During the Pandemic, Follow the Money: Hospitals and Health Care Provider Organizations Put Money Ahead of Clinician and Patient Safety, Public's Health

As the coronavirus pandemic continues its relentless course, we see many examples of selflessness and courage. They come from huge numbers of people keeping their social distance, to those in essential work, including primary care and public health professionals, facing long hours and increased risk, to first responders and hospital based doctors, nurses and other health professionals facing even longer hours, more risk, and the sorrows of sick and dying patients.  We also see economic hardships to many, including layoffs, lost wages, and closed small businesses. 

However, in the commercialized and dysfunctional US health care system, whose theme, like that of The Apprentice, should be "For the Love of Money," we see some stark contrasts. 


[For the Love of Money, the O'Jays]

So to understand why things keep going so wrong, we need to follow the money.  Let us consider some recent cases, roughly in order of when they came to light.


Hospitals Fail to Order Ventilators for Predicted Surge in Coronavirus Patients

As reported by the Washington Post on March 18, 2020, the background is now all too familiar:

Mechanical ventilators, which help patients breathe or breathe for them, are considered critical to the nation’s effort to contain the worst effects of the pandemic and avoid a crisis like the one Italy is facing. Depending on how bad the coronavirus pandemic gets in the United States, individual cities could come up thousands of ventilators short as patients flood hospitals, researchers say.

However,

Orders have not flooded in, she said, because most hospitals can’t afford to increase inventory of expensive equipment for what could turn out to be a short-term event.

'The risk is that they’ll never be used, and hospitals can’t eat the cost,' she said. 'Most hospitals in this country are not profitable.'

And why do hospitals not have any extra ventilators in case of a surge in demand?

Keeping backup ventilators is impractical for most hospitals because of the need to service and maintain them and train additional staff during rare events when they are needed, said Lewis Kaplan, a trauma surgeon at the University of Pennsylvania and president of the Society of Critical Care Medicine.

'It’s like taking military planes out of your boneyard,' he said. 'There can be a variety of economic disincentives to be prepared for the worst thing that can happen.'

Left unsaid is how the dollars saved might be balanced against any lives that could be lost were backup ventilators unavailable. Left also unsaid is whether the hospital could have bought the ventilators by using money earmarked for other purposes, like public relations, marketing, or increasing the compensation of top executives.   

Note that these comments came from early March, before US hospitals were overwhelmed.  They suggest that hospital leadership was not willing to sacrifice the short-term bottom line to be better prepared for a catastrophic event, despite, the mission of the hospital that should place the care of patients first, way ahead of short-term financial issues.

The reason is likely that most hospitals, like other health care organizations, are in the grip of managerialism.  Per an article from the June, 2015 issue of the Medical Journal of Australia (look here):
- businesses of all types are now largely run by generic managers, trained in management but not necessarily knowledgeable about the details of the particular firm's business
- this change was motivated by neoliberalism (also known as economism or market fundamentalism)
- managerialism now affects all kinds of organizations, including health care, educational and scientific organizations
- managerialism makes short-term revenue the first priority of all organizations
- managerialism undermines the health care mission and the values of health care professionals

The dangers of managerialism are becoming more apparent in this era of the pandemic.

Hospitals Still Allowing Elective Procedures, Despite Use of Resources that might be Needed for Pandemic Preparation, and Risks of Disease Transmission

An anonymous post on the KevinMD blog on March 24, 2020 suggested that hospital managers are pressuring doctors to do elective procedures, despite guidelines suggesting such procedures should be on hold during the pandemic:

Despite the guidelines issued from the American Society of Anesthesiologists, The Anesthesia Patient Safety Foundation, The American College of Surgeons, and the Center for Disease Control, many hospitals are continuing with elective cases during the COVID-19 crisis. Or worse, they are hiding behind the facade of canceling or postponing elective cases. At many hospitals, a tiered system of urgency allows leeway to surgeons or family to manipulate or distort the urgency by overplaying symptoms.

Furthermore,

For many of you, your hospital administration has forced your hand to continue operations or made examples of you if you disagree. There is pressure from your chiefs who are also likely being intimidated at the risk of losing their jobs.

The author noted that continuing elective surgery has risks, and gets in the way of pandemic preparedness

In addition to gambling on my very existence, every case you participate in that is not absolutely necessary right now is putting your community at risk. We do not have the luxury of practicing social distancing in our job. Every family that comes into the hospital is a potential vector for this virus, and we have no choice but to do the cases and then potentially spread this to our patients or our own family. We are sending mixed messages to our family by encouraging them to stay home in every aspect except this one. Every case you leave on the board requires us to use gloves, gowns, masks for all parties in the operating room. In addition, we must use anesthesia circuits, airway interventions, and medication that will be critically important in the coming days. As I alluded to earlier, even cases that do not typically require intubation might require it. In the same vein, intubation does not guarantee extubation. You must consider that your patient may need postoperative ventilation.

The implication is that the hospital managers are putting short-term revenue ahead of patient and health care professional safety, and using intimidation to do so.  Why? See the comments on managerialism above.

Within days, specific examples of the pressure by hospital management to continue performing elective procedures have appeared.

For baseball fans: on March 31, 2020, NJ.com reported:

On March 19, the Boston Red Sox learned ace Chris Sale needed Tommy John surgery. Five days later, New York Mets right-hander Noah Syndergaard found out he needed Tommy John surgery as well. Syndergaard went under the knife two days later. Sale had his operation on Monday, according to the Boston Globe.

There was no question both procedures were elective

When Red Sox chief baseball officer Chaim Bloom announced Sale’s impending surgery, he admitted the southpaw’s operation was elective. 'Obviously something we’re mindful of,'

Syndegaard's surgeon tried a little spin:

One of Syndergaard’s doctors said the right-hander’s operation was completely justified. According to the Mets, Dr. Neal ElAttrache gave Syndergaard a second opinion and defended Syndergaard going under the knife because the 27-year-old pitcher’s 'livelihood is at stake.'

The teams apparently set up the procedures to avoid hospitals and states where they were discouraged.

Each state has its own standards for medically-necessary procedures. Syndergaard went to Florida for his operation because at the time, the Sunshine State was allowing such operations whereas New York was becoming the epicenter of the coronavirus fight.

The Boston Globe reports Sale went to California for his operation because of the state’s lack of restrictions on procedures. His operation was performed by Dr. ElAttrache, who as we said, sees no problem with these surgeries.

In the modern sports world, team owners have shown they are in it for the money.  However, the physicians and doctors who collaborated to provide obviously elective surgery on wealthy, high-profile athletes also seemed to be putting money ahead of the public's health.

Some hospital systems seemed particularly cavalier about elective procedures. On April 1, USA Today reported,

This month, nearly 300 University of Pittsburgh Medical Center medical staff members – the majority of them residents and anesthesiologists – signed a seven-page letter outlining concerns about elective surgery and routine visits. It was sent to the health systems' management March 21, but some elective procedures have continued, according to two doctors who asked to remain anonymous.

Employees reported backlash from management because of the letter, one of the doctors said.

A second example,

Facilities allowing nonemergency surgeries include Steward Health Care. The more than 30-hospital chain, which operates in states including Texas and Louisiana, said in a statement that it will 'continue to support all scheduled surgeries and procedures, and we will leave the decision on whether it is appropriate to proceed now to our physicians and their patients.'

Steward said it is 'committed to preserving access to scheduled procedure time for as long as possible.' Steward did not respond to a request for comment Tuesday.

Just to reiterate,

Doctors and hospital staff 'have been put in a situation of deliberate sacrifice and are told to put our personal safety aside for monetary reasons,' said [Dr Nivedita] Lakhera, who has written two books on mental health and healing. 'When hospitals do nonemergency procedures, we see them as being OK with our death over their greed about short-term revenue. We resent that, but we are powerless, and we are forced to be there anyway.'

Note that UPMC is something of a poster child for managerialism in health care.  We have frequently discussed the hospital system management's ethical misadventures, led by a business-trained generic manager who has received outlandish compensation.  Our most recent round-up of the troubles at UPMC was in 2015.  

Furthermore, note that Steward Health Care is actually a for-profit hospital system owned by a private equity group, Cerberus Capital Management.  Thus it exemplifies another feature of the US commercialized health care system, financialization.  Steward Health Care, as run by Cerberus, was one of the earlier leaders in hiring corporate physicians, whom it pressured to avoid "leakage" of patients to other hospitals and doctors, even if some might question whether the care provided elsewhere might be better for those patients (look here).  The multimillion dollar a year CEO of Steward suggested the health care had become a commodity, objectionable to those who thought that health care should be a mission-based calling (look here). A 2016 summary of Steward's operational misadventures is here. As an aside, Steward was caught up in a dodgy scheme called World Health Networks to sell travelers quick analyses of their health via kiosks.  The scheme involved shady foreign participants, and a number of associates of ... Donald Trump (look here). 

Despite their sometimes dark pasts, both UPMC and Steward have remained major hospital systems, so maybe it should be no surprised that they are now seen as involved in ethically dubious activities that are hampering coronavirus preparedness, and possibly putting patients and health care professionals  at risk.


Hospitals Cutting Pay of Frontline Health Care Professionals Who Are at Personal Risk from Coronavirus

On March 27, 2020, the Boston Globe reported:

Emergency room doctors at Beth Israel Deaconess Medical Center have been told some of their accrued pay is being held back. More than 1,100 Atrius Health physicians and staffers are facing reduced paychecks or unpaid furloughs, while pay raises for medical staff at South Shore Health, set for April, are being delayed.

In particular, at the Beth Israel Deaconess Medical Center,

the physicians group announced that effective April 1, it is suspending employer contributions to the retirement plan for doctors in the group, as well as at an affiliated group that staffs many other hospitals in the state, Associated Physicians of Harvard Medical Faculty Physicians at BIDMC. There are 1,600 doctors in both groups, and the majority of them are affected by the cutback, according to a company spokesperson.

The physicians group also told ER doctors this week that it is withholding and deferring half of their quarterly 'bonuses' scheduled for March 30, according to another e-mail shared with the Globe. Those payments, which can reach tens of thousands of dollars per quarter, are based on extra shifts or additional patients the ER doctors took on months earlier, according to the doctors.

'The bonus is just pay we’ve earned,' [ED Doctor Matt] Bivens explained. 'It’s analogous to re-branding ‘overtime pay’ as ‘your bonus.’' Meanwhile physicians in other specialties in the group will not be receiving bonuses at all on March 30, according to the e-mail.

However,

'This is at a time when many of us have moved out to live like lepers separate from family to prevent spreading infection, and have already been working huge extra hours trying to scrape together [personal protective equipment] and otherwise brace for COVID-19,' said Dr. Matt Bivens, an ER doctor at Beth Israel Deaconess Medical Center and St. Luke’s Hospital in New Bedford.

What was the rationale? The need to preserve short-term revenue, of course:

'Like many other health care and physician organizations, the economics of the care we provide has changed quickly and dramatically,' wrote Dr. Alexa B. Kimball, chief executive of the Harvard Medical Faculty Physicians group practice at Beth Israel Deaconess Medical Center

I could find nothing in the article suggesting that the hospitals were cutting the pay of management personnel, however.  It seems particularly egregious to cut the pay of the health care professionals working the hardest and exposed to the most risk from coronavirus, while leaving the pay of already extremely well-compensated managers intact (if that is, in fact, the case).  But that's how the managerialist cookie crumbles....

Private Equity Owned Physician Staffing Company Cutting Pay of Front-Line Health Care Professionals Who Are at Personal Risk from Coronavirus

On March 31, 2020, ProPublica reported:

Most ER providers in the U.S. work for staffing companies that have contracts with hospitals. Those staffing companies are losing revenue as hospitals postpone elective procedures and non-coronavirus patients avoid emergency rooms. Health insurers are processing claims more slowly as they adapt to a remote workforce.

'Despite the risks our providers are facing, and the great work being done by our teams, the economic challenges brought forth by COVID-19 have not spared our industry,' Steve Holtzclaw, the CEO of Alteon Health, one of the largest staffing companies, wrote in a memo to employees on Monday.

The memo announced that the company would be reducing hours for clinicians, cutting pay for administrative employees by 20%, and suspending 401(k) matches, bonuses and paid time off. Holtzclaw indicated that the measures were temporary but didn’t know how long they would last.

In a follow-up memo sent to salaried physicians on Tuesday night, Alteon said it would convert them to an hourly rate, implying that they would start earning less money since the company had already said it would reduce their hours. The memo asked employees to accept the change or else contact the human resources department within five days “to discuss alternatives,” without saying what those might be. The memo said Alteon was trying to avoid laying anyone off.

'It’s completely demoralizing,' said an Alteon clinician who spoke on the condition of anonymity. 'At this time, of all times, we’re putting ourselves at risk but also putting our families at risk.'

So many ED physicians are neither private practitioners or hospital employees, but work for medical staffing companies, to whom hospitals have outsourced ED functions.  Presumably, hospital managers did this based on management dogma favoring outsourcing as a way to increase financial efficiency, thus improving the hospitals' revenue.  Here we see managerialism in action once again.

But wait, there is more.... It is not merely that the ED physicians in this case are employees of an organization led by managers with business training, but no health care background.  In fact, they work for for-profit companies owned again by private equity firms:

Private equity investors have increasingly acquired doctors’ practices in recent years, according to a study published in February in JAMA. TeamHealth was bought by Blackstone Group in 2016; another top staffing firm, Envision Healthcare, is owned by KKR. (The staffing companies have also been implicated in the controversy over 'surprise billing.')

What about Alteon?

Alteon and its private-equity backers, Frazier Healthcare Partners and New Mountain Capital, didn’t immediately respond to requests for comment.

ED clinicians now faced with pay cuts while they work harder, face more hardships, and are subject to more risks, were not happy.

'It’s completely demoralizing,' said an Alteon clinician who spoke on the condition of anonymity. 'At this time, of all times, we’re putting ourselves at risk but also putting our families at risk.'

So,

'I’ve completely lost trust with this company.'

The big question is why that clinician ever thought a private equity company would put patient care, and patient and clinician safety ahead of its own revenue?

We first discussed the perils of private equity takeovers of hospitals here in 2010, and of physicians providing direct patient care as employees of corporations owned by private equity here in 2011.   The private equity business model seems particularly unsuitable for organizations which provide patient care, as we discussed in some detail in 2012.

For a quick modern summary of why it is bad to have private equity involved in direct patient care, see Merrill Goozner writing in Modern Healthcare, September 5, 2019,

The private equity business model in healthcare parallels other industries: Use highly leveraged private capital to roll up a number of small firms into one entity, with the private equity firm providing collective management. In addition to hefty fees for arranging the transaction (generally 1% to 2% of the purchase price), the private equity firm typically demands a 20% return on its investment after paying interest on the debt.

After three to seven years, assuming all goes well in achieving the promised efficiencies, the private equity firm and its junior partners (who are the specialty physicians in this latest wave of takeovers) earn a windfall by taking the company public or flipping it to another set of private equity investors. If things don’t work out as planned, the firm cuts its losses and declares bankruptcy (most of its capital will have been recouped through the 20% annual returns).

The management company has two paths to achieve its financial targets. It can either reduce costs sharply or look for ways to increase revenue.

A private equity firm running a hospital is likely to be even more focused on putting short-term revenue ahead of all else, including patient's and the public's health, and ahead of health care professionals' safety and welfare.

Summary

We have been ranting about the perils of the US commercialized, dysfunctional health care system for a long time, unfortunately often with little effect.  But expect these perils to loom very large when the health care system and the nation's public health are under a deadly threat, like that from a pandemic.  I hope most of us will survive this pandemic.  When it is over, we have to rethink our societal devotion to neoliberalism, (or market fundamentalism) (look here).

We could start by banning the commercial practice of medicine, as we did in the past, and banning for-profit corporations from owing hospitals, or providing direct care to patients.

Until we do, we will continue to live in a dystopic version of The Apprentice.

 

Childish, petty and vindictive: UPMC hospitals ban sale of Post-Gazette from their gift shops

Here's a new angle on how a healthcare organization might react to unfavorable press:

Ban the sale of the newspaper in question from their territory:

UPMC hospitals ban sale of Post-Gazette from their gift shops
June 24, 2015 12:00 AM

http://www.post-gazette.com/business/pittsburgh-company-news/2015/06/24/UPMC-hospitals-ban-sale-of-Post-Gazette-from-their-gift-shops/stories/201506240066

By Steve Twedt / Pittsburgh Post-Gazette

Some UPMC hospitals are banning the Post-Gazette from sale in their gift shops, a move UPMC spokesman Paul Wood said was precipitated by “fairness issues” in the newspaper’s coverage of the health system.

At least three UPMC hospitals -- UPMC Shadyside, UPMC Mercy and Children’s Hospital of Pittsburgh of UPMC -- say they will no longer sell the newspaper.

This seems simply retaliatory and in fact silly, as (at least hopefully) the newspaper will remain on sale in the rest of the city, as well as available online.  That is, assuming UPMC does not go on a vendetta against the newspaper, in its own in-house PR campaigns and mailings, in other media, or in the courts.

Twice in recent years, UPMC executives have canceled the health giant’s advertising in the PG, citing dissatisfaction with the way UPMC was covered in the news pages and how it was portrayed in editorials and editorial cartoons.

One wonders if UPMC has specifically identified false and inaccurate reporting.  Editorial cartoons are also standard fare for newspapers, and if they are not liked, the answer is written response, not banning IMO.

''The Post-Gazette is edited without regard to any special interest, and our news columns are not for sale, at any price,'' said John Robinson Block, publisher of the newspaper. ''We have been here since 1786, and have as our purpose the same goal that UPMC was established for -- to serve the public's interest, not a narrow purpose.''

As pointed out many times at Healthcare Renewal, the purpose of healthcare systems may not entirely be for serving the public's interests anymore.  Rather, they are serving the private interests of a small executive group who reward themselves handsomely for all being such uniformly superb, excellent and deserving managers.

As Roy Poses wrote at http://hcrenewal.blogspot.com/2015/02/outsize-compensation-for-teflon-coated.html, and elsewhere:

... As we have said before, in US health care, the top managers/ administrators/ bureaucrats/ executives - whatever they should be called - continue to prosper ever more mightily as the people who actually take care of patients seem to work harder and harder for less and less. This is the health care version of the rising income inequality that the US public is starting to notice.

Thus, like hired managers in the larger economy, non-profit hospital managers have become "value extractors."  The opportunity to extract value has become a major driver of managerial decision making.  And this decision making is probably the major reason our health care system is so expensive and inaccessible, and why it provides such mediocre care for so much money. 

Back to the newspaper:

... UPMC officials did not respond Tuesday to questions asking which specific stories they found objectionable.

Perhaps anything that does not read like PR from a large advertising firm painting the organization in the finest light, and editorial cartoons showing executive halos....

''We believe that our coverage of UPMC has been fair-minded in every respect,'' said David M. Shribman, the newspaper's executive editor. ''Every entity in every town feels aggrieved at some point by what a good newspaper writes. It's part of living in a free society where the exchange of news and information is prized, not punished.''

It's sad when newspapers have to state the obvious.

But health system officials have often criticized stories, editorials, and editorial cartoons published in the Post-Gazette in recent years, most frequently in its coverage of the ongoing contract battle with insurer Highmark and, in years past, about the health giant's real-estate holdings and its business practices.

The answer to free speech is more free speech.  Colleges and universities are painfully learning this lesson (e.g., see the website of the Foundation for Individual Rights in Eduction, FIRE, at https://www.thefire.org/).

I actually think a ban on selling the newspaper at UPMC facilities is childish.  UPMC executives seem a bunch of petty, vindictive crybabies for banning sale of the paper from their shops.

-- SS

Who Benefits? - Despite Data Breaches, Staff Cuts, Vulnerable Patients' Coverage Cuts, Transplant Program Probation, Multi-Million Dollar Executive Compensation Persists at UPMC

There are so many things wrong with US and global health care that it is easy to get lost in the details, and despair of finding solutions.  Keep in mind, however, that the intractability of many of the problems may be quite man made.  Many problems may persist because the status quo is so beneficial to some people.

The Current Troubles at UPMC

Consider, for example, the troubles that have recently plagued UPMC, the giant health care system in western Pennsylvania.  In the last month, the following reports have appeared.

Electronic Data Breach Affected 2200 Patients

On May 15, the Pittsburgh Tribune-Review reported,

Personal data may have been stolen from more than 2,000 UPMC patients by an employee of an outside company the hospital giant used to handle emergency room billing, the latest in a string of data thefts to hit Pittsburgh health companies.

Note that this was only the most recent data breach at UPMC,

 UPMC was the victim of a data breach last year in which Social Security numbers and other sensitive data from all 62,000 UPMC employees were stolen when thieves hacked into an employee database at the health system.

The confidentiality of patient records is a  major responsibility of health care professionals and hospitals.  Yet UPMC does not seem to be doing a good job in protecting such confidentiality.

UPMC Move to Cut 182,000 "Vulnerable" Elderly Patients from it Medicare Advantage Plan Challenged in Court

The Pittsburgh Business Times reported on May 21,

Health system UPMC will defend its decision to cut 182,000 seniors from its provider network at a Commonwealth Court hearing May 27 in Harrisburg.

The hearing will determine whether UPMC complied with a consent decree that was reached last year and intended to protect 'vulnerable' populations from fallout of the messy Highmark-UPMC divorce. The seniors have Medicare Advantage coverage through UPMC rival Highmark Inc., and most commercial contract relations between the two health care titans ended Dec. 31.

This doesn't sound like the "patient-centered" care UPMC boasts about on its website.

UPMC to Cut 3,500 Staff Via Buyouts

Modern Healthcare reported on May 26,

In Pittsburgh's fiercely competitive healthcare market, UPMC announced voluntary buyouts to reduce its labor costs.

The system—which has also cut its hospital capacity in recent months—offered 3,500 workers voluntary buyouts to 'achieve cost-savings for UPMC by adjusting our workforce to meet the demands of the healthcare marketplace,' said spokeswoman Gloria Kreps.

Not mentioned by UPMC spokespeople were the possible effects on patient care of cutting about 5% of the most experienced members of the UPMC workforce.

UPMC Attorneys Disqualified from Defense of Wrongful Death Case

The Pittsburgh Post-Gazette reported on May 30,

The law firm that represents UPMC in many civil matter was disqualified from a medical malpractice cast this week after a judge found that an attorney from Dickie, McCarney & Chilcote improperly spoke with and advised a witness.

This does not say a lot for how UPMC managers pick legal counsel and manage their seemingly many legal defenses.

UPMC Lung Transplant Program on Probation, Again

On June 2, the Tribune-Review reported,

A national organ-sharing group has put UPMC's lung transplant program on probation for a year, listing concerns about how the program handled donated organs. 

The United Network for Organ Sharing cited 14 cases in 2013 and 2014 when the hospital system accepted lungs that UPMC doctors later found could not be transplanted in intended recipients, said Dr. Jonathan D'Cunha, UPMC's lung transplantation surgical director.

UPMC kept the organs for other patients in UPMC Presbyterian in Oakland, an approach approved by regional organ procurement groups that supplied the lungs, D'Cunha said. But UNOS, a nonprofit that manages the American organ transplant system, objected to what it called 'an unusually high number of instances' of the practice.

Probation ordered by the board of UNOS and the Organ Procurement and Transplantation Network took effect Monday, according to UNOS.

D'Cunha said the transplant program remains fully operational but will be operating under a corrective-action plan.

This was not the first trouble that a UPMC transplant program has encountered.  As the Pittsburgh Post-Gazette reported,

This is  the second time UPMC has been placed on probation for a transplant problem.

In 2011, it was placed on probation ... after disease was transferred from a living kidney donor to a recipient.

Note that while the first instance of probation seemed to suggest competency issues, the latest one seems to be about ethical issues.  By transplanting kidneys into immediately available UPMC patients who may have lower priorities than other patients on the list, UPMC may be disfavoring patients from "outside," whose transplants, incidentally, would not generate much revenue for UPMC.

An editorial in the Post-Gazette suggested while UPMC "pleads ignorance" about these rules, "Western Pennsylvania's largest hospital network should have known better."

Just Another Bad Month?

Thus it was just another bad month at the office for UPMC management.  But UPMC management has had lots of bad months.  For example, since 2011, we have previously discussed
-  Fantastical musing by the UPMC CEO about health care run by computers, not doctors (look here)
-  Fantastical claims by UPMC in response to a lawsuit that is has no employees (look here)
-  Numerous malpractice cases filed against UPMC related to problems with its electronic medical records (look here, here, here, here)
-  Layoffs at UPMC due to problems with its electronic medical records (look here)
-  A lawsuit by the Mayor of Pittsburgh claiming UPMC should be stripped of its non-profit status (look here).  

The $6.4 Million CEO, and the Other Million Dollar Managers

One would think that these series of events, all in a short time, coupled with all these previous stories, might raise questions about who is running the institution, and what they are being paid.


Instead, however, the Pittsburgh Tribune-Review published a story on May 15, 2015, about just how well paid top UPMC managers continue to be.

UPMC's Jeffrey Romoff banked total compensation of $6.4 million two years ago, ranking the chief executive's pay among the nation's highest for nonprofit health leaders.

The 69-year-old Romoff was one of 31 employees of Western Pennsylvania's largest integrated health system to be paid more than $1 million in 2013,...

Romoff's 2013 pay, which included a base salary of nearly $1 million plus $5 million in incentives and deferred income, was down 3 percent from the previous year but well above the median compensation for a nonprofit hospital CEO.

The defense of Mr Romoff's compensation followed the same pattern we have discussed repeatedly. Justifications for exceedingly generous compensation for health care managers, particularly of non-profit hospital, often are superficial, limited to talking points we have repeatedly discussed, (first  here, with additional examples of their use here, here here, here, here, here, here, and here.)  These are:
- We have to pay competitive rates
  We have to pay enough to retain at least competent executives, given how hard it is to be an executive
- Our executives are not merely competitive, but brilliant (and have to be to do such a difficult job).

So,

UPMC spokeswoman Susan Manko wrote in an email that compensation for the company's executives is tied to performance that is based on 'clearly defined goals, including quality of care, community benefit, financial measures and other key factors.'  Pay takes into consideration what other industry executives are making, she noted.

Thus,, by inference, she implied Mr Romoff's brilliance in meeting the "clearly defined goals," and overtly stressed the competitive rates talking point.

However, the clearly defined goals including putting the transplant on probation twice, having several electronic data breaches, trying to discharge the most experienced employees, being sued for being a non-profit in name only, being subject to numerous malpractice suits, and having one law firm used to defend one of these suits disqualified,  and dumping hundreds of thousands of elderly, "vulnerable" patients?  Really?

A fair comparison was to other overpaid managers, not to the dedicated health care professionals who make the system work?  Really?

Also, as the Pittsburgh-Tribune Review reported on February, 2015, the Chairman of the Board of UPMC, Nicholas Beckwith, thinks Mr Romoff is a

brilliant leader and stood by the board's decision to pay Romoff $6.6 million a year, among the highest CEO salaries for nonprofits in the region.

Furthermore,

'When people ask me about his pay, I say, ‘What would you pay him?'' Beckwith said. 'If they're going to understand the brilliance of Jeffrey Romoff, they have to acknowledge there's no more effective leader in the nation than Jeff Romoff.'

So here was the "brilliance" talking point really writ large.  The most effective leader in the entire US?  Really?

At best, Mr Beckwith seemed to be only thinking about the financial performance of UPMC, rather than its clinical performance, its ethical performance or its effects on patients and their outcomes. But then again, Mr Beckwith might not know much about that,

Beckwith worked as a salesman for Murrysville-based Beckwith Machinery and eventually became its CEO.

But one letter to the Pittsburgh Tribune-Review did suggest

Perhaps UPMC should consider offering buyouts to that group of egotists who inhabit the upper reaches of the U.S. Steel Tower. Then they could move to the next phase of life — old and wealthy.

Summary

So we have presented the recent unpleasantness at UPMC as emblematic of some of the types of unpleasantness that afflict US (and global) health care, including threats to patients' confidentiality and access, problems with quality of health care, possible ethical misconduct, ill treatment of experienced health care staff, etc.  Yet consider that despite these multiple failings, and a history of similar failings going back years, the top hired managers of the non-profit hospital health care system are being made millionaires many times over.  They clearly are benefiting greatly from the current system, regardless of whether the system benefits others.  In fact, one begins to wonder if they are paid well despite the current problems, or because of them?

So one lesson is: every time some new version of health care dysfunction appears in public, think not only about its bad effects on patients, professional values, the public, etc.  Think about who is gaining from the current bad status quo.

 For a slightly more specific lesson....  In a 2014 interview, corporate governance experts Robert Monks and Nell Minow, Monks said,

Chief executive officers' pay is both the symptom and the disease.

Also,

CEO pay is the thermometer. If you have a situation in which, essentially, people pay themselves without reference to history or the value added or to any objective criteria, you have corroboration of... We haven't fundamentally made progress about management being accountable.

The symptom and the disease have metastasized to health care, from huge for-profit corporations now also to even small non-profit hospitals.   Thus, like hired managers in the larger economy, health care managers have become "value extractors."  The opportunity to extract value has become a major driver of managerial decision making.  And this decision making is probably the major reason our health care system is so expensive and inaccessible, and why it provides such mediocre care for so much money. 

One wonders how long the people who actually do the work in health care will suffer the value extraction to continue?
As we have said far too many times - without much impact so far, unfortunately - true health care reform would put in place leadership that understands the health care context, upholds health care professionals' values, and puts patients' and the public's health ahead of extraneous, particularly short-term financial concerns. We need health care governance that holds health care leaders accountable, and ensures their transparency, integrity and honesty.

But this sort of reform would challenge the interests of managers who are getting very rich off the current system.

As Robert Monks also said in the 2014 interview,

People with power are very reluctant to give it up. While all of us recognize the problem, those with the power to change it like things the way they are.

So I am afraid the US may end up going far down this final common pathway before enough people manifest enough strength to make real changes. 

ADDENDUM (16 June, 2015) - This post was re-posted on OpEdNews.com. 

A $6.6 Million CEO Dreams of a "Doctor-Less" Future

The CEO of giant hospital system UPMC, Mr Jeffrey Romoff, has been one of the best compensated CEOs of ostensibly non-profit hospital systems.  As we noted here, his 2013-14 compensation was $6.6 million.  UPMC has become so big and its top managers so rich that a former Mayor of the city of Pittsburgh sued the organization claiming it was not really not-for-profit (look here and here).  The leadership of UPMC has previously supplied us with some interesting examples of conflicts of interest (look here and here). 

The announcement of a new alliance of Pittsburgh organizations provided an interesting insight into the thinking for which such a CEO is paid the big bucks.  Leaders of three big organizations, UPMC, the University of Pittsburgh (with which UPMC is affiliated), and Carnegie-Mellon University announced an alliance to use "big data" in health care (see this article in the Pittsburgh Post-Gazette).

UPMC, the University of Pittsburgh and Carnegie Mellon University on Monday announced the formation of the Pittsburgh Health Data Alliance to 'revolutionize health care and wellness' by using data to detect potential outbreaks as well as create health care innovations that will spawn spinoff companies.

The clinical goal, the leaders of the three institutions said, is to remake health care so that it is at once more computerized, yet more personalized, using millions of gigabytes of accumulated health records to predict and treat patients’ health issues in a manner far more specific than is possible today.

Big data now seems to be the latest rage in business schools and among the high-tech crowd, never mind the failures of fancy statistical modeling based on big data that helped lead to the global financial collapse of 2008.  Similarly, despite at least 30 years of research, multivariate prediction and diagnostic modeling in medicine has never lived up to its expectations.  Few models have been demonstrated to be better than mediocre predictors when tested in real-life clinical settings.  Finally, there are numerous concerns about privacy and data security when patients' data is being avidly traded back and forth.

The most striking talk in this meeting, however, was by UPMC CEO Jeffrey Romoff.  The Pittsburgh Post-Gazette noted,

Mr. Romoff said he envisioned 'doctor-less health care,' which is not to say there will be no doctors in the future, but they will be greatly aided by computerized diagnoses, by biometric data gathered on smartphones and transmitted in real time, and by a patient’s own genome. It could result in a new form of  'artificial intelligence,' he said.

The reporter, however, seemed to have edited Mr Romoff to take the edge off what he said.  A video of that part of the conference can be found, for the moment, here.  I transcribed, I believe accurately, Mr Romoff's three most relevant sentences.

The majority of healthcare that everybody receives will be accessible on their handheld device.

We will be thinking about 'doctor-less' healthcare.

We will in fact create an artificial intelligence better than the superb level of intelligence we now have among our physicians and our healthcare professionals.

So, in my humble opinion, it did not sound like Mr Romoff was just envisioning that physicians someday may actually have access to diagnostic or predictive models that are highly accurate for real patients.  He was envisioning replacing physicians with machines, with artificial intelligence. 

Again, never mind that despite years of work and billions of dollars, artificial intelligence so far has proved remarkably dumb.

So furthermore, in my humble opinion, this provided a glimpse into how health care managers now think.  Mr Romoff appears to be a generic manager.  He is not a health care professional, and has no apparent experience taking care of patients (see his official bio, listing his most advanced degree as a Masters in Philosophy).  Generic managers now often seem to think of themselves as some sort of new aristocracy, far removed from the peasants who work for them.  Would not it be easier for such aristocracy to avoid working with such peasants at all?  Machines would be so much neater and cleaner, would not ask for raises or think of unionizing or rebelling (at least outside of the world of Terminator movies).

Leaving aside such fantasies for the moment, the most concerning problem with Mr Romoff's dream of robotic doctors is that anyone who has ever had any direct involvement in health care knows that doctors need to do much more than crunch data and make predictions and diagnoses.  Doctors and other health care professionals have sworn to put patients' interests first.  That implies that doctors must talk to, endeavor to understand, and be empathetic towards their patients.  Many times we doctors may not do this anywhere near perfectly.  But we are human, so can at least try.  Artificial intelligence may be getting closer to making better health care predictions and diagnoses, but does anyone seriously think we are close to making an understanding, empathetic machine?

I believe that Mr Romoff has unwittingly made another argument why he and his fellow generic managers should not be leading health care.  Health care should be lead by people who understand the actual care of patients, uphold health care professionals' values, and are willing to be accountable for putting patients' and the public's health first. 

More Stories of Million Dollar Plus Hospital Executives, but Now the NY Times Challenges the Talking Points

It is spring, time for birds to sing, flowers to bloom, and hospital executives to get more money.  As we do periodically, we have amassed a series of media accounts of the big to enormous compensation paid to top non-profit hospital leaders.  These reports follow a certain pattern, but this year's spring crop included something different.

The Pattern

In the groundbreaking science fiction series "Fringe," "The Pattern" was a series of apparently inexplicable events which eventually pointed to the existence of a parallel universe.




In non-profit hospitals, The Pattern of the discussion of executive compensation is this.  Nearly all non-profit hospitals must release minimal data on the total compensation of a few of the highest paid executives.  When these reports come out, sometimes the local media take a look, either at an individual hospital or hospital system, or at a number of local hospitals.  They almost inevitably find that some, usually most executives make what appears to be lots of money.  This could be hundreds of thousands of dollars at small community hospitals, or millions of dollars at larger hospitals and hospital systems.  Sometimes the reports end there.  Sometimes the reporters ask hospital representatives or local experts to explain the apparently exalted compensation figures.  The explanations are usually very similar, and so we have called this part of The Pattern The Talking Points.

The Talking Points

It seems nearly every attempt made to defend the outsize compensation given hospital and health system executives involves the same arguments, thus suggesting they are talking points, possibly crafted as a public relations ploy.   We first listed the talking points here, and then provided additional examples of their use here, here here, here, here, and here, and here. 

They are:
- We have to pay competitive rates
- We have to pay enough to retain at least competent executives, given how hard it is to be an executive
- Our executives are not merely competitive, but brilliant (and have to be to do such a difficult job).

The talking points are usually supplied by hospital public relations personnel, sometimes by hospital trustees or executives, sometime by various health care consultants.  The talking points are rarely questioned.

So let us look at some recent media articles for The Pattern, grouped in chronological order, to illustrate.

Jersey Boys

On April 6, 2014, Crain's New York Business reported some of the biggest yearly compensation figures seen for non-profit hospital CEOs.  

Ronald Del Mauro, the former president and chief executive of Barnabas Health, pulled in almost $22 million in 2012, the year after he retired from New Jersey's largest health system. Joseph Trunfio, president and chief executive at Atlantic Health, made $10 million.

Never before have such outsized compensation packages appeared on Crain's annual list of top-paid hospital executives

The explanations fit the pattern.  First from a Barnabas spokesperson,

'When Mr. Del Mauro began his career, Saint Barnabas Medical Center was a stand-alone community hospital,' she said, adding that Barnabas is 'well positioned both financially and operationally, despite significant industry challenges. His retirement package is a function of over four decades of service ... and reflects his exceptional legacy.'

He was just another brilliant executive, in other words.

Then about Mr Trunfio,

In a statement, Karen Kessler, board chair of Atlantic Health System, said that while Mr. Trunfio's 'current agreement does not have these bonus provisions, his compensation is performance-based, aligned with industry standards and intended to assure we retain top executive talent to provide the best quality of care to the communities we serve.'

There in italics were the competitive market rates and retention arguments, and a repeat ("top talent") of the brilliance argument.

Meanwhile, on April 28, 2014, NJBiz had its own report on non-profit executive compensation in the state.   Their summary included,

Heading up the list is Robert C. Garrett, CEO of the Hackensack University Health Network at $2.12 million, followed by Richard P. Miller, Virtua Health ($1.99 million); John K. Lloyd, Meridian Health System ($1.68 million); Barry H. Ostrowsky, Barnabas Health ($1.67 million); and Stephen K. Jones, Robert Wood Johnson Health System ($1.55 million).

Several New Jersey multi-hospital systems paid several top executives more than $1 million in 2012. Hackensack, for instance, has two executives over the million-dollar mark.

[It is not clear why the two different reports listed two different people from Barnabas - Ed]


Then came The Talking Points, for example, from Hackensack Hospital,

'The pay for HackensackUMC's executives reflects its complexity and is consistent with those levels paid to executives in other similarly situated not-for-profit academic and integrated health systems,' Hackensack said in a statement. "The compensation philosophy is to provide market-competitive base salaries....

 The bit about complexity implies the brilliance argument, since only a brilliant CEO could cope with such complexity.  Then we had two versions of the competitive market based payment argument.  

Here is another version of the same thing, this time from one "Joel Cantor, director of the Center for State Health Policy at Rutgers University,"

On the other hand, hospital systems are large, complex organizations. Ultimately, CEO compensation is driven by the market for senior talent.  

My favorite version of the brilliance argument came from one Ms Betsy Ryan, president of the New Jersey Hospital Association,

They literally are on call 24/7, 365 days a year and they are running an institution where lives are at stake

 
More on that later.....

Smatterings of Data from Connecticut and Pennsylvania

There were a series of reports that simply noted large amounts, but did not look for explanations.  

HartfordBusiness.com recounted a state report of the top 10 most highly paid executives of individual hospitals (but did not account for the pay given to executives of hospital system).  The figures started at $3.26 million for the CEO of Yale-New Haven Hospital, and finished with $1.48 million for the senior vice-president and chief of staff at the same institution.

The Pittsburgh Post-Gazette reported pay at the West Penn Allegheny Health System, including that given to a former CEO, $1.89 million, and to a former chief administrative officer, $1.29 million.    

Then the Pittsburgh Tribune noted even bigger compensation given out at competitor UPMC.

UPMC CEO Jeffrey Romoff got an 8 percent raise two years ago, placing his generous compensation package near the top of the nonprofit hospital industry. 

The 68-year-old Romoff, who leads the largest integrated health system in Western Pennsylvania and one of the biggest in the nation, brought in $6.6 million in 2012, up from $6.1 million in 2011, according to tax documents UPMC made public on Friday.

Also,

UPMC paid 30 other executives and doctors more than $1 million each in 2012, up from 21 employees who were in the $1 million club the year before.

Wake Forest Baptist

The Winston-Salem Journal reported details of executive compensation at Wake Forest Baptist on May 16, 2014.  Its CEO, Dr John McConnell, had "total compensation [which] rose 0.8 percent to $2.06 million in 2012."  Then, however, "Donny Lambeth, the former president of N.C. Baptist, had a 52 percent drop in total compensation to $1.18 million."  Also, "Dr. Thomas E. Sibert, president of Wake Forest Baptist Health and chief operating officer, received a 10 percent drop in total compensation to $1.02 million."  Then, "Edward Chadwick, chief financial officer, had a 2.3 percent drop in total compensation to $956,465."  It is interesting that some executives actually saw small decreases.  Then again, the system lost $4.5 million for fiscal 2012-2013.

The article also offered up the usual explanations, first provided by the hospital system itself,

there are few executives with the required skill set to manage and provide leadership for an integrated (center) such as ours

There goes another version of the brilliance argument.  Then,

Its executive compensation packages, it said, 'are fiscally responsible, appropriate for the marketplace and an essential part of the effort to recruit and retain skilled executives and visionary leaders for the medical center.'

Those included the competitive market rates and the retention arguments, plus the ante for brilliance was upped to the visionary level.

The article ladled on one another version, this time supplied by "John Challenger, chief executive of outplacement consultancy Challenger, Gray & Christmas,"

 'Communities who want the best health-care system they can get should support paying the compensation levels required to attract top talent,' Challenger said.

'Cutting salaries will result in an exodus of top talent to systems that will pay it,...'

So "top talent" = brilliance argument, threatening an "exodus" = retention argument.

So there they go again, again.


Something Different: the New York Times Challenges the Pattern 

We have previously challenged the talking points.  For example, in August, 2013 we wrote,

As we have noted before, there is little evidence in support of these talking points.  What evidence there is on the topic suggests there is no real free market in interchangeable CEOs, and that CEOs are not very mobile, especially not across different kinds of organizations (look here).  There is little evidence that hospital (or other health care) executives are particularly brilliant, or any more brilliant than multitudes of physicians, nurses, and other health care professionals who work hard to make their institutions run.

Yet most discussions of executive compensation in hospitals, and indeed in health care, follow The Pattern.

So it was refreshing in this season of outsized compensation reports is that the New York Times ran an article that challenged The Pattern, albeit with limitations.  The most obvious problem with the pattern is that the arguments are out of context, and not challenged in context.  However, in the NY Times,

Physicians, the most highly trained members in the industry’s work force, are on average right in the middle of the compensation pack.

That is because the biggest bucks are currently earned not through the delivery of care, but from overseeing the business of medicine.

The base pay of insurance executives, hospital executives and even hospital administrators often far outstrips doctors’ salaries, according to an analysis performed for The New York Times by Compdata Surveys: $584,000 on average for an insurance chief executive officer, $386,000 for a hospital C.E.O. and $237,000 for a hospital administrator, compared with $306,000 for a surgeon and $185,000 for a general doctor.

Note that this comparison only refers to salaries, not total compensation, so

And those numbers almost certainly understate the payment gap, since top executives frequently earn the bulk of their income in nonsalary compensation.

We just saw examples of non-profit hospital CEOs making over $1 million to over $6 million in total compensation.  That would imply that non-profit CEOs may make from three times to over thirty times the total compensation of a surgeon, and from over five times to over thirty-five times the compensation of a general internist.  (And the ratio for such outliers as Mr Del Mauro above would be even higher.)  

So is a hospital CEO thirty times more brilliant than a general internist?  

That suggests also that we go back to another version of the brilliance argument found in one article above.  In the NJBiz article, the NJ Hospital Association President said, about CEOs, not physicians,

They are literally on call 24/7, 365 days a year and they are running an institution where lives are at stake.

They may be on call in a sense, but they are never on first call.  Their decisions may ultimately affect lives, and perhaps put lives at risk.  But they never have to make a decision about a patient that could literally cost that patient his or her life.  And they almost never have to be accountable for what happens to individual patients.  

It is easy to argue that physicians' responsibilities for life and death decisions are much more direct.  Explain, then, those pay ratios again.  

Actually, in an opinion piece about executive compensation in FierceHealthFinance, Ron Shinkman described the life of a typical seven-figure a year hospital executive,

While the days of seven-figure club members are long, they are also predictable--check the census and cash flow reports, confer with the medical staff, get updates on supplies, negotiate with payers, have some meetings on long-term planning. If it is a large hospital in a large market, those meetings are likely focused on site expansion and acquisition. If it is a medium-sized facility, tI expect they spend their time focused on finding a larger partner. Breakfast and dinner meetings and events switch focus to development and fundraising.

There may also be some meetings on quality initiatives, but they are of nominal consequence. Members of the seven-figure club enjoy little to no accountability from their customers.

So is executive compensation in hospitals, or other parts of the health care system, based on executives' brilliance.  Or is it based on their ability to be rentiers, rent-seekers, who can control the choke points of money flow, and make sure they get more than their share before what is left can go to real health care? 


Of course, hospital executives and their ubiquitous spokespeople do not discuss what they do day to day.  Maybe they need to, and also need to address the implications of these statements in the NY Times article, given that the US has the highest health care costs of any developed country, but nowhere near the best results,

And studies suggest that administrative costs make up 20 to 30 percent of the United States health care bill, far higher than in any other country. American insurers, meanwhile, spent $606 per person on administrative costs, more than twice as much as in any other developed country and more than three times as much as many, according to a study by the Commonwealth Fund.

As a result of the system’s complexity, there are many jobs descriptions for positions that often don’t exist elsewhere: medical coders, claims adjusters, medical device brokers, drug purchasers — not to mention the 'navigators' created by the Affordable Care Act.

Among doctors, there is growing frustration over the army of businesspeople around them and the impact of administrative costs, which are reflected in inflated charges for medical services.

We had previously argued (see above) against the talking points, and specifically that there is nothing to suggest that hospital executives are any more, much less an order of magnitude more brilliant than physicians or other health care professionals. But I confess as a physician I did not have the courage to extend that argument to a direct comparison of executive versus health care professional pay. The Times article, written by someone who is not a physician, did not have to worry about appearing self-serving.  I am glad, for it is high time to discuss the degree that the incentives produced by executive pay in health care have become perverse, and how to change these incentives to make health care leaders more accountable for health, and less focused on their own riches. 

Presto Chango - UPMC Tries to Make its Employees All Disappear

This story is just in time for Halloween. 

The Lawsuit Challenging the Non-Profit Status of UPMC

Back in March, 2013, we discussed a lawsuit initiated by the then Mayor of Pittsburgh that challenged the tax-exempt, non-profit status of giant hospital system UPMC.  The suit charged that UPMC functions more like a for-profit corporation based on its large surplus (recently $1 billion), larger reserves ($3 billion), minimal commitment to charitable care, and generous executive pay (recently $5.9 million  to CEO Jeffrey Romoff, 19 executives paid more than $1 million, and ownership of a jet aircraft).  By the way, Romoff's latest total compensation was said to be $6.1 million (look here), and UPMC just bought an even fancier corporate jet, a Bombardier Global Express worth $51 million (look here).

The Employees Vanish

The Pittsburgh Post-Gazette just described UPMC's remarkable response to the lawsuit.

 For purposes of the city's payroll taxes, [an attorney representing UPMC] Mr. [William] Pietragallo explained, UPMC's subsidiaries -- like UPMC Shadyside and Western Psychiatric Institute and Clinic -- file separate forms. Employees work for those legal subsidiaries. But UPMC itself?

'We don't have employees,' Mr. Pietragallo said.

The question is central to the city's suit to strip UPMC of its status as a purely public charity. UPMC argues the city can't challenge its exemption from payroll taxes because it technically has no employees. It's a case where the legal reality may differ significantly from the one that UPMC, which on its website claims to have 55,000 employees, markets on a regular basis.

'You can't pay employment taxes unless you have employees,' Mr. Pietragallo said.

This is not the first time UPMC has made this claim in response to a legal action,

Earlier this year, when UPMC faced 80 complaints of unfair labor practices, it argued that it was only a holding company and did not technically employ those in the complaints. The complaints alleged, among other things, that UPMC employees were being punished for attempting to unionize. UPMC ultimately settled.

Obvious Contradictions

These claims of invisible employees appear to be contradicted by UPMC's own public relations,

 UPMC touts it large workforce. Its 2012 annual report, for example: 'The economic impact of UPMC is more substantial than most people realize. The organization is the largest nongovernmental employer in the Commonwealth of Pennsylvania, and more than $6.2 billion in total labor income can be attributed directly or indirectly to UPMC.'

UPMC's website and media releases say the hospital giant employs in the range of 55,000 people. And when UPMC made the top rankings of U.S. News & World Report's Best Hospitals, it did so as a conglomeration of several facilities attorneys are now arguing are separate subsidiaries.

Also,

[An attorney representing the city of Pittsburgh, Ronald]   Barber argued that even for tax purposes, UPMC has documented having employees. In a Form 990 filed for the 'UPMC Group,' the hospital network said it employed around 52,000 people.

A few days later, the Post-Gazette reported that the city responded to these UPMC claims in matter-of-fact way,

 On its website, in its annual report and in some tax filings, UPMC purports to have employees -- sometimes tens of thousands of them, the city of Pittsburgh's attorneys said in a court filing.

Furthermore,

 The city also argued that those working for subsidiaries are UPMC employees as well, pointing to UPMC's 2012 Annual Report and website, which tout the hospital system as one of the state's largest employers. Attorneys also pointed to a lawsuit in which UPMC claimed to 'extend offers of employment.'

How Complexity Benefits Bureaucrats and Managers

It is Halloween coming up, not April Fool's Day, and the claims made on behalf of UPMC do not appear to be jokes.  Instead, I believe they underline two serious problems with how large health care organizations are currently lead.

The first is that health care organizations often have exceedingly complex structures for reasons that have nothing to do with fulfilling their health care mission.  One reason may be that the complexity creates options for plausible deniability.  In particular, when such organizations are accused of bad behavior, as they now often are, subsidiaries may be set up to "take the rap."  For example, we discussed how Pfizer Inc has been using the bankruptcy filing of its Quigley subsidiary made as if that subsidiary were independent to delay resolution of claims that the subsidiary sold hazardous asbestos products.   

This tactic of having the subsidiary take the rap may be particularly useful when taking the rap may lead to a severe penalty for the organization, such as disbarring it from being paid by the government.  A disbarred subsidiary may simply be dissolved and its work transferred to other parts of the organization.  For example, in May, 2013 we discussed a settlement in which Baush and Lomb subsidiary Ista Pharmaceutical would be disbarred from participation in government programs.  However, Baush and Lomb itself would not be disbarred, and would be able to "wind down" Ista's operations and transfer its products to other parts of the larger company. 

The current example appears to be a more creative use of subsidiaries to claim deniability, although whether the arguments about disappearing employess above are even plausible is open to question.


Complex organizations also offer many opportunities to employ and enrich administrators, bureaucrats and managers, and to justify ever larger compensation for the top executives who purport to run the whole thing.  That such proliferation of management and management compensation may detract from the mission does not appear to be a big concern of the sorts of people who now run health care.

Contempt for Truth

The second problem is that the leadership of large organizations seem to have little use for the truth.  Instead, they may put lots of faith in their marketers, public relations people, and legal staff to obfuscate the truth in pursuit of ever more revenue and executive enrichment.  As management becomes less and less reality-based, however, it may be less likely to be able to respond to the very reality-based needs of patients and the public.

Conclusion

I hope that the outlandish claims now being sanctioned by UPMC leadership may raise awareness of what is going wrong with the leadership of health care organizations in general.  As we have been saying for years, health care leadership that puts its self-interest ahead of patients and the public, and which disregards the truth in service of self-interest may be the biggest cause for ever increasing health care costs, and ever declining access and regard for the health of patients and the public.  True health care reform would encourage leadership that puts the mission ahead of self-interest, and values honesty more than personal profit. It would promote regulation that holds top leadership of organizations accountable for their organizations' actions and not allow the leadership to hide behind complex organizational structures.   

Updates on Three Medical Malpractice Cases Involving EHR's

Scorecard:

Case 1 - dead adult due to failure to intubate when in respiratory distress, causing anoxia and brain death; allegations of EHR alteration; case delayed six months due to newspaper publicity.
Case 2- adult renal failure patient infected with hepatitis C from transplant; lawsuit just filed.
Case 3 - dead baby due to x-ray never being read; hospital filed a Motion to Compel Settlement Conference.

The details:

Case 1:

Trial to begin in wrongful death claim
Monday, September 19, 2011
By Sean D. Hamill, Pittsburgh Post-Gazette

As far as Samuel Sweet was concerned, he only had a headache. It was a bad one, but nothing more, maybe something his chiropractor could fix with a little adjustment.

But three days after being admitted to UPMC Presbyterian for what his family was told was a treatable amount of bleeding on the brain, and six hours after his family saw him laughing and chatting about the Penguins' playoff chances, early in the morning of May 16, 2009, Mr. Sweet died unexpectedly.

Why he died is the subject of a civil case his family filed a few months later that is set to be heard by a jury as early as today in Allegheny County Common Pleas Court. [Read the whole story at link above - ed.]

Set to be heard by a jury as early as today (i.e., Sept. 19, 2011)? Well, no, actually. As a result of this newspaper story, the defendants filed a complaint with the judge, who ordered a six month delay in further proceedings. The complaint and decision is at this link (PDF).

Apparently, sanctions sought by the defendants against the plaintiff's attorney for "leaking" public information to the public about matters affecting their own health and safety were denied.

I find the allegations of EHR alteration of interest:

... [Plaintiff attorney] Ms. Maliver said UPMC's timeline came into question in early August 2011, when UPMC finally turned over -- after two years of discovery [i.e, they turned them over at the last minute, a few weeks before trial was scheduled to begin - ed.] -- 1,200 pages of "results detail sheets" which show not only when something was written in Mr. Sweet's electronic chart, but who wrote it and how.

[They possibly never expected someone to actually go through the 1,200 pages in detail on such a short time frame, but, apparently, the plaintiff's attorney took on the challenge - ed.]

So, for example, Ms. Maliver alleges that the results detail sheets show that during the 21 minutes before Mr. Sweet was said to stop breathing, none of the information in his chart is straight from the computer monitors that would tell what his vital signs were during that period.

But the results detail sheets also show something more troubling, Ms. Maliver said.

She said she found evidence that three days after Mr. Sweet died, Dr. Richard Simmons, UPMC Presbyterian's head of quality assurance, tried to put a "Diff Intub" [difficult to intubate, due to anatomy - ed.] red-letter warning on Mr. Sweet's electronic medical record. That effort showed up on the results details sheets, according to Ms. Maliver.

Such a warning would tell anyone who opened the record that Mr. Sweet was difficult to intubate.

Dr. Simmons wasn't trying to alter the record, [attorney for the defendants] Mr. Conti said; instead he was in Mr. Sweet's medical record as part of the "peer review" process, assessing what happened in Mr. Sweet's case.

As part of that, he was in the medical record three days after Mr. Sweet died trying to figure out how one would create a warning about a patient's difficult intubation [in effect, altering the record, at the very least through creation of a confusing audit trail - ed.], Mr. Conti said.

Moreover, Mr. Conti said, such a warning was irrelevant because "Dr. Kaura said he understood Mr. Sweet was a difficult airway just by looking at him." [In the picture of the patient in the newspaper article, I cannot tell that; perhaps Dr. Kaura could get a new career as a clairvoyant. In any case, the clairvoyance seemed insufficient for expert help to be called in a timely fashion, i.e., STAT - ed.]

I have problems with this explanation of EHR fiddling, coming from a defense attorney regarding someone who, as head of quality assurance, must have been extremely well-versed in 1) peer review, 2) the code of conduct regarding medical record alteration e.g., in the Pennsylvania Medical Care Availability and Reduction of Error (MCARE) Act of 2002 (PDF, see Section 511, "Preservation and accuracy of medical records", pg. 18-19), and 3) electronic health records systems, metadata, audit trails (and the difficulties in deciphering them), etc.

I suggest several possibilities.

The head of quality assurance was:

• Merely experimenting with the EHR during Peer Review for his own education, using the chart of a dead man who died under conditions suspicious for malpractice, rather than a dummy chart or test environment created for the purpose;
• Experimenting with the EHR using the chart of said dead man to educate the staff on how to place the appropriate warning about difficult intubations;
• Trying to discover if Windows was superior to Mac OS X by comparing to a MacBook Air in his lap;
• Seeing if he could generate Windows protection faults through aggressive fiddling;
• Looking for the "Super Mario" game on the computer;
• Attempting to spoliate crucial medical information that could put the physicians and medical center at risk of liability.

I leave it to the reader to decide which possibilities are most likely.

My comments are that:

• I feel sorry for the family, who must now endure six more months of suspense and suffering absent their loved one, and
• I am concerned about public health issues, the public being potentially exposed to six more months of risk that will not be investigated until the case resumes.

Additionally, in an April 2009 post "UPMC as 'Proving Ground' for IT Tests On Children: Pioneers in Health IT, or Pioneers in Ignoring the Past?" I noted that as in a May 2006 article in the Pittsburgh Tribune entitled "UPMC partners with technology provider":

... The University of Pittsburgh Medical Center is taking another step in a quest to commercialize new medical technology.

UPMC on Monday signed a three-year deal with health care information technology provider Cerner Corp. to develop and market medicine-related technological advances. Both parties will contribute $10 million in cash, services and intellectual property to the effort.

The deal is a smaller version of an April 2005 deal between UPMC and information technology behemoth IBM.

As is the case in the IBM deal, UPMC will serve as a built-in proving ground for jointly developed technologies and products, with Cerner marketing the products and UPMC awarded a share of profits.

I wrote, somewhat incredulously:

"Proving ground?"I cannot believe I am reading such a claim. A hospital and patients, as I have written before, are not a learning lab for HIT vendors. The appropriate "proving ground" for new medical technology is the controlled clinical trial where participants (in this case, patients and healthcare professionals alike) have freedom of choice whether or not to participate, and a chance to give (or deny) consent after being fully informed of potential risk.

Were patients or their parents asked to give consent to the use of HIT (such as here)? Were they even aware they were serving as subjects of a "proving ground?" Likewise for clinicians?

... Using a hospital as a "proving ground" for unproven HIT on unconsented or coerced subjects (e.g., children, their parents, and the doctors themselves) [or adults themselves - ed.] probably amounts to battery at the very least, is consistent with violations of fiduciary and Joint Commission safety standards, and I am concerned about it representing human rights violations as well.

In view of the recent Koppel and Kreda paper in JAMA on "hold HIT vendors harmless" and "defects gag" clauses, this entire arrangement seems incredibly disturbing at the very least.I also believe the conflict of interest represented by a healthcare organization partnering with a vendor to "commercialize new medical technology" on unconsented subjects while sharing profits is a horrendous development, for as I stated, the appropriate settings for such practices are properly conducted, impartial clinical trials. The potential for abuses in the current arrangement seems uncomfortably high.

My sentiments seem aligned with IOM's recommendation 4.1 and others on Conflict of Interest as pointed out by fellow HC Renewal blogger Bernard Carroll at this post:

Academic medical centers and other research institutions should establish a policy that individuals generally may not conduct research with human participants if they have a significant financial interest in an existing or potential product or a company that could be affected by the outcome of the research. Exceptions to the policy should be made public and should be permitted only if the conflict of interest committee (a) determines that an individual’s participation is essential for the conduct of the research and (b) establishes an effective mechanism for managing the conflict and protecting the integrity of the research…” (page S-14).

One might reasonably ask if there was a motive to "protect" the health IT when it was suspected of contributing to a patient death. (There was, apparently, the means and opportunity.)

Case 2:

Also from Pittsburgh, and is in followup to my May 2011 postings on a kidney transplant from a hepatitis-C donor entitled "Transplant Team at UPMC Missed Hepatitis Result - Suspicious for Health IT Failure?" and "Healthcare Renewal Cited in Pittsburgh Post Gazette on Health IT Issues."

The affected patients have now sued:

UPMC sued over botched kidney transplant
Tuesday, September 20, 2011
By Sean D. Hamill, Pittsburgh Post-Gazette

A Greene County couple involved in a botched kidney transplant that led to a two-month shutdown of UPMC's living donor kidney and liver transplant programs -- and to state and federal investigations -- filed two malpractice lawsuits this morning in Allegheny County Common Pleas Court.

Christina Mecannic and Michael Yocabet sued UPMC, University of Pittsburgh Physicians, four doctors and one nurse after federal investigators determined that an entire transplant team missed a test result that showed Ms. Mecannic was infected with hepatitis C when her kidney was transplanted into Mr. Yocabet on April 6

A Greene County couple involved in a botched kidney transplant that led to a two-month shutdown of UPMC's living donor kidney and liver transplant programs -- and to state and federal investigations -- filed two malpractice lawsuits this morning in Allegheny County Common Pleas Court.

Christina Mecannic and Michael Yocabet sued UPMC, University of Pittsburgh Physicians, four doctors and one nurse after federal investigators determined that an entire transplant team missed a test result that showed Ms. Mecannic was infected with hepatitis C when her kidney was transplanted into Mr. Yocabet on April 6

The complaints can be retrieved from these links: Yocabet, Mecannic (PDF).

Of interest, there are allegations of intimidation by doctors of the donor once they discovered that the donor was Hep-C positive, with questions about cocaine use, infidelity, etc.

Further, computers are featured relatively prominently in the actual complaint points, e.g., Count 96, emphases mine:

96. Defendant UPP was negligent and showed reckless indifference to Plaintiff in the following particlulars:

• Creating an environment that jeopardized patient safety;
• Allowing an environment that jeopardized patient safety;
• Creating an environment that encouraged volume at the expense of patient safety;
• Allowing an environment that encouraged volume at the expense of patient safety;
• In failing to promulgate and/or enforce rules, regulations, procedures and standards to ensure that kidney transplants are only performed with suitable patients;
• By placing financial gain over the safety of its patients;
• In failing to provide adequate safeguards to ensure that kidney transplant recipients do not receive kidneys from a donor that is positive for Hepatitis C;
• In having a medical records system in place that fails to properly alert its transplant team of an unsuitable donor;
• In having a medical records system in place that fails to properly alert its transplant team of abnormal test results;
• In failing to ensure that medical personnel are properly trained to recognize patients that are not proper candidates to be kidney donors;
• In failing to properly supervise their staff that provided care to Plaintiff during his admission; and
• In failing to assure that staff are properly trained and/or supervised in interpreting test results.

My comment here is that, if the doctors and nurses were compelled to use the electronic medical record system and had no other means of being informed of the hepatitis-C result, they should consider counter-suits against the hospital system and/or vendor for forced use of FDA-unapproved, defective (e.g., mission hostile) medical devices known to cause error and injury.


Case 3:

This is in followup to my report of the death of a premature infant in Pennsylvania, as in my June 2011 post "Babies' deaths spotlight safety risks linked to computerized systems."

The news here is that on Sept. 1, 2011 the hospital filed a "Motion to Compel Settlement."

Of interest, a plaintiff's amended complaint still includes issues related to computers, e.g., Count 42:

42. Upon information and belief, the incorrect date on the image caused the xray not to be read by a radiologist on the night the image was taken, and that if the image had been correctly dated February 27, 2010, it would have been reviewed by a radiologist immediately, who would have alerted Defendants that the PICC line was improperly positioned and had to be moved back to a safe position. However, since the film was incorrectly dated February 23, 2010, the film was classified as “old” [i.e., cybernetically, by the PACS system - ed.] and was not put in line for immediate review [in effect, the computer determined the clinicians' work flow - ed.], and was not reviewed in time to prevent injury to Plaintiff’s Decedent.

And count 57:

57. The death of Destinee and the losses directly related to her death, were the direct and proximate result of the negligence and carelessness of Defendant, Lindsay Davison, either individually and/or by and through her respective agents, and/or servants, and/or employees, and/or ostensible agents acting through and within the course and scope of their employment, consisting of, but not limited to one or more of the following;

a. failing to obtain an x-ray image of sufficient quality to adequately confirm that the PICC line was safely and properly inserted;
b. failing to recognize that the x-ray image referred to above was of an inferior quality such that it could not be used to confirm that the PICC line was safely and properly inserted;
c. failing to properly associate the correct identifying information about the patient with the x-ray that was taken to confirm the proper placement of the PICC line;
d. failing to put the right date on the x-ray that was taken to confirm the proper placement of the PICC line;
e. causing the x-ray of February 27, 2010 to be mislabeled and/or misdated and/or to not be read in a timely fashion [apparently due in part to computer decision-making about "old" films - ed.]; and
f. failure to prevent harm to Destinee and causing her death.

And:

Count 65, part o: "failing to have in place and enforce policies and procedures in the use of x-ray information and data systems."

I am surprised there is no component of the lawsuit against the PACS vendor for selling defective products.

As I mentioned previously, a computer programmed to consider an "old" but unread x-ray as unimportant (instead of critical to read, due to the effects it might have on the interpretation of later films) and that did not trigger an alarm to wake the dead (no pun intended) is, on first principles, defective.

My overall comment is that these lawsuits demonstrate hospitals had better get their acts together regarding clinical information technology, fast, or they will find their ROI's on the equipment turning sharply and ominously negative.

-- SS