering the poorly bounded, conflicted, highly variable, uncertain, and high-tempo nature of the field? [1]<br /><br />How can one even have a well-defined and unvarying "workflow" in such a domain that would "make computers work better?" <br /><br />Answer:  it's impossible.<br /><br />(Perhaps<span data-ft="{"tn":"K"}" data-reactid=".u.1:3:1:$comment10203787041178410_10203787453188710:0.0.$right.0.$left.0.0.1:$comment-body"><span class="UFICommentBody" data-reactid=".u.1:3:1:$comment10203787041178410_10203787453188710:0.0.$right.0.$left.0.0.1:$comment-body.0"><span data-reactid=".u.1:3:1:$comment10203787041178410_10203787453188710:0.0.$right.0.$left.0.0.1:$comment-body.0.$text0:0:$0:0"> patients should adjust the unpredictable nature of their illnesses and symptoms to make the computers work better, too?)</span></span></span><br /><br />What Dr. Kocher seems to turn on its head is the recognition that:<b> </b><br /><br /><b>"The reason so many [computers in healthcare] are inefficient is that they are grossly misdesigned for a domain like medicine.  They are unfit for purpose.  If they [the IT companies] redesigned their entire process in HIT production (from conception, design, implementation, marketing, and support) to be consistent with the needs of the field of clinical medicine and of clinicians, computers would work better." </b>- Silverstein<br /><br />The reality is that if the healthcare IT industry actually <i>fired its ossified business-IT-oriented leaders</i> (since business computing and clinical computing are two highly different fields, e.g., see <a href="http://hcrenewal.blogspot.com/2008/06/business-v-clinical-computing.html">http://hcrenewal.blogspot.com/2008/06/business-v-clinical-computing.html</a>), or relegated them to managing accounting systems, and embraced the teaching of 50+ years of Medical Informatics in building good health IT (see definitions of good and bad health IT at <a href="http://cci.drexel.edu/faculty/ssilverstein/cases/">http://cci.drexel.edu/faculty/ssilverstein/cases/</a>), then we might actually get significant value and better safety from the technology.<br /><br />Mr. Kocher, that's an idea to consider.  <br /><br />As I wrote at that 2008 post on business v. clinical computing:<br /><br /><blockquote class="tr_bq"><span style="font-family: inherit;"><span style="font-size: small;">... The prevalent belief in MIS [management information systems a.k.a. business computing] seems to be that <b>medicine is another area of transactional business subject to conventional modeling by generalists</b>, to be followed by "business process re-engineering" and traditional information systems development processes and methodologies.<br /><br />However, the belief that one could employ conventional business-oriented "analysis" in the clinical world always seemed to me to be oversimplistic, overoptimistic, and in fact not infrequently harmful to medical practice as a result of the simplistic assumptions. It is a belief that does not perform well even in the conventional business world where significant cost overruns, project difficulties, and project failures are commonplace, let alone in the unforgiving environments of medicine. </span></span></blockquote><br />My fear is that many in business computing may lack the mental flexibility and capability to understand issues like that, that conflict directly with their linear-flow, business-oriented worldview.<br /><br /><blockquote class="tr_bq">In other words, Mr. Kocher <b>wants doctors to practice according to the computer systems he helped impose, not the doctor's patients</b>. We must never let his agenda for medical practice prevail. State legislatures must act now to restore patient privacy rights and use Tenth Amendment powers to undo the EHR mandate.</blockquote><br />Exactly.  It's certainly the simple way to big profits, and injured and dead patients be damned.  Building good health IT is far more resource intensive.<br /><blockquote class="tr_bq"><br /><b>Working to sustain an ethical patient-doctor relationship,</b><br /><br />Twila Brase<br />President and Co-founder</blockquote><br />Thank heaven someone is working towards those ends.<br /><br />Notes: <br /><br /><span style="font-size: x-small;">[1]  Per Medical Informatics researchers Nemeth and Cook's "<b>Hiding in plain sight: What Koppel et al. tell us about healthcare IT"</b>, Journal of Biomedical Informatics 38 (2005) 262–263 available at <a href="http://www.ctlab.org/documents/Hiding%20in%20plain%20sight.pdf">http://www.ctlab.org/documents/Hiding%20in%20plain%20sight.pdf</a>)  </span><b><br /></b>

Citizen's Council for Health Freedom: "The Truth about Electronic Health Records"

The Citizen's Council for Health Freedom (CCHF) is an independent 501(c)3 non-profit organization with a mission "to protect health...

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