Wednesday, December 17, 2014

The Medical School as Hereditary Plutocracy - Retiring Board Chair Sanford Weill of Cornell Weill Medical School Names His Own Daughter as New Chair

As I have written before, sometimes you just could not have made this stuff up.

The Retiring Board Chairman Appoints His Own Daughter to Succeed Him

The most even handed reporting on this story was in Inside Higher Ed,


Leadership of the board that oversees Cornell University’s medical college is passing from father to daughter, an unusual transition of power for a higher education board.

Weill Cornell Medical College’s Board of Overseers has been chaired for the past two decades by its namesake and major donor, Sandy Weill, the former CEO of Citigroup.

His daughter, Jessica Bibliowicz, is now set to take over Weill's role. She is the founder and former CEO of a major insurance brokerage, and has also been on the board for a decade.

Let me just dissect this a bit.  Weill Cornell Medical College is a large, prestigious medical school located in New York City, and part of Cornell University.  The chair of its Board of Overseers for the last two decades as been one Sanford I Weill.  Mr Weill is a famous finance executive, formerly CEO of Citigroup from 1998 - 2003, remained chairman of the board of Citigroup through 2006, and is now chairman emeritus (look here). 

According to a Cornell press release, the new chairperson, ms Jessica Bibliowicz, is a

Cornell University graduate in 1981 and after working 18 years in financial services, Ms. Bibliowicz became CEO of National Financial Partners in 1999, a financial services firm that specializes in benefits and wealth management. The company went public in 2003 and was sold to Madison Dearborn in 2013.

 Currently,

Ms. Bibliowicz is a senior advisor at Bridge Growth Partners and serves on the board of directors of Sotheby's(NYSE: BID); Realogy (NYSE: RLGY); and the Asia Pacific Fund (NYSE: APB). She is a board director/trustee of Prudential Insurance Funds....

The Inside Higher Ed article noted that

In a statement, Cornell said, Weill Cornell Medical College engaged in a comprehensive process to select its chair of the Board of Overseers by canvassing multiple members of the board in full consultation with senior leadership. The search was headed by a group of senior trustee overseers with extensive knowledge of the institution and Weill Cornell firmly believes it has selected the best choice as chair.'

The New York Times reporting of the succession, oddly in the Dealbook blog, which is focused on finance and Wall Street, not medicine, made it seem, however, that Mr Weill handpicked his daughter to succeed him,

he increasingly felt that the time was nearing to appoint a successor.

'I felt like it was a good time for younger blood,' he said.

Ultimately, he decided upon his daughter,

The Cornell press release lauded Mr Weill, the retiring chair as providing "bold and visionary leadership," having "enduring dedication," exemplifying "benevolence and unwavering resolve to ensure a healthier future," etc, etc.  It called him a "self-made man who exemplifies the philosophy of leading by example."  It quoted the current dean of the medical school, Dr Laurie Glimcher, (whose apparent conflict of interest as a board member of Bristol-Myers-Squibb we discussed here and here) calling his accomplishments "breathtaking."  It quoted the university president, David Skorton, calling him again a "visionary."

In the Dealbook article, Dr Glimcher further praised the chairperson designate, Ms Bibliowicz, as "a person of enormous energy and passion," who will "bring her energy, her connections and her passion for medicine and medical research and education to the role."


The Inside Higher Ed article noted some vague questions about the position of chair of the board of trustees of an important medical school being passed from father to daughter,

'On the other side of the coin, within-family succession planning adds complexity to the issue -- it just raises certain questions,' [former vice president for programs and research at the Association of Governing Boards of Universities and Colleges Peter] Eckel said.

However, Mr Eckel did not really list these questions.

Later, the article referred to "nepotistic arrangements," presumably in part referring to this father - daughter transition, but then found someone to defend them. 

The Real Questions

Weill Cornell Medical College is part of a non-profit organization.  Nonprofit organizations have no owners. Non-profit organizations are formed to support particular missions, under the stewardship of boards of trustees (or directors or overseers).  These boards have three basic duties [italics added]

 Duty of care: Board members are expected to actively participate in organizational planning and decision-making and to make sound and informed judgments.
Duty of loyalty: When acting on behalf of the organization, board members must put the interests of the nonprofit before any personal or professional concerns and avoid potential conflicts of interest.
Duty of obedience: Board members must ensure that the organization complies with all applicable federal, state, and local laws and regulations, and that it remains committed to its established mission.

Thus, the transfer of the position of chair of the board from parent to offspring, apparently directly under the control of the parent, is questionable on its face, suggesting that family interests came before the "interests of the nonprofit."  Such transfers may commonly occur on the boards of privately family held for-profit companies, but are basically unheard of for medical schools or other large academic medical nonprofit organizations, where they certainly could appear nepotistic.

That concern is amplified when neither parent or child have any appreciable background or training in the work of the nonprofit.  Neither Mr Weill nor Ms Bibliowicz seem to have any training or background in health care, biomedical research, or specifically medicine.  Yet Weill Cornell Medical School's basic mission is to train students to be physicians.  So how well either or their personal judgments about the policy and operations of a medical school are "informed" is not exactly clear.  

Further concerns are raised by the background of the father in this father daughter transaction, the part of the background that was entirely ignored by the rather fawning public discussion of the transaction in the Cornell press release, and also the NY Times Dealbook article.

In fact, Mr Weill's leadership in the past was of Citigroup during the lead up to the global financial collapse of 2008.  Citigroup, the poster child for the too big to fail bank, nearly went bankrupt, and required a huge government bailout.  Its near collapse, again apparently only prevented by government action, is widely considered to have been a major cause of the finance disaster starting in 2008.  As we noted in a 2009 blog post about Weill Cornell,   The Sellout, by Charles Gasparino, featured vivid portraits of the bad leadership that lead to the collapse, including specifically Mr Weill,

But in reality, Will never really ran anything. He was a visionary, to be sure, but one whose vision was so myopically focused on building the empire had lusted for for so long and on its share price that he ignored just about everything else. (p. 144)

Furthermore, this was Mr Weill's listing in the "key people" section of the book,

Former CEO and chairman of Citigroup, Weill created the idea of the one-stop-shopping mega-financial conglomerate, engineering a series of mergers ... and in the process created the world's largest financial company.  Famously obsessed with his firm's stock price, Weill announced his resignation in 2003 after investigators discovered he'd pressured a stock analyst, Jack Grubman, to raise his rating on AT&T, where Weill was on the board, in return for ensuring that Grubman's children got into an exclusive preschool.

Furthermore, in the Time magazine series on the "25 People to Blame for the Financial Crisis," Mr Weill is listed as  "blameworthy" because,

Who decided banks had to be all things to all customers? Weill did. Starting with a low-end lender in Baltimore, he cobbled together the first great financial supermarket, Citigroup. Along the way, Weill's acquisitions (Smith Barney, Travelers, etc.) and persistent lobbying shattered Glass-Steagall, the law that limited the investing risks banks could take. Rivals followed Citi. The swollen banks are now one of the country's major economic problems. Every major financial firm seems too big to fail, leading the government to spend hundreds of billions of dollars to keep them afloat. The biggest problem bank is Weill's Citigroup. The government has already spent $45 billion trying to fix it. 

In a post on the Baseline Scenario blog, Simon Johnson, author of another authoritative book on the financial crisis, 13 Bankers, wrote this about Citigroup leadership,

Citigroup is a very large bank that has amassed a huge amount of political power. Its current and former executives consistently push laws and regulations in the direction of allowing Citi and other megabanks to take on more risk, particularly in the form of complex highly leveraged bets. Taking these risks allows the executives and traders to get a lot of upside compensation in the form of bonuses when things go well – while the downside losses, when they materialize, become the taxpayer’s problem.

Citigroup is also, collectively, stupid on a grand scale. The supposedly smart people at the helm of Citi in the mid-2000s ran them hard around – and to the edge of bankruptcy. A series of unprecedented massive government bailouts was required in 2000-09 – and still the collateral damage to the economy has proved enormous. Give enough clever people the wrong incentives and they will destroy anything.

Physicians are supposedly rigorously trained, and tasked with upholding important ethical principles.   So did it make sense to entrust the stewardship of a premier American medical school to the man who engineered the expansion of Citigroup that turned out to be "stupid on a grand scale," in order to "get a lot of upside compensation," while leaving the "downside losses" to become "the taxpayer's problem," so that the "collateral damage to the economy has proved enormous?"   Does it make sense to allow him to choose his own daughter, who has no more medical experience than he did (which was zero), to steward the school in the future?

I wonder what Cornell medical students, or physician alumni would say, if they felt safe enough to answer the question?

As we wrote in 2009,  boards of trustees of not-for-profit health care institutions have a primary duty to uphold the institutions' missions.  Thus, one would think such boards would be selected according to their dedication to their missions.  But perhaps, in the grubby real world, there may be more important criteria, possibly such as the size of their donations to the institution.  Furthermore, those likely to donate the most  may be more likely to be richest (and perhaps most in need to making themselves appear philanthropic and public-spirited) than the most fervent upholders of patient care, teaching and research.

Maybe giving stewardship of our once proud health care institutuions to people most likely to defend their missions, rather than most likely to donate a lot of money, would result in somewhat poorer institutions which do a better job of patient care, teaching and research.

You heard it here first.  
 

Monday, December 15, 2014

EHRs and Ebola in the Texas Health Presbyterian Hospital ED: the ED physician finally speaks out

At my Oct. 2, 2014 post "Did Electronic Medical Record-mediated problems contribute to or cause the current Dallas Ebola scare?" (http://hcrenewal.blogspot.com/2014/10/did-electronic-medical-record-mediated.html) I had written:

While I have no evidence as to any role of EHRs in this seemingly strange, cavalier and incomprehensible medical decision to send this man home, resulting in potential exposure of numerous other individuals to Ebola (and I am certainly not in a position to have such evidence), I believe this possibility [that is, an EHR-related information snafu - ed.] needs to be investigated fully.
 
I then did an update:

10/3/2014 Update:

My suspicions were apparently correct.  [The hospital admitted an EHR role - ed.]

Then, the hospital retracted its admission, blur and obfuscation broke loose in the press, and the situation became foggy.  See posts by Roy Poses and myself at query link http://hcrenewal.blogspot.com/search/label/Ebola%20virus, including Dr. Poses' Nov. 24, 2014 post "Public Relations and the Obfuscation of Management Errors - Texas Health Resources Dodges its Ebola Questions" at http://hcrenewal.blogspot.com/2014/11/public-relations-and-obfuscation-of.html.

Finally, the primary clinician involved speaks.  Do read the whole article, as it delves into behind-the-scenes issues:

ER doctor discusses role in Ebola patient’s initial misdiagnosis
By REESE DUNKLIN and STEVE THOMPSON
Dallas Morning News
Dec. 6, 2014
http://www.dallasnews.com/ebola/headlines/20141206-er-doctor-discusses-role-in-ebola-patients-initial-misdiagnosis.ece

... "[ED physician Joseph Howard Meier's] notes in the medical records say he had reviewed the nursing notes. Hospital officials told Congress that the ER physician several times accessed portions of the electronic records where the nurse had recorded Duncan’s arrival from Africa. It wasn’t clear, though, “which information the physician read,” hospital officials told Congress. 

Meier told The News he hadn’t seen the Africa notation in Duncan’s records. The physician said the hospital’s electronic medical records system contained a lot of information, which, like patients,must also be triaged.” 


Clinicians in an ED have to "triage" information from their records systems, just like patients need to be triaged?  That is a candid and astonishing (to anyone with common sense) admission.

Paper charts never had those problems in my own time working in the ED.

Further, ED charts used to be relatively brief, which is why as a Chief Medical Informatics Officer I recommended document imaging systems only in ED's, to make charts available 24/7/anywhere, and data transcriptionists to capture important data into computers later, not full EHR systems where clinicians enter data which I felt (and still feel) are inappropriate in faced-paced, high-risk settings.

(Put another way, the experiments of direct data entry by busy clinicians, and clinicians attempting to drink information from a tangled cybernetic EHR firehose, are proving a failure.)

... The “travel information was not easily visible in my standard workflow,” he said.This has now been modified very effectively.”

Modified only after near-catastrophe.  How many other "modifications" (i.e., experimental software changes) will be needed over time in this and other EHRs, I ask?  (Perhaps 10,000 such as here: http://hcrenewal.blogspot.com/2014/06/in-fixing-those-9553-ehr-issues.html?)

... The News asked Meier whether knowing Duncan’s travel history would have changed his evaluation. 

“If he told me he came from Liberia, this would have prompted me to contact the CDC and begin an evaluation for Ebola,” Meier said, “but the likelihood would have still been low since Mr. Duncan denied any sick contacts.”

Over the next few hours, Meier ordered tests, along with an IV for saline. He prescribed extra-strength Tylenol, which the nurse gave Duncan at 1:24 a.m. Meier reviewed Duncan’s vital signs. CT scans of Duncan’s head were “unremarkable,” the medical records say, showing no sign of sinusitis.

Doctors typically order CT scans to rule out more serious possibilities, such as a hemorrhage or meningitis. In his responses to The News, Meier said he ordered the CT scan because of Duncan’s headache.

Meier did not say whether the CT scan’s lack of an indication of sinusitis factored into his diagnosis. “Sinusitis is mostly a clinical diagnosis,” he said.

At 3:02 a.m., Duncan’s temperature was 103 degrees, his medical records say. Sixteen minutes later, however, Meier entered a note saying: “Patient is feeling better and comfortable with going home.” Meier told The News he hadn’t seen the higher temperature in Duncan’s chart.

Duncan was discharged at 3:37 a.m. with the diagnosis of sinusitis. His last recorded fever, at 3:32 a.m., was 101.2 degrees. Meier prescribed Duncan the antibiotic Zithromax, 250-milligram tablets, to be taken twice the first day and once daily for four more days.

I note two things:

1.  If an EHR company has hiring practices allegedly such as described via Histalk blog at my Aug. 15, 2010 post "EPIC's outrageous recommendations on healthcare IT project staffing" (http://hcrenewal.blogspot.com/2010/08/epics-outrageous-recommendations-on.html), where rank-novice recent college graduates suddenly become EHR experts afters some transfusion of wisdom at corporate HQ (perhaps via this alien neural interface device that imparts the Knowledge of the Ancients: http://stargate.wikia.com/wiki/Repository_of_knowledge?), then what can one expect?


The Stargate neural interface device that imparts the Knowledge of the Ancients via direct brain download.  Presto - instant EHR expert!


and

2.   I note what I am going to somewhat satirically going to call the "Silverstein EHR principle", that states:

  • When bizarre and otherwise inexplicable information-related snafus occur in hospitals, especially in fast-paced, high-risk areas, suspect bad health IT as causative or contributory as #1 in your differential diagnosis (or post-mortem, as the case may be).

-- SS

Sunday, December 14, 2014

Yale Medicine: "Straddling medicine and journalism, a former resident keeps an eye on the science press"

As a Yale medical school alumnus (post doctoral fellowship in Medical Informatics 1992-4, faculty in Medical Informatics 1994-6), I receive their literary magazine "Yale Medicine."

In the current issue I just received is a story about another Yale medical school graduate who through writing, both professionally and via blogs, is a gadfly against bad medicine - and bad media about bad medicine - like myself and the other bloggers at Healthcare Renewal, at http://yalemedicine.yale.edu/autumn2014/people/alumni/204173.

His name is Ivan Oransky, MD.

... After his internship, Oransky chose journalism over the practice of medicine. “It wasn’t the easiest for my parents to get used to, but once they saw that I was really happy and accomplishing things and adding value to the world, they got it,” he recalled. He was hired as founding editor in chief of Praxis Post, a webzine that was dubbed “Vanity Fair for doctors.” Following that, he was deputy editor of The Scientist and managing editor of Scientific American.

In 2010 Oransky started two blogs to keep tabs on the science communication ecosystem: Retraction Watch, which analyzes research corrections and retractions and which he runs with Anesthesiology News editor Adam Marcus; and Embargo Watch, a site that monitors premature news breaks and the effects embargoes have on news coverage. After four years as executive editor of Reuters Health, Oransky joined MedPage Today in July 2013.

The Yale Medicine piece is worth a read at the link above.

-- SS

Friday, December 12, 2014

Again, the Hospital CEO as Scrooge - Erlanger CEO and Other Top Hired Managers Get Bonuses Months After They Froze Employees' Paid Time Off

Less than two weeks ago, we discussed a series of cases in which there was a marked contrast between how well top hired managers of non-profit hospitals were doing, and how their institutions were doing. 

Now another vivid example of this problem as appeared, affecting Erlanger Health System,  a non-profit hospital system in Tennessee that has recently seen hard times.

Freezing Paid Time Off

In March, 2014, as reported by the (Chattanooga, TN) Time Free Press,

Erlanger Health System's latest strategy to staunch financial losses has hit its most personal note yet, as hospital executives have decided to freeze the paid time off accruals for 4,000 employees from now until July.

Erlanger employees used the words 'defeated,' 'distressed' and 'betrayed' when describing staff reactions to the cuts, announced Friday.

The sudden decision shows just how high stakes are becoming at the Chattanooga public hospital. Erlanger is $3.8 million in the red this fiscal year and is also feeling the weight of roughly $14 million in state, federal and insurance cuts this year, hospital executives say.

At that time, hospital managers emphasized the fairness of the freeze because it would be applied across the board,

 No one -- including executive staff and doctors-- will be exempt from the freeze, which will span nine pay periods and is expected to save the hospital $5.4 million, said hospital Chief Administrative Officer Gregg Gentry.

Furthermore,

 Of all potential cuts discussed -- including layoffs -- the executive staff said the decision to temporarily freeze paid time off would have the most impact on the budget while having the 'least impact' on employees.

The result means 'everyone has to sacrifice' to make those goals, [CEO Kevin] Spiegel said.

The freeze may have so badly affected employee morale because it came on top of other changes imposed on employees,

 Erlanger has already made significant changes to employees' benefits this year -- phasing out its traditional pension plan in favor of 401(k)-like accounts; changing how paid leave is structured and approved; and increasing what retirees pay toward their health insurance.

However, there was hope that perhaps the freeze would not last long, since hospital managers had located some government money that might be obtained to relieve the deficit.

More Money, So the First Thing to Do is Give Bonuses to Top Hired Managers

By December, 2014, Erlanger finances had at least temporarily improved, partially because of access to the government money.  So, as again reported by the Times Free Press, the first thing the hospital system board did was to give bonuses to the managers who had imposed all those cuts on other employees.

At the end of a year that started with freezing employees' vacation time and warnings of financial crisis, Erlanger Health System will award $1.7 million in bonuses to its top management for financial performance.

Erlanger trustees voted Thursday to pay the incentives, which were determined by a series of benchmarks set last year. The public hospital's financial turnaround -- driven largely by a $19 million infusion of federal money -- will enable the payout averaging $17,100 to 99 managers.

Erlanger CEO Kevin Spiegel will collect $234,669 in bonus pay, bringing his total compensation this year to $914,669. Trustees also voted to give Spiegel a 10 percent raise next year, upping his base pay to $748,000, and approved a 2 percent nonbudgeted pay raise for hospital employees.

Sometimes, you just cannot make this stuff up. The CEO gets a 10% increase in base pay, and almost a quarter-million dollar bonus, while regular employees may get a 2% increase after enduring vacation time freezes, and various reductions in benefits.

Furthermore, while money was saved by supposedly across the board cuts, reducing the benefits of hard working employees, including health professionals who took direct care of patients, and revenues were increased by some relatively easily found money from the federal government, the hospital system board seemed to attribute the sudden success only to the top hired managers.

 'Management has performed exceedingly well,' said board Chairman Donnie Hutcherson, [a certified public accountant, and partner in an accounting firm] who added that the compensation is comparable to that of other hospitals such as Erlanger.  'This is well deserved. They have put in long, long hours.'

He explicitly did not seem to consider whether other Erlanger employees, especially doctors, nurses, and other health professionals also were putting in long hours, and working diligently under difficult circumstances.

 One Erlanger nurse, who asked not to be named for fear of losing her job, said the management incentives 'have come at the expense of their employees and the sacrifices they have made.'

'[Employees] have had vacation time taken away and are paying more for benefits. They are routinely overworked and understaffed,' the nurse said Friday. 'The morale among staff and doctors is the lowest I have ever witnessed. If that constitutes a bonus, obviously my belief system of what I think is morally and ethically right and wrong is not shared by the management or board members at Erlanger.'
Thus this was a strikingly bizarre use of one of the talking points that are often used to justify high and ever increasing compensation for top hired managers.  Managers are often hyped as "brilliant," and "hard working," without any explicit comparison to any other employees, especially to health care professionals who often go through much more rigorous training, and may work far longer hours than managers, administrators, bureaucrats, or executives.  (Look here)


Previous Disconnects Between Executive Compensation and Hospital Finances

In fact, discrepancies between how hired executives are treated and how the hospital system is faring financially are old hat for the Erlanger Health System.  In 2012, we noted how the board voted to give a previous CEO a golden parachute soon after the system first began running a deficit, and after unpaid work days were imposed on other employee.  After further financial deterioration, the board voted to put the severance package on hold.  However, this 2013 Times Free-Press article suggestsd that CEO ultimately received it, paid out over 15 months.  Furthermore, as we wrote in 2011, the system board did something similar in 2009, giving the CEO bonuses despite financial losses and a bond default.

This history did not seem to inform the board's current decision making, or perhaps it did inform the board that they could get away with such decisions?

Once Again, the Board Temporarily Backs Off Under Public Pressure

The Times Free-Press reported today, December 12, 2014, that once again the board has retreated,at least for a while, 

Facing criticism and questions from state lawmakers after voting to award executives $1.7 million in bonuses, Erlanger Health System officials said Thursday night they will put the payments on hold and review their actions.

Trustees for the public hospital voted Dec. 4 to approve bonuses for 99 managers, including more than $234,000 for CEO Kevin Spiegel.

The Hamilton County legislative delegation -- which appointed three trustees to the 11-member board -- harshly criticized the move, saying the hospital had not proven it could afford such bonuses after ending the last three years in the red and relying on a federal funding pool to end this year with a profit.

Whether or not the bonuses will be cancelled, reduced, or merely delayed, however, still is unclear.

 Summary

In US health care, the top managers/ administrators/ bureaucrats/ executives - whatever they should be called - continue to prosper ever more mightily as the people who actually take care of patients seem to work harder and harder for less and less. This is the health care version of the rising income inequality that the US public is starting to notice.  It seems all the more unfair in health care, since the income inequality is clearly between managers/ administrators/ bureaucrats/ executives who are mostly generic, that is, not specifically trained or experienced in health care or biomedical science, and the doctors, nurses, therapists, and technicians who actually take care of patients.  (For example, the CEO of Erlanger Health Systems, Mr Kevin Spiegel, has an MBA in Health Care Administration from Adelphi, and no obvious training or experience in actual patient care, nor biomedical science.)

As we have noted before, most recently here, the favored treatment of the managers/ etc ... is often justified by other managers on the boards of trustees who are supposed to exercise stewardship over health care organizations, and by the public relations flacks, marketers and lawyers employed by the self-same managers.  The justifications usually consist of repetitions of the same stale talking points, as if in a vacuum.  Note above that the Erlanger board member justified the bonuses by extolling the managers' performance and long hours, totally ignoring how many other hospital system employes worked hard and well to keep the system above water.

Thus, like hired managers in the larger economy, non-profit hospital managers have become "value extractors."  The opportunity to extract value has become a major driver of managerial decision making.  And this decision making is probably the major reason our health care system is so expensive and inaccessible, and why it provides such mediocre care for so much money. 


One wonders how long the people who actually do the work in health care will suffer the value extraction to continue?

So to repeat, 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.  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.

Wednesday, December 10, 2014

The Tenth Anniversary of Health Care Renewal

Today is the tenth anniversary of Health Care Renewal.

To commemorate, I have republished our introductory post...(with links added)

Health care around the world is beset by rising costs, declining access, stagnant quality, and increasingly dissatisfied health care professionals. Discussions with physicians and other professionals revealed pervasive concerns that the core values of health care are under seige. Patients and physicians are caught in cross-fires between conflicting interests, and subject to perverse incentives. Free speech and academic freedom are threatened. Psuedo-science and anti-science are gaining ground. Causes include the increasing dominance of health care by large organizations, often lead by the ill-informed, the self-interested, and even the corrupt. (1) However, such concentration and abuse of power in health care has rarely been discussed openly. This blog is dedicated to the open discussion of health care's current dysfunction with the hopes of generating its cures.

1. Poses RM. A cautionary tale: The dysfunction of American health care. Eur J Int Med 2003; 14: 123-130.

You heard it here first.

Health Care Renewal is written by voluntary bloggers.  We have a small amount of financial support from our poor but honest non-profit, the Foundation for Integrity and Responsibility in Medicine (FIRM).  Please help us by contributing to FIRM, a US 501(c)3.  All contributions are US tax deductible as provided by US law. Our address is 16 Cutler St, Suite 104, Warren, RI, 02885. Email info at firmfound dot org for questions or comments.

Tuesday, December 09, 2014

Stryker Subsidiary Pleads Guilty to Selling Adulterated Devices, Former CEO of Subsidiary Pleads Guilty to Fraud, Stryker's Track Record Goes Unremarked

The US Thanksgiving Day parade is over, so it must be time for the march of legal settlements to begin again. Our next example was best described by Bloomberg and by NJcom, but brief articles from the Associated Press, Reuters, and the Wall Street Journal have also appeared.

The Basic Facts

The Bloomberg lede was,

Stryker Corp. OtisMed unit pleaded guilty to selling devices used in knee-replacement surgeries in September 2009 without regulatory approval and will pay more than $80 million to resolve the case.

The conduct in question was,

The company admitted it never obtained U.S. Food and Drug Administration approval to sell 18,000 custom-built devices used by surgeons from 2006 to 2009 to make accurate bone cuts to implant prosthetic knees. OtisMed applied for FDA approval in October 2008, and the agency said 13 months later the company hadn’t shown it was safe and effective. [OtisMed CEO Charlie] Chi then shipped 218 devices to surgeons, overruling his advisers and board.

Furthermore, in this case, there was some information about who actually did what,

After a conference call with OtisMed directors on Sept. 9, 2009, Chi talked to two employees about ways to hide the shipments from the FDA, including taking them to an off-site shipping location, using Chi’s personal Federal Express account, and backdating shipping documents, court records show.

The NJ.com report clarified to what charges the guilty pleas referred,

Charlie Chi, 45, pleaded guilty to three misdemeanor counts of fraud linked to the September 2009 shipment of 218 OtisMed devices to surgeons throughout the U.S., including 16 in New Jersey.

Also,

OtisMed, which was acquired by Stryker Corp., pleaded guilty to a felony charge of distributing adulterated medical devices into interstate commerce.... 

So, a company acquired by large medical device manufacturer Stryker admitted and pleaded guilty to charges that it fraudulantly marketed an unapproved device, and that this marketing was lead and facilitated by the company's CEO.  The CEO pleaded guilty to misdemeanor fraud charges.

The Penalties

Per Bloomberg,

OtisMed will pay a fine of $34.4 million and forfeit $5.16 million in a criminal case, while paying a civil fine of $41.2 million. The company pleaded guilty today in federal court in Newark, New Jersey, where former Chief Executive Officer Charlie Chi also pleaded guilty.

Chi has not yet been sentenced, but according to NJ.com,

Chi, of San Francisco, faces up to three years in prison when he’s sentenced on March 18, 2015.

Bloomberg noted that,

The $80 million payment is almost three times the total revenue that OtisMed got for all of the knees the company sold, according to Fishman.

However, the amount could also be compared to the approximate annual revenue of Stryker Corp, which was most recently about $8 billion per Google Finance, or its net income, about $1 billion.

Furthermore,

OtisMed was barred from Medicare, Medicaid and all other federal health-care programs for 20 years. Stryker, based in Kalamazoo, Michigan, wasn’t barred.

This case was unusual in that a health care corporate CEO was actually charged and pleaded guilty to crimes connected to illegal marketing practices, and in that his company not only admitted wrongdoing and pleaded guilty, but also agreed to disbarment from federal programs.  However, by the time the case was thus decided, the CEO was no longer CEO, his company had been acquired by a larger health care corporation, and that corporation, while letting its new subsidiary agree to a fine and disbarment, was not itself disbarred from anything. 

Stryker's Track Record 

The Bloomberg noted that Stryker did not have unblemished track record,


In 2007, New Jersey’s U.S. attorney at the time, Chris Christie, reached an agreement with four makers of hip- and knee-implants that paid $310 million to settle U.S. claims they paid kickbacks to surgeons who used their products. Stryker, a fifth company, received a non-prosecution deal. Christie, a possible Republican presidential candidate in 2016, is now governor.

In fact, that year, we posted (here, here, here, and here) about the payments, often huge, that five manufacturers of prosthetic joints (Biomet, DePuy Orthopaedics (a unit of Johnson & Johnson), Stryker Orthopedics,a unit of Stryker Inc, Zimmer Holdings, and Smith & Nephew) revealed they made to orthopedic surgeons and various academic and other organizations. We also noted that some of the leadership of the major orthopedic societies have received substantial amounts from these companies, as have the societies themselves.

However, there is much more to the Stryker track record,

In 2013, we noted that Stryker paid $13.2 million to settle charges that it bribed doctors in various countries to use its devices, violating the US Foreign Corrupt Practices Act (FCPA) (look here).

In 2012, we noted that Stryker paid a $15 million fine after pleading guilty to a federal count of misbranding a medical device. Government prosecutors alleged the company conspired to defraud surgeons into combining two of its products, contrary to their labeled usage, and possibly harming patients (look here).

In 2010, we noted that Stryker paid $1.35 million to settle charges that it marketed bone growth products without FDA approval (look here).

In 2009, we noted that two Stryker sales representatives pleaded guilty to charges they promoted off-label use of Stryker bone growth products although they knew such use could endanger patients (look here).  

So the larger corporation that paid fines that appeared large, but were actually small given its size, and that let its subsidiary and its subsidiary's former CEO otherwise take the raps, had a long track record of similarly questionable behavior.  That track record did not apparently inform the resolution of the current case.


Summary

So here we go again. A large medical device company resolved charges of wrongdoing by paying a fine that appears large to the common person, but in fact was small compared to its revenue.  The case was unusual in that the company did admit wrongdoing, but in a way that seemed to reflect the blame onto one of its subsidiaries.  The case was further unusual in that a CEO was charged and pleaded guilty, but it was not the CEO of the large corporation, but the former CEO of the acquired company.  The case was yet further unusual in that a company was disbarred from transactions with the federal government, but the company was just the subsidiary of the larger company, which otherwise could continue business as usual. 

Thus while the penalties meted out in this case seemed more severe than usual, on examination they left the big parent corporation relatively unscathed.  No one still in management at that corporation, including anyone involved in the acquisition of the wayward subsidiary, apparently will suffer any negative consequences.  Furthermore, that larger corporation turns out to have a substantial track record of previous misbehavior.  Yet that did not apparently affect the outcome of this case, and little of this track record was even reflected in the reporting of the current case.

While we have often - some might say ad infinitum - discussed the march of legal settlements by large health care organizations, and how these settlements seem to impose relatively small penalties on the corporations, and leave their hired managers untouched, these settlements seem to produce few echoes.  Like many other examples of unpleasantness that might reflect badly on the leaders of large health care organizations, even those who may have personally profited from the unpleasantness, they remain largely anechoic.  So we would urge the reporters who cover the next settlements by big health care organizations at least look to see if the organizations had been involved in similar settlements in the past

Finally, as we have said all to often,...   The failure of the current limp legal efforts against such corruption is evident by how many corporations have become ethical repeat offenders.  Pervasive bad behavior by large health care organizations has got to be a major cause of our ongoing health care dysfunction.  So, to really deter bad behavior, those who authorized, directed or implemented bad behavior must be held accountable. As long as they are not, expect the bad behavior to continue.

Wednesday, December 03, 2014

A new "Better EHR" book and an observation re: health IT regulation, health IT amateurs, and user centered design (UCD) - "responding to user feature requests or complaints?"

A new book has appeared on improving usability of electronic health records.  The result of government-sponsored work, the book is available free for download.  It was announced via an AMIA (American Medical Informatics Association, http://www.amia.org/) listserv, among others:

From: Jiajie Zhang [support@lists.amia.org]
Sent: Tuesday, December 02, 2014 6:00 PM
To: implementation@lists.amia.org
Subject: [Implementation] - New Book on EHR Usability - "Better EHR: Usability, Workflow, and Cognitive Support in Electronic Health Records"

Dear Colleagues,

We are pleased to announce the availability of a free new book from the ONC supported SHARPC project: "Better EHR: Usability, Workflow, and Cognitive Support in Electronic Health Records". The electronic versions (both pdf and iBook) are freely available to the public at the following link: https://sbmi.uth.edu/nccd/better-ehr/


First, this book appears to be a very good resource at understanding issues related to EHR usability.  I particularly like the discussion of cognitive issues.

However, this book also holds messages about the state of the industry and the issue of regulation vs. no regulation, and impairment of innovation:

I think it axiomatic that user-centered design (UCD) is a key area for innovation, especially in life-critical software like clinical IT.  (I would opine that UCD is actually critical to safety and efficacy of these sophisticated information systems in a sociotechnically complex setting.)

I think it indisputable that the health IT industry has been largely unregulated for most of its existence, in the manner of other healthcare sectors such as pharma and traditional medical devices.

Yet, even in the absence of regulation, the book authors found this, per Section 5 - EHR Vendor Usability Practices:

a)  A research team of human factors, clinician/human factors, and clinician/informatics experts visited eleven EHR vendors and conducted semi-structured interviews about their UCD processes. "Process" was defined as any series of actions that iteratively incorporated user feedback throughout the design and development of an EHR system. Some vendors developed their own UCD processes while others followed published processes, such as ISO or NIST guidelines.

Vendor recruitment. Eleven vendors based on market position and type of knowledge that might be gained were recruited for a representative sample (Table 1). Vendors received no compensation and were ensured anonymity.
and

b)  RESULTS
Vendors generally fell into one of three UCD implementation categories:

Well-developed UCD: These vendors had a refined UCD process, including infrastructure and the expertise to study user requirements, an iterative design process, formative and summative testing. Importantly, these vendors developed efficient means of integrating design within the rigorous software development schedules common to the industry, such as maintaining a a network of test participants and remote testing capabilities. Vendors typically employed an extensive usability staff.

Basic UCD: These vendors understood the importance of UCD and were working toward developing and refining UCD processes to meet their needs. These vendors typically employed few usability experts and faced resource constraints making it difficult to develop a rigorous UCD process.

Misconceptions of UCD: These vendors did not have a UCD process in place and generally misunderstood the concept, in many cases believing that responding to user feature requests or complaints constituted UCD. These vendors generally did not have human factors/usability experts on staff. Leadership often held little appreciation for usability.

About a third of our vendor sample fell equally into each category.

In other words, a third of health IT sellers lacked the resources to do an adequate job of UCD and testing; and a third did not even understand the concept.

Let me reiterate:

In an unregulated life-critical industry, a third of these sampled sellers thought 'responding to user feature requests or complaints constituted UCD'.  And another third neglected UCD due to a 'lack of resources'.

I find that nothing short of remarkable.

I opine that this is only possible in healthcare in an unregulated healthcare sector.

Regulation, for example, that enforced good design practices and good manufacturing practices (GMP's) could, it follows, actually improve clinical IT innovation considering the observations found by these authors, through ensuring those without the resources either found them or removed themselves from the marketplace, and by making sure those sellers that did not understand such a fundamental concept either became experts it UCD, or also left the marketplace.

I can only wonder in what other fundamental(s) other sellers are lacking, hampering innovation, that could be improved through regulation.

As a final point, arguments that regulation hampers innovation seems to assume a fundamental level of competency and good practices to start with among those to be freed from regulation. In this case, that turns our to be an incorrect assumption. 

As a radio amateur, I often use the term "health IT amateurs" to describe persons and organizations who should not be in leadership roles in health IT, just as I, as a radio amateur, should not be (and would not want to be) in a leadership role in a mission-critical telecommunications project.

I think that, inadvertently, the writers of this book section gave real meaning to my term "health IT amateurs."  User centered design is not a post-accident or post-mortem activity.

-- SS

12/4/2014 Addendum:

I should add that in the terminology of IT, "we don't have enough resources" - a line I've heard numerous times in my CMIO and other IT-related leadership roles - often meant: we don't want to do extra work, to reduce our profits (or miss our budget targets), or hire someone who actually knows what they're doing because we don't really think that the expertise/tasks in question are really that important.

In other cases, the expertise is present. but when those experts opine an EHR product will kill people if released, they find the expert 'redundant', e.g., http://cci.drexel.edu/faculty/ssilverstein/cases/?loc=cases&sloc=lawsuit.

Put in more colloquial terms, this is a slovenly industry that has always made me uncomfortable, perhaps in part due to my experience having been a medical safety manager in public transit (SEPTA in Philadelphia), where lapses in basic safety processes could, and did, result in bloody train wrecks.

Perhaps some whose sole experience with indolence and incompetence-driven catastrophe has been in discussions over coffee in faculty lounges cannot appreciate that viewpoint.

Academic organizations like AMIA could do, and could have done, a whole lot more to help reform this industry, years ago.

-- SS

Monday, December 01, 2014

The Hospital CEO as Scrooge - Hired Managers Get Raises While Presiding Over Deficits, Layoffs and Pay Cuts

Million dollar plus managers of non-profit hospitals and health systems are now -forgive me - a dime a dozen. Payments to top managers continue to rise, faster than inflation, and faster than the pay given to other people in the health care field.

Top Hired Managers' Pay Increases Far Faster than Pay of Other Employees

For example, last August, Modern Healthcare published a summary article which included

Total cash compensation grew an average of 24.2% from 2011 to 2012 for the 147 chief executives included in Modern Healthcare's analysis of the most recent public information available for not-for-profit compensation. Of those 147 CEOs, 21, or 14.3%, saw their total cash compensation rise by more than 50%.

Another 51, or 35.7%, received total cash compensation increases of 10% or higher.

Furthermore,

The survey results suggest hospital system CEOs received increases in their base compensation that was about four times greater than average workers, who have gotten annual pay hikes of less than 2% in recent years. Of the 143 analyzed, 37, or 25.9%, received raises in their base compensation that were 10% or higher; another 69, or 48.3%, had raises between 2% and 9.9%; and just 23 of the group, or 16.1%, saw a decline in their base compensation, according to Form 990s.
The Talking Points Remain Unchanged

Yet the justification given for such munificent pay of the top hired managers of non-profit organizations that are supposed to put patient care (and sometimes teaching and research) ahead of personal enrichment never seem to go beyond the talking points we have previously discussed.

 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 here, and then provided additional examples of their use here, here here, here, here, and here, and here

They are:
- We have to pay competitive rates
- We have to pay enough to retain at least competent executives, given how hard it is to be an executive
- Our executives are not merely competitive, but brilliant (and have to be to do such a difficult job).

True to form, the Modern Healthcare article also included,

The "Competitive Rates" Talking Point

Hospital systems, their boards and outside compensation consultants justify these raises as adjustments necessary to keep pace with what the market dictates and to compete for talent that might flee to more-lucrative for-profit positions.

The "Retention" Talking Point

'We want to make sure we can recruit and retain the highest quality of staff, while balancing benefits and the salaries that are reasonable as compared to other organizations,' Mayo's [chief human resources officer Jill] Ragsdale said.

The "Brilliant Executive, Difficult Job" Talking Point

Jill Ragsdale, Mayo Clinic's chief human resources officer  [said] 'We want to make sure we can recruit and retain the highest quality of staff.'

Also,

'Not everyone can step up and step into running a healthcare system with 25 to 50 hospitals,' said Tom Flannery, a partner with consulting firm Mercer. 'It's a heck of a complex job.'

Questions Begged


Always left unsaid, and left unsaid in this article are answers to questions like:

Why are so called market comparisons limited to other CEOs or top managers, and never take into account other hospital employees, especially the health care professionals who actually provide the health care?

Why is the complexity of the managers' jobs never compared to complexity of other health care jobs, like the care of complex patients with multiple diseases, or neurosurgery, for example?

How is the "brilliance" of the managers measured, and compared to the brilliance of other employees, especially health care professionals?

These questions become more pointed when the size and rate of increase of executive, that his hired managers' pay seems obviously disproportionate to the trajectory of the financial performance, much less clinical quality of the hospitals the managers run.

In the recent months, we have found some striking examples of non-profit hospital executive pay that seems ridiculous in the context of what is going on at these managers' institutions.  Very briefly, some recent examples, alphabetical by state, include...



California - Washington Hospital Health System CEO Got Total Compensation Near $1 Million After Hundreds of Layoffs, and Charges of Conflicts of Interest and Poor Organizational Transparency

This story appeared in late September, 2014, in the Silicon Valley Business Journal, and noted that a local chapter of the Service Employees International Union (SEIU) was protesting the pay of the hospital's CEO,

Washington Hospital CEO Nancy Farber’s $593,000 salary ... [was] coupled with benefits that push compensation closer to $1 million

However, three months before,

an Alameda County grand jury report noted several potential conflicts of interest and poor organizational transparency at the institution, which the hospital's administration has since refuted or vowed to fix.

Furthermore,

The hospital laid off 200 workers two years ago and another 31 earlier this month. Washington Hospital’s most recent federal tax filing available show net assets of negative $16 million, plus expenses of $31.8 million, which outpaced revenue by $1.3 million during 2011.

The 2014 controversy over Ms Farber's pay is particularly notable since her pay has been raising concerns, and hackles, for more that 10 years, as we discussed in this 2013 post.  (In 2003, a local newspaper decried her 10% raise and her then $406,000 base salary.)  Yet none of these concerns seems to have affected her continuing generous remuneration despite ongoing problems at her small, partially publicly funded institution.  


Massachusetts - UMass Memorial Health Care CEO Received $4.8 Million Compensation Months Before Hospital Announced $55 Million Operating Loss

In this story from the August, 2014, Boston Globe, the contrast was between the CEO's rising remuneration and the hospital's worsening losses.  

The departing chief of UMass Memorial Health Care in Worcester earned $4.8 million in 2012, topping the list of Massachusetts hospital executives who received healthy increases in seven-figure pay packages — even as they faced growing pressure to bring costs under control.

John G. O’Brien, who retired in February 2013 after more than a decade at UMass Memorial, nearly doubled his compensation from 2011, when he earned $2.4 million as head of the biggest health care system in Central Massachusetts. Much of his 2012 compensation included retirement benefits earned during his tenure.

O’Brien’s payout came several months before UMass Memorial reported a staggering $55 million operating loss for the fiscal year ending September 2013.

Not only was the hospital losing a lot of money, soon after Mr O'Brien departed with his riches, it began laying off employees.

The system has since laid off hundreds of workers and made other changes to close the gap under the new chief, Dr. Eric W. Dickson.

The justification came from the system's top lawyer, included an example of the "our executives are brilliant" talking point,

Douglas Brown, UMass Memorial’s chief legal counsel, said O’Brien helped expand the health system and did 'a remarkable job' as chief executive.
Note that Mr Brown's official title is "Senior Vice President for Member Hospitals and Chief Legal Officer," per the UMass website, and thus was also a top hired manager who reported to Mr O'Brien.

To gloss over the counter-factual nature of this justification, Brown came up with an example of a double standard that was brilliant in its own way,

'It is true we suffered a lot in 2013,' Brown said. 'We certainly don’t blame that on John O’Brien.  We look at his [entire] tenure.'

So Mr O'Brien got credit for, and millions of dollars justified by all the good things that were said to have happened at UMass Memorial in the past, but somehow got to avoid responsibility for the recent financial losses.  That makes no sense.

Just to gild the lilly, Mr Brown added the "we have to be competitive" talking point, while reaffirming the "brilliant manager" talking point,

Brown added that the health system, which employs 12,000 and collects $2.5 billion in revenues, needs to pay well to attract top talent. 'We want to pay competitively with the markets so that we can get the best,' he said.

Of course, he did not present any facts showing why Mr O'Brien was "the best." But top hired counsel and top hired managers are paid well to come up with such creativity.

North Carolina - Novant Health Executives Got Raises While Core Revenue Drops, and Later Low Level Employees Got Pay Cut 

This story was in the Winston-Salem Journal by Richard Craver in August, 2014,

The top executive of Novant Health Inc., Carl Armato, received $1.05 million in salary during 2013, an 11.8 percent increase during a year in which the system had a slight dip in operating income.

Armato is in his third year as the system’s chief executive and president. His salary has risen 49.4 percent since taking over as top executive Jan. 1, 2012, following the retirement of Paul Wiles.

Armato’s incentive compensation rose 33.6 percent to $917,964. Altogether, what Armato received in direct compensation was $1.96 million, up 20.9 percent. He also received $39,372 in compensation, mostly nontaxable, company-paid insurance benefits. 

Other top executives also did well,

[Chief administrative officer Jacqueline] Daniels received a 1.2 percent raise in salary to $543,607 and an 11.9 percent increase in incentive pay to $545,680 [total direct compensation, $1,089,287]. Fred Hargett, chief financial officer, received a 10.1 percent salary increase to $611,703 and a 22.4 percent increase in incentive pay to $561,004 [$1,172,707].

Sallye Liner, chief clinical officer, received a 3.5 percent increase in salary to $501,462 and a 3 percent increase in incentive pay to $507,094 [$1,008,556]. Dr. Stephen Wallenhaupt, chief medical officer, received a 2.5 percent salary increase to $517,755 and a 12.3 percent in incentive pay at $523,518 [$1,041,273].

In addition, because of a one-time change in the corporate retirement program for top executives, all these managers also received large lump sum payouts, for example,


Making the change required Novant to close out the defined benefit plan, including paying out all the money owed to qualified executives in a lump sum.

For example, Armato received a $6.11 million payout – the second highest of 13 Novant qualified executives. The most, $8.66 million, was paid to Jacqueline Daniels, its chief administrative officer who has been with Novant 31 years. 
Note that this is not the first time we have discussed opulent pay for Novant managers.  As discussed in 2013, the previous CEO got $5.1 million in his last year. 

The article included the usual talking points to justify all this money going to a handful of top managers,

Novant, as do most not-for-profit health-care systems serving North Carolina, stresses high compensation levels are necessary to attract executives to run 'a very complex organization.' 

That was a mixture of the "competitive pay" and "brilliant executive, difficult job" talking points.  However, no one at the organization apparently was willing to explain how the increasing compensation related to what appears to be declining financial performance,

For fiscal 2013, Novant’s total operating revenue was up 1.1 percent to $3.59 billion, and total operating expenses rose 3.6 percent to $3.19 billion. Altogether, income from core health-care operations was down 40.6 percent to $109.8 million.

A few months after these munificent payments to top executives were disclosed, another Winston-Salem Journal article by Richard Craver reported that more lowly workers were taking pay cuts,


Novant Health Inc. confirmed Tuesday that it will reclassify the titles and duties for medical-unit secretaries in early January, as well as cut their pay.

The implementation of electronic health records at Novant facilities over the past year has led to a reduced workload for the medical secretaries, Novant said. Employees were told about the changes last week.

'The total number of individuals affected is 157, which includes employees in both Charlotte and Winston-Salem,' Novant spokeswoman Robin Baltimore said. 'We do not have the specific number broken down by market.'

The Charlotte Observer reported the pay cut could be up to 10 percent.

So Mr Armato's management allowed him and his fellow hired managers to make millions, and get raises, while he cut the pay of lowly unit secretaries because their jobs had supposedly become easier. 
This must be one of those difficult decisions that the CEO and his friends among top management get paid so much to make.  Maybe Mr Armato will get to play Scrooge in some version of A Christmas Carol this year.


Texas - El Paso University Medical Center CEO, Managers Gets Bonuses Despite Budget Deficit, Layoffs


A story from television station KVIA in mid-November noted that challenges for El Paso's University Medical Center,


According to UMC, El Paso Children’s Hospital owes it $70 million, which forced UMC to lay off 56 employees earlier this year.

And the hospital’s relationship with Texas Tech has been rocky.

So, no one at the hospital got a raise this year.  However,

[CEO Jim]Valenti’s base salary is $460,000.

But he did get a bonus because he met goals outlined in his contract. The board awarded him a $119,000 bonus. The El Paso Times reported in 2012 that Valenti received a $117,401 incentive bonus in 2010.

The explanation for giving the CEO a bonus under these circumstances fit the usual pattern.  There was this version of the "our CEO is brilliant" talking point,

board members praised the way Valenti has improved patient care at UMC and his work with medical reimbursements.

They said he’s a masterful manager of talent.

This was actually more specific than the usual "brilliance" argument, but hardly detailed enough to explain why he was apparently "brilliant" enough to deserve a bonus at a time when base pay for less exalted employees was frozen  (Actually, a later story in the El Paso Times suggested that while pay was frozen for the more plebian employees, 26 top managers got bonuses, although Mr Valenti's was the biggest.)  

And there was this version of the "we have to be competitive" talking point, courtesy the UMC board chairman, William Hanson,

'It's reasonable in the context of the market that Mr. Valenti works in,' Hanson said. 

Hanson says the pay is comparable to the salaries of other hospital CEOs around the region.

Again, it was not clear whether the supposed "market" for Mr Valenti's talents would not demand a discount for the leader of a hospital with frozen pay and a history of recent layoffs, or why the market for managerial employees was so different than the market for other employees .  


Washington - EvergreenHealth CEO Pay Up 18%, Average Employees Pay Up 1%

This story was from the Seattle Times in July, 2014,

Union members at EvergreenHealth medical center Thursday highlighted the comparison between the 1 percent pay raise they say the Kirkland hospital is offering them versus the 18 percent raise received by the CEO of the public hospital district facility last year.

Specifically,

[CEO Robert]  Malte’s pay, including retirement and benefits, went from $843,236 in 2012 to $996,268 for 2013.

 The only justification offered by Kay Taylor, the hospital's "vice president for communication," (that is, chief of its public relations department), was the usual "we have to pay competitive rates" talking point,

'Regarding our CEO’s compensation, it is important to remember that our board of commissioners benchmark CEO compensation to other similar organizations and create compensation that is at or near the 50th percentile,' Taylor said. 'With our CEO’s recent raise, his compensation is still on par — if not below — other CEOs of similar-sized healthcare organizations.'

Why it was imperative to compare the CEO's pay to that of other CEOs of other hospitals, meanwhile ignoring the obvious comparison of the size of the increase of the CEO's pay to that of other employees was not clear.

Summary

As health care organizations have become increasingly big and influential, their leadership has been increasingly in the hands of generic professional managers, not health care professionals.  These hired managers have commanded generous and ever increasing pay, which has been justified by the common talking points: managers have extremely hard jobs and are brilliant, and high pay is necessary in a competitive market to attract and maintain top leaders.

Yet none of the boosters of high pay for health care managers, who mainly seem to consist of the legal, marketing, and public relations personnel who answer to them, and occasionally the board members who also are hired manager, answer the obvious questions:
What is the evidence that managers are brilliant and their jobs are so hard, especially when compared to the highly-trained health care professionals at their own institutions?
Is their really a free market in hired managers, and why is it so isolated from the market for health care professionals and other people employed by health care organizations?

These justifications seem particularly ridiculous when managers whose results are obviously not brilliant, e.g., marked by deficits, losses, and lay-offs, are getting huge and increasing pay.  They also seem ridiculous when the "market" apparently dictates salary cuts and lay-offs for all employees other than the managers of a particular organization.

 Instead, it seems likely that hired health care managers make more and more because of the influence they have on their own pay.  This influence is partially generated by their control over their institutions' marketers, public relations flacks, and lawyers.  It is partially generated by their control over the make up of the boards of trustees who are supposed to exert governance, especially when these boards are subject to conflicts of interest and  are stacked with hired managers of other organizations.  Furthermore, per the dogma of pay for performance, their pay may be heavily tied to short-term financial results, rather than fulfillment of the patient care or academic mission. 

Thus, as in the larger economy, non-profit hospital managers have become "value extractors."  The opportunity to extract value has become a major driver of managerial decision making.  And this decision making is probably the major reason our health care system is so expensive and inaccessible, and why it provides such mediocre care for so much money. 

So to repeat, 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.  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.

Wednesday, November 26, 2014

Is this why Abington Memorial Hospital tried to censor this blog - so they could shop around for a favorable ruling on Certificate of Merit attacks in future malpractice cases?

On the increasing corporatization of medicine and the conduct that results:

As I wrote on August 11, 2013 at "Who Would Have Thought That The Most Severe Form of Attempted Internet Censorship Could Originate in a Community Hospital, Abington Memorial?" (http://hcrenewal.blogspot.com/2013/08/who-would-have-thought-comrades-that.html), a community hospital whose EHR-related error led to my mother's injury and death tried to censor my writing through a Motion for Prior Restraint in the local courts in Montgomery County, Pennsylvania:

... I would not have thought such an attempt at abridgement of fundamental American rights could originate in a local hospital, until this Motion by the defense in the EHR-related lawsuit initiated by my deceased mother in which I am now substitute plaintiff proved otherwise:

75E4/19/2013MotionBY ABINGTON MEMORIAL HOSPITAL MOTION TO PROHIBIT COMMENTARY ABOUT THIS LITIGATION TO ANY PUBLIC CONTEXT WITH MEMORANDUM OF LAW WITH SERVICE ON 04/19/2013No9267260

The hospital was attempting to have the Court issue a Motion for Prior Restraint (http://en.wikipedia.org/wiki/Prior_restraint), including against my writings here in the Healthcare Renewal blog, in a civil matter.

Their motion for censorship was summarily rejected by the court, but...

I have always wondered why a hospital would go to such lengths, considering the jury selection process in any possible trial has a voir dire process in which potential jurors with knowledge of a case or other conflicts of interest are eliminated from jury service in that case.

voir dire - http://dictionary.law.com/Default.aspx?selected=2229
(vwahr [with a near-silent "r"] deer) n. from French "to see to speak," the questioning of prospective jurors by a judge and attorneys in court. Voir dire is used to determine if any juror is biased and/or cannot deal with the issues fairly, or if there is cause not to allow a juror to serve (knowledge of the facts; acquaintanceship with parties, witnesses or attorneys; occupation which might lead to bias; prejudice against the death penalty; or previous experiences such as having been sued in a similar case).

I believe I may have found the answer.

As I wrote on Feb. 2, 2013 at "The lengths a hospital will go to in order to protect their EHR - Motion for Reconsideration of Denial of Motion for Reconsideration of Denial of Objections" (http://hcrenewal.blogspot.com/2013/02/the-lengths-hospital-will-go-to-in.html), the object of the hospital's and defense team's wrath seemed to be my writing about the frivolous nature of their Certificate of Merit attacks, and later, their failure to mention to the judge their argument's earlier rejection by another PA court (in 2008, Stroud v. Abington Memorial Hospital).  

The Stroud v. AMH Certificate of Merit decision of August 2008 is at this link:  http://www.gpo.gov/fdsys/pkg/USCOURTS-paed-2_06-cv-04840/pdf/USCOURTS-paed-2_06-cv-04840-3.pdf - see Sec. II. Motion as to Vicarious Liability Claims Based on Other Actors’ Conduct.

Note that a Certificate of Merit is required in Pennsylvania for the initiation of a medical malpractice lawsuit, e.g., PA Code Rule 1042.3, http://www.pacode.com/secure/data/231/chapter1000/s1042.3.html.  It specifies that an appropriate and non-involved professional agrees with the merits of the case.  It is a simple paper form.

As I wrote at the aforementioned post:

... The(ir) major objection about the [Certificate of Merit] paperwork is, in essence, that a "Certificate of Merit" (a certification of case merit by a qualified medical professional) needed to be filed not just for Defendant (the hospital) but for each and every employee/agent for whom the Defendant is vicariously liable under the doctrine of Respondeat Superior...

... A major problem with this claim is that the law simply says otherwise.  Also, Certificates of Merit have, under the identification field where the sued party's name is penned in, the label "defendant" ... not "defendant, employees, agents, their uncles and aunts, and their little dogs too for whom defendant is vicariously liable."  Not to mention, among other issues, that such misconceptions are specifically put to rest by the actual Civil Procedural Rules Committee rules as published by the state's court administrative body:

"The [certificate of merit] rule requires the filing of only a single certificate of merit as to a claim against a defendant that is based on the activities of licensed professionals who are not named in the action."

The judge in Montgomery County, PA agreed, and threw out the hospital's Certificate of Merit attacks as well as their motion for reconsideration of his denial (and their motion for reconsideration of his rejection of their motion for reconsideration of his denial, if you can follow that, as well).

So why try to censor my writing on this blog about the matter, including that nearly the same attacks had been thrown out repeatedly, and that the defense team in Silverstein v. AMH did not mention the adverse ruling in Stroud as 'opposing authority' in their many filings in my locale, Montgomery County, in my mother's case?

Candor before the tribunal is codified in the American Bar Association rules for ethical conduct at http://www.americanbar.org/groups/professional_responsibility/publications/model_rules_of_professional_conduct/rule_3_3_candor_toward_the_tribunal.html, and PA has a similar rule:
... (a) A lawyer shall not knowingly:
(1) make a false statement of fact or law to a tribunal or fail to correct a false statement of material fact or law previously made to the tribunal by the lawyer;
(2) fail to disclose to the tribunal legal authority in the controlling jurisdiction known to the lawyer to be directly adverse to the position of the client and not disclosed by opposing counsel ...

Perhaps this is the reason...

So the hospital could try the argument/attack yet again to evade a lawsuit.

The same tactic, once again, in 2014, same hospital, same law firm, this time in Philadelphia County (adjacent to Montgomery County) indeed occurred.

Oh, and this time around defense appears to have neglected to mention the adverse rulings to their Certificate of Merit attacks - in both Stroud v. Abington Memorial Hospital as well as Silverstein v. Abington Memorial Hospital - in the latest lawsuit against the hospital, namely Thach v. Abington Memorial Hospital:


Judge Rejects Instant Certificate of Merit Appeal
http://www.thelegalintelligencer.com/id=1202669926394/Judge-Rejects-Instant-Certificate-of-Merit-Appeal
 P.J. D'Annunzio,
The Legal Intelligencer
 

A hospital cannot instantly appeal a trial judge's order denying its request to have the plaintiff in a medical malpractice suit file separate certificates of merit for hospital personnel who are not defendants in the case, a Philadelphia judge has ruled.

In Thach v. Abington Memorial Hospital, Philadelphia Court of Common Pleas Judge Frederica Massiah-Jackson denied the hospital's motion to strike plaintiff Lyah H. Thach's certificate of merit. Thach claimed the hospital was vicariously liable for multiple strokes and other injuries she suffered while 28 weeks pregnant.

According to Massiah-Jackson's memorandum, the hospital requested that Thach produce certificates of merit for all identified and unidentified agents of the hospital who Thach's expert deemed to have provided negligent care.

In other words, in the same type of attack as prior, the hospital demanded a separate Certificate of Merit for each and every clinician involved, known and unknown, and if their names were not known, a Certificate of Merit for each class of clinician:

The actual request was this:

From DEFENDANT ABINGTON MEMORIAL HOSPITAL'S MOTION TO STRIKE THE APRIL 10, 2014 CERTIFICATE OF MERIT of April 17, 2014

... 19. One example of an appropriate Pa.R.C.P. 1042.3(a)(1) certificate of merit in the present case would include the following:

CERTIFICATE OF MERIT AS TO THE PHYSICIANS, NURSES, NURSE PRACTITIONERS, PHYSICIAN ASSISTANTS, WHO RENDERED CARDIOLOGY CARE TO LYAH THACH DURING HER ADMISSION TO ABINGTON MEMORIAL HOSPITAL ON MARCH 8, 2012

I, John Mirabella, Esquire, am an attorney for the Plaintiff in the above captioned matter. Pursuant to Pa.R.C.P. 1042.3, I hereby certify that an appropriate licensed professional has supplied a written statement to the undersigned that there is a basis to conclude that the care, skill or knowledge exercised or exhibited by the physicians, nurses, nurse practitioners, physicians' assistants who rendered CARDIOLOGY care to Lyah Thach during her admission to Abington Memorial Hospital on March 8, 2012 in the practice, treatment or work that is subject of the Complaint, fell outside the acceptable standards and that such conduct was the cause in bringing about harm to the plaintiff.

20. The above 1042.3(a)(1) certificate of merit certifies that a cardiology specialist reviewed the case on behalf of the Plaintiff and concluded that the cardiology care provided during the March 8, 2012 admission fell outside the acceptable standards of care. This requirement sufficiently fulfills the whole reasoning for requiring certificates of merit, which is to prevent the filing of unsubstantiated claims against health professionals.

21. The same should be repeated for any criticisms of the care provided to Plaintiff by other specialists who Plaintiff deems Abington Memorial Hospital vicariously liable, including radiology, neurology, hematology, infectious disease, etc.

I note that's s boatload of certificates being demanded.

In fact in the judge's decision, which I reviewed, the judge wrote:

"There is no suggestion expressed or implied in the Pennsylvania Rules of Civil Procedure that a plaintiff must file 36 Certificates of Merit when there is only one defendant."

Back to the Legal Intelligencer:

... When that request was denied, the hospital moved for an interlocutory [higher court - ed.] appeal of the order, which Massiah-Jackson also refused.

"Defendant-hospital contends that because in other cases, certain plaintiffs have filed multiple certificates of merit, then this trial court is bound by those 'precedents.' This court does not agree," Massiah-Jackson said. "There is no suggestion expressed or implied in the Pennsylvania Rules of Civil Procedure that a plaintiff must file [multiple] certificates of merit when there is only one defendant." [The hospital with its vicarious responsibility for the conduct of its employees, agents etc.- ed.]

There was no doubt in the judge's mind:

Massiah-Jackson said the guidelines governing the certificate of merit are clear and the defendant was trying to change the Rules of Civil Procedure. Moreover, Massiah-Jackson said the motion was part of a delaying tactic.

"In the case at bar, the defendant-hospital is faced with Rule 1042.3(s)(2) and Rule 1042.10 which are clear and free from all ambiguity," Massiah-Jackson said. "This defendant's attempts to add impediments to the litigation only days after the commencement of the civil action and prior to normal pretrial discovery, appear to be a pretext designed to delay Philadelphia case management protocols."

The hospital and its defense lawyers would still not give up:

The denial of Abington Memorial's subsequent request to strike the plaintiff's certificate of merit was followed by the hospital's July motion for appellate certification. According to Massiah-Jackson, that motion proposed new language not found in the Rules of Civil Procedure regarding the certificate of merit.

"If this defendant-hospital or its counsel propose new forms or new wording or other amendments, the proper forum for such recommendations is the Supreme Court's civil procedural rules committee," Massiah-Jackson said. "The hospital's bald suggestions are not a proper legal basis to support its motion to strike plaintiff Thach's certificate of merit."  Additionally, "Only the Supreme Court of Pennsylvania may amend or modify its Rules of Civil Procedure or the policy decisions relating to certificates of merit," Massiah-Jackson said.

Apparently this hospital thinks it has both the power to censor writers, and the power of the PA Supreme Court to rewrite PA law. (I also note that "bald" in legal documents is not a compliment.)

I note that Marshall Dennehey Warner Coleman & Goggin attorney Joseph Hoynoski III (http://www.marshalldennehey.com/attorneys/joseph-l-hoynoski-iii) wrote the following in the aforementioned brief:

Many courts of this Commonwealth which have been presented with the question as to whether Pa.R.C.P. 1042.3(b)(1) certificates of merit are required for the other licensed professionals for whom a plaintiff deemed a defendant vicariously liable, held that where a Plaintiff bases his/her claim on vicarious liability, a certificate of merit must be filed as to each licensed professional for whom the Defendant is allegedly responsible, whether they are named or unnamed.  These include, but are not limited to, the following cases:

A series of court cases are listed:


From the brief "DEFENDANT ABINGTON MEMORIAL HOSPITAL'S MOTION TO STRIKE THE APRIL 10, 2014 CERTIFICATE OF MERIT".  Click to enlarge.


Unfortunately, the past PA cases that ruled against the defense Certificate of Merit attacks being made in the present 2014 case, namely, the 2008 Stroud case and the 2010 Silverstein case, both involving the same hospital and same defense law firm, Marshall Dennehey Warner Coleman & Goggin, are missing.

In summary, I believe the motive behind the hospital and defense team's attempts to censor this writer in April 2013 may have had to do with a desire to try to shop the same Certificate of Merit attack around to another judge, while minimizing the chance anyone would notice the arguments had been discarded by two other Pennsylvania judges prior.

The conduct mentioned in these posts is the modus operandi of a Big Corporation, not the conduct expected from a community hospital, I add.   I believe this reflects the increasing corporatization of medicine.

-- SS

11/27/2014 Addendum:

If this Certificate of Merit attack is attempted again on another patient, there are now at least three PA cases where the arguments were rejected that I, and this defense law firm and this hospital, know of. (There may be others.)

In my opinion, failure to mention them to the tribunal under the "Candor" rules would be quite deliberate and likely merit a motion for sanctions and a complaint to the PA Bar Disciplinary Board, and perhaps a complaint to Pennsylvania hospital regulatory and PA human relations authorities as well.

This tactic stalled my late mother's case from being addressed for approximately two years.  She did not live to see the merits heard.  I do not believe others should have to experience that.

-- SS