In US, More than One-Third Think Government and Business Leaders are Corrupt, Media Shrug

We have noted  (most recently here),  that health care corruption, particularly its global nature and its presence in developed countries like the US, is a taboo topic and thus remains anechoic.  Yet corruption in general, and health care corruption in particular, are huge global problems.

Transparency International just released the full results of the 2017 version of its Global Corruption Barometer.  (The November 14, 2017 news release is here.  The full report is available here.  Details about the methods are here. Country by country results are here.)

The report summarizes responses from 162,136 people to surveys done in 119 countries from 2016 to January, 2017.

Key Issues

The surveys asked about peoples' perceptions of corruption in various parts of government, including corruption affecting:
- the top executives (prime minister, president)
- the national legislature
- government officials

It also asked about corruption in business in general.  (Unfortunately, this version of the barometer did not specifically aska about health care.  Nonetheless, corruption in business and government is clearly relevant to corruption in health care, and to health car dysfunction.)

The survey, for the first time, also asked about how well government is dealing with corruption, and whether citizens feel empowered to challenge corruption.

Results in the US and Some Comparable Countries

Just like in 2013, while the US did not have the worst results, neither did it have results worthy of pride.  (Keep in mind, as well, that these surveys were all done before the Trump administration began, so they do not reflect any changes brought about by that.  We have seen many indications that corruption and its risk factor, conflicts of interest, are much worse under the Trump regime than previous administrations, e.g., look here.)

Some key results from the US, compared to three other developed Western countries (Austrialia, France, Germany, and the UK, but not Canada) follow. The numbers are those who agree with the header statements. (When the US had the best result of all 5, I highlighted that in green.  When it had the worst result, I highlighted it in red.)

Corruption Increased in Past Year (presumably 2016)

Australia     34%

France         44%

Germany      -

UK               48%

US                37%

Most of  President/ Prime Minister and Officials in that Office are Involved in Corruption

Australia      15%

France          35%

Germany         7%

UK                27%

US                 36%

Most Legislators are Involved in Corruption

Australia       12%

France           35%

Germany         6%

UK                 28%

US                  41%

Most Government Officials are Involved in Corruption

Australia        12%

France            31%

Germany          6%

UK                  25%

US                   32%

Most Business Executives are Involved in Corruption

Australia         20%

France             17%

Germany         33%

UK                   21%

US                   35%

Government is Handling the Fight Against Corruption Badly

Australia         41%

France             64%

Germany         24%

UK                  57%

US                   51%

It is Not Socially Acceptable to Report Corruption

Australia          22%

France             24%

Germany         12%

UK                  23%

US                   23%

Summary: Many People Believe Corruption Seriously Affects US Government and Business, but the Topic is Taboo

Thus once again, the US had results suggesting it has important problems with corruption.  More than one-third of US respondents thought that most executive branch leaders, legislators, and business executives are involved in corruption,  Just less than one-third thought that most government officials are involved in corruption.  More than one-half of US respondents thought that the government is handling the fight against corruption badly.  More than one-third thought that corruption had gotten worse in the previous year.  More than 20% thought it is not socially acceptable to report corruption.

Furthermore, the US had the worst results, compared to the other four developed countries, in four categories, and did not have the best results in any.

Thus, this survey suggested that substantial minorities of people thought that corruption in government and business was a major problem in 2016, and that perceptions of such corruption were no better, and likely worse in the US than in some comparable developed countries.


These would seem to be important, if discouraging results.  But in the US, they do not appear to be considered news, and it is likely that so far, hardly anyone in the US outside of readers of this blog have heard any of this.

To date, there has been no coverage that I can find of the 2017 Global Corruption Barometer results in the US at all, much less coverage in the US that focused on US results.  (I admit that since the full report was released, there has been litttle coverage of it anywhere.  Transparency International did release multiple reports on regional results earlier this year, but not including North America.  These did get some coverage in affected countries at the time.)

We have frequently noted how discussion of health care corruption has been nearly a taboo topic in the US, anechoic, presumably because its discussion would offend the people it makes rich and powerful. As suggested by the recent Transparency International report on corruption in the pharmaceutical industry,

However, strong control over key processes combined with huge resources and big profits to be made make the pharmaceutical industry particularly vulnerable to corruption. Pharmaceutical companies have the opportunity to use their influence and resources to exploit weak governance structures and divert policy and institutions away from public health objectives and towards their own profit maximising interests.

Presumably the leaders of other kinds of corrupt organizations can do the same. 

When health care corruption is discussed in English speaking developed countries, it is almost always in terms of a problem that affects somewhere else, mainly benighted less developed countries.  At best, the corruption that gets discussed is low level.  In the US, frequent examples are the "pill mills"  and various cheats of government and private insurance programs by practitioners and patients that lately have been decried as a cause of the narcotics crisis (e.g., look here).  (In contrast, the US government has been less inclined to address the activities of the leaders of the pharmaceutical companies who have pushed legal narcotics, e.g., see this post). 

However, Health Care Renewal has stressed "grand corruption," the corruption of health care leaders.  We have noted the continuing impunity of top health care corporate managers.  Health care corporations have allegedly used kickbacks and fraud to enhance their revenue, but at best such corporations have been able to make legal settlements that result in fines that small relative to their  multi-billion revenues without admitting guilt.  Almost never are top corporate managers subject to any negative consequences. 

Furthermore, of late there is reason to worry about worsening corruption of US government leaders in the health care sphere.  The Trump regime is being increasingly identified with corruption and impunity itself.   There has been an apparent recent increase in one particular species of corruption, the revolving door phenomenon, affecting appointments of key government health regulators and health care and public health policy makers, as noted most recently here.

However, the silence so far that has greeted Transparency International's latest Global Corruption Barometer in the US shows that corruption, including health care corruption, remains a taboo topic. 


So as I have said till blue in the face.... if we really want to reform health care, in the little time we may have before our health care bubble bursts, we will need to take strong action against health care corruption.  Such action will really disturb the insiders within large health care organizations who have gotten rich from their organizations' misbehavior, and thus taking such action will require some courage.  Yet such action cannot begin until we acknowledge and freely discuss the problem.  The first step against health care corruption is to be able to say or write the words, health care corruption.

Perpetual Revolving Motion: Yet More Transits Through the Health Care Revolving Door

The pace of people spinning through the US federal revolving door seems unprecedented. 

Most were people going from the health care corporations to government positions regulating or making policy influencing those same corporations.  Since our last roundup, of 11 days ago, we have found two more significant travelers from industry to government, and one from the previous administration to industry.  In addition, we realized that the case of one of the travelers discussed only last month is more significant than we realized.


Nina Devlin from Mylan to Senior Communications Adviser for the US Food and Drug Administration (FDA)

As reported extremely briefly by The Hill on Oct 27, 2017,

The Food and Drug Administration (FDA) has hired a senior executive from EpiPen maker Mylan to be a senior communications adviser in the agency, CBS News reported Friday.

Nina Devlin, who was the head of global communications at Mylan, was reportedly hired on Oct. 15 and reports to the FDA's chief of staff.

At the time Ms Devlin was doing public relations for Mylan,

Mylan reached a $465 million settlement with the federal government stemming from a Justice Department claim that it had overcharged the government for EpiPens.

The EpiPen is a medical device that treats dangerous allergic reactions by injecting epinephrine.
Accusations that Mylan overcharged for EpiPens got so much media attention that it seemed superflouous to discuss this case on Health Care Renewal. However, we did discuss some earlier and more obscure Mylan shenanigans here.

So this appointment is troubling because Ms Devlin went straight from a pharmaceutical company to the main federal agency regulating pharmaceutical companies, and she went from a company with a notably recently checquered ethical record.

Scott Mungo from Vice President for Safety Etc for Fedex to Assistant Secretary of Labor for the Occupational Safety and Health Administration (OSHA)

This case was described by Allgov.Com on November 12, 2017.  Mr Mungo's recent career was described thus,

In February 2000, Mugno was named managing director for corporate safety, health and fire prevention at FedEx. He held that post until December 2011, when he was named vice president for safety, sustainability and vehicle maintenance for the company’s FedEx Ground unit. Along with his more conventional duties there, Mugno served as 'brain coach' and 'den mother' for FedEx drivers participating in National Truck Driving Championship competitions. FedEx drivers often won their events. Mugno was in that job when nominated for the OSHA post.

In November 2012, Mugno was added to the Research Advisory Committee of the American Transportation Research Institute, and was its chairman at the time of his OSHA nomination. He is also chairman of the U.S. Chamber of Commerce OSHA subcommittee.

Mr Mungo's record suggests that he may be more sympathetic to the interests of big corporate executives than to the safety and health of their workers. Per Allgov,

Industry groups welcomed Mugno’s appointment to OSHA, who has represented the American Trucking Associations at Congressional hearings, believing that he will continue the Trump administration’s drive to weaken worker-protection regulations put in place under the Obama administration. In 2006, Mugno told the U.S. Chamber of Commerce that the actions of employees deserved more scrutiny, pointing out that obese workers and workers with high blood pressure and high cholesterol levels impact workplace safety. That same year, he told the publication Business Insurance: 'We’ve got to free OSHA from its own statutory and regulatory handcuffs.' He noted that much has changed since OSHA was established in 1971, and that some regulations should perhaps be subject to sunset provisions.

Another reason for Mungo's appointment might have been

Mugno was an enthusiastic Trump supporter, even attending the inauguration.

Dr Karen DeSalvo from National Coordinator for Health Information Technology and Assistant Secretary of Health and Human Services to Member of the Board of Directors, Humana

As reported by Louisville Business First on November 13, 2017,

Humana (NYSE: HUM), a Louisville-based health insurance and health services company, named Dr. Karen DeSalvo as the 12th member of its board of directors.

DeSalvo, 52, is a former government public health administrator and university administrator, according to a news release. Most recently, she held two overlapping roles with the U.S. Department of Health and Human Services: national coordinator for health information technology from January 2014 until August 2016 and the assistant secretary for health in the HHS department from October 2014 until January 2017.

Dr DeSalvo will now be responsible for the governance of a large health insurance company with a considerable Medicare supplement business, and which certainly has important interactions with electronic health records after having been the principal government officer overseeing EHRs, and an administrator within the agency that runs Medicare and other government insurance programs.

Joe Grogan, Lobbyist for Gilead to Director of Health Programs, Office of Management and the Budget

We had briefly discussed Mr Grogan's move from pharmaceutical manufacturer Gilead to the "White House working group on drug prices" here.  A November 13, 2017 article in the Washington Post makes it clear that Mr Grogan's influence over health care in general and the pharmaceutical industry in particular is much broader than what we described.  Not only did it specify his title to be Director of Health Programs for the OMB, but it also included:

Grogan, perhaps more than any other member of Trump’s administration, holds the power to nix or give the nod to hundreds of regulations shaping how the federal government runs Medicare, Medicaid, the Affordable Care Act marketplaces, the FDA, the CDC and all the other sub-agencies contained within the sprawl of the Department of Health and Human Services.

Furthermore,

It’s fair to say that virtually every rule change proposed or enacted by HHS — from easing reporting requirements for doctors to exempting more employers from paying for birth control to rolling back drug discounts — have Grogan’s mark on them in some way.

'Whether it’s a big home health regulations or nursing homes or hospitals, I can tell you it’s a 90 percent Joe call,' [former CMS administrator Tom] Scully said.

The article made explicit that Mr Grogan's decisions are influenced by his industry background:

In 2006, he went to the FDA as a policy adviser, and from there joined the drug industry -- first at Amgen and then at Gilead Sciences. Those who know him say he brings those industry sensibilities to the OMB job.

'Philosophically, he’s very focused on making sure he understands the way that private industry operates and interacts with the government,' AdvaMed chief executive Scott Whitaker told me.

But of course, as a member of the executive branch, he is supposed to foster government of, by and for the people, not of, by and for big pharmaceutical corporations.  This is all more disturbing because of the sketchy ethical track record of his former employer, Gilead.  We have discussed the company's excessive pricing and promotion of its anti-viral drugs for the treatment of hepatitis C, which went way beyond any evidence of the drugs' benefits to patients.  While these drugs can abolish detectable hepatitis C virus in patients' blood over the short-term, there is no good evidence that they produce any long-term benefits, particularly that they prevent the known complications of hepatitis C, or extend patients' lives. 

Summary

On and on it goes.  The revolving door has been a chronic problem for the US federal government, but the level of revolving door activity in the current regime seems way beyond anything we have seen before.  It seems we chronical multiple instances of people going from important health care corporate positions to government positions that regulate or make policy affecting those same corporations for every instance of someone coming from the previous administrations to industry.

As we have noted now again and again and again....    The revolving door is a species of conflict of interest. Worse, some experts have suggested that the revolving door is in fact corruption.  As we noted here, the experts from the distinguished European anti-corruption group U4 wrote,

The literature makes clear that the revolving door process is a source of valuable political connections for private firms. But it generates corruption risks and has strong distortionary effects on the economy, especially when this power is concentrated within a few firms.

The ongoing parade of people transiting the revolving door from industry to the Trump administration once again suggests how the revolving door may enable certain of those with private vested interests to have excess influence, way beyond that of ordinary citizens, on how the government works, and that the country is still increasingly being run by a cozy group of insiders with ties to both government and industry. This has been termed crony capitalism. The latest cohort and now this most flagrant example of revolving door transits suggests that regulatory capture is likely to become much worse in the near future.

So, as we have said before [before, before...] The continuing egregiousness of the revolving door in health care shows how health care leadership can play mutually beneficial games, regardless of the their effects on patients' and the public's health.  Once again, true health care reform would cut the ties between government and corporate leaders and their cronies that have lead to government of, for and by corporate executives rather than the people at large.

Give Us Those Old Time Conflcts of Interest: Stephen Parente, Key Opinion Leader for UnitedHealth and Redeemer of Former CEO William McGuire to Assistant Secretary of HHS

This latest revolving door case echoes scandals of long ago.

Background: CEO Dr William McGuire and the UnitedHealth Affair

A long time ago,in a galaxy far, far away, actually, from 2006 through 2008, we posted frequently about shenanigans at huge for-profit health insurance/ managed care company UnitedHealth.  We often discussed the patient-unfriendliness of its policies and processes (look here), despite its apparently high-minded past mission statements and public relations, as a function of its persistently bad leadership.

In 2008, we wrote....  One hypothesis is that UHG has trouble adhering to its idealistic mission because of the shortcomings of its leadership.The story of the fall of its recent CEO, Dr William McGuire, was strikingly instructive. As we have previously discussed, (see these posts here, here, and here from 2006 with links backward) Dr McGuire received outrageously lavish remuneration, which stood in stark contrast to the previous UHG mission's pledge to "make health care more affordable."

Controversy has swirled over the timing of huge stock option grants given to Dr McGuire (see post here), leading to his resignation in October, 2006 (see post here). More recently, McGuire agreed to pay back some of those options, although that would reportedly leave him with more than $800 million worth of them (see post here).

Later, Dr McGuire paid $30 million to settle a class action lawsuit over these stock options, and agreed to return 3.68 million stock options to the company.  At the time this was one of the largest cash settlements produced by a class-action lawsuit over financial instruments.  There was supposedly a criminal investigation of the case ongoing in 2008, but I cannot find any record that it produced indictments or convictions.

So Dr McGuire was able to escape this situation with relative impunity.  Then, despite those tributions, we noted that Mr McGuire, however, was quickly offered a bit of redemption. In particular, at the same time, the Minneapolis Star-Tribune reported, Dr McGuire seems to have found ways to keep busy,

The University of Minnesota is courting William McGuire, the health insurance executive who lost his job in a stock options scandal, as "executive in residence" at its business school.

Stephen Parente, director of the Medical Industry Leadership Institute in the Carlson School of Management, said the school had given him the go-ahead to explore the idea with McGuire, former chief executive of Minnetonka-based UnitedHealth Group.

'We are courting him to be an executive-in-residence at Carlson,' Parente said, adding that McGuire's immense experience in health care is what appealed to the university.

Parente said he first reached out to McGuire in August 2007, inviting him to be the keynote speaker at an invitation-only event attended by 70 to 80 guests at the Lafayette Club in Minnetonka Beach. The subject of McGuire's talk was the future of health care.
McGuire hit familiar themes during the hourlong speech, including the need for universal access to health care and the need to track the quality of care by physicians and to pay them accordingly.

Parente said his approach to McGuire was along the lines of: 'We don't really care about the stock options. You know stuff. Tell us what you think.'

Since then, McGuire has attended two seminars at the Carlson school, including one where he arrived unannounced.

There was some discussion within the school, Parente said, on whether it was appropriate to engage McGuire, given the lawsuits and investigations in which he was embroiled. The conclusion was that it was.

'It's one thing if you're bringing in a criminal to speak. But if someone's under investigation, that's fair game,' he said.

Since then, McGuire has acted as "ad hoc kitchen-cabinet adviser" to him, Parente said.

In June, when Parente presented a paper titled 'Is Consumerism at Odds with Prevention?' at the American Society of Health Economics at Duke University, he listed McGuire as one of six co-authors.

At the time, we thought it was all pretty outrageous.  However, we could not find out why the business school in general, and Mr Parente in particular was so enamored of Dr McGuire despite his checkered past.

Now nine years later, and only out of the investigative reporting inspired by the Trump regime was this explained in retrospect.

Mr Parente Transits the Revolving Door from the Medical Industry Leadership Institute (MILI) to the US Department of Health and Human Services (DHHS) 

As we discussed briefly in October, 2017, as briefly reported within a larger August, 2017 ProPublica report on the many patients moving from industry to the Trump regime, Mr Parente was nominated to be Assistant Secretary of Health and Human Services (DHHS) for planning and evaluation.  That article listed him as coming from a position as Principal, Health Systems Innovation Network LLC, but did not mention the Medical Industry Leadership Group. 

This DHHS position is important, as explained in an October 30, 2017 Politico article. .

In his role as assistant secretary, Parente would be the 'principal advisor' to the HHS secretary on policy development and 'responsible for major activities in policy coordination, legislation development, strategic planning, policy research, evaluation, and economic analysis,' according to HHS' website. The job, known as ASPE, has been a springboard for policy leaders; it was filled by Bobby Jindal, the future Louisiana governor, and Ben Sasse, the future Nebraska senator, during the George W. Bush administration.

Moreover, the article also explained that Mr Parente's financial relationships and previous commercial work extended far beyond Health Systems Innovation LLC. 

Parente, a 52-year-old economist, has long maintained close ties both to UnitedHealth and to other insurers. A specialist in health care finance, he holds an academic chair at the university called the Minnesota Insurance Industry Endowed Chair. It is funded by Thrivent Financial and Securian Financial Group, which offer a variety of insurance products. UnitedHealth in 2010 made a five-year, $1 million gift to his center, and Blue Cross Blue Shield of Minnesota also was one of five corporate donors that made $30,000 annual gifts to Parente’s academic center.

'Without the support of corporations, MILI would not have evolved beyond [the] start-up stage,' Parente said in a 2015 interview with his business school’s magazine.

Beyond the university, Parente has served as the chairman of the Health Care Cost Institute, a nonprofit research consortium backed by UnitedHealth, Aetna, Humana and Kaiser Permanente. Parente also has a private consulting business that has done work for UnitedHealth and other health care organizations.

In addition,

Parente’s longtime center is intended to bring together academics and the industry and help foster career opportunities for students, school officials say. The center supports research into industry challenges, and students attend lectures taught by executives at UnitedHealth and other industry companies. 'MILI offers national and international firms access to the rigorous intellectual community we have established,' the center’s website touts.

According to a University of Minnesota department directory, Parente is still listed as the director of the small center, which he helped launch more than a decade ago and had led since 2006. School officials say he is no longer leading the center. The center also has a staffer who handles administrative duties, but the institute has been viewed as 'a one-man shop' run by Parente for years, according to two individuals who have knowledge of its operations. Eight other people, three of whom either previously worked for UnitedHealth or currently work there, are listed as part-time instructors at MILI.

Some experts interviewed by Politico explained the importance of Mr Parente's arrangements with UnitedHealth.

'I absolutely think there’s a concern here,' said Wendell Potter, a former insurance executive who’s now a consumer advocate.

Given Parente’s years of work with the insurance industry, 'I would imagine that he would certainly have a bias toward the current model of health insurers,' Potter added.

Potter, a frequent critic of the insurance industry who once ran Cigna’s communications, said that the industry’s gifts to universities are 'widespread' and part of a broader strategy to encourage pro-industry research. [Insurers] absolutely want to make sure that their interests are protected, and they are seen by this administration as … effective and efficient and a crucial part of the health care system,' Potter said.

In other words, it is likely that Mr Parente and his institute were funded as part of a systematic stealth health policy advocacy campaign by UnitedHealth.  Furthermore, it is likely that Mr Parente, especially given that he was a paid consultant to UnitedHealth, functioned as a key opinion leader for it, especially concerned with advocating not for UnitedHealth's products, as many health care professional key opinion leaders do for drug, device and biotechnology companies, but for UnitedHealth's policies.

It seems that Mr Parente has been recently advocating for policies aligned with UnitedHealth, viz

UnitedHealth, like all insurers, also is heavily affected by the rules and regulations published by HHS, which can be informed by the analysis conducted by the office Parente has been nominated to run. As an academic, Parente has played a role in the Obamacare fight, offering supportive analysis of separate proposals by House Speaker Paul Ryan and then-Rep. Tom Price to repeal and replace the Affordable Care Act. He’s also criticized the law as too costly and warned that it would effectively lead to an insurance market death spiral. 'The autopsy will show that [Obamacare] died from a lack of affordability, leaving behind millions of Americans who were sold a bill of goods,' Parente wrote in a 2014 op-ed for The Wall Street Journal, in which he predicted that 40 million Americans would be uninsured by 2024. Since that article, the number of uninsured has fallen from 36 million in 2014 to about 28 million this year.

And UnitedHealth seemed to have added to the center's financial pot in hopes of further cementing Mr Parente's relationship with the company

Five months after President Donald Trump nominated Stephen Parente to be an assistant secretary for Health and Human Services, the nation's largest health insurer quietly gave a $1.2 million gift to a tiny academic research center that Parente helped found and served as director over the past decade.

Discussion

So here is just the latest embellishment in the march of people transiting the revolving door from health care corporations, and related firms, such as lobbying firms, the the executive branch during the Trump administration. 

Fortunately, good investigative journalists have looked more deeply into this cases, showcasing its more interesting aspects.  First, Mr Parente was not simply a corporate executive moving to the executive branch where he would be able to influence the fortunes of his former corporation.  Mr Parente was apparently a distinguished academic in a business school.  However  he had conflicts of interest, albeit not obvious ones.  These were similar to those affecting many health care academics, as we have frequently discussed.  Making his conflicts inapparent may have allowed him to more effectively advocate for his commercial colleagues in the guise of a disinterested academic.  This is the same game many health care professionals and academics have played (that of the key opinion leader), although many more in the apparent service of pharmaceutical and device marketing than in the service of corporate policy goals.  Nonetheless, such marketing or public relations, carried on by apparently unbiased academics who may really be paid, directly or indirectly, by corporate marketing or public relations departments, is much more insidious and deceptive than marketing or public relations carried out by identifiable corporate spokespeople. 

And now one of these deceptive corporate advocates is already in the executive branch, and perhaps on his way to an even more influential role.

This argues again for the importance of the dangers presented by the web of conflicts of interest that now drapes over medicine, health care, the government, and it seems the whole society.   I say again that all conflictis of interest affecting any medical, health care, or health policy decision makers should be revealed in detail, and most ought to be banned. 

This case also again argues for paying attention to the problem of the revolving door.  As we have said all too many times,...   The continuing egregiousness of the revolving door in health care shows how health care leadership can play mutually beneficial games, regardless of the their effects on patients' and the public's health.  Once again, true health care reform would cut the ties between government and corporate leaders and their cronies that have lead to government of, for and by corporate executives rather than the people at large.

Finally, this case argues that impunity, especially of top health care (and other leaders) has consequences.  One wonders what might have happened had Dr McGuire suffered much more severe negative consequences after the stock backdating case.  Mr Parente would not have been able to get further into the graces of UnitedHealth by giving a distinguisehd academic position to its apparently disgraced former CEO.  Maybe Mr Parente's career trajectory would have been different.  Who knows?  But still.... If we do not make health care leaders accountable for patients' and the public's health, leaving them free to put self-enrichment first, all our health will be further impoverished.