You Can Check Out Any Time You Like, But You Can Never Leave - Duke and UNC Allegedly Agreed Not to Hire Each Other's Faculty

We have intermittently discussed the worsening plight of physicians trying to provide clinical care as employees of large organizations.  Such corporate physicians are likely to be squeezed between professional values that put the patient first, and management that puts revenue first.   Physicians employed by large corporations may find their values increasingly at risk as these organizations adapt the tactics of the robber barons.

Now it appears that even ostensibly genteel academic medical institutions may be adapting these tactics.

Allegations of Anti-Competitive Faculty Employment Practices at Duke and University of North Carolina Medical Schools


The story first appeared with little fanfare in the (Duke) Chronicle in June.  An assistant professor at the UNC School of Medicine was interested in a position, also at the assistant professor level, at nearby Duke.

[Dr Danielle] Seaman had been in email communication with UNC’s Chief of Cardiothoracic Imaging beginning in 2011, when she expressed interest in a radiology position at the UNC School of Medicine, and the chief of the division encouraged her to apply, the case file describes. In 2012, Seaman was invited to visit the campus and toured the radiology department at UNC.

However,

When Seaman expressed interest in the assistant professor position again in early 2015, however, the chief responded in an email by saying he had just received confirmation that 'lateral moves of faculty between Duke and UNC are not permitted' as per a 'guideline' set by the schools’ deans.

In a later email, the chief also described to Seaman the reason the agreement was created—Duke had tried several years ago to recruit the entire bone marrow transplant team from UNC, and UNC was forced to pay them a large retention package to keep them.

Both emails are included in the filing by Dr Seaman's lawyers.


Imagine the nerve of medical faculty thinking they should be paid more by the current employer because another institution was willling to recruit them and pay them that much.
 
An Agreement Comfortable for the Deans, but Disadvantageous for Their Faculty

An August article in the Chronicle suggested that the top leaders of the two medical schools felt that the "no-poaching" agreement was mutually beneficial. 

According to the case file, Seaman became aware of the policy earlier this year, but the UNC chief of cardiothoracic imaging—who is unnamed in the file—believed the policy had been in place for several years after Duke had previously tried to recruit the entire bone marrow transplant team from UNC.

'The general rule was that we didn’t recruit there and they didn’t recruit at Duke—it certainly was in the years I was in the administration,' said John Burness, former senior vice president for public affairs and government relations from 1991 to 2008. 'I don’t know if it’s ever been a formal agreement, but it’s certainly been a practice over a long period of time.'

Burness—now a visiting professor of the practice in the Sanford School of Public Policy—noted that he could not recall an instance in which a faculty member from UNC was recruited to Duke during Nannerl Keohane’s tenure as president of the University from 1993 to 2004. Keohane also confirmed that during her time as president the University avoided poaching of UNC faculty.

Also,

'The question of whether Duke and UNC [or N.C. State] should attempt to recruit faculty from the other campus was always somewhat delicate,' Keohane, now Laurance S. Rockefeller distinguished visiting professor of public affairs at Princeton University, wrote in an email.

The Chronicle found a Duke Law professor who provided a comfortable rationale for the agreement between the two schools,

Despite the case file’s claims that such a policy is detrimental to faculty from both schools, Clark Havighurst—a former professor in the Duke University School of Law who taught healthcare policy and antitrust law for more than 40 years—also believes that this agreement would be beneficial to both institutions in the long run.

'You’d probably find relatively few instances where Duke and Carolina have poached each other’s faculty,' Havighurst wrote in an email. 'This is probably a matter of mutual restraint as much as explicit agreement, however, as each school or department would hesitate to irritate the faculty at the neighboring institution, thus undermining collegial and personal relations that are undoubtedly beneficial to each.'


What the soothing words about mutual benefit and collegiality leave out is that while the school administrations benefit from less disruption, they also likely benefited by being able to pay their faculty, especially junior faculty less. As Dr Seaman argued in her filing, as per the June Chronicle article,

The suit—filed June 9 in the United States District Court for the Middle District of North Carolina—contends that the no-hire agreement had the “intended and actual effect” of suppressing competition and employee wages, therefore violating federal and state anti-trust laws.

An Aside, the Non-Poaching Agreement Defended by One of the Key Advocates for Market Fundamentalism in Medicine

As an aside, Professor Havinghurst turns out to be one of key architects of the transformation of the US health care from a regulated system emphasizing health care provided by individual professionals and small non-profit institutions to our current laissez faire commercialized system.  It is more than ironic that while Prof Havinghurst now scoffs at applying anti-trust law to alleged collusion by big employers, per M Gregg Bloche in the Stanford Law Review(1),

Since the mid- 1970s, market-oriented scholars have challenged a broad range of legal principles previously assumed to sustain the trustworthiness of physicians and health systems. Doctrines shielding physicians from antitrust law, insulating them from insurers' and hospitals' influence over clinical practice, and reinforcing the precept of undivided clinical loyalty to patients came under attack as protection for the medical profession at consumers' expense. These scholars, including Clark Havighurst, Richard Epstein, and Mark Hall, urge contractual ordering of clinical standards of care; relationships among physicians, hospitals, and health care payers; and physicians' conflicting obligations to patients, payers, and other third parties.

Again, Havinghurst appears to have been one of the principal, if not the principal advocate to use anti-trust law against small groups of physicians, and against the notion that physicians can promulgate their own codes of ethical conduct.  In an introduction to an article by Havinghurst in Health Affairs in 1983.(2)

For a decade or more, Clark Havighurst has been a philosophical thorn in the side of organized medicine, preaching a view of the health sphere that rejects decision making by professional self-regulation in favor of a system based on marketplace principles.

Note that in retrospect, this article seemed to stake out Health Affair's position as an important organ to promote market fundamentalism in health care. 

How convenient that Prof Havinghurst is still affiliated with Duke and in a position to defend his university's treatment of other faculty.


I urge you to scan Health Care Renewal to see how the change from professional self-regulation of ethics to the free rein of the laissez faire marketplace turned out. Look here for our first reporting on the late Dr Arnold Relman's discussion of how medicine was pressured to accept commercialization, and how that acceptance has since decimated our core values.  Look here for our discussion of the fallacy of the perfect market in health care.  Look here for a rebuttal from an authority we do  not often quote of the concept of health care as a commodity versus a calling. 

Summary

Note that the outcome of the lawsuit against Duke and UNC is unknown.  The allegations it makes are not proven.  However, I chose to discuss it because the evidence, particularly the emails reproduced in the court filing, seems pretty strong that the two schools did have an actual agreement not to compete in the hiring of faculty, and the argument that his suppressed faculty wages and opportunity is prety strong and obvious.

Academic physicians, particularly at elite institutions, may feel they are in a rarefied atmosphere separate from the hurley burley or everyday health care.  They may feel they are protected from, and can even ignore the health care dysfunction we discuss on Health Care Renewal.  They certainly may not think of themselves as "wage slaves" from the era of trusts, monopolies, and robber barons.

But this case exhibits that academic medical institutions are getting closer to the ruthless world of poorly regulated, commercialized, market fundamentalist health care.  Talk about collegiality is nice, but it seems pretty clear that the "non-poaching" agreement between Duke and UNC may have reflected collegiality among top medical school leadership, but limited their faculty salaries and individual faculty members' choices and opportunities.  This seems like another example, however soft spoken and genteel, of the leaders of health care organizations putting the interests of their own ingroup ahead of the interests of the larger organizations and the mission they are supposed to serve.

It is time for even academic physicians to realize that they are not protected from the troubles of the larger world.  If they truly believe in their professional values, if they really care about patients' and the public's health, and about medical and health care science and education, they will have to start speaking up, or they will end up wage slaves of the new health care robber barons along with nearly everyone else.   

To lighten things up at the end, the Eagles doing Hotel California live in 1977 -



"We are all prisoners here, of our own device"

References
1.  Bloche MG. Trust and betrayal in the medical marketplace.  Stanford Law Review 2002; 55: 919-954.  Link here.
2.  Havinghurst C. The doctors' trust.  self-regulation and the law.  Health Affairs 1983; 2: 64-76.  Link here.

Hospital Executives - What Will They Think of Next?

Health care organizations are now most often run by people with management, not clinical backgrounds.  It seems like business schools have taught managers to sign on to whatever the latest management fashions are.  So what are the latest fashions in hospital management?  Here are a few hot items.

Retreading Pharmaceutical Representatives

My jaundiced reading of the business news suggests that most executives think that marketing is the most important part of their organizations, and that clever marketing can sell any product or service. For example, the pharmaceutical industry spends about twice as much on marketing as it does on research and development (despite pharma executives' protestations that they run research driven businesses) (see this post). So it should be no surprise that now hospitals are using "hospital representatives" to market referrals to their institutions to doctors.

From last week's USA Today:

n northwest Indiana, Carrie Sota visits five or six doctors' offices every workday as part of her new sales job.

But Sota isn't selling the physicians on a prescription drug or a medical device. She's promoting her hospital — the University of Chicago Medical Center.

Sota, 30, is one of four employees the academic medical center has hired in recent months to make 'sales calls' on physicians in the hope that they will send more patients to the hospital. 'We are trying to build meaningful relationships,' said Sota, who was previously a saleswoman for a small medical device company.

The University of Chicago Medical Center is one of a growing number of hospitals nationwide hiring former drug and device sales reps to visit doctors' offices to persuade them to use their services over competing facilities.

Rather than handing out samples of prescription drugs, the sales reps call on doctors armed with the latest information on how their facility is reducing hospital-acquired infections and improving patient-satisfaction scores.

In visits that can last five to 20 minutes, reps try to win doctors' loyalty by helping them get better times on operating room schedules or easier patient referrals to hospital-based specialists. The sales reps can also carry messages back to the hospital, such as a doctor's request for a new medical device to be available in surgery.

The article suggested a few problems with this approach. First, the point of the marketing is not to improve the match between patients' needs and the services the hospital provides. Rather, it is to generate referrals that have the potential to provide the maximum revenue:

While hospitals have always tried to woo doctors to refer patients to them, the institutions are growing more direct in their efforts. The hospitals mine data to see which doctors have the most profitable, well-insured patients, and then they assign those doctors to a sales rep.

So in particular,

Many of the physician liaisons focus on specialists, who bring in patients for services with the highest profit margins, including orthopedics, cardiac care and cancer care, [Duke University Health System physician liaison manager Christine] Perry said.

Second, the hospital reps have incentives based on revenue, not on value to the patient:

About two-thirds of Tenet's liaisons are former drug and device sales reps, and they can make tens of thousands of dollars in bonuses if doctors increase their referrals to the hospitals.

Third, across the system, the revenues generated may be much less than the costs incurred, since most of the marketing will only succeed in moving patients from one hospital to another:

Paul Ginsburg, president of the non-partisan Center for Studying Health System Change, said, 'When you look at the health system, this is a waste of resources. It's a zero-sum game.'

He added: 'The net results of changing physician-referral patterns is that one hospital gains at a cost of others, and all the hospitals burn resources to pay (sales)people who take up the doctor's time.'

Of course, the reps could succeed in persuading doctors to refer patients to specific hospitals for services the doctors originally did not think the patients needed. That would be good were the patients to need those services, but bad if they were not.
Fourth, we have discussed (for example, here and here) how pharmaceutical representatives use sophisticated psychological and emotional manipulation, despite claims that all they do is provide unbiased information and educational, to influence physicians to prescribe drugs. Again, this may result in patients getting drugs whose benefits do not outweigh their harms. It is possible that hospital representatives will do something similar:

'These people are really good and really assertive and very sophisticated,' said Stephen Newman, Tenet's chief operating officer.

Unbundling Payments

The airlines decided a while ago that they could make more money by charging passengers for each checked bag, and even for those little meals on plastic trays. It looks like hospital executives have discovered a new way to unbundle.

As reported last month by the St Louis Post-Dispatch, hospitals have begun charging often hefty "facility fees" for patients seen as outpatients in hospital clinics or hospital owned practices, even for very minor procedures or just office visits, and even for Medicare patients. (Private physicians who see patients in their own offices cannot charge such fees to Medicare patients, and most private insurance companies will not cover such fees.):

A few weeks after Allison Zaromb took her 4-year-old son Meir to see a dermatologist in an outpatient office at the SSM Cardinal Glennon Children's Medical Center campus, she received separate bills from the doctor and the hospital.

The cost for a 3-minute procedure to treat Meir's warts totaled $538, which included a $220 bill for physician services - and a separate bill for a $318 hospital 'facility fee.'

Zaromb, a periodontist who lives in University City, is now suing SSM Health Care Corp. and Cardinal Glennon Children's Medical Center in a proposed class action lawsuit on behalf of other patients

More generally,

With the proliferation of hospital-owned outpatient centers and hospital-owned physician practices, hospital 'facility fees' have become increasingly common. Such hospital facility fees often involve greater dollar amounts than the fees charged by physicians.

Technically, it all appears to be legal:

Under federal regulations, health systems are permitted to charge a hospital facility fee for an outpatient service if it's done in a clinic that is 'hospital-based' - meaning that the clinic is owned and operated as part of a hospital or health system, regardless of whether the clinic is physically located on the hospital grounds.

This technique does seem to be a way to increase revenue. But one person's revenue is another person's cost, so it also seems to be a great way to further increase the already high cost of US health care. It is not obvious, however, that these increased costs will lead to increased quality of care or value for the patient:

'From a consumer's perspective, when you go see your doctor, you go see your doctor - whether it's in an office inside a larger hospital complex or right across the street,' [Zaromb's lawyer John] Phillips said. 'The doctor's practice remains the same. ... They're making the doctor's office a ‘hospital-based' clinic for one reason: to make money by charging a facility fee, not to improve consumer service.'

Negotiating the Costs of Medical Devices

One of the favorite topics on Health Care Renewal, at least before we found even more outrageous subjects, was the stratospheric cost of medical devices. For example, look at posts from 2005 here, here, here, and here. So last month we found out that hospital executives have come up with a revolutionary idea to combat the high cost of devices. They will actually try to see what prices the device companies charge other hospitals, and then negotiate the prices down, as Reuters reported as big news in late November:

Implantable devices make up a sizable chunk of typical hospital budgets, and administrators are devising new ways to limit that cost as they brace for cuts to government reimbursement and treat more patients who can't pay for care.

That means methodically working through each category of device, from heart valve replacements and stents to spinal products, to see where they can negotiate lower prices. It also means creating databases of shared information on pricing between hospitals.

Imagine that! Of course, the notion that buyers ought to bargain with sellers to get the best price goes back a few years. However, only in 2011 did it apparently occur to hospital executives that they ought to negotiate the prices of one their most expensive purchases. This suggests that there has been something profoundly wrong with the basic assumptions underlying the commonly accepted wisdom that making the health care system more of a market will lead to more financially efficient care. 

Summary

In 1988, Alain Enthoven advocated in Theory and Practice of Managed Competition in Health Care Finance, a book published in the Netherlands, that to decrease health care costs it would be necessary to break up the "physicians' guild" and replace leadership by clinicians with leadership by managers (see 2006 post here). Thus from 1983 to 2000, the number of managers working in the US health care system grew 726%, while the number of physicians grew 39%, so the manager/physician ratio went from roughly one to six to one to one (see 2005 post here). Health care went from being controlled by clinicians to controlled by a growing volume of managers.  Most of these managers were generic, in that they had little if any knowledge of, experience in, or sympathy to the values of health care. These generic managers have used the same techniques advocated for the management of supermarkets or automobile manufacturers to manage health care organizations, despite all the obvious differences in context, goals, values, and people involved.

So these generic managers have brought us such "innovations" as the "hospital (marketing) representative," and the "facility fee" for outpatient visits, but only thought to negotiate device prices in 2011. But that is why we pay them the big bucks.

How many more arguments do we need that health care organizations ought to be lead by people who understand the health care context, share its core values, and are accountable for how these organizations affect patients' and the public's health?

Duke Divinity Students Protest Pay of Chancellor for Health Affairs

This may be a first.  A small group of Duke University divinity students publicly protested the compensation given to some top university leaders, specifically including the Chancellor for Health Affairs.  According to the Raleigh-Durham News-Observer:

Theo Luebke strolled the plaza outside Duke's Bryan Center on Thursday afternoon with a bucketful of apples and a tale of woe.

'Come on! Everyone's in this together! Get your apples!' he exhorted students passing by during the lunchtime rush. 'With all the cuts we have around here and all the bonuses we have to give to the big guys, we need to raise all the money we can.'

Luebke isn't really the Depression-era fruit peddler his costume suggested. Luebke and a couple of other Duke divinity students hawked apples, ostensibly to raise money for the university, while others dressed as paperboys distributed a mock newspaper railing against bonuses paid to top officials within Duke's healthcare system and investment company.

For Duke workers whose pay has been frozen of late, the bonuses appear staggering.

A couple of examples: Neal Triplett, president of the management company, received a $729,749 bonus on top of his $413,603 salary; Victor Dzau, chancellor of the Duke health system, got a $983,654 bonus, bringing his total compensation to more than $2.2 million.

Thursday's skit, which mostly drew befuddled looks, was the third in a series mocking executive pay.

It turns out these munificent compensation amounts were paid at a time when Duke is in some financial difficulty:

In recent years, Duke has frozen pay and eliminated jobs in an attempt to pare its annual operating budget by $100 million.

Nearly 400 workers have accepted buyout offers since early 2009. Their jobs were then eliminated.

'During a time when the administration is saying we all needed to tighten our belts and make sacrifices...as it turns out, some of the folks who lost money for Duke were giving themselves bonuses,' said Amy Laura Hall, a tenured professor of Christian ethics. 'I think that's obscene.'

I cannot recall a previous example of students demonstrating against the compensation of a leader of a medical school and/or university health care system.  Maybe these students have started something.

In fact, we have frequently discussed executive compensation given by health care organizations that seems wildly out of proportion to the value of the health care they provide or the clinical value of their products.  Although compensation is even higher for executives of for-profit health care corporations, even leaders of not-for-profit organizations, including academic institutions, is now often in the millions per year range.

Service on (Mostly Health Care) Corporate Boards

Dr Dzau's compensation may appear even more extreme in the context of the money he brings in from outside work.  As Prof Margaret Soltan pointed out on the University Diaries blog, Dr Dzau also serves on multiple corporate boards.  The multiplicity of his outside work is not fully acknowledged in the most complete official biography posted on the Duke web-site, here, which only notes service on the Genzyme board.  In fact, he also serves on the boards of Anylam Pharmaceuticals, Medtronic, and PepsiCo.

According to the Alnylam Pharmaceuticals 2010 Proxy Statement, Dr Dzau's compensation as a director in 2009 was $234,433.  In 2009, Dr Dzau owned the equivalent of 45,000 shares, worth $424,800 at today's $9.44 price per share. 

According to the Genzyme 2010 Proxy Statement, Dr Dzau's compensation as a director in 2009 was $412,942.  In 2009, Dr Dzau owned the equivalent of 75,137shares, worth $5,312,937 at today's $70.71 price per share.

According to the Medtronic 2010 Proxy Statement, Dr Dzau's compensation as a director in 2009 was $173,698.  In 2009, Dr Dzau owned the equivalent of 14,552 shares, worth $493,895 at today's $33.94 price.

According to the PepsiCo 2010 Proxy Statement, Dr Dzau's compensation as a director in 2009 was $260,000.  In 2009, Dr Dzau owned the equivalent of 25,065 shares, worth $1,622,458 at today's $64.73 price per share.

So, in summary, in 2009, Dr Dzau received  $1,081,073 in compensation to be a director of these four companies.  In 2009, Dr Dzau owned stock or equivalent in these four companies valued at $7,854,090.  He has become what most people would consider rich just from his work on these boards, in addition to the millions he has received from Duke.

Conflicts of Interest and Other Questions

So this raises even more questions.  The most obvious is how the good doctor has time to simultaneously fulfill his responsibilities at Duke and for the four corporations? 

The next most obvious is why the university does not make a full disclosure of what appear to be severe conflicts of interest?  Anylam and Genzyme are biotechnology pharmaceutical companies.  Medtronics is a medical device company.  PepsiCo is a food and beverage company whose products affect nutrition and public health.  Dr Dzau's service on the board of each of these companies means he has fiduciary duties to each company, and is supposed to show unyielding loyalty to the companies' stockholders.  Of course, many business commentators have charged that most corporate directors are mainly chosen to be compliant with the top hired management's wishes, if not to be frank cronies of the management.  Even in the best case, showing unyielding loyalties to the stockholders of companies that make drugs, medical devices, and sugary drinks seems to be likely to influence a leader of an academic medical institution in ways that risk degrading the leader's responsibilities to uphold the institution's mission, i.e., to create severe conflicts of interest. 

Dr Dzau has a fairly severe case of what we labeled as a "new species of conflict of interest" in 2006.  Concerns about such conflicts affecting university presidents, but not specifically chancellors or vice presidents for health affairs, appeared in the New York Times last summer (see post here).  Maybe some day student protesters will see such conflicts as a problem.

However, should Dr Dzau make the usual defense of such conflicts, that they promote collaboration with industry needed for innovation, maybe Duke students or alumni might ask questions about the other side of the coin.

The Other Side of the Conflict of Interest Coin

Dr Dzau is supposed to be responsible for the stewardship of Genzyme.  We have recently posted about the company's seeming recent inability to make pure, unadulterated pharmaceuticals, and while exhibiting such inability to perform such basic functions, its payment of extremely lucrative compensation to its hired CEO.  Maybe someone could ask Dr Dzau what he thought about such actions, and whether he would take any responsibility for them?

Dr Dzau is supposed to be responsible for the stewardship of Medtronic.  Medtronic recently settled thousands of patients' lawsuits that alleged injuries due to a faulty lead on one model of a Medtronic implantable cardiac defibrillator for over $200 million. Medtronic has been the source of several alleged conflicts of interest involving influential physicians (see posts about Medtronic here).   Maybe someone could ask Dr Dzau what he thought about such actions, and whether he would take any responsibility for them.

Finally, a larger question is: is it good to have a leader of a medical school and academic medical center who has presided over such ethical lapses by health care corporations?  Let's see if anyone does get to ask Dr Dzau such questions. 

Academic Medical Center Crime Wave?

Every large group or organization has a few bad apples.  My web searches constantly turn up stories of individuals working in health care who behave unethically or commit crimes.  I do not generally discuss these cases on Health Care Renewal, since they seem unavoidable, and their sporadic appearance does not necessarily have anything to do with systemic problems in health care.

However, in the last week, I noted four cases of rather exceptionally bad behavior by individuals working in large hospital systems, and the severity and proximity of these cases made me wonder if they reflect some new trend.

Pennsylvania State University Faculty Member Charged with Rape

As reported by PennLive.com,

Former Derry Township, Dauphin County, doctor Dr. Robert L. Yarwood stands accused of using his position and influence to addict two of his patients to painkillers and raping them multiple times.

Yarwood, 56, has been charged with more than 42 criminal counts, including rape and sexual assault, stemming from allegations made in 2008 by two women, ages 40 and 45.

He is accused of giving narcotics to the women to 'exert psychological force,' said Fran Chardo, Dauphin County first assistant district attorney.

'The case, speaking abstractly, is very disturbing because of the trust relationship between the patient and the doctor,' Chardo said. 'It’s a violation of trust.'

In an interview with The Patriot-News, one of the women said she had visited Yarwood several times over the course of a year. He was prescribing her pain medication, which she eventually became addicted to. Then, she said, he raped her. 'I was paralyzed. I was in shock,' she said. 'I trusted him.'

At the time of the allegations, Yarwood was an obstetrician and gynecologist at the Penn State Milton S. Hershey Medical Center, which he joined in the late 1990s. In August 2008, the medical center was apprised of the investigation and immediately suspended Yarwood from having contact with patients.

$5 Million Embezzlement from Columbia University Medical Center

As reported by the Wall Street Journal,

A 48-year-old Bronx man has been arrested and charged with grand larceny for allegedly stealing nearly $4.5 million from Columbia University over the course of two months, authorities said Monday.

George Castro is accused of adding a TD Bank account belonging to him as a payee in the Columbia University Medical Center's accounts payable system, netting payments of $3.4 million in October and $1 million in November, authorities said. Mr. Castro, whose relationship with the university is unclear, was arrested Wednesday.

A law-enforcement official familiar with the case said Mr. Castro had $200,000 in cash in his possession when he was arrested and had withdrawn $140,000 the day before his arrest. According to a criminal complaint, Mr. Castro told investigators the money 'just appeared' in his bank account and that he had gotten 'greedy.'

Duke Surgeon and Surgical Department Business Manager Accused of Embezzlement

As reported by WRAL.com,

A former Duke University surgeon and manager have been charged with stealing $267,000 from the university, police said Tuesday.

Dr. Eric Joel DeMaria, 51, of 1101 Tacketts Pond Drive in Raleigh, and John William Cotton, 39, of 7228 Loblolly Pine Drive in Raleigh, were each charged with embezzlement of more than $100,000. Cotton also was charged with obtaining property by false pretense.

Cotton was arrested last Wednesday, and DeMaria surrendered to police Tuesday morning. Both have been released on $25,000 bonds.

DeMaria was director of Duke's bariatric surgery program, while Cotton was a business manager in the surgical department at Duke University Hospital, according to Michael Schoenfeld, Duke's vice president for public affairs.

Office Worker Accused of Stealing $3.8 Million from Memorial Sloan-Kettering Cancer Center

As reported by the New York Post,

A former worker at Memorial Sloan-Kettering stole nearly $4 million from the cancer center in a massive scheme that involved ordering a boatload of unnecessary printer cartridges and reselling them, authorities said.

The loot from the elaborate scam was used to fund a lavish lifestyle that allowed $37,000-a-year receiving clerk Marque Gumbs to move from a Bronx housing project to a luxurious Trump high-rise in the suburbs.

Gumbs, 32 -- who was arraigned yesterday in Manhattan Criminal Court on charges of grand larceny and criminal possession of stolen property -- allegedly began his scheme in 2004 by ordering extra toner cartridges and reselling them.

In one astounding stretch from October 2009 through August 2010, Gumbs ordered $1.2 million worth of toner that wasn't usable for any machine at the hospital, authorities said.

His alleged ruse cost the hospital $3.8 million.

Summary

So here is the box-score. Reported in one week were three alleged theft/ embezzlement schemes with values from $267,000 to $5 million, and one alleged series of multiple rapes. The alleged perpetrators included two academic physicians (one in surgery, one in obstetrics-gynecology), two hospital staff, one in management, and a person with an unclear relationship to the hospital. All involved large, prestigious academic medical centers.

So, again, maybe these were just coincidences. However, it may be that there is a real trend toward bigger and more spectacular thefts and embezzlements from big, not for profit health care institutions.  The most likely explanation is simply that the increasingly huge amounts of money flowing through such institutions attracts those who go to where the money is, and that the increased complexity of the bureaucracy of ever-growing health care institutions makes it easier to hide such thefts.  At least, this odd string of cases should prompt more questions about the conventional wisdom that it is good for health care organizations to grow ever larger. 

However, just to be speculative, note that three of these incidents occurred at institutions whose leadership has attracted our attention before.  We discussed conflicts of interest affecting one Columbia academic leader here, and the prevalence of leaders of failed financial services companies on the New York-Presbyterian board here.  We discussed a leader of two of the firms most involved in the global financial collapse who was also the chairman of the board of Duke University here.  A quick skim of Memorial Sloan-Kettering's Board of Overseers (in its 2009 annual report) showed the presence of at least two leaders of failed financial services firms heavily involved in the global financial collapse (E Stanley O'Neal, former CEO of Merrill Lynch, and Sanford I Weill, former CEO of Citigroup).  The speculation is that as academic medical centers and hospital systems and their parent universities have increasingly been recipients of the "stewardship," and hence immersed in the culture of the financial services industry, particularly firms which contributed to the global financial collapse, the culture of health care became increasingly laissez faire, anything goes, wild, wild west, and so it got easier for the wrong people to be hired, and for the wrong people to pull off truly spectacular capers.

I submit that the first criterion for being a trustee or director, and hence ostensibly a steward of an academic medical institution should be devotion to the mission of the organization, not size of one's contribution.

Duke Scientist Bringing Millions from NIH and Pharma Suspended Over Rhodes Scholar Claims

The New York Times reports that a medical researcher faked claims to being a Rhodes Scholar, and that a major scandal that has erupted.

The scenario is very familiar to readers of Healthcare Renewal, with universities collecting millions from public sources and the pharmaceutical industry, turning a blind eye to credentials discrepancies of faculty "taxpayers", and the public possibly put at risk through faulty research and suspect "reviews":

Duke Scientist Suspended Over Rhodes Scholar Claims
New York Times
July 20, 2010

Duke University School of Medicine has suspended a researcher and stopped patient enrollment in three cancer studies upon learning of reports that the researcher had overstated his academic credentials.

One of the lead investigators on the cancer studies, Dr. Anil Potti, was placed on administrative leave, said Douglas J. Stokke, a spokesman for Duke, while the university investigates allegations that Dr. Potti had falsely claimed that he was a Rhodes scholar.

The controversy erupted late last week after an article published in The Cancer Letter (PDF), a weekly publication for cancer specialists, reported that Dr. Potti, an assistant professor of medicine, had on occasion exaggerated his credentials. (A spokeswoman at Rhodes House at Oxford confirmed on Tuesday that Dr. Potti had not received the scholarship.)

The scientist, Anil Potti, was engaged in cancer clinical trials using questionable and possbily erroneous analytical methods (prediction models).

In addition, several dozen biostatisticians and cancer researchers at Harvard, Princeton, Johns Hopkins and other academic institutions are now questioning the methodology behind the three clinical trials, urging a halt to the Duke studies — two on lung cancer and one on breast cancer — in a letter sent to the director of the National Cancer Institute.

He'd used the fake credentials to get American Cancer Society money:

When questions about Dr. Potti’s credentials became public, the American Cancer Society suspended payments of a five-year, $729,000 grant awarded to Dr. Potti to study the genetics of lung cancer. The society awarded the grant based in part on a résumé from the doctor that included the Rhodes honor, said Dr. Otis W. Brawley, the chief medical officer of the cancer society.

According to The Cancer Letter's exposé linked above:

A high-profile cancer genomics researcher at Duke University claimed in multiple grant applications that he had been a Rhodes scholar, when, in fact, the Rhodes Trust states flatly that he was not.

Documents obtained by The Cancer Letter show that in biographies submitted to NIH, Duke oncologist and genomics researcher Anil Potti claimed variously to have won the prestigious scholarship in 1995 or 1996, depending on the version of the biography.

Potti also made the Rhodes claim in an application that resulted in a $729,000 grant from the American Cancer Society. “We don’t have any record that Anil Potti was a Rhodes scholar,” spokesman for the Rhodes Trust said to The Cancer Letter.

Assuming the fabrications are proven, a number of questions arise:

• How can a Duke scientist have gotten away with exaggerated credentials on a CV used in a grant applicationa to NIH, the American Cancer Society, and perhaps other organizations, claiming to be a Rhodes Scholar?
• Did he make similar exaggerations in his application to Duke itself?
• Do the exaggerations made in NIH and/or other federal grant applications constitute a crime, e.g., under Title 18 of U.S. Code, Section 1001 which makes it a federal crime to make a false statement to the government, according to one contributor to The Cancer Letter article?
  
• Will Duke act on fabrications as criminal matters?
  
• What were the Duke grants office and/or credentials-checking staff doing during their working hours?
• Why did this exaggeration come out in The Cancer Letter?
  

Patients may be at risk:

[MD Anderson Cancer Center biostatisticians] Keith Baggerly and Kevin Coombes said they devoted about 1,500 hours to checking Potti’s and Nevins’s work. These efforts—dubbed “forensic bioinformatics”—resulted in a paper in the November 2009, issue of the Annals of Applied Statistics.

“Unfortunately, poor documentation can shift from an inconvenience to an active danger when it obscures not just methods but errors,” the paper stated. “Patients in clinical trials are currently being allocated to treatment arms on the basis of these results.”

The two raised questions about Duke’s randomized phase II single-institution trials that used the Nevins and Potti technology to assign patients to treatment (NCT00545948, NCT00509366, and NCT00636441). Baggerly and Coombes argued that these trials “may be putting patients at risk.”

Duke initially suspended but then restarted the trials after an "investigation" by outside scientists. However:

Experts asked by The Cancer Letter to review these [investigation] documents [obtained under the FOIA] noted that Duke deans Cuffe and Kornbluth were inaccurate in their description of the document’s substance and conclusions when they announced completion of the investigation and resumption of the clinical trials earlier this year.

“Having read the committee’s report, we must disagree with Duke’s representation of the committee’s findings,” Baggerly and Coombes said in an email after reviewing the documents released under FOIA. The committee stated that “In our review of the methods … we were unable to identify a place where the statistical methods were described in sufficient detail to independently replicate the findings of the papers,” and further noted that the Duke investigators “really need” to work on “clearly explaining the specific statistical steps used in developing the predictors and the prospective sample assignments."

Duke has apparently now decided to stonewall:

... The Cancer Letter sent an email with questions to Potti, his collaborator Joseph Nevins, and Duke administration officials. The questions focused on the Rhodes claim, but also touched on other apparent discrepancies.

Responding to everyone on the email CC list, including this reporter, Potti wrote: “Sounds like I need to call him to clarify ...... and probably also talk with you all to clarify. I was a nominee..... and several of the others can also be explained. –Anil.”

After that email, Potti and Duke officials didn’t respond to questions seeking details that could substantiate this response. Multiple calls and emails from The Cancer Letter were not acknowledged.

One reason is that this escapade appears to have many twists and turns regarding credentials claimed by their researcher in the past. See the full article published in The Cancer Letter (PDF). The tale is stunning.

Another reason appears to be this:

Genomic research led by the two scientists [Potti and senior collaborator Joseph Nevins] has brought millions of public and private dollars to Duke. The duo’s connections with the industry are considerable. According to a recent disclosure, Potti is a member of the scientific advisory boards of Eli Lilly and Co., GlaxoSmith-Kline, and CancerGuideDx.

This also raises the questions:

• Did Potti misrepresent his credentials to these pharmas?

• Was Nevins aware of these exaggerations himself?
  

Of course this author is familiar with laxity in Duke's management and academics, and their not replying to pointed questions on their failures.

Perhaps at the time of this grant application, Duke personnel were busy checking the credentials of the Duke Lacrosse team, or of academics such as myself, maligned by Duke professors for having a strong sense of ethics (see link below). I then found myself "stonewalled" by Duke's President Richard H. Brodhead on the issues.

(See my Jan. 2008 post "A Truly Appalling Lawsuit Against Duke University" for more on that affair.)

-- SS

A Truly Appalling Lawsuit Against Duke University

Most everyone is aware of the Duke lacrosse team scandal, the debacle about alleged rape by Duke lacrosse team students that led to the resignation of prosecutor Nifong for prosecutorial misconduct, exoneration of the accused, an expose of the radical agendas of a subset of Duke's faculty, and a great deal of national publicity, or, I should say, notoriety.

Now, in Dec. 2007 several of the team members have filed a civil suit. The lawsuit filing documents are downloadable from these links (PDF files):

Part 1 (100 kb PDF)
Part 2 (1.3 Mb PDF)

I recommend downloading and perusing these in their entirely. Stunning - and frightening.

Using Adobe Acrobat, a search in them upon the term "medical" is of great concern. Named in the suit as defendants are Duke University Health Systems, a private diagnostic clinic contracted to Duke, a number of physicians and RN's, and unversity officials overseeing medical affairs.

What caught my attention were:

• A massive conspiracy to deprive three young men of their rights under the U.S. Constitution, of Stalin-police state proportions
• Sections on production of falsified medical records to support fabrications regarding sexual assault examinations
• The naming of a number of Duke medical center and medical center-associated officials including the Chancellor for Health Affairs (a physician Victor Dzau MD) as direct participants by commission and/or omission (e.g., indifference to, and failure to act against obvious impropriety)
• The collusion or tepid reactions of the most senior Duke officials right up to the Chairman of the Board of Trustees.

Overall, this story would make for the most stunning of movies of Serpico proportions - and probably will be, and should be.

If the allegations are even partially true, we have the most candid expose of the severe state of moral decay that afflicts our educational system (a system that produces our leaders of other organizations), our healthcare system, our justice system, and our culture.

More on the Duke situation can be found at this extensive, well-written fellow blogspot site, put together by one non-Duke professor named KC Johnson, Durham-in-Wonderland.

How I became aware of this is a story unto itself.

I noted the following passage in a polemical November 2007 article most ironically entitled Academic Freedom: The 'Danger' of Critical Thinking", International Studies Perspectives 8 (4), 396–400, doi:10.1111/j.1528-3585.2007.00306.x by Duke Professor of Asian and African Languages and Literature Miriam Cooke (fulltext here):

In this time of war that allows some people to lie and cheat, it is taboo for others to think critically ... It is dangerous even "to speculate about the relation between this war (in Iraq) and the geopolitical interests of Israel." These are the words of Paul Gilroy, who, at the time of speaking, was chair of African-American studies at Yale. Enraged, his colleague Scott Siluerstein compared him with Hitler and claimed that his words "illustrated the moral psychosis and perhaps psychological sadism that appears to have infected leftist academia." (Younge 2006).

This discovery led me to a literature search that led me to the Duke lawsuit documents. Cooke is profiled here.

Cooke actually misquotes a misquote by writer Gary Younge in the British newspaper The Guardian in an article "Silence in Class", April 4, 2006. In turn, Younge had misquoted an editorial authored by me that appeared in the Wall Street Journal on April 17, 2003 (see this link for my original.)

To be more precise, I should say that Younge used the "art of political war" rhetorical ploy utilized to discredit anyone who even writes about history's worst figures and any favored academic/politican/etc. in the same essay. As an act of obfuscation and diversion in the interests of ideological/political warfare, the ploy is to say the author is comparing the subject to history's worst figures, or even equating them. Cooke then parroted Younge's rhetoric.

Why the diversion and obfuscation? To obscure that I was actually pointing out that dangerous ideas -- especially crackpot conspiratorial ideas held by numerous very notorious historical figures dating back centuries -- have dangerous consequences. I was also commenting on the proven bigotry, cruelty, crassness, and insensitivity of statements made by deGenova, Baraka, Gilroy and others towards Israel, Holocaust victims and their families. (If you want a flavor of what many radical academics write, say, or think of as brilliant work, see here and here as examples.)

This ploy and lexical, semantic, contextual, and other games often seem the limit of the capability for debate of far too many of today's academics and mainstream media writers. (Where they learn these tactics, I do not know, but perhaps there is some sort of training fellowship.)

Duke Prof. Cooke didn't bother to contact me, a fellow academic, nor apparently do a simple google search or utilize the considerable informatics resources of her own university's library to find my original Wall St. Journal letter and my online response to Younge, on AOL at the time and now here. (Another possibility is that she did find them and ignored them, of course.) Cooke simply parroted Younge plus for literary effect invented my being "enraged" at my "colleague" (in fact, I rolled my eyes at Gilroy's statements, as one does towards the drivel coming from the Ivy League these days, and a simple fact check would have shown that I was not Gilroy's "colleague" and that our times at Yale did not intersect).

In summary, academic research for this tenured professor and Oxford graduate consists of parroting secondary sources such as The Guardian as fact, inventing events and relationships that did not exist, and not bothering to check primary sources either directly or indirectly, a fundamental tenet of reputable academic research. Or perhaps Cooke chose to ignore primary sources, a rather shoddy and irreputable approach to scholarly research. To Cooke, "critical thinking" apparently means "semantic legerdemain and reckless criticism of everything she does not agree with."

I subscribe to a different definition, consistent with the teachings of my early mentor Victor P Satinsky, inventor of the Satinsky clamp and many other cardiothoracic surgery tools and techniques used to this day. Dr. Satinsky ran ran rigorous programs emphasizing critical thinking, responsibility, and clear, direct language in the interests of patient care:

Critical thinking means correct thinking in the pursuit of relevant and reliable knowledge about the world. Another way to describe it is reasonable, reflective, responsible, and skillful thinking that is focused on deciding what to believe or do. A person who thinks critically can ask appropriate questions, gather relevant information, efficiently and creatively sort through this information, reason logically from this information, and come to reliable and trustworthy conclusions about the world that enable one to live and act successfully in it.

(It's not a simple matter of incompetence. "Quackademics" who do not believe in reason and logic - the tools of the "oppressors" - are largely incapable of true critical thinking. Hysterical rants, semantic trickery, obfuscation they can do. Distortions and mistruths are no problem for them, since in their minds the means justifies the ideological ends. Put plainly, they are deceptive liars. But they are not incompetent. In the Art of Political War, they are actually quite competent. It does, however, scare the daylights out of such academics when people who do think rationally have "got their number" on that particular skill. Thanks to advances in information and communication technologies, an increasing number of ordinary people are "getting their number." Of that they are truly terrified. But I digress.)

Not surprisingly, I discovered that Cooke was a member of the "Group of 88", a group of Duke professors who apparently gave the accused students a behind-closed-doors fair trial (of course, defendants' presence not required), then lined them up and had them figuratively shot with a well-publicized statement implying their guilt. From the Inside Higher Ed article linked above:

... The 88 signatories affirmed that they were “listening” to a select group of students troubled by sexism and racism at Duke. Yet 8 of the 11 quotes supplied from students to whom these professors had been talking, 8 contained no attribution — of any sort, even to the extent of claiming to come from anonymous Duke students. Nonetheless, according to the faculty members, “The disaster didn’t begin on March 13th and won’t end with what the police say or the court decides.” It’s hard to imagine that college professors could openly dismiss how the ultimate legal judgment would shape this case’s legacy. Such sentiments perhaps explain why no member of the Duke Law School faculty signed the letter.

I contacted Cooke, pointing out her errors and providing rather sarcastic commentary on how I was part of the Great Walt and Mearsheimer Cabal against academic freedom (a metaphor for another rather tenuous and tendentious piece of 'research' from yet another Ivy, Harvard). I have not received any reply. This is typical of academic tyrants, who are cowards when confronted outside of their power base. I contacted by email and phone the office of Duke President Richard H. Brodhead inquiring if Brodhead believed citing secondary sources constituted good research practice. He also has not replied.

Finally, I wonder if current Duke president Brodhead, who was an official at Yale until 2004 and implicated in this Duke lawsuit for sins of omission and commission, was involved in events covered in the previous post about an ongoing Federal investigation of Yale research grant accounting ("Lux et Veritas, or Trust But Verify? Yale discovers eDiscovery"). An interesting Powerpoint presentation on that matter is here (PPS file).

I think a comment made on the Duke-in-Wonderland site is particularly apropos:

"Another development on the local Duke scene is the “raised consciousness” of sensible alumni and institutional friends ... Any intelligent Duke alumnus of whatever age should now realize that he or she probably has more sensible and constructive ideas that many prominent Duke faculty."

This Duke disgrace is perhaps an epitaph for today's tenured, $100,000+ annually, pot-smoking, "oppressed" 1960's misfit-dominated academia.

-- SS

Addendum: there is much wisdom in this posting by KC Johnson regarding intellectual decay in academia. Many of the points raised also apply to the matters discussed on this blog. That academia sets the tone through its influence on students suggests that one path to "healthcare renewal" is via "academic renewal."

The Ongoing NIH Conflicts of Interest Story: The Case of the "Footloose and Fancy-Free" Institute Director

My apologies for being off the air. I was on the road, and then my lap-top decided it no longer wanted to communicate with the internet. Of course, while I was incommunicado, health care's problems continued.

For example, a while back we posted quite a bit (recently here) about conflicts of interest affecting top US National Institutes of Health (NIH) officials. In 2005, the NIH director reinstated strict rules about conflicts of interest.

Yet last week the Washington Post reported that the issue has not gone away. The most recent story was about "David Schwartz, a physician and researcher recruited from Duke University to great fanfare in 2005 as chief of the National Institute of Environmental Health Sciences...." "Schwartz, an expert in environmentally related lung diseases, was hired in 2005 just three months after [NIH Director Elias] Zerhouni imposed strict new conflict-of-interest rules in the aftermath of a scandal involving agency scientists who failed to disclose lucrative consulting deals with pharmaceutical companies." "In an internal NIH investigation he "was found to have spent modest amounts of institute money for personal purposes but was cleared of other allegations of wrongdoing...." However,

several members of Congress have demanded more details, saying they have evidence that the NIH report is incomplete. And scores of e-mails reviewed by The Post confirm that ethics officials in NIH and in the Health and Human Services secretary's office have grown increasingly frustrated with Schwartz's repeated insensitivity to conflict-of-interest rules.

Schwartz allegedly had several kinds of conflicts of interest. One kind involved his personal investments. Schwartz reportedly did not see that his personal investments should not be limited by any petty federal rules and regulations.

In one exchange, when officials learned that Schwartz had not fully divested all his biotechnology and drug company stocks as required, Schwartz wrote to the NIH ethics office that the divestiture 'seems totally unreasonable. . . . I'm simply not willing to limit my investments in this way.'

The ethics officer, who later complained that she had 'lost patience . . . a long time ago' with Schwartz, responded, 'It may appear to be unreasonable, but it is the law.'

Another kind of conflict of interest involved Schwartz's activities as a paid expert witness.

Also raising alarms were Schwartz's growing commitments to give expert testimony in multimillion-dollar asbestos injury cases -- of concern because he might be perceived as profiting personally from his status as head of the nation's premier environmental toxicology program.

Schwartz said he earned about $150,000 from asbestos-related expert testimony and clinical exams from mid-2005 through fiscal 2006.

A third kind of conflict of interested involved Schwartz's position at Duke University.

Schwartz brought more than a dozen Duke researchers to his federal lab, despite a requirement that he recuse himself from matters involving Duke. He also overspent his lab budget by millions of dollars. Those actions led agency officials to take the extremely unusual step of banning Schwartz from his own lab for nearly three months, putting it into receivership and sending the researchers back to Duke in what one official called a 'de-Duking' process.

The lab was recently placed under the budgetary control of another NIH institute to prevent further problems....

And in March, Schwartz -- who had retained his faculty status at Duke, a few miles from the institute's headquarters in Research Triangle Park, N.C. -- separated himself from the university.

All this has attracted the attention of Congress.

Last Thursday, Sen. Chuck E. Grassley (R-Iowa), ranking minority member of the Finance Committee, which has been investigating Schwartz for months, sent an eight-page letter to NIH Director Elias A. Zerhouni with a host of new questions to be answered by July 10.

'The National Institutes of Health conducts important research for the public good, and individuals who hold high-level positions there ought to understand that they hold the public trust and demonstrate respect for it with their actions,' Grassley said.

Schwartz denied any wrong-doing.

In a telephone interview yesterday, Schwartz said he made mistakes, which he blamed on "misunderstandings" about institute rules and "poor communication," for which he said he takes "full responsibility."

Schwartz denied any deception on his part, however, and said he has taken corrective actions to prevent future problems.

The Post found that Schwartz's actions were taking their toll on those he supervises.

In interviews this week, various current and former NIEHS employees called Schwartz 'brilliant' and an 'excellent scientist' but also 'patriarchal,' and 'footloose and fancy-free with the rules.'

Since his arrival, three top institute officials have left, and many employees have expressed dismay at Schwartz's leadership.

'Morale is just horrible,' one said speaking on the condition of anonymity for fear of retribution.

This story seems significant first because it demonstrates that there are continuing conflict of interest problems at the NIH, even after the rules were stiffened in 2005. Such conflicts should be of particular concern because the NIH is one of the world's foremost biomedical research organizations. Having conflicted people in its top leadership positions, particularly as full Institute directors, raises concerns about whether their actions are meant to serve science and the public, or their private financial interests.

This story also seems significant because it shows how multi-faceted conflicts of interest may be. Schwartz's conflicts included not only his pharmaceutical and biotechnology company stock-holdings, but his role as an expert witness, and his continuing relationship with a university that gets millions of dollars in NIH funding. Clearly, solving the conflict of interest problems at the NIH is goint to require ongoing vigilance.

Finally, at the end of the story is a reminder that conflicted leaders tend to demoralize their subordinates, an effect that is particularly important given the pervasive nature of conflicts of interest in health care.

An Even More Tangled Web: "Development Cases," "Go-To Men," and Health Care Corporations

The Wall Street Journal excerpted (available here from the Providence Journal with free registration) a chapter from a new book, The Price of Admission by Daniel Golden. The book is about allegations of how major American institutions of higher education actively recruit children of the rich or famous, regardless of their academic qualifications, to enhance the institution's prestige or funding. (See the Washington Post's review of the book here.)

Full disclosure: one of the two universities the excerpted chapter discusses is my own alma mater, Brown University, where I currently have a voluntary faculty appointment.

The chapter otherwised focused on Duke University, and in doing so suggested yet another dimension of financial entanglements between universities, their top leaders, and health care corporations.

Over more than 20 years, Duke transformed itself from a Southern school to a premier national institution with the help of a winning strategy: targeting rich students whose families could help build up its endowment.
What makes Duke and Brown, among other institutions, stand out, is the way in which they ramped up and systematized their pursuit: rejecting stronger candidates to admit children of the rich or famous, regardless of their ties to the university.

Both schools had a behind-the-scenes power broker, a go-to man for prominent parents seeking to fast-track their children's applications. Duke had Joel Fleishman, 72 years old, a wine connoisseur who sits on boards of companies run by Duke donors and the parents of Duke students.
In the world of higher education, children of the rich and famous are known as 'development cases,' pursued by presidents and fund-raisers often to the dismay of admissions staffs. Duke landed the children of fashion mogul Ralph Lauren and other corporate titans. Some of them became major donors, helping boost Duke's endowment from 25th in 1980 ($135 million) to 16th in 2005 ($3.8 billion).

Mr. Fleishman has held numerous titles at Duke, from senior vice president to professor of law. His power at the university stemmed in part from a long association with Mr. Sanford, which dated to the president's days as governor. Mr. Fleishman's résumé also includes a variety of affiliations with nonprofit foundations and companies.

What it omits is his role at the vortex of development and admissions. Mr. Fleishman, who served as chairman of a 1983-92 fund-raising campaign that raised $221 million, courted potential donors and pushed to admit their children.

Mr. Fleishman also sits on the board of Boston Scientific Corp., whose chairman, Duke alumnus Peter Nicholas, is one of Duke's biggest donors. His three children graduated from the university.
Mr. Fleishman sits on more corporate boards 'than a lot of people, especially nonpresidents,' says J. David Ross, a former vice president at Duke. Mr. Ross says he believes the directorships weren't payback for admissions. Duke spokesman Mr. Burness says Mr. Fleishman 'is a person of considerable distinction and accomplishment, and it's no surprise that a number of leading nonprofit and corporate organizations have invited him to share his wisdom as a member of their boards of directors.' Boston Scientific declines to comment.

The entanglements in this case are clearly even more complex than those in the case of a medical school leader simply sitting on the board of a health care corporation.

Again, most of the public discussion about conflicts of interest in health care has been about practicing physicians getting pens and coffee mugs with company logos or take-out lunches from company representatives. Some has been about faculty members getting thousands or tens of thousands from consulting relationships or speakers' fees. These conflicts are very important.

Yet more complex and intense entanglements affecting top medical school officials and the university leaders to whom they report have up to now received almost no attention. Maybe they will now.

"Slippery As Oiled Pigs"

The Washington Post followed up on the case of the hospitals that employed used elevator hydraulic fluid rather than detergent to attempt to sterilize surgical instruments. The paper reported comments by the CEO of Duke University Health System, Dr. Victor Dzau. To explain why it took so long for administrators to figure out there was something wrong with the sterilization process, he noted that normally a lubricant is applied to surgical instruments to "make sure they don't develop rust and lock up during surgery." So, "it took us a while to figure out that this was beyond the normal level of oiliness."
Futhermore, Dzau discounted the potential health risks of the exposure, "while we understand that some patients have experience symptoms following their surgeries, everything we know would suggest that no causal connection has been established between any of the these patients outcomes and instruments exposed to the fluid in the presterilization process."
Meanwhile, this case has attracted considerable media attention, most not very flattering to Duke. A local commentator wrote in the News Observer, "what galls most is not the mistake, but the post-mistake arrogance of hospital officials. Hospital regulators accused them of ignoring clear, early distress signals being sent by staff members who knew the instruments weren't supposed to be as slippery as oiled pigs and leave a yellow residue."
Unfortunately, Dzau's remarks did not convince me otherwise. Surgical instruments are made of alloys that do not corrode easily, and its implausible that more than tiny amounts of oil are normally used in their sterilization. Although I am not a surgeon, I have seen plenty of sterilized instruments, and none of them were oily. Hence, if the instruments were really as "slippery as oiled pigs," anyone familiar with the operating room context should have identified this as a big problem.
Furthermore, Dzau's comment about causality is, while probably true, not helpful. The only way to establish that exposure to operating room instruments coated with used elevator hydraulic fluid causes particular health problems would be a controlled trial that randomized some patients to such an exposure. Such a controlled trial would clearly be unethical, and I am sure no previous trial has been done. Yet in the absence of such ultimate proof, it seems reasonable to assume that it is not a good for patients to expose them to surgical instruments washed with used hydraulic fluid.
A more productive approach would require investigating why adminstrators did not identify the oily instruments as a problem sooner.

Not Very Slick Management: Administrators Alleged to Ignore Surgical Instruments "Disinfected" with Used Hydraulic Fluid

From the Associated Press, via the Charlotte Observer, came the story that a mix-up at Duke Health Raleigh and Durham Regional hospitals, both run by the Duke University Health System, caused surgical instruments used for operations on 3800 patients to be "disinfected" by immersion in hydraulic fluid drained from a hospital elevator system, rather than detergent.
According to the version reported in the Raleigh News and Observer, operating room staff complained to administration that their instruments were covered with oil. Sometimes, the staff had to wipe down tools because they were too slick to be usable. However, according to a Center for Medicare and Medicaid Services (CMS) report, "Administrative staff failed to heed the multiple complaints of staff sterilizing and using the instruments, thus delaying the discovery of the error and needlessly exposing patients to these instruments over a longer time period." So far, Duke has refused to reveal results of analyses of the content of the used hydraulic fluid. Duke officials declined interviews, but insisted that the surgical infection rate has not increased since the mix-up. A patient who suffered various maladies after surgery with the oily instruments requested information about the exposure from Duke, but received a letter from its risk-management department stating, they were "not in a position to respond at this time."
Not such slick managerial work on this one... Sorry, I couldn't help making these terrible puns, but sometimes we try to laugh to keep from crying. This story is so bizarre that it sounds like an urban legend. What kind of hospital manager would ignore repeated reports that surgical instruments came out of the sterilizer coated with oil? But with 422 related posts on Google News by June 14, this story appears all too real.