Those Big Doors Keep Revolving

A few months ago, we discussed the revolving door that seems to connect US government leadership positions and leadership positions of commercial health care firms. There are other such revolving doors, like two recently discovered just north of here.

State Government to For-Profit Hospitals

As reported by the Boston Herald:

David Morales, a longtime trusted adviser to [Massachusetts] Gov. Deval Patrick, became the latest official to leave the administration as he stepped down from a top health-care post for a private sector gig.

Morales resigned abruptly yesterday to take a position with Steward Health Care System.

Furthermore,

Morales worked as a top adviser during the governor’s first term before taking a $128,000-a-year post in 2009 as commissioner of the Division of Health Care Finance and Policy. His resignation was effective yesterday.

Note that we have previously discussed the Steward Health Care System, the new name given to the Caritas Christi system after it was bought out by private equity firm Cerberus Capital Management. Steward's aggressive plan to stamp out "leakage" raised concerns that the new movement to make practicing physicians employees could push them to do what is best for the company's bottom line rather than for patients.

We previously suggested that deals that turn previously non-profit health systems and physicians' practices into for-profit corporations deserve considerable scrutiny. After Caritas became Steward, state government officials promised close oversight. Now Steward has acquired a new executive who has friends in state government.

Non-Profit Health Insurance/ Managed Care by Way of a Political Campaign to Health Care Venture Capital

This story also came from the Boston Herald:

Four months after his failed Massachusetts gubernatorial bid, Charlie Baker has landed a private-sector job at a Cambridge venture capital firm.

The former Harvard Pilgrim Health Care CEO is now an 'executive in residence' for General Catalyst Partners. He’ll focus on working with small and midsize health-care services companies for the VC firm, which has $1.7 billion under management across five funds.

In addition,

Health-related companies already in General Catalyst’s portfolio include iWalk, a Cambridge developer of orthotic and prosthetic devices, and North Carolina-based TearScience, which specializes in diagnostic and treatment devices for evaporative dry eye in addition to several still in stealth mode.

Note that managed care was originally touted as a way to control health care costs, and that the commercial health care insurance companies/ managed care organizations claim to be doing all they can to control costs. Such a focus on cost control would imply that they ought to be able to vigorously negotiate at arms' length with health care providers and drug and device companies.  Now some device companies have acquired a new venture capital overseer who has friends in insurance and managed care.

Summary

Not only are there revolving doors connecting the national government and large commercial health firms, but also connecting state government and regional hospital systems, and non-profit health care insurers/ managed care organizations and device companies.

This is just some more evidence that people in the leadership of large health care organizations have more in common with each other, even if their organizations are supposed to be competing or negotiating at arms length, than they have with patients, clients, customers and the public at large. 

The various revolving doors appear not to align the interests of leaders of health care organizations with their organizations' stated missions, or with promoting the health of patients.  To truly reform health care, we need to expose these doors to more sunlight, and then think about retarding their spin or even locking them in place.

A Million Dollar CEO With More Than an Arm Around "the Medical Expense Trend"

Earlier, I noted how Charles Baker, the CEO of Harvard Pilgrim Health Care, in Massachusetts, scolded employees for their responsibility for rising health care costs. He stated, "if everybody keeps doing what they're doing , we will probably never get our arms around the medical expense trend."
To check Mr Baker's contribution to the "medical expense trend," I found Harvard Pilgrim's 990 forms, which are available on the Guidestar web site.
( Harvard Pilgrim is a not-for-profit organization. All such organizations with revenues greater than $25,000 must file annual disclosure forms with the Internal Revenue Service (IRS). These must list compensation paid to their most highly paid employees. Guidestar maintains an on-line library of these forms, updated at least through 2003.)
Harvard Pilgrim's 2003 990 form showed that Mr Baker's total compensation was $1,045,336.
Maybe Mr Baker has more than an arm around "the medical expense trend."
Do I detect a whiff of hypocrisy here? By what moral authority does Mr Baker get to lecture employees about their responsibility for medical costs while he gets more than one million a year as the CEO of a not-for-profit one of whose ostensible goals is to control health care costs?

Managed Care CEO Blames Patients for High Costs

Charles Baker, the CEO of Harvard Pilgrim, a large, and heretofore well-reputed non-for-profit managed care organization in Massachusetts (and formerly in Rhode Island, until our local Blue Cross drove them out), "told executives they need to get employees involved in their medical spending decisions," according to the Boston Globe. He also said "if everybody keeps doing what they're doing, we will probably never get our arms around the medical expense trend." "There really has to be some disruptive activity."
My comments: if you want to give employees more involvement in medical spending decisions, that's fine. But will you also give them more involvement in decisions made about where they get their health care coverage, and which physicians and other professionals they go to for their care? Just blaming employees, i.e., people, for rising health care costs comes close to blaming the victim, given the little control that employees have over what sort of health care insurance they can get, and given the restrictive nature of many contemporary commercial managed care plans.
To the credit of the Globe, the article provided some pithy dissent. Katherine Putnam, President of Putnam Machinery Co, responded that too much "healthcare spending goes to administration, not to providers of care. Furthermore, administration "would be an easy thing to cut."
I agree, but by putting administrators (of managed care organizations, of hospitals, of corporations acting as employers, etc., etc.) in charge of cutting costs, can one expect that they are going to cut administrative costs? The implication, of course, is that patients and health care professionals have to have a bigger role in the governance of health care organizations. Otherwise, administrators are going to just continue seeing to their own.
Incidentally, the Globe identified Harvard-Pilgrim CEO Baker as a "possible Republican gubernatorial candidate." That might give voters an opportunity to show what they think of his prescription for cutting health care costs.