Friday, November 04, 2005

Eliot Spitzer Sues Guidant for Fraud

According to the Indianapolis Star, and Bloomberg News, New York Attorney General Eliot Spitzer has sued Guidant Corporation for alleged fraud in connection with its sales of implantable cardiac defibrillators (ICDs).
We have discussed Guidant several times. ( See recent posts here and here)
"Spitzer's claim: Guidant failed to tell doctors from 2002 to 2005 that its Ventak Prism defibrillators had a flaw that could cause them to short-circuit and stop working without warning. Spitzer said,

Concealment of negative facts that might influence a consumer to purchase another manufacturer's product is the essence of fraud. We wouldn't permit this type of conduct in connection with the sale of cars or washing machines. It is simply unconscionable that it occurred with a critical medical device.
The Star noted, "Spitzer's suit, filed in New York State Supreme Court in Manhattan, adds credibility to the 10 or so privately filed cases against Guidant over its handling of the defibrillator flaw...."
To recapitulate:
  • Guidant has admitted that it did not disclose information about defects in ICDs to doctors and patients.
  • These ICDs are very expensive, costing about $25,000.
  • Had the physicians and patients known prospectively that the ICDs were not as reliable as previously thought, they might have chosen not to implant them, and implanting such flawed defibrillators provided less benefit to the population of patients receiving them than they thought they would receive.
  • Thus, by concealing the information, Guidant likely made more money and increased costs to the health care system, but decreased the benefits to patients.
And lots of experts in health care policy wonder why our costs are going up, our quality of care is no better than stagnant, and patients and physicians are disgruntled and demoralized?
Doesn't it seem that this sort of mismanagement and potential malfeasance by the leadership of large health care organizations has something to do with it?

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