Wednesday, August 11, 2010

Deceptive Marketing, For-Profit Universities, and Health Care Education

Last week, reports about deceptive marketing and other questionable practices used by the growing for-profit higher education industry in the US appeared in the news.  For example, per Bloomberg:
Recruiters at U.S. for-profit colleges lied to entice students and encouraged them to commit fraud to qualify for aid, a report by the Government Accountability Office found.

Recruiters at all 15 colleges studied by the GAO, Congress’s investigational arm, misled potential students about the costs, duration and quality of their programs, according to a report obtained by Bloomberg News....

Other deceptions include:
“'college representatives exaggerated undercover applicants’ potential salary after graduation and failed to provide clear information about the college’s program duration, costs, or graduation rate,' the report said. 'Admissions staff used other deceptive practices, such as pressuring applicants to sign a contract for enrollment before allowing them to speak to a financial advisor about program cost and financing options.'

In one case cited by the report, a GAO investigator posing as an applicant was told to lie on an aid application about the number of household members to qualify for grants. When the investigators told college employees that they had $250,000 in savings, officials at three colleges told them to hide their savings in order to qualify for financial aid.

In addition,
For-profit colleges overstated the quality of their programs and the organizations overseeing their accreditation, the report said. One recruiter told an investigator posing as an applicant that his school was accredited by the same one that accredits Harvard University.

'It’s the top accrediting agency,' the recruiter said, according to the report. 'Harvard, University of Florida --they all use that accrediting agency.'

Recruiters exaggerated their colleges’ benefits and graduation rates, the report said. A beauty college recruiter said barbers earn as much as $250,000 a year, while the Bureau of Labor Statistics said 90 percent of barbers make less than $43,000 annually, according to the report.

A later report by the Dow Jones news service named some of the corporate players whose educational "institutions" were involved in dubious schemes.
Colleges operated by Apollo Group Inc. (APOL), Corinthian Colleges Inc. (COCO) and Washington Post Co.'s (WPO) Kaplan Higher Education unit were among the schools the U.S. Government Accountability Office found provided 'deceptive and otherwise questionable information' to agents who posed as prospective students in an undercover investigation of for-profit student recruitment tactics.

It is tempting to look for parallels with health care, once a calling like higher education, but now increasingly an "industry," often run, as we have documented endlessly, by people with little experience or knowledge about how health care is actually done on the ground, with little sympathy for the values of health care professionals, and given strong incentives to maximize the money coming in, whatever it takes.

However, the issue goes beyond these parallels. In fact, many of the bigger for-profit education corporations provide considerable health care education, including the three named above. The University of Phoenix, a subsidiary of the Apollo Group Inc, offers a Masters of Science in Nursing degree. Several of the "brands" of Corinthian Colleges Inc offer offer "diploma and/or degree programs in health care." Kaplan University, a subsidiary of Kaplan Higher Education Corporation, has a School of Health Sciences.  So it seems likely that many health care professionals, or would-be health care professionals, have been enticed by the sorts of sales practices documented in the report. 

There are no known for-profit US medical schools.  However, as we have discussed, many US students go to for-profit "off-shore" medical schools, often in the Caribbean, who mainly "educate" US citizens who want to practice here (as opposed to all the schools in countries other than the US whose main goal is to educate doctors for their own countries.)  Some of these off-shore schools are owned by big US corporations.  One can only wonder whether their recruitment tactics are similar to those of the for-profit "universities" located in the US. 

We have discussed deceptive marketing of hospitals, drugs and devices, but now it seems that deceptive marketing is even more widespread in health care than we originally thought, along with the take the money and run ethos that has infected so much of the business world.

If we truly want to reform health care to improve quality and access, and control costs, we need to restore the focus to care, the care of the patient, and away of the false pursuit of economic efficiency that only seems to benefit the quick buck artists. 


Anonymous said...

Deceptive marketing is rampant within the medical industry. In yet another twist found in the August 10, 2010 WSJ, Banks Subpoenaed in Cuomo Card Probe, we find companies have been issuing health care credit cards.

“Our ongoing investigation has uncovered conflicts of interest and predatory practices in the health-care industry that are hurting New Yorkers and patients across the country,” Mr. Cuomo said.

It appears that “fast-talking sales pitches” are being used to persuade people to sign up for these cards by health-care providers. The problem is the “kickback arrangement” in the fee structure and the 48 hour payment reimbursement to the provider. This encourages the provider to suggest using the card over other forms of payment.

Beside the big bank providers of Chase and Citi who do we see offering these cards? GE.

The same people who are partnering with the ACP to bring EMR’s to doctors along with a vast array of other medical devices, including imaging equipment, and computer services.

Steve Lucas

Anonymous said...

Has this country become a larger than Madoff Ponzi scheme? Health care and the lack of it, has.