Saturday, December 15, 2018

Johnson and Johnson's Latest Ethical Misadventures: Settled Kickback Allegations, Reportedly Concealed Knowledge of Adverse Effects of a "Sacred Cow" Product


Giant pharmaceutical/ biotechnology/ device company Johnson & Johnson has its famous "credo" which starts with

We believe our first responsibility is to the doctors, nurses and patients, to mothers and fathers and all others who use our products and services.  In meeting their needs everything we do must be of high quality..
Nonetheless, the company has a long history of ethical misadventures (look here, and see appendix below).  Now late in 2018,  we note two more Johnson & Johnson misadventures. In chronological order,


$360 Million Settlement of Allegations of Kickbacks to Medicare/ Medicaid Patients to Support Use of Extremely Expensive Drug

The story, per the New York Times, was that Actelion, a drug maker purchased by Johnson & Johnson in 2017, in 2014-2015 had

raised the price of its main drug, Tracleer, by nearly 30 times the rate of inflation. Tracleer, which is prescribed to treat pulmonary arterial hypertension, sells in pharmacies for an average cash price of about $14,500 for 60 tablets, according to the website GoodRx.

But to facilitate charging such high prices, pharmaceutical companies

often help patients pay their out-of-pocket costs through coupons or other financial assistance. These payments are not just about benevolence — they also help blunt the outrage over rising drug prices by limiting how much patients have to pay. Insurers then cover most of the cost.

But federal anti-kickback laws prohibit companies from giving such financial assistance to Medicare and Medicaid beneficiaries because doing so is considered an inducement to buy their drugs. For years, drug makers have skirted those laws by instead donating to nonprofit charities, which then give the money to Medicare patients. Such arrangements are legal as long as there is no direct coordination between the pharmaceutical company and the nonprofit organization.

However,

Federal prosecutors said Actelion violated the law by collecting detailed data in 2014 and 2015 about the patients receiving help from a nonprofit, the Caring Voice Coalition, and using the data to budget for future donations. As a result, Actelion ensured that the money it donated would be used only to assist patients who used its drugs, and not competing companies’ treatments for the pulmonary condition.

Prosecutors said Actelion kept up the practice even after the charity itself warned the company against it.

Actelion also steered Medicare patients to the Caring Voice Coalition who would have otherwise qualified financially for the company’s free drug program. By directing them to the nonprofit, the company avoided having to provide the drug to eligible patients and left Medicare to cover the cost instead, prosecutors said.

So,

Actelion Pharmaceuticals has agreed to a $360 million settlement stemming from an investigation into whether the company illegally funneled kickbacks through a patient-assistance charity, federal prosecutors said Thursday.

But keep in mind that Actelion is now a Johnson & Johnson subsidiary, and by buying it, Johnson & Johnson bought its financial, and ethical and legal liabilities.. So ultimately it will be Johnson & Johnson which pays the settlement.

Johnson & Johnson Alleged to Have Concealed Knowledge that its Baby Powder Contains Asbestos



The first reporting on this story was a lengthy investigative report from Reuters published December 14, 2018, based on newly released documents produced during a variety of lawsuits.  The report stated

that from at least 1971 to the early 2000s, the company’s raw talc and finished powders sometimes tested positive for small amounts of asbestos, and that company executives, mine managers, scientists, doctors and lawyers fretted over the problem and how to address it while failing to disclose it to regulators or the public.

The documents also depict successful efforts to influence U.S. regulators’ plans to limit asbestos in cosmetic talc products and scientific research on the health effects of talc.

Note that since the 1970s, exposure to asbestos has been recognized as an important health hazard.  In 1972, the US agency OSHA limited occupational exposure to asbestos.  Also,

The World Health Organization and other authorities recognize no safe level of exposure to asbestos.

Johnson & Johnson has been sued by

11,700 plaintiffs now claiming that the company’s talc caused their cancers — including thousands of women with ovarian cancer.


After three major jury verdicts that found Johnson & Johnson liable for cancers caused by asbestos in its baby power,

J&J has said it will appeal the recent verdicts against it. It has maintained in public statements that its talc is safe, as shown for years by the best tests available, and that the information it has been required to divulge in recent litigation shows the care the company takes to ensure its products are asbestos-free. It has blamed its losses on juror confusion, 'junk' science, unfair court rules and overzealous lawyers looking for a fresh pool of asbestos plaintiffs

However, there now seems to be substantial evidence that the company's public posturing is a smokescreen. While in the past Johnson & Johnson internal documents about its management decision making related to talc and asbestos were used in litigation,


Many were shielded from public view by court orders that allowed J&J to turn over thousands of documents it designated as confidential. [But] Much of their contents is reported here for the first time.

These showed,

The earliest mentions of tainted J&J talc that Reuters found come from 1957 and 1958 reports by a consulting lab. They describe contaminants in talc from J&J’s Italian supplier as fibrous and 'acicular,' or needle-like, tremolite. That’s one of the six minerals that in their naturally occurring fibrous form are classified as asbestos.

At various times from then into the early 2000s, reports by scientists at J&J, outside labs and J&J’s supplier yielded similar findings. The reports identify contaminants in talc and finished powder products as asbestos or describe them in terms typically applied to asbestos, such as 'fiberform' and 'rods.'

In 1976, as the U.S. Food and Drug Administration (FDA) was weighing limits on asbestos in cosmetic talc products, J&J assured the regulator that no asbestos was 'detected in any sample' of talc produced between December 1972 and October 1973. It didn’t tell the agency that at least three tests by three different labs from 1972 to 1975 had found asbestos in its talc – in one case at levels reported as 'rather high.'

The article shows that the company repeatedly found evidence that asbestos was present in the raw talc that went into its baby powder, first in 1957, and could be found at times in samples of the finished product since 1971.  Since the 1970s, Johnson & Johnson managers realized that the asbestos was a problem.  For example,

J&J research director DeWitt Petterson visited the company’s Vermont mining operation. 'Occasionally, sub-trace quantities of tremolite or actinolite are identifiable,' he wrote in an April 1973 report on the visit. 'And these might be classified as asbestos fiber.'

J&J should 'protect our powder franchise' by eliminating as many tiny fibers that can be inhaled in airborne talc dust as possible, Petterson wrote. He warned, however, that 'no final product will ever be made which will be totally free from respirable particles.' Introducing a cornstarch version of Baby Powder, he noted, 'is obviously another answer.'
Slightly later on December 14, 2018, the New York Times published its own story on asbestos in Johnson & Johnson talcum powder.  It corroborated the Reuters report while adding informative detail.  It started with:

An executive at Johnson & Johnson said the main ingredient in its best-selling baby powder could potentially be contaminated by asbestos, the dangerous mineral that can cause cancer. He recommended to senior staff in 1971 that the company 'upgrade' its quality control of talc.

Two years later, another executive raised a red flag, saying the company should no longer assume that its talc mines were asbestos-free. The powder, he said, sometimes contained materials that “might be classified as asbestos fiber.”

The carcinogen, which often appears underground near talc, has been a concern inside the company for decades. In hundreds of pages of memos, executives worried about a potential government ban of talc, the safety of the product and a public backlash over Johnson’s Baby Powder, a brand built on a reputation for trustworthiness and health.

Executives proposed new testing procedures or replacing talc outright, while trying to discredit research suggesting that the powder could be contaminated with asbestos, according to corporate documents unearthed by litigation, government records obtained by The New York Times through the Freedom of Information Act, and interviews with scientists and lawyers.

In one instance, Johnson & Johnson demanded that the government block unfavorable findings from being made public. An executive ultimately won assurances from an official at the Food and Drug Administration that the findings would be issued only 'over my dead body,' a memo summarizing the meeting said.

Thus, despite these warnings of asbestos in talcum powder, Johnson & Johnson continued to sell it.  There is certainly now strong reason to suspect that for decades Johnson & Johnson management has been denying its own fears about asbestos contamination of its baby powder, and doing its best to hide evidence of its hazards, thus benefiting the corporate bottom line, but allowing continued exposure of large number of people to a potentially hazardous, even fatal product.



The Business World Tries to Shrug It Off

Responding to the Reuters and New York Times story, many business pundits stated their confidence in Johnson & Johnson as an investment.  For example, Charley Grant wrote in the Wall Street Journal,

But while investors should be wary, they needn’t panic. J&J’s strong finances and diverse revenue base are good coping mechanisms.

Wells Fargo, per CNBC, opined

the selling based purely on the outcomes of any talc litigation is likely overstated.

But does Johnson & Johnson's management really act on its belief that its "first responsibility is to "doctors, nurses, and patients, to mothers and fathers?" On CNBC,  Bill George wrote,

It is not plausible that these leaders knew nearly five decades ago that their iconic baby powder caused cancer and continued to market the product. This is a company whose leaders consistently try to do the right thing, admit their mistakes, and continue to develop life-saving products that restore the health of millions of people around the world.

While the plaintiffs' attorneys may continue to pursue their cases, I feel confident that J&J will be shown to put the interests of its customers first, and maintain its reputation for the highest integrity.

I wonder if Mr George's confidence was boosted by his previous work as a paid speaker for Johnson & Johnson, and former chairman and CEO of Medtronic, a company which has had its own share of ethical misadventures (look here)?  In any case, some recent history calls into question Johnson & Johnson's "reputation for the highest integrity."

Johnson & Johnson's Long History of Ethical Misadventures

So, recent reports suggested that Johnson & Johnson willfully acquired a company that appears to have provided kickbacks to patients in apparent violation of US law in an effort to support high drug prices.  Furthermore, Johnson& Johnson appears to have concealed considerable evidence that one of its primary products might be dangerous in order to support the sales of a "'sacred cow,' as one internal email put it (per the Reuters report).

These are but  the latest in a long string of misadventures by the company, as we have been documenting over years.  (Our collected posts on Johnson & Johnson are here.  An updated version of their legal record since 2010 is at the end of this post.)

Perusing the list suggests that this giant company (with about $70 billion in yearly revenue) is a poster child for bad behavior by health care organizations.  It has faced a multitude of allegations leading to settlements, and sometimes findings of guilt.  The charges included many instances of deceptive and unethical marketing, some that promoted drugs or devices for use in situations in which they may have had harms outweighing their benefit, some that involved concealing knowledge of their risks, and some of selling adulterated drugs or defective products. 

So the new allegations of deceptive marketing meant to conceal a hazardous product are just the latest in the series.

What is striking is that the company and its management have not faced more consequences for this sorry track record.

Although the company has paid multiple fines and made numerous monetary settlements over the years, none have been big enough to affect its immense revenues.  Furthermore, ultimately the monies used to pay them came from all Johnson & Johnson employees in the form of smaller paychecks; customers, patients and the public at large in the form of higher prices; and only to some extent by investors in the form of slightly lower profits.  Meanwhile, it appears that the company's top managers made an awful lot of money, possibly in part as rewards for the revenues produced by the misadeventures.

Former Johnson & Johnson CEO William Weldon, upon his retirement in 2014, was to receive a retirement package estimated to be worth from $143 to $197 million (look here).  In 2010, his total compensation was $29 million (look here).   According to the 2012 Johnson and Johnson proxy statement, his 2011 total compensation was greater than $26 million. As far as I can tell, Mr Weldon never suffered any negative consequences for his company's sorry record, and retired a very rich man. (look here).

Current CEO Alex Gorsky received  $25 million total compensation in 2014 (look here).  More recently, the New York Times reported his 2017 total pay was $22.8 million, making him the seventh highest paid health care executive in that year, by their accounting. 

While management made so much money, very rarely has anyone at the company who was involved in authorizing, directing, or implementing any of the bad behavior had to suffer any negative consequences, therefore appearing to enjoy impunity.

So what was to deter management from embarking on further misadventures, as long as the results might be enlarging management's personal wealth?  

This is all in line with what we have been discussing for years.  In general, we have seen many legal settlements made by health care organizations of alllegations like fraud, bribery, and kickbacks.  Despite the unsavory nature of the behaviors revealed by most settlements, which often appeared to risk patient harms, the companies involved usually have had to pay fines that were tiny relative to their multi-billion dollar revenues.  They companies only seldom have had to admit responsibility, and almost never did a settlement cause company managers and leaders to  suffer any negative consequences for enabling, authorizing, directing or implementing the bad behavior.

This adds to the evidence suggesting that US health care is rigged to benefit top insiders and their cronies, and as such, is part of a larger rigged system.  We have previously discussed how market fundamentalism (or neoliberalism) led to deregulation, which enabled deception, fraud, bribery, and intimidation to become standard business practices, and allowed increasing concentration of power by large corporations. Managerialism allowed the top leaders of these corporations and their insider cronies to amass increasing power and money. Everyone else, other employees, stockholders of public corporations, customers, vendors and suppliers, and the public at large lost out.   In health care, these changes led to an increasingly costly system which produced increasingly bad results for patients and the public. 
We have called for true health care reform to derig the system. Unfortunately, despite our hopes, perceptions of a rigged system may not always inspire honest reform. Instead, they can enable the rise of demagogues and wouldbe dictators who promise only they can solve the problem.  Donald Trump cried out that only he could fix our problems and drain our swamps.  However, at least in terms of policing white-collar crime, particularly in health care, he seems to be letting the swamp waters rise.  And now he seems to have had his own record of impunity (look here).  

While we thus have bigger problems to solve than the impunity of health care leaders, let us remember the need for wholesale, real health care reform that would make health care leaders accountable for what their organizations do, particularly when these organizations misbehave.


Appendix - Johnson and Johnson Legal Record since 2010

 2010
- Convictions in two different states for misleading marketing of Risperdal
- A guilty plea for misbranding Topamax

2011
- Guilty pleas to bribery in Europe  by Johnson and Johnson's DePuy subsidiary
- A guilty plea for marketing Risperdal for unapproved uses  (see this link for all of the above)
- A guilty plea to misbranding Natrecor by J+J subsidiary Scios (see post here)

2012 
  - Testimony in a trial of allegations of unethical marketing of the drug Risperdal (risperidone) by the Janssen subsidiary revealed a systemic, deceptive stealth marketing campaign that fostered suppression of research whose results were unfavorable to the company, ghostwriting, the use of key opinion leaders as marketers in the guise of academics and professionals, and intimidation of whistleblowers. After these revelations, the company abruptly settled the case (see post here).
-  Johnson & Johnson was fined $1.1 billion by a judge in Arkansas for deceiving patients and physicians again about Risperdal (look here).
-  Johnson & Johnson announced it would pay $181 million to resolve claims of deceptive advertising again about Risperdal (see this post).

2013
-  Johnson & Johnson settled case by shareholders alleging that management made misleading statements and withheld material information about manufacturing problems (see this post)
-  Johnson & Johnson Janssen subsidiary pleaded guilty to a charge of misbranding Risperdal, and settled for a total of $2.2 billion allegations that it promoted the drug for elderly demented patients and adolescents without an indication, and despite evidence of its harms (see this post).
 -  Johnson & Johnson DePuy subsidiary agreed to settle with multiple plaintiffs for $2.5 billion allegations that it sold defective mental-on-metal artificial hip, and hid evidence of its harms .
- Johnson & Johnsonn Janssen subsidiary was found by two juries to have concealed harms of its drug Topamax (see this post for this and above case).
- Johnson & Johnson Ethicon subsidiary's Advanced Surgical Products and two of its executives agreed to settle charges by US FDA that is sold mislabeled products used to sterilize equipment such as endoscopes (see this post).
- Johnson & Johnson fined by European Commission for anticompetitive practices, that is, collusion with Novartis to delay marketing generic version of Fentanyl (see this post).

2014 
- Johnson & Johnson DePuy subsidiary settled Oregan state charges that it marketed the ASR XL metal-on-metal hip joint prosthesis without disclosing its high failure rate (see this post).

2015
-  Johnson & Johnson found by jury to have concealed harms of Risperdal.
-  Johnson & Johnson Ethicon subsidiary found by jury to have concealed harms of its vaginal mesh device.
-  Johnson & Johnson McNeil subsidiary pleaded guilty to marketing adulterated Tylenol. (see this post for three items above.)

2016
- Johnson & Johnson subsidiary Aclarent settled allegations that it sold its Stratus device for unapproved uses.  Two former executives of that subsidiary also were found guilty of distributing misbranded and adulterated devices (see this post

Sunday, December 09, 2018

Mission-Hostile Hospital Management: Quieter, but Still Pernicious After All These Years

Hospitals exist to take care of sick people, with the goal of making them better.  Hospitals employ and work with health care professionals, again who are sworn to put taking care of patients ahead of all other concerns.

However, since we founded Health Care Renewal, we have noted striking examples of hospital leaders threatening their hospitals' fundamental mission and/or health care professionals' core values, which we dubbed mission-hostile management.  We also saw mission-hostile management affecting the broader health care industry, particularly pharmaceutical and device companies.  Most recently, the most striking examples of mission-hostile health care related management appearing in the press have come from the Trump administration.

While journalists attention is focused on Trump et al, and coverage of other topics fades, bad management of hospitals has received less attention.  However, the problem has not vanished, nor become less important.  So here is my round-up of cases of mission-hostile hospital management from the recent past.


Hospitals Offering Better Care to Wealthier Patients

Hospitlas generally proclaim that they endeavor to care for all patients, regardless of their personal characteristics, or worthiness for care  Yet we have seen non-profit hospitals offering better care to those who can pay more.  


Preferential Treatment for Wealthy Foreign Nationals Seeking Organ Transplants 

A story from November, 2017 in ProPublica documented how some US hospitals seem to give preferential treatment to wealthy people coming from overseas specifically for organ transplants.  

Little known to the public, or to sick patients and their families, organs donated domestically are sometimes given to patients flying in from other countries, who often pay a premium. Some hospitals even seek out foreign patients in need of a transplant. A Saudi Arabian company, Ansaq Medical Co., whose stated aim is to 'facilitate the procedures and mechanisms of ‘medical tourism,’' said it signed an agreement with Ochsner Medical Center in New Orleans in 2015.

In particular,

Foreign patients generally are not entitled to the same discounts as those with private insurance or Medicare, the federal insurance program for seniors and the disabled. In 2015, for instance, the average sticker price for a liver transplant at NewYork-Presbyterian was $371,203, but the average payment for patients in Medicare was less than one-third of that, $112,469, according to data from the Centers for Medicare and Medicaid Services, which runs Medicare. In the case of Saudi Arabia, its embassy in Washington often guarantees payment for patients.


This is actually not a new pheonomenon. 

There have been scandals in the past about foreigners and organ transplants. In 2005, a liver transplant center in Los Angeles shut its doors after disclosing that its team had taken a liver that should have gone to a patient at another hospital and instead had implanted it in a Saudi national. The hospital said its staff members falsified documents to cover up the incident.

The University of California, Los Angeles, came under fire in 2008 for performing liver transplants on a powerful Japanese gang boss and other men linked to Japanese gangs, and then receiving donations afterward from at least two of the men. The hospital and its surgeon said they do not make moral judgments about patients.

We discussed the case of the Yakuza transplants most recently here.

Note that while foreign nationals seem to end up on the same waiting lists that US citizens may be on, the operation of these medical tourism programs implies that they are virtually guaranteed an organ, while US citizens are not. The preferential treatment of the medical tourists does not seem to stem from compassion, but rather from the larger fees they are willing to pay. 


Discouraging Organ Transplants for Patients Unable to Afford Expensive Anti-Rejection Drugs and Other After Care

A story from December, 2018 from Kaiser Health News published in the New York Times, suggested that most organ transplant centers will not take care of patients until they can show their ability to pay, usually to pay the "sticker prices." One case made public in November, 2018, brought this issue to light

Hedda Martin, 60, of Grand Rapids, was informed that she was not a candidate for a heart transplant because of her finances. It recommended 'a fund-raising effort of $10,000.'

The Times reporters found that this was not unusual.

Two years ago, Mr. Mannion, of Oxford, Conn., learned he needed a double-lung transplant after contracting idiopathic pulmonary fibrosis, a progressive, fatal disease. From the start, hospital officials told him to set aside $30,000 in a separate bank account to cover the costs.

Mr. Mannion, 59, who received his new lungs in May 2017, reflected: 'Here you are, you need a heart — that’s a tough road for any person,' he said. 'And then for that person to have to be a fund-raiser?'

Ms. Martin’s case incited outrage over a transplant system that links access to a lifesaving treatment to finances. But requiring proof of payment for organ transplants and postoperative care is common, transplant experts say.

'It happens every day,' said Arthur Caplan, a bioethicist at the New York University Langone Medical Center. 'You get what I call a ‘wallet biopsy.’'

Virtually all of the nation’s more than 250 transplant centers, which refer patients to a single national registry, require patients to verify how they will cover bills that can total $400,000 for a kidney transplant or $1.3 million for a heart, plus monthly costs that average $2,500 for anti-rejection drugs that must be taken for life, Dr. Caplan said.

Note again that the 'sticker prices' quoted above are much higher than those paid by US government health insurance programs, so this insistence on having enough money or coverage available to pay the sticker prices appears to discriminate against poorer patients who may not have the most deluxe insurance coverage.  Futhermore, it is likely that the actual costs to do the transplant and provide follow-up care are lower than the discounted prices, suggesting that the hospital are putting their revenue ahead of the mission to provide care to patients according to the patients' needs.


Expensive Concierge Care at Non-Profit Academic Medical Centers

We have previously discussed cases of non-profit academic hospitals offering deluxe services to patients able to pay hefty fees, despite their idealistic mission statements about serving the whole coummunity.  In March, 2018, the Michigan Daily discussed the latest version of such care offered by Michigan Medicine,

Michigan Medicine at the University of Michigan is currently launching Victors Care, a concierge medical care model aiming to deliver tailored health care access to a limited number of patients. These patients will receive specialized, convenient and optimized care with purchase of an annual membership fee to cover primary care services without copays or deductibles.

A number of faculty members took exception to this program in a letter addressed to top Michigan Medicine executives,

grievances listed in the faculty letter include: being unaware in the content of the Victors Care program invitation letter, video and website; discriminating against the underserved; promotional materials suggesting Victors Care patients will 'receive preferential treatment at Michigan Medicine based on ability to pay'; implication that if receiving Victors Care is quality care, receiving care from traditional primary care physicians is not quality; and a concern that Victors Care promotional materials and website recommend care that is not evidence based.

'We ask that the institution stop recruiting our patients to this program and advertising it as providing much better care than all the rest of our primary care clinics, the letter reads. 'Victors Care purports to offer ‘better’ health care to those with enough money to pay a large access fee. The University of Michigan is a public institution and our commitment is to serve the public, not a private few.'

The letter also includes direct quotations from Michigan Medicine faculty, one of which notes: 'This reinforces UM as an elitist institution catering to the wealthy.'
Note that Michigan Medicine is a creature of the University of Michigan, a non-profit, state-supported institution, although I cannot determine whether legally Michigan Medicine is a government entity, a non-profit corporation, or something else.  The mission statement on the organizational website is:

We advance health to serve Michigan and the world

It says nothing about providing better service to wealthier patients 


Hospital Spending Priorities Put Patients and Health Profesionals Last


Increasing Market Dominance Rather than Improving Affordability of Health Care

The problem was described in a February, 2018, NBC News article, entitled with the question:"Hospitals made $21B on Wall Street last year, but are patients seeing those profits?"

Some medical economists say that nonprofit hospitals are using lucrative Wall Street portfolios to fatten their bottom lines rather than lower what patients pay for health care.

'The tenor and the responsibility of hospital CEOs has now changed over time,' said Gerard Anderson, a professor of health policy, management and international health at the Johns Hopkins University Bloomberg School of Public Health. 'They focus on the bottom line and … they get performance ratings based on profitability,' he said.

In particular, the article suggested rather than using investment earnings to lower costs to patients,

Hospitals have an incentive to reinvest Wall Street income into growing their networks in order to compete. 'To acquire hospitals you need to have money. If you want to be the biggest hospital system in your community you have to have a lot of money,' Anderson said.

But bigger hospital networks don’t necessarily mean better, or cheaper, health care for patients.


Luxury Hotel Like Accoutrements Rather than Direct Patient Care Services

Furthermore, while the patients may literally see the results of lavish hospital spending, much of that spending has scant relationship to patient care. An  article in the Spectator, March, 2018, described the lavish ways many big non-profit academic medical centers spend their money.

The Emperor Nero would have felt at home in our hospitals.

At St. Vincent’s Hospital in Worcester, Massachusetts, visitors immediately encounter a waterfall, trees, massive rocks, and a pathway for hospital-goers interested in a stroll all located underneath a glass atrium. The massive indoor nature preserve of sorts appears about half the size of a football field. It provides peace and tranquility in a place in need of such comforts.

Also,

IU Health in Indianapolis boasts a monorail-like People Mover that shuttles patients, families, employees, and anybody else who cares to ride between hospitals for free. Cedars-Sinai in Los Angeles offers deluxe maternity suites featuring such perks as access to a 'personal doula,' 'soft colors and recessed lighting to offer a soothing environment for laboring women,' and an 'in-room refrigerator stocked with complimentary chilled juices and bottled water.' Even hospitals labeled 'struggling' struggle to avoid lavish spending. The New York Post reported in 2016 that Brooklyn’s SUNY Downstate Medical Center paid consultants $83,000 for such frills as 'pricey rooms at the Carlyle Hotel on the Upper East Side, a booze-infused ‘team dinner’ at the Docks Oyster Bar in Midtown, and sticker-shock limo bills.'

True to the publication's ideology, the article blamed the spending on the government.  Obviously, though, it was hospital managers who made the spending decisions.


Hospital Board Members Meet in Cayman Islands While Budget for Employee Benefits Threatened


Hospital managers, even in hospitals meant to serve the poor, like to use the hospital budget for lavish perks.  For example, according to a report from Newsday from March, 2018, Nassau University Medical Center, is a "safety net" hospital which

treats low-income people, receives state aid even though Nassau County ended its subsidy several years ago. However, the county is liable for more than $242 million in hospital long-term debt if NHCC defaults.

Its finances have been challenged:

hospital finances continue to be tight as NuHealth faces tens of millions of dollars in liabilities for accrued employee time, health care and pensions.

'This is a cash cow without the cash,' [Chairman of the Board George] Tsunis said. 'We have a very perilous position here.'

Yet until then, hospital management continued

the practice of sending three hospital officials to the Cayman Islands for a week during Thanksgiving and a week in February to discuss the health care corporation’s offshore self-insurance facility, Tsunis said.

Like other hospitals, NuHealth set up a limited liability company called NHCC LTD in the Cayman Islands for tax purposes to self-insure for malpractice and general liability claims. The hospital’s chief executive officer, chief financial officer and chief operating officer are the company board members. To maintain the Cayman location, company officials must meet at least once a year outside the United States.

The hospital usually sent all three board members to the Cayman Islands twice a year, Tsunis said.

Now the hospital will send two people once a year to a meeting at an airport hotel ... in Canada.

So even when the bottom line was threatened, Caribbean jaunts for board members continued, apparently until they were caught 


Eliminating Faculty Retention Bonuses to Pay for Legal Liability Due to Alleged Mismanagement

While hospital managers may get lavish perks, when expenses go up they do not shrink from cutting the pay of their employees, even their most well-trained medical professionals.  For example, in January, 2018, McClatchey reported (here via the Charlotte Observer) that the University of New Mexico suspended its retention bonuses for anesthesia faculty because of the settlement it had to pay for a suit brought by 'a former dismissed problem resident.' However,

The woman said in the wrongful termination lawsuit filed in 2011 that she was raped in June 2009 by a post-doctoral fellow and anesthesiologist at the university. Afraid she’d face repercussions, she waited until September to report it to department higher-ups, the lawsuit said.

The lawsuit said officials 'discouraged' her from reporting the alleged assault to law enforcement officials to avoid damaging the school’s reputation.

The suit accused the university of failing to conduct an investigation into the allegations and of eventually terminating the resident, violating state laws, in 2011. The case was thrown out in 2013 but reinstated on appeal in 2015. UNM’s attorneys agreed to settle for an undisclosed amount in November, according to the NM Political Report.

So the suit alleged considerable bad management, as well as bad behavior by one anesthesia trainee,  but the money to settle it had to come out of senior physicians' compensation, not management's pockets.


Hospitals Threatening Health Care Professionals who Call for Patient Care Improvements that Might Cost Money

Hospitals depend on health care professionals to actually take care of patients. Health professionals swear to put patients and patient care first, while hospital managers have no such professional values, unless they are also health professionals.  Yet hospital managers have been known to threaten health professionals who dare differ with them on matters pertaining to patient care, particularly professionals who call for changes that would cost more money.


In Medscape, from October, 2017, Dr John Mandrola described the plight of employed physicians who dare protest actions by their hospitals' managers:

The need to keep one's job decreases a worker's candor. Seniority offers little protection. Look at what happened to an esteemed surgeon who spoke out on double-booking in the OR. Hospital leaders fired him.

The irony of the employed-clinician model is that many embraced it for job security but have ended up feeling more vulnerable than before. And feeling vulnerable means making less noise. The danger is obvious: Clinicians become clock-punching workers rather than leaders; bad policies persist; outlier doctors continue working unabated, and low morale becomes the new normal.

In November, 2018, the New York Daily News reported a graphic example of a hospital CEO threatening to fire a nurse who complained about staffing levels:

Brooklyn Hospital CEO Gary Terrinoni, along with several other executives and department heads, were updating the nursing staff about the hospital's future a month ago when Terrinoni launched into what sources described as a nasty screed.

'Are you all tired?' Terrinoni mockingly asked the nurses, according to a letter distributed by the New York State Nurses Association.

When no one offered a response, Terrinoni singled out one veteran RN, who at first politely tried to deflect his question. After more prodding, she answered that the biggest problem they faced was understaffed shifts.

'That's what I'm talking about! Look at your attitude!' Terrinoni allegedly erupted. 'Then you don't need to be here. Go find another job!

When the 13-year Brooklyn Hospital vet noted she had more than a decade on the job, Terrinoni only grew more agitated, the union said.

'I don't care if you've been here ten years or 30 years,' he allegedly said. 'You can leave if you don't like it here.'

Summary

Recently we have seen many examples of mission-hostile management by political appointees to health care related leadership positions in the Trump administration.

However, while the political conflagration in Washington, DC has pulled journalists away from the health care beat, we continue to see examples of bad, and particularly mission-hostile management of non-profit hospitals that threatens care of vulnerable patients. Such management tends to prioritize hospital revenues, and the financial self-interest of management over patient care.

Some recent examples of related posts included one from 2017 in which we discussed a New York hospital CEO who seemed to put revenue generation in support of his own very generous paycheck ahead of quality of care and patient safety (look here).  Also, the revered Mayo Clinic seemed to let patients with more remunerative commercial insurance coverage get attention before poor patients who have only government insurance, despite its stated mission "providing the best care to every patient" (look here).

Mission-hostile management in hospitals, pharmaceutical companies, or government agencies seems to have been enabled by several factors. 

Managerialism is the belief that trained managers are better leaders of health care, and every other sort of organization, than are than people familiar with the particulars of the organizations' work.  Managerialism has become an ascendant value in health care over the last 30 years.  The majority of hospital CEOs are now management trained, but lacking in experience and training inmedicine, direct health care, biomedical science, or public health.  And managerialism is now ascendant in the US government.  Our president, and many of his top-level appointees, are former business managers without political experience or government experience.  

The rise of the manager-leader occurred at a time when management schools increasingly preach the dogma that maximizing shareholder value, usually equivalent to maximizing short-term revenue, should be the first, if not the only goal of all managers (look here).  A recent article on the miseducation of Sheryl Sandberg, Facebook's chief operating officer, asserted that

Harvard Business School, like much of the M.B.A. universe in which Sandberg was reared, has always cared less about moral leadership than career advancement and financial performance.

The article recounted a recollection of a case discussion which included Jeff Skilling, the now disgraced former CEO of Enron

in which the students were debating what the C.E.O. should do if he discovered that his company was producing a product that could be potentially fatal to consumers. 'I’d keep making and selling the product,' he recalled Skilling saying. 'My job as a businessman is to be a profit center and to maximize return to the shareholders. It’s the government’s job to step in if a product is dangerous.' Several students nodded in agreement, recalled LeBoutillier. 'Neither Jeff nor the others seemed to care about the potential effects of their cavalier attitude. . . . At H.B.S. . . . you were then, and still are, considered soft or a wuss if you dwell on morality or scruples.'
Boards of directors or trustees, which are now often dominated by managers, are inclined to financially reward organizational managers for increasing revenue.  Hospital boards rarely are so interested in improving patient care or public health.  So the result is mission-hostile management, which is very bad for patients' and the public's health


As I have said before,  true health care reform would put in place leadership that understands the health care context, upholds health care professionals' values, and puts patients' and the public's health ahead of extraneous, particularly short-term financial concerns. We need health care governance that holds health care leaders accountable, and ensures their transparency, integrity and honesty.

But this sort of reform would challenge the interests of managers who are getting very rich off the current system.  And these days, such reform would also challenge the interests of many people in top positions in the US government.  So I am afraid the US may end up going far down this final common pathway before enough people manifest enough strength to make real changes.

Sunday, December 02, 2018

The Perils of CEO Worship - What Happens When the Leader Becomes Demented?

Introduction: the Cult of the CEO

Although the US and most developed countries are nominally democratic, many of us seem to be again yearning for a man on a white horse, and in the current era, the horse ridden is corporate.
On Health Care Renewal, we having been talking about this pheonomenon for a long time. We have written about it in terms of the messianic (or visionary, or charistmatic) CEO, CEO disease, and the imperial CEO.



These concerns are diffusing into the broader media.  For example, from the introduction to a revent Vox article entitled "The Problem with CEO Worship"

Society has always had heroes, be those of war or art or politics. But entrepreneurs are particularly suited for our current moment, in which success in business is our primary marker of achievement. Business acumen doesn’t just get you money anymore; it can make you the most powerful man in the world.

The signs of CEO worship are everywhere: unprecedented venture capital funding for founders, media overemphasis on company leaders, and to use the most extreme and obvious example, the election of Donald Trump.

That article noted that CEO worship may overestimate the importance of leaders; create "secular fundamentalists" out of individuals; perpetuate destructive neoliberal ideologies; encourage CEOs to make worse decisions; and be bad for business

Those are not the only consequences.  CEO worship makes it possible for a progressively impaired leader to go unconstrained. Unfortunately, we may be seeing the ultimate example of this in the US.

Incoherent Verbal Utterances

Even before he was elected, we noted that Donald Trump sometimes was completely incoherent when describing his health policy ideas.  In early 2016 we raised questions about Donald Trump's cognition.  At that time, a conservative columnist labelled as "word salad" Trump's attempts to sketch a position on health care, specifically the "mandate" provision of the Affordable Care Act (ACA).  We found other examples of his utterances on health care policy that could be characterized as gibberish.  This one was short, if not sweet

I want to keep pre-existing conditions. I think we need it. I think it’s a modern age. And I think we have to have it.

How could anyone understand this while listening in real time? A close reading suggests that maybe this was meant to suggest that some people ought to have  insurance coverage for pre-existing conditions. However, Trump seemed to befuddled by that concept.  Furthermore,  note that pre-existing conditions are not desireable, so that one would not want to "keep" them, nor can one choose not to.  To what the word "it" in the second sentence and again in the fourth refers is unclear.  The third sentence seems to be a complete non sequitur. 


We found additional examples of incoherent verbal responses about health care in 2017, and early 2018.  In the last six months, things have only gotten worse.  Examples of verbal incoherence have multiplied, although most were not related to health care. 

In July, 2018, MediaIte reported Trump's incoherent comments at a political rally,

I have broken more Elton John records, he seems to have a lot of records. And I, by the way, I don’t have a musical instrument. I don’t have a guitar or an organ. No organ. Elton has an organ. And lots of other people helping. No we’ve broken a lot of records. We’ve broken virtually every record. Because you know, look I only need this space. They need much more room. For basketball, for hockey and all of the sports, they need a lot of room. We don’t need it. We have people in that space. So we break all of these records. Really we do it without like, the musical instruments. This is the only musical: the mouth. And hopefully the brain attached to the mouth. Right? The brain, more important than the mouth, is the brain. The brain is much more important.

Perhaps this was meant to suggest that the president drew a larger crowd to an arena than did Elton John.  However, note the non-sequiturs: from "Elton has an organ" to "lots of other people helping" to "we've broken a lot of records," "They need much more room, for basketball, for hockey..." Who are the people helping whom are they helping, and to do what? What records were broken by whom, and how is this relevant to Elton John, etc.  To whom does they refer, and why do they need a lot of room? Etc, Etc.  Again, in real time this would have made no sense at all

In September, 2018, CNBC reported that speaking at a meeting about preparations for Hurricane Florence, Trump said

This is going to be a very large one ... It's tremendously big and tremendously wet. Tremendous amounts of water

Maybe he meant to say this will be a very large hurricane, bringing a tremendous amount of rain.  However, he seemed to be unable to convey the concept of rain.

In September, 2017, the Hill had reported that Trump had defended difficulties in providing relief for Puerto Rico after Hurricane Maria thus,

This is an island, surrounded by water. Big water. Ocean water

Again, to be charitable, he seemed to handle the concept of an island in a vast ocean as would a three-year old.

Media articles also suggested that normal people cannot follow or understand what Trump says in real time.  For example,  on November 8, 2018, a Bloomberg op-ed said this about a recent Trump news conference,

In fact, the president was difficult to follow because he simply doesn’t make any sense half the time.

More specifically,

Trump was asked one specific question about health care, and good luck to anyone who tries to figure out what his answer meant. He pretty clearly has just as little idea what he’s talking about on most major policy issues as he did when he first started running for president. On Jamal Khashoggi, waivers on Iranian sanctions, North Korea and Russia, he either ducked the questions with non sequiturs or just babbled.

On November 11, 2018, an article in Slate noted that Trump confused Baltic states with Balkan states in a way that could have foreign policy repercussions,

When President Donald Trump met with Dalia Grybauskaitė of Lithuania, Kersti Kaljulaid of Estonia and Raimonds Vējonis of Latvia earlier this year, he started with a criticism. At the White House in April, Trump opened by chastising the Baltic leaders for starting the war in the 1990s that ended with the breakup of the former Yugoslavia. The Baltic leaders were apparently very confused and it took them 'a moment' to realize that the commander in chief was confusing Baltic states with the Balkans

this case is particularly notable considering Melania Trump is originally from the Balkans. The first lady was born in Slovenia, which gained independence in 1991 at the start of the Balkan wars. As Le Monde wrote, Trump remained 'apparently uneducated in the matter by his wife, Melania, originally from the former Yugoslavia.'

This suggests at best that at times Trump may be unable to distinguish words that sound vaguely alike but have quite different meanings. 

A November 28, 2018, Vox summary article about Trump's recent interview with the Washington Post provided this quote from Trump about economics,

And I’m not blaming anybody, but I’m just telling you I think that the Fed is way off-base with what they’re doing, number one. Number two, a positive note, we’re doing very well on trade, we’re doing very well — our companies are very strong. Don’t forget we’re still up from when I came in 38 percent or something. You know, it’s a tremendous — it’s not like we’re up — and we’re much stronger. And we’re much more liquid. And the banks are now much more liquid during my tenure. And I’m not doing – I’m not playing by the same rules as Obama. Obama had zero interest to worry about; we’re paying interest, a lot of interest. He wasn’t paying down — we’re talking about $50 billion lots of different times, paying down and knocking out liquidity. Well, Obama didn’t do that. And just so you understand, I’m playing a normalization economy whereas he’s playing a free economy. It’s easy to make money when you’re paying no interest. It’s easy to make money when you’re not doing any pay-downs, so you can’t — and despite that, the numbers we have are phenomenal numbers.

The author of the article stated,

I have basically no idea what Trump is talking about here, and I’m pretty sure he doesn’t either.

On repeated close reading, I still do not have any idea what Trump meant.  I would add the following questions:  38 percent of what? Who is much more liquid, and how is liquid defined?  Who is paying a lot of interest? What does "paying down and knocking out liquidity" mean? What is a "normalization economy?"  Note that this was coming from someone who claims to be a brilliant business manager.

Furthermore, consider what Trumps aid about the climate,

And when you’re talking about an atmosphere, oceans are very small. And it blows over and it sails over. I mean, we take thousands of tons of garbage off our beaches all the time that comes over from Asia. It just flows right down the Pacific, it flows, and we say where does this come from. And it takes many people to start off with.

Oceans are "small?" What "blows over and sails over?" Over what? What "flows?" What "takes many people?"

In 2017, StatNews published an article describing how 

STAT reviewed decades of Trump’s on-air interviews and compared them to Q&A sessions since his inauguration. 

To summarize the conclusions.

The differences are striking and unmistakable.

Research has shown that changes in speaking style can result from cognitive decline. STAT therefore asked experts in neurolinguistics and cognitive assessment, as well as psychologists and psychiatrists, to compare Trump’s speech from decades ago to that in 2017; they all agreed there had been a deterioration, and some said it could reflect changes in the health of Trump’s brain.

In 2018, Trump's verbal communications at times are even more garbled.  Parts of the passages above suggest the word salad produced by somebody with fluent aphasia versus the nonsensical responses produced by patients suffering from acute delusional states. That Trump is capable of producing this sort of word salad at times, without realizing he is making no sense, suggests the intermittent symptoms seen early in progressive dementia.  


Lack of Insight About Cognition

Furthermore, Trump appears to lack insight about his difficulties commicating.  

In July, 2018, after the NATO conference,  Politico reported, that Trump seemed to have no insight about why much of what he says appears unbelievable to others.  The article noted
leaders who spent the first 18 months of Trump’s presidency thinking there might be a method to his chaos creation — and struggling to discern what it might be — now seem to have concluded that it’s just chaos, and that Trump himself may not understand what he’s doing.

More specifically, European officials commented on what Trump was saying:

A senior NATO official said leaders had concluded that they simply could not rely on anything Trump said.

'You know the way he speaks, you cannot take him literally,' the official said.

Another EU official echoed the point. 'He speaks a language that doesn’t match with diplomacy,' the second official said. 'We were used to the Brits, who speak a more frank diplomatic language, but this is another thing.'

These officials again seemed to be stating that Trump's verbiage can be completely incoherent, albeit they were doing so diplomatically.  After the conference, however, when confronted with a question about the inconsistency of his remarks,

When a Croatian journalist confronted Trump about his inconsistencies, the president flatly denied there were any, and he repeated a defense of his own sanity that he had made when previously questioned about his fitness for the presidency.

'We understand your message, but some people ask themselves, will you be tweeting differently once you board the Air Force One?' the reporter said.

Trump, speaking at his news conference before leaving the summit, replied: 'No, that's other people that do that. I don’t. I’m very consistent. I’m a very stable genius.'

Not to belabor the point, but the examples noted above suggest neither consistency nor stability.  And true geniuses almost never boast about their intellect.

In September, 2018, The Hill reported an interview with Trump in which he said his personal health and management style were reasons that Republicans might do better than expected in the 2018 elections,

'You know, I took that test when I got my last physical, and the doctor said that’s one of the highest scores we’ve ever seen,' Trump said. 'I did that not because I wanted but I did it, I was always good at testing.'

He continued: 'But if there’s anything great about me it’s stability, and I’m a good manager. Always been a good manager, but you know, I have a vision,'

Note that above Trump was presumably referring to the screening test for dementia he took during his official physical examination.  High scores on the test are common, and do not signify great intelligence, just the probable absence of dementia.

In addition, this interpretation assumes that the test was administered in an unbiased way.  However,  there are reasons to question whether Trump's physical was unbiased.  In retrospect, we now know that soon after taking the test, Trump nominated the physician who administered it to be Secretary of Veterans Affairs.  Later the physician withdrew his name after allegations of his questionable personal behavior appeared (look here).  

At least Trump's boast about having "a vision" does correspond to the language often used by public relations spokespeople to justify their CEOs' lack of accountability and high compensation (look here)


Similarly, in the Vox summary of the November, 2018, Washington Post interview (see above for link), Trump stated
a lot of people like myself - we have very high levels of intelligence


Finally, a November 18, 2018 article in MediaIte described this interchange between Trump and interviewer Chris Wallace on Fox News, starting with his response to a question about how he makes decisions

'I don’t think about them,' Trump replied. 'I don’t think about, you know, how I make them....'

However, he responded to a question about Federal Reserve policy

They're making a mistake because I have a gut, and my gut tells me more sometimes than anybody else's brain can ever tell me

This suggests that Trump has lost insight into his own thinking. 

External Observers Suggested Trump Is Cogitively Impaired

In August, Vanity Fair reported:

More than ever, Trump is acting by feeling and instinct.  'Trump is nuts,' said one former West Wing official. 'This time really feels different.' Deputy Chief of Staff Bill Shine has privately expressed concern, a source said, telling a friend that Trump’s emotional state is 'very tender.' Even Jared Kushner and Ivanka Trump are unsettled that Trump is so gleefully acting on his most self-destructive impulses as his legal peril grows.

In September, 2018, Newsweek reported two instances in which apparent Trump insiders sought psychiatric or medical help for Trump's perceived cognitive problems

[Dr] Lee told Salon that two Trump administration officials approached her after the book was published to express their concern about the president’s mental health, saying he was 'scaring' them because he was 'unraveling.'

In comments to Newsweek over email, Lee said 'it appeared that the officials (if they were officials at all) were at least frequently in [Trump’s] presence.

She continued, 'They were definitely calling from within the White House, which I confirmed by calling back their number. However, I did not ask about their rank. There was no reason for me to doubt they were high-ranking enough to have regular access to the president.'

Lee also said that a 'person [who] was a friend of his entire family, since his childhood” had also been in touch with her at the same time in October 2017, as people in the White House were “stating concern about the president (this was an observation from afar).'

Also in September, 2018, a Politico review of the new book by Robert Woodward based on numerous White House interviews suggested that Trump's inner circle called him a "dope," "idiot," or "moron."

Summary

Donald Trump is the chief executive officer of arguably the most powerful country in the world.  Starting during his campaign for the US presidency, we noted that his utterances about health care were at times so incoherent as to suggest cognitive dysfunction.  In the two years since then, especially in the last six months, he has increasingly been noted to be verbally incoherent or confused, has seemed to lack insight about these episodes, and has been observed by close allies and associates to be cognitively impaired.

However, there have ben few, at best, public attempts to link these suggestions of cognitive impairment together, nor to discuss their implications.  The most recent of those that I have found was in January, 2018 (look here and here).  Yet the problems appear to have been getting worse since then.  

While patients with worsening cognitve impairment deserve accurate diagnosis, compassionate care, and access to what few effective, safe treatments may be available for their condition, they obviously should not be in a position to make consequential decisions.  They certainly should not be in charge of large organizations, particularly powerful countries with nuclear weapons.

Yet President Trump's apparent cognitive decline remains anechoic.

For this we may blame CEO worship, which we have too often seen in health care. We have seen many health care leaders praised for their brilliance and paid royally despite leadership resulting in financial distress, threats to the organizations' health care missions, poor patient care, unethical behavior, or even crime. Yet health care CEOs, like other corporate CEOs, and like politicians are just people, sometimes smart, but almost never brilliant.  Promoting them as messianic 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 here.)

We must get quickly past our worship of CEOs.  We may not long survive in a world where leaders of nuclear armed nations have no cognitive clothes.




Sunday, November 18, 2018

From Russia with Money - Harvard Medical School Accepts $200 Million from Russian Emigre with Ties to Russian Oligarchs and Putin, and Who Is Under Investigation for US Election Meddling

On Health Care Renewal we have frequently written about individual and institutional conflicts of interest.  The landmark but often ignored 2009 report by the Institute of Medicine on Conflicts of Interest in Medical Education, Research and Practice defined institutional conflicts of interest as arising when

an institution's own financial interests or those of its senior officials pose risks of undue influence on decisions involving the institution's primary interests.

We have written about institutional COIs affecting academic medical institutions, medical societies and patient advocacy organizations.  Typically, the COIs arise from industry (that is, usually pharmaceutical, biotechnology medical device, and sometimes health insurance corporate funding) that might be seen as influencing the institution's decisions about medical care, health care policy, teaching and/or research.  For example, most recently we wrote about systematic research on institutional conflicts of interests affecting patient advocacy organizations, and on organizations writing clinical practice guidelines

But now things are different.

We present a big case of what looks like an entirely new, and very troubling variation on an institutional conflict of interest.

A "Transformative" Gift to Harvard Medical School

On November 8, 2018, Felice Freyer, writing in the Boston Globe, documented a huge new gift to Harvard Medical School.

Harvard Medical School has received a $200 million donation — the largest in its history — to support research into fundamental questions about human illness and health.

The pledge, from the Blavatnik Family Foundation, will enable the school to hire researchers, add to its advanced technology, and a build an 'incubator' in the Longwood area to help bring research findings to market.

The gift is so large that Harvard will rename many of the school's components after Blavatnik.

Harvard Medical School is keeping its name for now. But a large portion of the school will be renamed. The 10 academic departments in science and social science — as distinguished from the affiliated hospitals where postgraduate training takes place — will be called the Blavatnik Institute at Harvard Medical School.
Per the Harvard's in-house publication, the Gazette,

Announcing the donation, Harvard President Larry Bacow described it as an 'unprecedented act of generosity and support,' and thanked Blavatnik for his faith that HMS — and the region’s broader life sciences community — can make dreams of dramatic progress in human health become reality.

'It’s one thing to dream for oneself, for one’s family and friends, even for one’s community. It’s another thing to dream for all people, to dream for a future in which more lives are improved and saved through the creation and application of knowledge through science,' Bacow said.

HMS Dean George Q. Daley called the donation 'a transformative opportunity' for the School and said it will enable a new generation of scholars and scientists to emulate those who made key discoveries in every area from organ transplants to polio vaccines to gene therapy.

The Gazette described the donor, Len Blavatnik, thus

The foundation is led by Blavatnik, who graduated from Harvard Business School (HBS) with an M.B.A. in 1989, founded Access Industries, and became one of Britain’s wealthiest men.

What could possibly go wrong?

The Russian Connection

Actually, while he may currently operate out of Britain, Blavatnik came from Russia.  Per the Globe,

Blavatnik made his fortune in aluminum, oil, and gas after the fall of the Soviet Union and in 2011 bought the Warner Music Group. His philanthropy has sometimes raised eyebrows because of his alleged connections to Russian oligarchs.

His connections to these (other) oligarchs should raise some eyebrows, and concerns. 



The Access-Alfa Renova Consortium, Alleged Russian Sponsored Harassment of BP, and FSB Active Measures

Blavatnik's recent generous donations to Oxford sparked protests, and provided documentation of some relevant issues. Per the Globe


When Oxford University in England named a school of government after Blavatnik in 2015, some 20 critics wrote to chide the school for 'selling its reputation and prestige to [Russian President Vladimir] Putin’s associates,'

Their letter, published in the Guardian in 2015, stated that Blavatnik belongs

to a consortium of Russian billionaires called Access-Alfa-Renova (AAR). The consortium has long been accused of being behind a campaign of state-sponsored harassment against BP. In 2008-09 dozens of British and other western managers were forced out of Russia. As part of this campaign, Vladimir Putin’s FSB intelligence agency fabricated a case against two Oxford graduates. According to evidence from its jailed owner Sergei Bobylyov, Alfa-Bank oligarchs also raided a retail company called Sunrise.

The spy case and the attack on Sunrise involved the participation of Russian officials who are listed as gross human rights violators by the US Treasury in line with the Sergei Magnitsky Rule of Law Accountability Act of 2012.

These corporate abuses took place in Russia with active official support. There was a backdrop of state-sponsored propaganda. Russian state media broadcast libellous assertions against western and Russian citizens. AAR went on to make billions from a highly controversial deal with Rosneft.

The letter writers asserted

Oxford University apparently failed to investigate these facts, AAR’s track record from the beginning, and its close ties with the Kremlin.

A 2015 Guardian article described the background of the letter's signatories, including

Pavel Litvinov, one of eight people who in 1968 protested on Red Square against Moscow’s invasion of Czechoslovakia. He was exiled for five years to Siberia. Another is Vladimir Bukovsky, jailed by the KGB. Bukovsky, who lives in Cambridge, exposed the Kremlin’s use of psychiatric treatment against dissidents.

Others include former Oxford academics and graduates, members of Russia’s democratic opposition and human rights activists. One is Vladimir Milov, a colleague and friend of Boris Nemtsov, the opposition leader shot dead in February outside the Kremlin. The letter was organised by Ilya Zaslavskiy, a TNK-BP employee and Oxford graduate who ran Moscow’s Oxford alumni association.

In 2008 Putin’s FSB spy agency arrested Zaslavskiy and his brother Alexander in Moscow and accused them of being 'western agents'. Russian state TV claimed the FSB had exposed a major spy ring. The case against them was 'fabricated', the letter says.

Despite their credentials suggesting that the letter writers knew whereof they spoke, Oxford apparently has not done any further investigation.   However, per the Globe again, 


Last year, after Blavatnik donated $1 million to Donald Trump’s inauguration committee, an Oxford professor quit in protest, the Guardian reported.

In fact, according to contemporaneous (2017) coverage in the Guardian, Professor Bo Rothstein

a specialist on corruption, called the donation 'incomprehensible and irresponsible' in his resignation letter.

The academic subsequently told the Guardian he had received hundreds of messages of support about his decision, adding: 'I’m not going to be the Blavatnik chair of government and public policy because I’m not going to give legitimacy and credibility to this person. $1m is a sizeable amount of money. In my book by donating to the inauguration of Donald Trump you are supporting Donald Trump.'

The 2017 Guardian article expanded on the allegations made by the 2015 letter writers

Access began making investments in Russia after the fall of communism as the energy and aluminium groups of the former Soviet Union were broken up. Eventually Blavatnik combined assets with Viktor Vekselberg and Mikhail Fridman to form AAR. Their partnership with BP ended in acrimony.

In 2008, Bob Dudley, then the chief executive of TNK-BP and now the boss of BP, left Moscow after what the British company described as an 'orchestrated campaign of harassment'. Armed police also raised TNK-BPs office and more than 100 BP managers had to leave Russia after the authorities refused to renew their visas.

US diplomats alleged that at least one individual in AAR, German Khan, was involved in a state-sponsored campaign against BP to try to force them out of Russia. However, AAR and lawyers for Blavatnik have denied any involvement, including that of Khan, in a plot against BP.

In the end, both BP and AAR were bought out of the venture by state-backed Russian energy company Rosneft. The $55bn (£42bn) deal in 2013 handed the oligarchs, including Blavatnik, $28bn. It was signed off at a meeting with Putin.

The cash from the sale of TNK-BP pushed him to the top spot of the Sunday Times rich list in 2015. By this stage Access had already diversified beyond Russia and the energy sector.

However, note that the 2017 Guardian article's addendum included

Sir Leonard Blavatnik’s lawyers have informed the Guardian that the term 'oligarch' in his view does not apply to him. [But] The Guardian editor-in-chief disagrees.

So to recap, Blavatnik made a lot of money from aluminum, gas and oil in Russia after the collapse of the USSR.  He banded together with other very rich Russians in a consortium, AAR, that was accused by multiple people of dirty tricks meant to drive the UK oil firm BP from the Russian market.  There were allegations that this trickery involved Russian state agencies, and was likely to have been condoned by Putin.  The people behind AAR eventually netted a lot of money from the resulting buyout of their firms and of BP, a deal that apparently did involve Putin. 

Blavatnik's Changing Pattern of Political Contributions Raise Question about Foreign Influence on the US Election

While giving a lot of money to various educational and cultural institutions, Blavatnik was giving modest amounts of money to politicians. 

However, his pattern of political giving apparently changed greatly upon Trump's advent on the scene.  A May, 2018, Dallas News op-ed article by Professor Ruth May of the University of Dallas on Russian oligarchs' affinity for Trump's campaign stated,
Data from the Federal Election Commission show that Blavatnik's campaign contributions dating back to 2009-10 were fairly balanced across party lines and relatively modest for a billionaire. During that season he contributed $53,400. His contributions increased to $135,552 in 2011-12 and to $273,600 in 2013-14, still bipartisan.

In 2015-16, everything changed. Blavatnik's political contributions soared and made a hard right turn as he pumped $6.35 million into GOP political action committees, with millions of dollars going to top Republican leaders including Sens. Mitch McConnell, Marco Rubio and Lindsey Graham.

In 2017, donations continued, with $41,000 going to both Republican and Democrat candidates, along with $1 million to McConnell's Senate Leadership Fund.

A Vice News article April 2018, provided more detail,

according to the Wall Street Journal, Blavatnik gave $12,700 in April 2017 to a Republican National Committee fund that was used to help pay for the team of private attorneys representing Trump in the probe of Russian interference in the 2016 election. He’d given the RNC legal fund $100,000 in 2016, the Journal said.

The problem is that, as stated by Represenative Adam Schiff (D-CA), likely now incoming chair of the House Intelligence Committee,

'Unless the contributions were directed by a foreigner, they would be legal, but could still be of interest to investigators examining allegations of Russian influence on the 2016 campaign. Obviously, if there were those that had associations with the Kremlin that were contributing, that would be of keen concern.'

Under federal law, foreigner nationals are barred from contributing directly or indirectly to political campaigns in local, state and federal elections.

Note that according to an April, 2018, Mother Jones article, the 

the question of possible illegal foreign donations from Russia is also under scrutiny by the FBI and the Federal Election Commission. 

Apparently because of these allegations that Blavatnik was helping to channel Russian money to influence the 2016 election, per the Globe

Although no wrongdoing has been alleged, ABC News reported in the spring that special counsel Robert Mueller is looking into Blavatnik’s donation to the inauguration as part of an inquiry into foreign financial support for Trump.
So to recap, Blavatnik became a dual UK-US citizen, and for quite a while made political donations in a style similar to that of many rich businesspeople at the time, giving amounts to both parties, presumably to enhance access whoever was in power.  However, when Trump became a presidential candidate, Blavatnik began making much bigger donations, and only to Republicans and Trump-related causes.  Then he gave a million dollars to Trump's inagural.  Given the known scheme  by Russia to meddle in the US election to benefit Trump (see the 2018 Senate committee report as discussed here), this raised suspicions that Blavatnik, was helping to also influence the election on Russia's behalf. 

Blavatnik's Sanctioned Associates

Moreover, perhaps Mueller is also interested in Blavatnik's ties to other Putin-linked oligarchs.  A profile in Forbes from October, 2018, stated

Blavatnik still retains a few Russian assets. He and Vekselberg, along with [Oleg] Deripaska, are key investors in Rusal, one of the world’s largest aluminum producers.

Note that

His former business partners are now facing U.S. sanctions. They include Viktor Vekselberg (net worth: $13.1 billion) and Oleg Deripaska (net worth: $3.3 billion), two of seven Russian oligarchs that the U.S. Treasury and State departments identified in the April sanctions. Allegations made against the sanctioned oligarchs include interference with the 2016 presidential elections and financially profiting from a Russian government that engages in 'destabilizing activities.'
To recap, Blavatnik has ongoing business relationships with other oligarchs who have been sanctioned for meddling in the 2016 US election.


Blavatnik's Former Lobbyists Spin Through the Revolving Door into the Trump Administration

Furthermore, the April, 2018, Vice News article documented apparent ongoing ties between Blavatnik operators and the Trump administration.

Two senior Trump administration officials were once registered as lobbyists for an investment company controlled by a Soviet-born industrialist who made billions doing business with newly sanctioned Russian oligarchs.

Makan Delrahim is now the assistant attorney general for the Antitrust Division in the Department of Justice, after rising from his original appointment as deputy White House counsel and deputy assistant to the president. David Bernhardt is the No. 2 official in Trump’s Department of the Interior.

Both men registered as lobbyists in 2011 and 2012 for Access Industries, a holding company controlled by billionaire Leonard Blavatnik, according to public filings reviewed by VICE News. And though they are far from the only D.C. lobbyists to get plum jobs in the Trump administration, the connection to Blavatnik, long in business with billionaire associates of Russian President Vladimir Putin, reveals yet another link between Russia and senior Trump officials.

The article noted,

As of the fourth quarter of 2017, the lobbying firm that Delrahim and Bernhardt worked for was still on Access Industries’ payroll, according to public records. Bernhardt told the Senate during his confirmation hearing that despite filing the paperwork, he never actually did any lobbying for Blavatnik’s firm.

Delrahim, may have been in a particularly fraught position,

Both wound up on the Trump transition team. One, Makan Delrahim is now the assistant attorney general for the Antitrust Division in the Department of Justice, after rising from his original appointment as deputy White House counsel and deputy assistant to the president. David Bernhardt is the No. 2 official in Trump’s Department of the Interior.

The problem is while

Neither Delharim nor Bernhardt, who registered to lobby for Blavatnik and Access Industries in the past, currently has a job with direct oversight of issues related to the Russian economy or the Russia probe.... Delharim might have been involved when he was in the White House counsel's office, a position he left in September for the DOJ.

Richard Painter, former White House ethics lawyer under President George W. Bush, said that in his view, Delrahim would have needed to recuse himself from any work at the White House involving the investigation into Russia’s role in the 2016 election due to his previous work for Access Industries.

'I think that if I were in the White House Counsel’s Office, I’d say, ‘This guy needs to stay away from the entire Russia thing,'' Painter told VICE News.
To recap, former lobbyists for Blavatnik's firm served on the Trump transition team, and then were appointed to responsible federal offices, suggesting at the least, conflicts of interest.


Harvard Officials See No Evil

Nonetheless, Harvard officials had nothing but praise for Len Blavatnik, their generous donor.  Per the Globe,

[Lawrence S] Bacow, Harvard’s president, stood by the donor, calling him a 'distinguished alumnus' and 'somebody that we know very well.'

'We’re very comfortable with who Len is,' Bacow said. 'Len is well-known to the medical community here at Harvard and has been very supportive of science at Harvard and elsewhere. . . . He’s also somebody who is intensely curious, who believes in the power of science to improve the human condition, and he also believes in backing really talented young scientists.'

Were they totally unaware of all the accusations against, suspicions of, and likely investigations of their very wealthy donor?  Or did they just not want to look this very generous gift horse in the mouth? 

Not With a Bang,...

As noted above, there were vigorous protests of Blavatnik's much smaller gift to Oxford in 2015, and then in 2017 after Blavatnik's million dollar gift to the Trump inaugural was announced.  Yet so far, there has been little media discussion, and no protest of Blavatnik's "transformative" gift to Harvard, and the naming of a good chunk of the Harvard Medical School in his honor.

Blavatnik's story seems to be anechoic so far.  It has gotten little public coverage.  A Bloomberg article and a tiny AP story made no mention of Russia, oligarchs, Putin, etc.  Not surprisingly, coverage by Harvard's public relations did not bother either, (see the Harvard Gazette as above, and Harvard Magazine.) The only media coverage beyond the Boston Globe that said anything about the questionable aspects of Blavatnik's background was by the Harvard Crimson and WBUR.   


Summary and Discussion

Len Blavatnik  has been accused of acting in association with other Russian oligarchs, and with the Putin regime's FSB to use unethical means to push UK oil interests out of Russia.  Blavatnik has been accused of helping Russia to influence the 2016 US elections.  Some of Blavatnik's business associates have already been sanctioned by the US government for election meddling and profiting from "destabilizing activities."  And Special Counsel Mueller and other federal authorities are apparently in the midst of investigating Mr Blavatnik.


So Blavatnik's huge gift to Harvard Medical School seems likely to generate a new version of an institutional conflict of interest.  Consider a typical insitutional COI: a medical school getting a big donation from a pharmaceutical corporate foundation.  The concern in that case might be that the people running the school would be unduly inclined to support research that might boost the company's products, or support teaching that would again favor its products, or favor pharmaceutical therapy over other approaches.  Perhaps the students and professionals at that school might feel they are supposed to help hype the company's products, or avoid criticizing them.  All that would be highly concerning.

However, in the current case the issue is not how the school, its officials, its faculty, its health professionals and/or its students would favor Mr Blavatnik's corporate products and avoid criticizing them.  It is that they all are being pushed to cozy up to an oligarch, and thus might be pushed to favor the authoritarian government to which Mr Blavatnik appears tied, its anti-democratic practices, its corruption, and its apparent attempts to meddle in US elections, undermine US democracy, and support a particular candidate who may be beholden to it.

The protesters at Oxford in 2015 wrote
We insist that the university should stop selling its reputation and prestige to Putin’s associates.

Now Harvard University and its medical school appear to be "selling its reputation and prestige to Putin's associates."  This endangers Harvard, and the rest of us. Yet no on at Harvard appears to be protesting.  The silence is deafening.