Thursday, July 27, 2017

The Mysterious Demise of World Health Networks - Fugitive Kazakhs, the Trump Organization, Dodgy Visa Applications, Oh My

A common justification for a market fundamentalist approach to health care is the promise of innovation.  Providing market-based incentives will inspire generations of entrepreneurs who will bring out new and wondrous health care products and services, or so the story goes.  So we are now daily bombarded with media coverage of the latest innovations by such entrepreneurs.  But after the initial hype these entrepreneurs and their innovations often seem to fade away.

I stumbled on a recent media story that suggests the outer limits of what may go wrong with such innovations.  Let me try to tell the story chronologically.

World Health Networks and the Airport Promotion of Healthy Behaviors

In 2013, Masslive reported on the newest innovation, kiosks providing health evaluations:

Holiday travelers passing through Boston's Logan International Airport can now get an impromptu health report while waiting for their flights.

Four new health stations that include detailed walking paths through the airport and a machine that measures blood pressure, body mass index and weight, were installed Wednesday in three terminals.

The intervention was the product of collaboration between various commercial health care corporations.

For-profit hospital system Steward Health Care is sponsoring the stations for one year as part of a new health and wellness initiative at the airport.

Nic Denyer, executive vice president of machine manufacturer World Health Networks says next year, people may be able to test for diabetes and glaucoma in the future.

A press release from nLIVEnHealth included promises of "potential life-saving services" from the CEO of World Health Networks:

'The core objective of our partnership is to tackle heart disease through easy access, early detection, education and empowerment of individuals,' says Lon von Hurwitz, President & CEO of World Health Networks. 'We provide this service free of charge to both airports and passengers through associated sponsorships. Airports will therefore be able to offer their customers potential life-saving services.'

Furthermore, Mr von Hurwitz said,

Individuals can begin to take more control of their own personal health and wellness, and airports/airlines can also benefit their employees with this service on site. The sponsorship of the health stations allows prominent companies engaged in the healthcare industry to impart information about meaningful health products and services to a vast user base. It is expected that over 1 billion air passengers will have access to the health stations when fully deployed in the next two years. This audience also provides the enormous and dynamic opportunity for mobile applications and the portability of personal health records that will be subscriber supported.

The press release noted the involvement on nLIVEnHealthalong with Airport Marketing Income (AMI) too:

With successful installations already at JFK’s Jet Blue Terminal, Houston George Bush Intercontinental and Mineta San Jose International, WHN has teamed up with nLIVEn & Airport Marketing Income (AMI) to provide a unique advertising platform for one of Massachusetts’s leading Health Care providers, Steward Health Care System at Boston Logan International.

Little Known About the Intervention's Effects

So here was an intervention apparently meant to empower people to a healthier life style in a way that could "tackle heart disease" and even be "life-saving."  What was not to like?  Of course, none of these messages suggested the existence of any evidence that the intervention could change behaviors, and that the behaviors could reduce the prevalence or severity of heart disease, much less improve life expectancy.

Further was the goal here really to improve health outcomes, or to advertise?

I was unable to find anything resenbling systematic evidence about health outcomes, but did find a January, 2014 blog post offering a somewhat jaundiced review from a marketing expert who traveled through Logan Airport.

If you travel through Boston Logan Airport, you know that Dunkin Donuts ads and banners are quite prevalent. If you’ve been through there lately, you may also be aware that Steward Healthcare has launched a Health & Wellness Sponsorship Program. The last couple of times that I flew in through the JetBlue Terminal I came into contact with the campaign. The first thing I noticed were Steward Healthcare announcements over the public address system. It struck me that the oxymoron presented by Steward’s health & wellness campaign and the Dunkin Donuts marketing speaks to the challenges we have as a society when it comes to healthy living. Of course, the other thing that struck me is that Steward’s campaign feels a lot more like a branding initiative rather than a true health and wellness program. As a frequent business traveler, the last thing I need is for a health system to tell me that I need to do more walking in airports – and from my observations, that is the primary thrust of the marketing campaign.

So apparently fast food powerhouse Dunkin Donuts was also in on this action, causing the blogger some cognitive dissonance, given the caloric content of their offerings.

(Dunkin Donuts shop in Peru)

As a somewhat frequent flier, I also agree that urging someone running through the airport to walk more seems a bit over the top.

So to summarize the story this far, a bunch of corporate entities, World Health Networks, nLIVEnHealth, and Airport Marketing Income teamed up to create a supposed health intervention that appeared more like an advertising campaign for its sponsors, for-profit hospital chain Steward Healthcare, and apparently fast food giant Dunkin Donuts.  World Health Networks boasted of the potential to reduce heart disease and even save lives, without providing any evidence to support these claims.  

After that in 2014, all was silent.  What happened to World Health Networks? I saw no further media coverage of this new innovation, much less publication of clinical evidence of its effects, until....

World Health Networks, Trump Organization Associates Felix Sater and Daniel Ridloff, Kazakh Fugitives, and Visas - Oh My

On July 21, 2017, McClatchy published a long investigative piece that provided a disconcerting followup.   It opened thus:
Two former associates of Donald Trump helped a family of wealthy Kazakh fugitives make extensive investments in the United States, some aimed at helping family members obtain legal residency here, a McClatchy investigation shows.

Felix Sater, an ex-con and one-time senior adviser in the Trump Organization, helped the Trump family scout deals in Russia. He led an effort that began in 2012 to assist the stepchildren of Viktor Khrapunov, who that year had been placed on an international detention request list by the global police agency Interpol.

Khrapunov is the former Kazakh energy minister and ex-mayor of Almaty, that nation’s most populous city. He fled to Switzerland a decade ago, after Kazakhstan’s leaders accused him and his wife of stealing government funds. They are now accused in civil lawsuits of laundering money through luxury properties, including Trump-branded condos in the Soho neighborhood New York.

McClatchy’s probe reveals that with the help of Sater and his then-business associate Daniel Ridloff, also formerly affiliated with the Trump Organization, the Khrapunov family invested millions in a short-lived company that sought to place biometrics machines in airports across the country.

The real aim of Khrapunov’s investment was obtaining US residency for at least one member of the family; the company submitted, with the help of the onetime Trump associates, at least three requests to obtain visas for foreign workers.

The McClatchy investigation reveals a deeper relationship than previously known between the former Trump Organization figures and the fugitive Khrapunovs — underscoring how little is known about many of those involved with the Trump Organization.

There is no evidence that Trump himself participated in the courting of the Khrapunovs, but the affair sheds light on the often murky activities of the associates with whom he did deals at home and abroad.

Oops.  The "short-lived company" that allegedly served as a vehicle for the sketchy Kazakhs to obtain visas was none other than World Health Networks, viz:

On the surface, a multimillion dollar investment by the Khrapunovs in a New York-based health technology company would appear to make little sense.

World Health Networks was formed from the ashes of a failed firm that had created health monitoring kiosks placed in pharmacies. The new company aimed to put similar devices in airports across the world, but first it needed capital.

Enter Sater. He was representing the Khrapunovs, who were looking for US investments, and was introduced to executives of World Health Networks through an intermediary who attended the same synagogue on Long Island, according to a person with intimate knowledge of the deal.

Company executives made a pitch to the Khrapunovs in April 2012, according to documents reviewed by McClatchy, and court documents show that the money started flowing into the New York firm soon after.

World Health Network’s business model evolved over the course of its short existence, from an early plan to attract sponsorships from health insurance companies to a later plan to sell advertising space on the machines.

'It was definitely a real company,' said Ken Williams, who helped develop the firm and sat on its board.

Sater installed Ridloff as the company’s chief operating officer, according to former employees who demanded anonymity because of several ongoing lawsuits.

McClatchy explained how World Health Networks could have been used to obtain visas for the Khrapunovs....

This much is known: Ridloff submitted three visa applications for highly skilled workers on the company’s behalf between March 2013 and March 2014, all seeking to hire foreign budget analysts.

Stopped on the street as he left his Manhattan office, Ridloff confirmed to McClatchy that the investment by the Khrapunovs – ultimately $6 million, according to court records -- was aimed at securing Kudryashova, Viktor’s stepdaughter, legal residence in the United States.

The company partnered with the Swiss-based World Heart Federation and managed to place its machines in several airports, including Detroit, San Jose and Sacramento, Calif. But former employees confirmed its revenue couldn’t keep pace with expenses.

The company spent liberally on international travel and a bloated payroll, they said, and it folded soon after funding from the Khrapunovs dried up in late 2014.

It’s unclear the visas were ever issued, or whether the Khrapunovs obtained legal U.S. residence through any other means. The State Department and Homeland Security did not immediately provide documents requested under the Freedom of Information Act about World Health Networks’ visa applications.

Elvira Kudryashova listed a Newport Beach, Calif., address on a 2016 incorporation document for an upscale toy store she owned called Anthill shopNplay. The property in Newport Beach was sold later the same year.
Note further that

On paper, Donald Trump’s business relationship with Sater ended almost a decade ago. But earlier this year, Sater re-entered Trump’s orbit when he and Michael D. Cohen, one of Trump’s personal lawyers, were involved with a Ukraine-Russia peace proposal that was presented to Michael Flynn, then Trump’s national security advisor.


This as Bloomberg reported Thursday that Trump Soho in New York, where the Khrapunovs invested, were among several Trump businesses being looked at by former FBI Director Robert Mueller in his probe of possible collusion between Russia and the Trump campaign in 2016.


Several key people in Trump’s orbit did business with the Kazakh clan, including the law firm of Trump campaign surrogate Rudy Giuliani and the Bayrock Group, which developed Trump-branded projects in New York, Florida and Arizona and was founded by Tevik Arif, a politically-connected former Soviet official from Kazakhstan.

Lincoln Mitchell, a political consultant who specializes in Russia and its neighboring countries, said virtually any investment from Kazakhstan warrants scrutiny.

'It would be hard to imagine getting Kazakh investment that wasn't close to the ruling family,' Mitchell said in a telephone interview from the former Soviet republic of Georgia.

Nursultan Nazarbayev has ruled resources-rich Kazakhstan since 1989, placing his children and their spouses in top government posts. Some of his family assets have been frozen in Switzerland, and a U.S. Justice Department settlement in 2015 spotlighted how bribes paid to senior Kazakh officials ended up in offshore accounts belonging to the Kazakh government.


Both Sater and Ridloff had worked for Bayrock before joining the Trump Organization, Sater being one of its managing partners. Later, the two men facilitated the purchase in 2013 of three condos in the Trump SoHo for $3.1 million by companies tied to the Khrapunov children, Ilyas Khrapunov and Elvira Kudryashova. In 2012 and 2013 alone, Sater and Ridloff worked with the Khrapunovs on more than $40 million in real estate and investment deals. All came after Kazakhstan added Viktor to the Interpol wanted list in February 2012. Later, the former Trump associates and their Kazakh investors appeared to have a falling out, becoming mired in acrimonious lawsuits that ended in secret sealed settlements. Yet their business relationship appears to have continued after the settlements, and they continue to maintain a friendship via social media. Viktor Khrapunov’s wife, Leila, would be added to the Interpol wanted list later in 2012, and stepson Ilyas was added in May 2014.

The Khrapunovs – who declined to answer detailed questions from McClatchy — maintain that they are the victims of political persecution by the despotic Nazarbayev, who once offered Viktor the post of prime minister before their falling out.

Please note that based on the McClatchy article, whether the Khrapunovs were criminals or innocents fleeing from a despotic regime is not known. Or could the dispute between the regime and the Khrapunovs represent a falling out amongst cronies? Nor is it known whether top leaders of the Trump Organization, or Mr Trump himself, knew all the ramifications of what was going on.

Nonetheless, there at least appears to be a good argument that the World Health Networks' funding from the Khrapunovs depended on its potential ability to obtain visas for them and their family. Probably other aspects of its operations, including any ability to innovate in the health care sphere, were at best side effects of the main goal, and at worse window dressing.  When the company's main reason for being evaporated, so did it, and so did any chances for health care innovation, much less tangible health benefits to anyone.

But sic semper to most media hyped commercial health care innovations?  World Health Networks absorbed a lot of money, perhaps produced some visas useful to people with good or bad or indeterminate motives, produced no meaningful improvments in public health, and quietly died.  What was the use of it all?

Summary and Discussion

As we have previously discussed, based on the doctrines of neoliberalism or market fundamentalism, the US health care system is increasingly dominated by for-profit corporations.  The practice of medicine is increasingly corporate.  Hospitals and hospital systems are increasingly owned by for-profit corporations.  Health insurance is increasingly provided by for-profit companies.  Drug, device and biotechnology companies have been almost entirely commercial for a long time.  And touted as  sources of innovations, there are entrepreneurial start-ups everywhere offering new products and services.  All of this has been happening in a climate of deregulation, laissez faire, and laissez les bon temps roulez.

It may be that all this has produced a lot of innovation, but very little of it has proved to be capable of meaningful improvement in patient or public health outcomes.

Admittedly, the story above may be an extreme example.  However it does suggest that in a laissez faire envirnoment, an awful lot of churn is generated by fast buck schemes, some of which may not be entirely honest, or legal.  Furthermore, the tides of money rolling through the system may be attracting people much more interested in short-term returns than health care outcomes.  So we spend more and more, perhaps producing innovations, but without much obvious improvement in patients' or the people's health.

True health care reform might involve decreasing commercial involvement in selected aspects of health care, increasing transparency about the business operations of all health care organizations, and insisting that health innovations not be widely adapted without good clinical evidence that their benefits outweigh their harms.

For our musical interlude, The Cars, "Let the Good Times Roll," live


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