The Revolving Door's Bearings Overheat - Two Examples of the Health Care Insiders Who Keep it Spinning

Two recent stories illustrate a kind of conflict of interest affecting government health care policy. Note that neither story appeared in any one media outlet, but had to be pieced together from several sources, not all contemporaneous.

The Peripetatic Architect of Health Care Reform Implementation

Here is the story of Steve Larsen's latest career move, per the Wall Street Journal,

A top official in charge of implementing the federal health-care overhaul said Friday he would step down in mid-July, shortly after the Supreme Court is expected to rule on the fate of the law.

The official, Steve Larsen, heads the office at the Centers for Medicare and Medicaid Services that oversees most of the insurance provisions in the 2010 law. Those include setting up exchanges for consumers to shop for plans and obtain subsidies for premiums, establishing rules on how much money insurers must spend on medical benefits, and administering a federal program to provide insurance for consumers with pre-existing conditions.

Mr. Larsen said in an interview that his departure was '100% for personal and family reasons,' and that he hadn't considered the timing of the court decision. He cited his need to pay tuition for his college-bound children,...

The Wall Street Journal coverage made it sound like Mr Larsen was fleeing his post to avoid dealing with how the Supreme Court's decision on the Obama administration's health care reform law might complicate future functions of his office,

Mr. Larsen's departure highlights the challenges the administration will face once the Supreme Court rules. If the court upholds the law, the administration has a 2014 deadline to put it in place, including persuading states to set up the exchanges or establishing them on states' behalf.

If the court strikes down the law's key requirement, that most individuals purchase insurance or pay a fine, federal officials will have to establish whether they can make the remaining insurance elements of the law work, which would face stiff opposition from insurance companies and from Republican lawmakers who have pledged to overturn the law.

If the court voids the law entirely, officials will have to start undoing hundreds of its requirements that are set up to take effect or are, in many cases, already in place.

It only briefly mentioned where Mr Larsen was going, ostensibly in hopes that a better salary would aid in his tuition payments,

[he] said he would be working at a health-services business unit of UnitedHealth Group, an insurer

On the other hand, a report from Bloomberg suggested that UnitedHealth thought he would be well worth his salary,

Larsen will be executive vice president at Optum, a health services and information technology company that is part of UnitedHealth Group Inc., of Minnetonka, Minn., the company confirmed. UnitedHealth Group is the parent company of UnitedHealthcare, the largest health insurer in the United States in terms of policyholders and revenues.

'We are excited to welcome Steve Larsen to Optum,' company spokesman Matthew Stearns told BNA in an email. 'Steve's extensive, broad-based experience in health care will further enhance the support Optum provides to the health system and consumers in a rapidly evolving environment.'

It is funny how that experience seemed to be about crafting the regulations under which Optum, or at least its parent corporation would have to operate.

But wait, there is more. Bloomberg also mentioned that Mr Larsen had previously gone from a state government health policy position to the insurance industry before he wound up at the CCIIO.

Prior to joining the Obama administration to implement PPACA, Larsen served in a number of capacities at Amerigroup Corp., a public managed care company serving Medicaid and Medicare beneficiaries, according to his biography on the CCIIO website. Larsen also was Maryland insurance commissioner for six years, chairman of the Maryland Public Service Commission for Gov. Martin O'Malley (D),...

To clarify, Amerigroup is a publicly-held, Fortune 500 for-profit corporation (look here).
So in summary, and in chronological order, as best as I can establish it, Mr Larsen went from a Maryland state government policy position that affected health (and other insurance) companies, to a health insurance company (Amerigroup), to a US government policy position that affected health insurance, and now to another health insurance company (UnitedHealth).

The Peripatetic Legislative Policy Director

Brett Roper moved in the opposite direction, to government from industry, and to the Republican legislative majority, not the executive branch now controlled by the Democrats. Early in June, on the Republic Report,

In late 2010, as Congressman John Boehner (R-OH) prepared to take the gavel as Speaker, he hired a lobbyist named Brett Loper as his new policy chief. Loper left his job at the Advanced Medical Technology Association, a lobby group for medical device-makers, to join Boehner.

The Association did not seem to sad to see him go,

Republic Report reviewed ethics forms disclosed filed with the House clerk’s office, and noticed that Loper actually received a $100,147 bonus in 2011 for leaving his medical device lobbying group and becoming a public servant.

But wait, there is more. Loper also previously made more than one transition between government and industry. As Politico reported in 2010, before Loper worked for the Advanced Medical Technology Association,

Loper worked in senior positions for then House Majority Leader Tom DeLay and as the House Ways and Means Committee Republican staff director under then-ranking member Rep. Jim McCrery of Louisiana

But wait, there is still more. In 2011, the Atlantic reported,

In December, Boehner hired Brett Loper to be his policy director. At the time, articles focused on Loper's previous job as a lobbyist for the Advanced Medical Technology, where Loper vigorously resisted attempts to reduce the deficit by fighting cuts in fees to his clients proposed by the Obama administration.

That is part of the story.

But missing from the pieces about Loper have been his connection to the Abramoff scandal and knowledge of how to use government money to 'nfluence'legislators.

Sometimes a picture is worth a thousand words. Here is a photo of Loper (far right), basking in the tropical sun of the Marianas Islands, with Michael Scanlon (center), Jack Abramoff's partner in crime.

What is Loper doing in the Marianas?

As a staff member for Tom Delay, Loper was part of a mission to deliver money from the "favor factory," otherwise known as the Appropriations Committee of Congress, to two legislators in the Marianas, Norm Palacios and Alejo Mendiola (between Scanlon and Loper, above). In exchange for money for their two pet projects, Palacios and Mendiola agreed to switch their votes and support Abramoff's key ally in the Marianas, Benigno Fitial, in his bid to become Speaker of the House there.

The gambit worked. Fitial won. Abramoff -- whose lobbying contract to the Marianas had been canceled -- was re-hired by the Marianas. In that capacity, Abramoff resumed lobbying for the continuation of abusive labor practices in the islands. (For more on this, see my film, 'Casino Jack and the United States of Money.') Abramoff also continued to make sure that the grateful garment factory owners flowed campaign cash to key mainland Republican legislators, including Tom Delay.

Note that according to the Washington Post web-page on the Abramoff scandal,

Former Republican lobbyist Jack Abramoff was sentenced to five years and 10 months in prison on March 29, after pleading guilty to fraud, tax evasion and conspiracy to bribe public officials in a deal that requires him to cooperate in an investigation into his relationshps with members of Congress. Sources familiar with the federal probe have told The Post that half a dozen lawmakers are under scrutiny, along with Hill aides, former business associates and government officials.

The scandal prompted Rep. Tom DeLay (R-Tex.) and Rep. Robert Ney (R-Ohio) to give up their leadership posts,...

So Mr Larsen went from Republican senior legislative staff positions, during which time he associated with the now admittedly guilty Abramoff, to an industry trade association, and then back to a Republican senior legislative staff position.

Summary

So here are two recent good examples of a particular type of conflict of interest involving government and health care corporations. Both cases are of people who have made multiple transitions through the "revolving door" between the health care corporate world, and government agencies and organizations that are involved in policies that affect that world.

These transitions' multiplicity appears to represent a conflict of interest because these peoples' frequent revolutions through the door might diminish any sense that they ever have a primary interest on behalf of any immediate employer when another employer on the other side of the supposed arms' length government-industry relationship is always beckoning. Thus the people involved appear to have become members of a peculiar class always in transition, and hence more attuned to self-interest than to promoting the health of patients and the population (which ought to have been the primary concern for government leaders.) As Matt Kelley on the Compliance Week blog wrote in response to the Larsen story,

if you ever wonder why so many Americans feel like their country is slipping away from them, the revolving door—the sense that a private club of success exists in this country, and most Americans don't get to go through it, but merely live with the dictates of those who do—is a big reason why.

As we wrote before health policy in the US, in particular, has become an insiders' game. Unless it is redirected to reflect patients' and the public's health, facilitated by the knowledge of unbiased clinical and policy experts rather than corporate public relations, expect our efforts at health care reform to just increase health care dysfunction.

Physicians, public health advocates, whatever unbiased health policy experts remain must educate the public about how health policy has been turned into a corporate sandbox. We must try to somehow activate the public to call for health care policy of the people, by the people, and for the people.

What Influenced a Paean to Karen Ignagne?

As the discussion here in the US about health care reform gathers steam, the Washington Post published a rather uncritical profile of one of the prominent participants, Ms Karen Ignagni, CEO of America's Health Insurance Plans (AHIP), the trade group for the health insurance/ managed care industry. It included some compliments from Princeton Professor and prominent health care economist Uwe Reinhardt:

'Whatever AHIP pays her, it's not enough. She's unbelievably effective,' said Princeton economist Uwe Reinhardt. 'It's just amazing what she's achieved for them against all odds.'

Ignagni's total compensation, according to AHIP's most recent filing from 2007, was $1.58 million, which includes $700,000 in base salary, $370,000 in deferred compensation and a bonus. Ignagni won't say how many hours a week she works. The number's so high it's embarrassing, she said.

Among successes cited by Reinhardt and others is helping persuade the Bush administration to develop private insurance plans within Medicare that are producing unexpectedly high payments for private insurers.

What the Washington Post article did not bother to mention was that in addition to being on the Princeton faculty, Professor Reinhardt is a member of the board of directors of Amerigroup, a health insurance company specializing in providing Medicaid and Medicare managed care (see this previous post), and a member of AHIP. Former Amerigroup CEO Jeffrey McWalters was on the board of AHIP. According to Amerigroup's 2009 proxy statement, Professor Reinhardt controls (via ownership or options) 144,558 shares of Amerigroup stock, and received $226,531 in compensation from Amerigroup in 2008.

Perhaps Professor Reinhardt's enthusiasm for Karen Ignagne's performance as CEO of AHIP derived more from his leadership of Amerigroup than a scholarly analysis.

Note also that Professor Reinhardt is a member of the board of directors of Boston Scientific, a medical device company. Furthermore, per proxy statements from the above companies, Professor Reinhardt is on the board of two funds from H&Q Healthcare Investors, and is a Trustee of Duke University and the Duke University Health System.

Professor Reinhardt's leadership roles in US publicly traded corporations are public, but not easily found unless one knows where to look. We had first discussed these relationships on Health Care Renewal in 2006. However, many of the more academically tinged biographies of him publicly available omit his leadership roles in the for-profit world. At the moment, biographies of Professor Reinhardt on the Princeton web-site, and furnished by the Princeton Bioethics Forum, the Commonwealth Fund, and the Henry J Kaiser Foundation did not note these relationships.

This illustrates once more participation in the current health policy debate may be driven by vested interests, rather than ideology, much less dispassionate analysis. Were the participants yo disclose, at least, their financial interests, the debate would become that much clearer. Meanwhile, when listening to the debate, always ask, "cui bono?" (Who benefits?)

Hat tip to the Health Care Blog.

BLOGSCAN - Whose Interests Does Health Care Advocacy Serve?

Merrill Goozner, on the GoozNews Blog, dissected recent pronouncements on health care reform by economist Uwe Reinhardt. Reinhardt compared our US "system" of financing health care with those of some other countries. He noted some advantages of the latter systems, but wondered whether US citizens would accept the trade-offs they implied. In particular, he wondered whether the US would accept the tight regulation of private insurance companies found in Germany. But he conveniently failed to note that the German plan's success may depend on its exclusive use of only not-for-profit health insurers. Mr Goozner wondered whether if this omission had to do with Mr Reinhardt's position on the board of a for-profit US health insurance company, a relationship not disclosed in Mr Reinhardt's New York Times blog post. (We have posted before about how Mr Reinhardt's authoritative writings on health policy have not been accompanied by disclosure of his positions on the boards of several major health care corporations.) Once again, it is hard to tell whose interests prominent health care advocacy serves.

What, The RUC? - A Prominent Health Care Policy Blog Leaves Some Important Things Out

A new US President, health care costs that continue to rise despite declining access and questionable quality, even during an unprecedented global economic crisis all have made health care reform a hot topic once again in the US. This has even lead to discussion of some topics that formerly rarely merited polite discussion, sort of.

Last week, writing in the New York Times Economix blog, Professor Uwe Reinhardt, a noted health care economist at Princeton University, took on the topic of payments to physicians. His main point was:

America’s health care spending issues might have something to do with our fee-for-service payment system.

Studies have shown that physicians are not impervious to the financial incentives inherent in fee-for-service payments. For example, on average, physicians who have a direct financial interest in the use of imaging services, like CAT scans or M.R.I. scans, recommend far more such services for their patients than do physicians without such financial interest....

He noted some possible solutions:

In recognition of the conflict of interest inherent in fee-for-service payment, there is now a worldwide movement to replace the system with so-called 'evidence-based case reimbursement'. Under this approach, one single payment would cover all of the supplies and services that are needed, under best, evidence-based clinical practices, to respond adequately to well-defined medical conditions.

Not all health care, of course, can be categorized into neat, episodic bundles for this purpose. For chronic conditions, for example, payment may shift from fee-for-service to annual or monthly fees per patient, and care for such patients might be organized by clinically integrated health systems or by managed care companies procuring health care from different systems on an integrated basis. And for some patients with very complicated conditions, fee-for-service would still persist. One would think, however, that a move toward these alternative payment systems would not only reduce the geographic variations in per-capita health spending, but help control the annual growth of health spending over all.

What is missing from this picture?

Positive Incentives for Procedures, Negative Incentives for "Cognitive" Services, Especially Primary Care

First, Reinhardt suggested that the major problem with the current way the US pays for physicians is that it gives excess incentives for physicians to order diagnostic tests provided by facilities in which they have financial interests. This is, in my humble opinion, a real problem. But it is hardly the biggest problem with our current system of physician payments.

I submit that the biggest problem with our current system is that it provides big and increasing incentives to do procedures. This may lead to the over-use of some procedures in some instances. Moreover, it promotes high prices for the devices, drugs and support services required by the physicians to do these services. Thus, the current system pays many people well, and makes some people very rich. However, its enormous costs come out of other peoples' wallets, decreasing access and quality. Furthermore, the current system has provided disincentives to provide "cognitive care," especially primary care. Payments to physicians who do primary care do not cover all that they do on behalf of patients. Payments have not even kept up with inflation, nor with the increasing overhead costs of providing primary care, most of which are produced by the demands of government and insurance company bureaucracies. Thus, primary care in the US is dying. It is increasingly difficult for patients to find physicians who will take care them as whole patients, not as a set of different organs.

The Shadowy RUC

These biased incentives that lead to so much mischief are not the product of divine intervention or the laws of physics. They are the result of the actions of people, a few people operating in the shadows.

As we have discussed, the US Medicare system determines what it pays physicians using the Resource Based Relative Value System (RBRVS). This system determines the pay for every kind of medical encounter according to a complex formula that is supposed to account for physicians' time and effort, physicians' practice expense, and the cost of malpractice insurance. The components of physicians' effort assessed are, in turn, technical skill and physical effort; the required mental effort and judgment; and stress due to the potential risk to the patient.

To keep the system, which was started in 1990, current, requires addition of new kinds of encounters, which means encounters involving new kinds of procedures, and updating of the estimates of various components, including physicians' time and effort. To do so, the Center for Medicare and Medicaid Services (CMS) relies almost exclusively on the advice of the RBRVS Update Committee (RUC). The RUC is a private committee of the AMA, touted as an "expert panel" that takes advantage of the organization's First Amendment rights to petition the government. Membership on the RUC is allotted to represent specialty societies, so that the vast majority of the members represent specialties that do procedures and focus on expensive, high-technology tests and treatments. However, the identities of RUC members are secret, as are the proceedings of the group.

This opaque and unaccountable process has resulted in increases outstripping inflation in fees paid for procedures, while fees paid for "cognitive"medicine, i.e., for primary care, and for services that involve diagnosis, management of acute and chronic disease, counseling, coordination of care, etc, but not procedures, have lagged inflation. The effects of the RUC have been amplified by the unexplained tendency of commercial managed care and health insurance to track the RBRVS system when making their own payments to physicians.For further details about the RUC, see these posts on Health Care Renewal (here, here, here, here, and here) and important articles by Bodenheimer et al,(1) and Goodson.(2)

By the way, why the US Center for Medicare and Medicaid Services (CMS) relies de facto exclusively on the RUC to control the RBRVS system, and why the AMA made the RUC into a secret organization apparently beholden only to the organization's proceduralist members are unanswered questions.

What Reinhardt Left Out, and Why?

Professor Reinhardt, one of our most distinguished health care economists, barely touched on the biggest problems with how the US fee-for-service payment system works, and why these problems occurred. Thus, it is not surprising that the few solutions he recommended seem irrelevant to these problems.

As an aside, his discussion is not atypical of what is seen in most writings about health care policy that have to do with costs. It appears that it is politically incorrect to say that incentives are skewed, that this skewing appears to have resulted from the acts of a few individuals, and that these acts occurred with little outside attention or accountability. Why do health care policy experts follow these dictates of political correctness?

I don't know, but one possible explanation is that they are themselves biased by their own incentives. So let us further consider the case of Professor Reinhardt.

Professor Reinhardt's Conflicts of Interest

Not listed in the NY Times official bio of Professor Reinhardt are the following relationships:

- Professor Reinhardt is a member of the board of directors of Amerigroup, a health insurance company specializing in providing Medicaid and Medicare managed care. The company's 2008 proxy statement said that Professor Reinhardt owns the equivalent of 134,482 shares of stock, current value, $3,859,633 (at its current price, $28.70 per Google Financial), and got $221,422 total compensation in 2007.

- Professor Reinhardt is a member of the board of directors of Boston Scientific, a medical device company. The company's 2008 proxy statement said that Professor Reinhardt owns the equivalent of 51, 533 shares of stock, current value, $396,288 (at its current price, $7.69 per Google Financial) and got $118,885 total compensation in 2007.

In addition, per the above proxy statements, Professor Reinhardt is on the board of two funds from H&Q Healthcare Investors, and is a Trustee of Duke University and the Duke University Health System.

Boston Scientific, a device manufacturer, benefits from increased demand for its products due to physicians' pay incentives that favor the procedures for which they are used. As a director of the company, Professor Reinhardt has a duty to advance the financial interests of the company and its shareholders. Amerigroup may benefit from the current status quo in how physicians are paid. As a director the company, again Professor Reinhardt has a duty to advance the financial interests of the company and its shareholders. Thus, it seems that Professor Reinhardt's legal responsibilities to these companies might tend to bias him against actively questioning how physicians are currently paid, or proposing solutions that might upset the status quo.

Professor Reinhardt's leadership roles in US publicly traded corporations are public, but not easily found unless one knows where to look. (A previous post on Health Care Renewal did discuss Professor Reinhardt's previous failure to review relationships relevant at the time to a riposte Reinhardt wrote in response to an op-ed in the New York Times by a physician who decried the increasing commercialization of health care.)

However, the New York Times did not choose to make public these conflicts of interest. I should note that biographies of Professor Reinhardt on the Princeton web-site, and furnished by the Princeton Bioethics Forum, the Commonwealth Fund, and the Henry J Kaiser Foundation did not note these relationships. A transcript of an interview on the Public Broadcasting System Frontline show also did not reveal these relationships.

Without the knowledge of these financial relationships, one might suppose Professor Reinhardt's opinions are only based on his disinterested expertise as a well-known economic scholar. Without knowledge of these financial relationships, one might think that a secretive, opaque process skewing physicians' payments toward procedures is not an important problem for our health care system.

We have come to a critical time in the history of attempts to reform the US health care system. Whether reform occurs, and whether it does any good will depend on the quality of the debate that precedes it. Such a debate should be robust, but those involved ought to make clear where their biases and interests may lie.

Unfortunately, it may be that some of the most prominent voices in the debate are those of people with strong personal financial interests in having health care reform go in certain directions, not others. Furthermore, people with particular interests may not want certain issues to be even brought up. If these interests are not revealed, the debate becomes deceptive.

I fear that much of the debate up to now has been deceptive, and will not lead to good outcomes.

References

1. Bodenheimer T, Berenson RA, Rudolf P. The primary care-specialty income gap: why it matters. Ann Intern Med 2007; 146: 301-306. Link here.
2. Goodson JD. Unintended consequences of Resource-Based Relative Value Scale reimbursement. JAMA 2007; 298(19):2308-2310. Link here.

Amerigroup Settles

Another addition to the cavalcade of settlements, from the Virginian-Pilot,

Amerigroup Corp., which faced $334 million of damage awards and court-imposed penalties from a Medicaid fraud suit in Chicago, said Tuesday that it will pay the U.S. government and state of Illinois $225 million to settle the civil case.

As part of an agreement struck with federal and state agencies, the Virginia Beach-based health insurer said it also will pay $9 million in legal fees, but it will not admit any wrongdoing.

However, Amerigroup said it also will enter into a corporate-integrity agreement with the inspector general of the Department of Health and Human Services, the federal agency that provides part of the funding for state Medicaid programs.

The suit's plaintiffs - a former Amerigroup employee, the state of Illinois and the federal government - said in federal court in Chicago that Amerigroup and its Chicago-area health care plan defrauded state and federal agencies by discouraging pregnant women and individuals with special needs from enrolling.

During a trial in October 2006, the jury found in favor of the plaintiffs and awarded damages of $48 million. That was tripled to $144 million because the suit had been filed under state and federal 'whistle blower' statutes, which required that any damages be trebled. The judge also imposed $190 million of fraud-related penalties on the company.

We first posted about the jury's finding against Amerigroup here. At that time it was reported that "jurors saw a videotape in which one executive said he always sought out 'the healthies' when signing up patients for the HMO. Jurors also saw a number of e-mails in which company officials spoke positively about limiting the number of pregnant women enrolled."

A health insurer who tried to only insure "the healthies" defeats the purpose, doesn't it?

This case adds to the impression that many leaders of health care organizations put short-term financial gains ahead of honesty and patient welfare. Furthermore, what negative incentives for such practices currently exist do not seem to deter them. After all, a fine or settlement paid years later can just be written off as a cost of doing business. Furthermore, although such a payment may have a (minimal) effect on the company's bottom line, it has no real effect on the people whose decisions and actions lead to the problem.

A physician who does something unethical can lose his or her license and practice. An executive of a health care company who does something unethical usually suffers no penalty. In my humble opinion, one solution would be to require state licenses for executives of insurance companies and managed care organizations, as well as other health care organizations whose actions affect the public health and safety (e.g., pharmaceutical, biotechnology and device companies; hospitals, hospital systems, and academic medical centers; medical schools; etc). Such licenses could be challenged, and could be lost, given due process, for findings of unethical conduct. That might provide sufficient negative incentives to reduce the epidemic of unethical behavior by health care organizational leaders.

Amerigroup Fined

Last week, as reported by Bloomberg, and the Associated Press (here through ABC News), "Amerigroup Corp, which manages government health ploans for the poor, must pay at least $144 million in damages for wrongfully denying coverage to pregnant women eligible for Medicaid, a jury found. The jury today awarded the plaintiffs, which included the U.S. and Illinois governments and a whistleblower former employee, $48 million. That amount will be tripled under federal law." This is "the eighth-largest jury award of any trial in 2006, according to data compiled by Bloomberg."

According to the AP, "Federal and state prosecutors as well as a whistleblower said that while marketing its services in Illinois, Amerigroup avoided pregnant women and others likely to run up high doctor bills. That cheated the government, which was subsidizing the company to market its services evenly among all low-income patients regardless of whether they were pregnant or had costly illnesses, the attorneys said."

AP also reported that " Jurors saw a videotape in which one executive said he always sought out 'the healthies' when signing up patients for the HMO. Jurors also saw a number of e-mails in which company officials spoke positively about limiting the number of pregnant women enrolled."

That's some kind of health insurance, that seeks out "the healthies," and tries to avoid anyone who might actually have medical bills. This shows how far the concept of managed care, at least the commercial version of it, has sunk, from managing care to make it more efficient to figuring out ways to discourage anyone who might actually need care from enrolling.

An Economist Puts Down a Physician's Cri du Couer

We previously posted about the consequences of turning control of health care over to managers and bureaucrats, a movement which may have been inspired in part by Einthoven's call in the late 1980's to break up the physicians' "guild." In that post we discussed an op-ed article in the New York Times by Dr Peter Salgo, a cri du coeur (pardon my bad French) about how increasing business pressures were fraying the doctor-patient relationship.

The article drew some responses. One letter, which wowed one of my favorite fellow health care bloggers, was from Professor Uwe Reinhardt from Princeton University, an internationally known health economist. Reinhardt was not kind to Salgo's article.

• Salgo argued that "as health-care dollars became scarce in the 1980's and 90's," hospitals began using business strategies to control costs. Reinhardt countered that total health care spending rose from 1980 to 2000. With all due respect, his reading of Salgo was obtuse. Salgo's phrase seemed to refer to increasing pressures on hospitals' reimbursement, not total health cares spending. And although Salgo was addressing hospitals, Reinhardt added somewhat gratuitously that "per capita spending on doctors services increased even more rapidly." Of course, while spending on doctors increased, the costs imposed on many doctors, at least those in primary care and other cognitive specialties, increased even faster, so that those doctors' income at best barely kept up with inflation (for example, see this survey.)
• Salgo argued that "publicly traded H.M.O's ... began restricting doctors to an average seven-minute 'encounter' with each customer." Reinhardt countered , "I defy him, or any doctor, to produce a memorandum from an H.M.O. to that effect. During the 1990's, H.M.O.'s did extract discounts from doctors. To keep their income at previous levels, doctors voluntarily shortened visits. The H.M.O.'s were not to blame." Here Reinhardt was quibbling, in my humble opinion. Managed care organizations (and Medicare and Medicaid) drove down fees paid to all physicians, while requiring more paper-work and other bureaucratic burdens that increased all physicians' costs. Since anti-trust laws prevented physicians from collectively negotiating with managed care, whatever objections they had to these changes were ineffective. Managed care (and Medicare and Medicaid) mandated changes in physicians' incentives such that those who still wanted to earn a living had only one realistic alternative, to see more patients. It is true that managed care did not directly "restrict" the time physicians spent on patients. But managed care's control of physicians' financial incentives left physicians little choice. Calling how physicians responded to these changing incentives "voluntary" entails a rather collectivist definition of the word, to put it politely.

One wonders why Reinhardt felt the need to take such a heavy-handed approach to Salgo's cri du coeur. Perhaps economists have little sympathy for such intangibles as the doctor-patient relationship, or perhaps Professor Reinhardt was influenced by interests other than those deriving from his academic position.
Prof Reinhardt turns out to be yet another academic who also sits on the board of directors of multiple public commercial health care corporations.

• He is on the board of directors of Boston Scientific, a medical device manufacturer, a position he has held since 2002.
• He is on the board of Triad Hospitals, a for-profit hospital network, a position he has held since 1999.
• Last, but distinctly not least, he is on the board of Amerigroup, a commercial managed care organization, a position he has held since 2002.

Thus, he has fiduciary duties to uphold the financial interests of all three companies and of all three companies' share-holders. Presumably, it is in the financial interest of the latter corporation to defend the actions of commercial managed care in general against any criticisms by physicians. So was his written put-down of Salgo based on his academic background and experience, or on his corporate fiduciary duties? I cannot tell.
Prof Reinhardt did not reveal his fiduciary responsibilities to these three corporations in his letter to the New York Times. Nor did he reveal them on his official Princeton web-page, nor in at least some of his publications in prominent journals on varying aspects of health care policy since 2002 which I could review. See, for example this article in JAMA, this article in Health Affairs, and this letter in the British Medical Journal. These discussed topics that were likely relevant to the interests of device manufacturers, for-profit hospital systems, and/or commercial managed care organizations. (And the latter two both chided physicians for their interests in preserving or enhancing their incomes.)

So once again I say in summary, it seems that the more one looks, the more examples one finds of academics influential in health policy who also are directors of health care companies, yet who may not have always revealed their conflicts when writing about health care, even when their works relate to the interests of the companies whose interests they were legally bound to protect. So how much of their influential work reflects their professional and academic research and beliefs, and how much reflects their fiduciary responsibilities to commercial organizations? Inquiring minds really want to know.