Growing Health Care and Grand Governmental Corruption - But Still Anechoic After All These Years

Here we go again.  We have long been concerned about health care corruption as a major cause of health care dysfunction. Our last post on the topic was in January, 2018.


Summary: the Corruption of Health Care Leadership as a Major Cause of Health Care Dysfunction

As we wrote in August, 2017, Transparency International (TI) defines corruption as

Abuse of entrusted power for private gain

In 2006, TI published a report on health care corruption, which asserted that corruption is widespread throughout the world, serious, and causes severe harm to patients and society.

the scale of corruption is vast in both rich and poor countries.

Also,

Corruption might mean the difference between life and death for those in need of urgent care. It is invariably the poor in society who are affected most by corruption because they often cannot afford bribes or private health care. But corruption in the richest parts of the world also has its costs.

The report got little attention.  Health care corruption has been nearly a taboo topic in the US, anechoic, presumably because its discussion would offend the people it makes rich and powerful. As suggested by the recent Transparency International report on corruption in the pharmaceutical industry,

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

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

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

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

While we at Health Care Renewal have written about this for years, we saw little improvement.  However, in the past few years we began to feel a little more encouraged.  For example, we had long complained that US law enforcement had not been devoting enough effort going after the corruption of the leadership of large health care organizations, thus effectively allowing these leaders' impunity. However, the US Department of Justice during the Obama administration made some modest attempts to decrease such impunity.  One such measure was the formation of a Health Care Corporate Strike Force.

As reported by Law.com,

the strike force was created in the fall of 2015, with five dedicated lawyers working on about a dozen of the most complex corporate fraud cases in the health care space.

Andrew Weissmann, the then-chief of the DOJ’s fraud section, told a health care conference in April 2016 that the section was placing 'a heightened emphasis' on corporate health care fraud investigations. He pointed to the recently established Corporate Fraud Strike Force that he said would focus resources in investigation and prosecution of larger corporate health care law violations, as opposed to smaller groups or individuals.

Unfortunately, that strike force was downsized by the Trump administration as we noted in July, 2017.  Perhaps that could have been viewed as just a minor setback.

However, we noted in May, 2018, that legal actions by the US government against apparently corrupt acts by large US health care organizations seemed to be falling off.  At that point, we found only one significant settlement made this year.  We also found a report by Bloomberg, with the headline, "White-Collar Prosecutions Fall to 20-Year Low Under Trump," on May 25, 2018.

 Increasing Evidence of Corruption in the Trump Administration


We had noted in January that corruption in the US was becoming even more systemic, and worse, it appeared that the administration itself was fundamentally corrupt. We noted sources that summarized Trump's personal, family, and the Trump administration's corruption, a website, entitled "Tracking Trump's Conflicts of Interest" published by the Sunlight Foundation, and two articles published in the Washington Monthly in January, 2018, "Commander-in-Thief," which categorized Mr Trump's conflicted and corrupt behavior.  The second, "A Year in Trump Corruption," was a catalog of the most salient cases in these categories in 2017.

The evidence of corruption has only gotten more substantial since then.

April, 2018: The New York Magazine Timeline

In April, 2018, New York Magazine published "501 Days in Swampland," a time-line of  starting just after the 2016 presidential election.   Its introduction included,

The rewards of government would now be reaped by a single man — and the people would bear the cost.

More than at any time in history, the president of the United States is actively using the power and prestige of his office to line his own pockets: landing loans for his businesses, steering wealthy buyers to his condos, securing cheap foreign labor for his resorts, preserving federal subsidies for his housing projects, easing regulations on his golf courses, licensing his name to overseas projects, even peddling coffee mugs and shot glasses bearing the presidential seal. For Trump, whose business revolves around the marketability of his name, there has proved to be no public policy too big, and no private opportunity too crass, to exploit for personal profit.

The timeline was  organized by mode of malfeasance.  Pages were devoted to how foreign governments and private entities curried favor with Trump by lavish spending at his hotels, golf clubs, and other properties.  More pages were devoted to dubious dealings by Trump's family and friends, and officials in his administration.  Yet more recounted relationships with lobbyists and "petty graft."

Although it was not focused on health care corruption, some of the cases it listed involved health care and public health:

[Under Trump's Hotel in DC - 2017]

7/17 E-cigarette-makers hold their annual conference at the hotel. Ten days later, the FDA announces it will delay federal oversight of e-cigarettes until 2022.

Note that this suggests not just regulatory capture, but the possibility of a quid pro quo bribe.

[Under Officials & Their Pals - 2017]

1/24 During his confirmation as secretary of Health and Human Services, Tom Price fails to disclose an insider deal he got on $520,000 in stock in a biotech company. As secretary, he will be in a position to approve a drug the company has developed.

[2018]


1/31 CDC chief Brenda Fitzgerald is forced to resign over her purchase of stock in one of the world’s largest tobacco companies. She bought the shares a month after taking over the agency tasked with reducing tobacco use.

[Under Lobbyistss & Other Sleaze - 2018]

1/29 Alex Azar, a former lobbyist who worked his way up to the presidency of a drug company, is sworn in as secretary of Health and Human Services. Azar, whose company hiked the price of insulin and other drugs under his watch, is now in charge of making drugs more affordable.

[Under Petty Graft - 2017]

6/2 David Shulkin’s chief of staff falsifies an email to suggest that the VA secretary needed to travel to Europe to receive an award. Shulkin’s 11-day trip with his wife, most of which was devoted to sightseeing, cost taxpayers $122,344.

8/4 HHS Secretary Tom Price takes a private jet at taxpayer expense to St. Simons Island, an exclusive resort where he owns land. The trip, like many of the 26 flights Price took on corporate jets, could have been accomplished with a routine commercial flight.

9/29 HHS Secretary Price is forced to resign over the nearly $1 million in taxpayer money he spent taking military planes and private jets, often to visit family and friends.

This list also included several other examples, not directly health care or public health related, suggesting quid pro quo bribery.  For example, in 2017 at the Trump International Hotel in Washington, DC:

10/4 At its annual board meeting, the National Mining Association is addressed by three Cabinet members: Commerce Secretary Wilbur Ross, Labor Secretary Alexander Acosta, and Energy Secretary Rick Perry. 'Coal is fighting back,' Perry exults over breakfast with the country’s top mining executives. 'Clearly the president wants to revive, not revile, this vital resource.' Five days later, the Trump administration announces the repeal of Obama’s Clean Power Plan, which would have encouraged states to replace coal with wind and solar energy. The plan would have cut climate-warming pollution from coal plants by a third and saved taxpayers and consumers as much as $93 billion a year. The venue for the mining board’s meeting: the Trump International Hotel in Washington, D.C.

So the evidence base of conflicts of interest and outright corruption is becoming more massive, includes cases relevant to health care and public health, and includes examples that seem like outright bribery.


June, 2018: the ProPublica Database of Spending at Trump Properties

In June, 2018, ProPublica reviewed questionable spending amounting to $16.1 million since the beginning of Trump's candidacy for president at Trump properties by the US government, and by Trump's campaign, and by state and local governments.  Its introduction included,

Since Donald Trump declared his candidacy for president in late 2015, at least $16.1 million has poured into Trump Organization-managed and branded hotels, golf courses and restaurants from his campaign, Republican organizations, and government agencies. Because Trump’s business empire is overseen by a trust of which he is the sole beneficiary, he profits from these hotel stays, banquet hall rentals and meals.

Note that

The use of taxpayer dollars at Trump hotels is under scrutiny in a closely watched lawsuit in Maryland federal court. The District of Columbia and the state of Maryland sued Trump, citing a venerable anti-corruption provision of the U.S. Constitution known as the Emoluments Clause. It prohibits any financial gift, or emolument, from benefiting a sitting public official, including the president.

June, 2018: Public Citizen's Corporate Presidency's Hotel Swamplandia

Meanwhile, Public Citizen released a report on money spent at Trump's hospitality properties.  

In its introduction

For those seeking to get on Trump’s good side, it certainly helps to fork over some cash at one of his properties. There simply is no other plausible explanation why so many companies, business groups and foreign governments are spending big money eating, drinking, socializing and sleeping at Trump’s properties around the country. And there’s always the chance that the president himself will show up, as he did in June....

Also,

Trump came to office with the most blatant corrupting conflicts of interest in the history of American politics, so what followed should not be a surprise. By spending money at his properties, corporations and foreign governments are being transparent about their desire to curry favor with the president and influence the Trump administration’s policies.

Information on how much is being spent at Trump properties for political events is available, but remains unknown for the vast majority of spenders at Trump properties. An exception was the Saudi embassy, whose $270,000 in spending at the D.C. hotel was disclosed through a PR firm’s filing with the Justice Department. That said, we were able to document $1.75 million in spending, with more than half coming from the Republican Party.

Examples of spending by health care and public health related organizations included

Allign Technology [medical device company]
American Association of Orthodontists
Curetivity Foundation [supports St Jude Hospital]
National Drug & Alcohol Screening Association
University of Wisconsin
Vapor Technology Association [trade assocation for manufacturers of e-cigarettes]

So it seems that various large health care and public health related organizations are happy to shovel money  into the Trump Organization, and hence into the pocket of the president himself, if doing so can advance their business agendas.


Meanwhile Corruption, Even of a President, Remains a Virtually Taboo Topic

And still, we don't talk about it. 

 As noted above, corruption in health care has always seemed a taboo topic.  In November, 2017, we noted that once again, a report by Transparency International that showed that in an international survey of corruption perceptions, substantial minorities of US respondents thought that US corruption was increasing, and was a particular affliction of the executive and legislative branches of the national government, other government officials, and top business executives.  There was virtually no coverage of these results in the US media, just as there was virtually no coverage of a 2013 survey that showed 43% of US respondents believed that US health care was corrupt.

Similarly, the reports listed above have generated little discussion.  Despite the extensive and ever-increasing list of apparently corrupt acts by the Trump and cronies, grand corruption at the top of US government, with its potential to corrupt not just health care, but the entire country and society, still seems like a taboo topic.  The US news media continues to tip-toe around the topic of corruption, in health care, of top health care leaders, and in government, including the top of the US executive branch.  As long as such discussion seems taboo, how can we ever address, much less reduce the scourge of corruption?  The first step against health care corruption is to be able to say or write the words, health care corruption.


But even if we can take that step, when the fish is rotting from the head, it makes little sense to try to clean up minor problems halfway towards the tail. Why would a corrupt regime led by a president who is actively benefiting from corruption act to reduce corruption? The only way we can now address health care corruption is to excise the corruption at the heart of our government.

Why Did CVS Health Betray its Charitable Giving Policy and Social Responsibility Agenda to Donate to a Sketchy Non-Profit Devoted to Trump's Agenda?

Many big health care organizations, including for-profit corporations, have high-minded mission statements, and proclaim their social responsibility.  Unfortunately, we have shown that many leaders of such organizations seem indifferent to these seemingly exemplary goals, and even exhibit mission-hostile management.

A recent example involving CVS Health provided an unprecedented example of mission-hostile management, or something worse.

Introduction: CVS Health and the Promotion of Social Responsibility

CVS Health is a huge corporation that runs a large chain of pharmacies, many of which contain MinuteClinics, touted as quick albeit limited sources of primary care, staffed by nurse practitioners.

It thus employees numerous health care professionals with strong professional values.  For example, the American Pharmacists Association has a code of ethics which includes respecting the covenantal relationship between pharmacists and patients, promoting "the good of every patient," acting with "honesty and integrity," serving "individual, community and social needs."

CVS Health proclaims its "social responsibility." This includes "keeping the planet in balance," and making "quality health care more affordable, more accessible and more sustainable."

CVS claims to act socially responsible by making charitable contributions for

improving health and health care nationwide. We support programs that improve access to health care services, provide chronic disease management and promote smoking cessation and prevention.

That seems fine and dandy, but then....

CVS Will Stop Funding America First Policies After Three of its Leaders were Revealed to Have Made Racist, Misogynistic, and pro-Nazi Remarks

CNN reported on June 1, 2018, that 

CVS Health said Friday that it would no longer donate to America First Policies, a nonprofit group that works to promote President Donald Trump's agenda, after CNN and other outlets reported racist comments made by staffers of the organization.

The details were,

[Carl] Higbie has a history of making racist, sexist, Islamophobic and anti-LGBT comments. Some of his more inflammatory statements were that the 'black race' had 'lax' morals and that Americans should be allowed to shoot undocumented immigrants crossing the border with Mexico. Following CNN's January report, Higbie resigned from his position as chief of external affairs for Corporation for National and Community Service, which manages volunteer services for the federal government. He joined America First Policies in March.

Higbie initially apologized for his remarks but later defended them and said they were taken out of context.

John Loudon, a policy adviser for the group, has also made inflammatory comments about Muslims and women, CNN's KFile reported in May, such as calling Barack Obama 'the Islamchurian candidate' and joking about 'crack whore Dem voter.'

In May, Mediaite reported that Juan Pablo Andrade, another America First Policies adviser, praised Nazis and said that, 'The only thing the Nazis didn't get right is they didn't keep f***ing going!' Andrade claims the video is out of context and he was quoting someone else. He has said he is looking for the full video, which would exonerate him.

One wonders if CVS Health had vetted America First Policies prior to making its contribution, since the presence in the latter's leadership of three such people suggest there just could be a bit of a corporate culture problem.

In any case, the CVS Health response came courtesy spokesperson Carolyn Castel:

Comments made by employees of America First Policies that were reported after we made our contributions are unacceptable to us. We have zero tolerance for discriminatory actions or behaviors, and as such we will not be making contributions to this organization in the future.

CVS Health's denial of further donations to America First Policies seemed admirable, but begged the question of why it made its initial donation.  In the Providence Journal, Brian Amaral reported on June 1 that  CVS justified its initial contribution to America First Policies as a way to “to support the tax cuts signed into law last year,” saying that it “supported this legislation and used the tax savings it created to invest in the growth and success of our employees,...”

However, that rationale seemed at best very loosely related to CVS Health's stated policy of making donations to improve health and health care.  I suppose that perhaps if tax cuts did lead to happier CVS employees, the indirect result would be better health care.  However, at least the purpose of the contribution did not seem in direct conflict with the stated goals of CVS charitable giving.

Nonetheless, the result of the CVS Health contribution to America First Policies seemed retrospectively a spectacular case of mission-hostile management.

But wait, there is more.


America First Policies Also Advocated Multiple Positions at Odds with CVS Health's Support of Social Responsiblity

As noted above,  CVS Health suggested that it supported America First Policies because it was dedicated to tax reforms that would result in increased CVS Health's revenues.  Their website does list "tax cuts that put America first," as one of its issues.

CVS Health's comments suggested that this is America First Policies' only issue.  It is not.  The America First Policies website lists advocacy on 13 other issues.

One is "repeal and replace Obamacare."  In particular,

America First Policies believes Obamacare is a disaster, burdening our country with rising premiums, unaffordable deductibles, fewer insurance choices, and higher taxes. Congress needs to repeal and replace this law, including rescinding the individual mandate and eliminating taxes that drive up costs,

This issue certainly has to do with quality and accessibility of health care.  However, whether most CVS Health employed health care professionals, or customers think that dismantling the Affordable Care Act would lead to better or worse, or more or less accessible health care is doubtful.  Certainly CVS Health management did not explicitly justify how supporting America First Policies was informed by the company's stated objectives for charitable giving that supports health and health care.


Another issue addressed by America First Policies is "securing our border."  In particular, the organization advocates for

a wall to stop illegal immigration and drug smuggling; putting an end to sanctuary cities; and deporting illegal aliens with criminal records.

These issues seem to have nothing directly to do with health care, or with the company's stated reasons for charitable giving.  Many people might argue that these objectives could harm the health care, at least of some immmigrant groups.

So far, it is not clear why CVS Health really chose to donate to America First Policies.

But wait, there is more...

America First Policies Appears to be a Partisan Political Operation of Dubious Legality

A Political Agenda from the Start

A few more minutes of Google searching reveals that America First Policies has an advocacy agenda that seems in direct conflict with the CVS committment to social responsibility, and that America First Policies does not in the least resemble the sort of charitable organization that CVS says it intends to fund.   Recall that CVS says that the purposes of its charitable giving are

improving health and health care nationwide.

We support programs that improve access to health care services, provide chronic disease management and promote smoking cessation and prevention.

Yet when America First Policies was started, initial coverage, like this AP report from January, 2017, per WJLA, said it was a political operation.

Six of President Donald Trump's top campaign aides have banded together to start a nonprofit called 'America First Policies' to back the White House agenda.

In addition,

'Some of the same like-minded individuals who put their energy into getting Mr. Trump elected are now going to be part of a grassroots group to go out there and help with the agenda, help the White House be successful,' [former Trump campaign digital director Brad] Parscale said.

Was it about improving health and health care?

America First Policies will conduct research into public policies and promote Trump's favored causes, such as dismantling and replacing President Barack Obama's health care law and changing immigration policies.

Again, many would argue such actions could harm health and health care.

For a Non-Profit "Social Welfare Organization," Doing Political Polling May be Illegal

In March, 2018, CNBC did a long investigative article on America First Policies political polling operation.

Last summer, America First Policies took an unprecedented step for a politically allied nonprofit: It started using three top polling firms from Trump's 2016 presidential campaign to produce a steady stream of Trump-focused polls, strategy memos and reports that continue to this day. The three firms initially put their own logos on the polling they did for the group, but over time the America First Policies logo gradually replaced theirs on some of the documents.

CNBC reviewed many of the polls it conducted. One example of an obviously political poll was

A September poll showed that America First Policies was exploring ways to defeat Arizona Republican Sen. Jeff Flake in a primary, a month before Flake, a Trump critic, announced his retirement.

Note that America First Policies worked closely with a political polling firm which was founded by a close Trump associate who now works in the White House, but somehow obtained an ethics waiver  allowing her to continue working with this firm.

The America First Policies polling effort operates as a network of coordinated groups, with two lesser-known firms, National Research Inc. and Baselice & Associates, working alongside a well-known Washington firm, The Polling Company, which was founded by former Trump campaign manager-turned-White House counselor, Kellyanne Conway.

When Conway sold her firm in September 2017, The Polling Company had already been working for America First Policies for more than two months, judging from the company's logo on polls that it conducted for the group in June and July.

Conway was granted a special ethics waiver last June so she could engage in 'communications and meetings' with former clients of The Polling Company without violating Trump's two-year ban on communications with former employers or clients. Conway has been called the 'Trump whisperer' for her ability to influence the often mercurial president. In a 2016 interview with MSNBC, she described herself as a 'discreet advisor' to Trump who was expected to use her data and strategy experience to help Trump craft his message.

CNBC interviewed ethics experts on the legality of what America First Policies was doing.

'AFP is doing the type of polling that would typically be done by a presidential campaign or a major party committee like the RNC or the DNC,' said Brendan Fischer, an election law expert at the nonprofit Campaign Legal Center. 'So even though they claim to be committed to a set of issues, the available evidence here indicates that they're operating as a polling shop for the president.'

 Also,

Stephen Spaulding, a former special counsel at the Federal Election Commission and now director of strategy for the nonpartisan watchdog group Common Cause, agreed. 'There are ample grounds here to investigate whether America First Policies has been raising money that's subject to limits and disclosure requirements because it's being used for political purposes,' he said.

Finally, the article suggested that America First Policies was a way for wealthy donors, who could be individuals or corporations, to fund Trump's political agenda while hiding their identities and circumventing legal limits on direct political contributions.

'So you have a situation where large donors are contributing to America First Policies with the understanding that their secret donations are going to be seen as valuable by the president, because this group appears to work so closely with the White House,' said Campaign Legal Center's Fischer. 'And because these donors are secret, the public and Congress will never know if the White House later took action to advance a donor's interests.'

So it appears that CVS Health was one of those wealthy corporate donors who was secretly giving to a obviously political operation, possibly to be seen as "valuable to the president," which may be a way of saying to bribe the president?

America First Policies' Founders Included Shady Characters

The early AP article about the founding of America First Policies stated that the people involved included,

The group includes Trump's digital and data director Brad Parscale, onetime deputy campaign manager Rick Gates and two campaign advisers to Vice President Mike Pence, Nick Ayers and Marty Obst.

As the New York Times reported in February, 2018, Rick Gates pleaded guilty to the federal crimes of financial fraud and lying to investigators,

A former top adviser to Donald J. Trump’s presidential campaign has agreed to cooperate with the special counsel inquiry into Russia’s interference in the 2016 election after pleading guilty on Friday to financial fraud and lying to investigators.

The adviser, Rick Gates, is a longtime political consultant who once served as Mr. Trump’s deputy campaign chairman

Note that Mr Gates had previously been charged with many more crimes,

The deal came as the special counsel, Robert S. Mueller III, has been raising pressure on Mr. Gates and Mr. Manafort with dozens of new charges of money laundering and bank fraud unsealed on Thursday. Both men were first indicted in October and pleaded not guilty.

By that time, it was likely that Mr Gates was increasingly involved in America First Policies.  As of March, 2017, an article in Politico noted that,

Rick Gates, a former Trump aide who served as Paul Manafort’s deputy, is increasingly involved day-to-day [in America First Policies].

Also, Brad Parscale, the 2016 Trump campaign digital director, was involved with Cambridge Analytica's highly questionable operations on behalf of the campaign.  Per a New York Times article of March 17, 2018, 

Under the guidance of Brad Parscale, Mr. Trump’s digital director in 2016 and now the campaign manager for his 2020 re-election effort, Cambridge performed a variety of services, former campaign officials said. That included designing target audiences for digital ads and fund-raising appeals, modeling voter turnout, buying $5 million in television ads and determining where Mr. Trump should travel to best drum up support.

A New Yorker article published on March 21, 2018 stated,

Cambridge Analytica contractors worked with Trump’s digital team, headed by Brad Parscale and Jared Kushner. Alongside all of them were Facebook employees who were embedded with the Trump campaign to help them use Facebook’s various tools most effectively—including the so-called 'dark posts,' used to dissuade African-Americans from showing up to vote. Did any of them know that the data that Cambridge Analytica was using to target voters, craft ads and blog posts, and determine Trump’s travel schedule came from millions of American Facebook members whose data had been taken without consent and sold for a million dollars—what Cadwalladr is calling a massive data “breach”? 

Discussion

CVS Health says it donates to charity to improve health and health care, and that it has a social responsibility agenda to again improve health and keep the planet in balance.  Yet it secretly donated to a "social welfare" organization that explicitly was devoted to upholding the Trump agenda, founded by former Trump campaign officials, at least two with questionable ethics, one of which  pleaded guilty to federal crimes, and which ran a political polling operation that may have been illegal.  When its donation was discovered, and the racist sayings of two, and apparently pro-Nazi sayings of another of the organization's leaders were exposed, CVS then said it would not donate further.

Why did CVS Health donate to America Health Policies in the first place?

Given what transpired, at least CVS Health should immediately explain the reasons for this donation, and why it was made despite its obvious conflicts with CVS Health's stated policies and mission.

CVS Health should also disclose whether it has made any similar donations in the past, and what its policy on donations will be in the future.

Until such disclosures are made, we are left with further, exceedingly troubling questions.

Was this merely a case of severe and mission-hostile (mis)management?  However, it is difficult to believe that CVS Health managers did not know what the purpose of America First Policies was, and who its leaders were.

Was the donation to America First Policies an effort to cozy up to the Trump regime, arguably the most conflicted and corrupt presidential administration (look here), in hope of securing economic favors for CVS Health and/or its managers?

Did the donation somehow otherwise support top CVS Health managers' self-interest?  Given that President Trump has failed to condemn white supremicists and neo-Nazis (look here), and has recently proclaimed he is above the law, and thus called by editorialists a president who would be a king (e.g., here in the New York Times), are CVS Health managers closet monarchists, authoritarians or fascists?

Is this case unique?  Are other corporations that proclaim their social responsibility secretly funding groups like America First Policies?  Are these corporations thus covertly undermining not only patients' and the public's health, but the foundations of the American republic?

The frogs must figure out how to get out of the pot of now boiling water.

Novartis' Latest Ethical Misadventure: Did it Pay to Play ... with the US President?

Amidst the news deluge, a story that stood out in the last few days was that of the strange relationships between a consulting firm set up by President Donald Trump's former lawyer and Trump Organization counsel Michael Cohen, and several large corporations.  As reported on May 8, 2018 by the New York Times, the focus was on the payments made to the firm, Essential Consultants LLC, by a financial firm, Columbus Nova, associated with a Russian oligarch, Viktor Vekselberg, who has been described as "Kremlin-linked."

 Did Novartis Pay Michael Cohen's Essential Consultants LLC for Access to the White House?

However, Essential Consultants LLC also had a poorly described business relationship with Swiss-based multinational pharmaceutical manufacturer Novartis.  Per the NYT,

Among the other payments to Mr. Cohen’s company described in the financial records were four for $99,980 each between October and January by Novartis Investments S.A.R.L., a subsidiary of Novartis, the multinational pharmaceutical giant based in Switzerland. Novartis — whose chief executive was among 15 business leaders invited to dinner with Mr. Trump at the World Economic Forum in January — spent more than $10 million on lobbying in Washington last year and frequently seeks approvals from federal drug regulators.

Additional reporting on this relationship suggests that Novartis may have been trying to buy access to or influence on the Trump administration. More details on the arrangements between the firms came from Ed Silverman in Stat News ,

A Novartis unit called Novartis Investment SARL made four payments, each one totaling $99,980, to the consulting firm, according to documents released by Michael Avenatti, the lawyer for Stormy Daniels, the adult film star whose real name is Stephanie Clifford and who was paid $130,000 by Essential Consultants to keep quiet about her alleged affair with Trump.

In a statement, Novartis says it entered into a one-year agreement with Essential Consultants in February 2017, 'shortly after the election of President Trump focused on U.S. healthcare policy matters. The terms were consistent with the market. The agreement expired in February 2018.'

The first Novartis payment was purportedly made on Oct. 5, 2017, while the subsequent payments followed in successive months — Nov. 3, 2017, Dec. 1, 2017, and Jan. 5, 2018, according to the documents.

A Novartis spokesman said that 'any contracts were done prior to (chief executive officer Vasant Narasimhan) taking over' and that he 'had no involvement whatsoever with this arrangement.' He did not provide any further details concerning the payments, but indicated the agreement had expired.

Narasimhan succeeded Joe Jimenez as Novartis chief executive on Feb. 1 this year, although he attended a dinner with Trump at the World Economic Forum in Davos, Switzerland, on Jan. 25, which Avenatti noted in the documents that he released. A Novartis spokesman later added that Jimenez last met with Trump at a meeting with executives from several drug makers last spring.

Another article by Mr Silverman in Stat gave some further rationale for this agreement.

Michael Cohen, a longtime fixer for the president, reached out to Novartis’s then-chief executive officer Joe Jimenez, promising help gaining access to Trump and influential officials in the new administration, according to an employee inside Novartis familiar with the matter.

Jimenez took the call and then instructed his team to reach a deal with Cohen.

Furthermore, a Novartis empoyee said,

'With a new administration coming in, basically, all the traditional contacts disappeared and they were all new players. We were trying to find an inroad into the administration. Cohen promised access to not just Trump, but also the circle around him. It was almost as if we were hiring him as a lobbyist.'

A Huffington Post article found

an official with one of those companies [Novartis, At&T, or Korea Aerospace], who requested anonymity to speak openly, was more blunt. The official said Cohen 'was promising access to Trump and members of the administration, positioning himself as a lobbyist.'

So there seemed to be a confluence of reporting suggesting that Novartis paid Michael Cohen via the perhaps ironically named Essential Consultans LLC for access to or influence over the Trump administration, and possibly specifically President Trump himself.  Chummy relationships between large health care organizations, particularly large for-profit health care corporations, and US government agencies that regulate health care, or set health policy are old news.  We have frequently discussed the revolving door through which people travel going to and from leadership positions in health care corporations and in health related government agencies.  While we have discussed many examples of health care corporations being accused of, settling allegations of, or even pleading guilty to charges of bribery or kickbacks, I cannot recall any case of a health care corporation paying for access to and possibly raising suspicions about the bribery of the President of the US. That would be a new low in the annals of health care corruption.


Nothing New for Novartis

Thus it should be no surprise that pundits on the business of health care were back on their heels.  John LaMattina, wrote for Forbes,

The most recent revelation involving Novartis is both shocking and depressing.

Also,

One wonders what Novartis was thinking in entering such an agreement. Clearly, any sensible person would look at such an agreement cynically and come away with the view that Novartis was attempting to buy access to the President through his lawyer. Furthermore, the one year contract that Novartis had with Cohen - $100,000/month – is a lot of money for a lawyer with no background in healthcare. Didn’t anyone at Novartis think about how badly this would look if such a deal was made public?

But Mr LaMattina is a former President of Global Research and Development for Pfizer, a company with a long history of ethical misadventures (look here), so may be a bit biased about the integrity of the pharmaceutical industry.

In fact, Mr Silverman's first article suggested that Novartis is not so innocent.

Throughout much of last year, Novartis was embroiled in a bribery scandal in Greece, where the government was probing allegations that the drug maker made payments to numerous politicians to boost sales of its medicines through public agencies.

Also,

In the U.S., the drug maker is defending a long-running lawsuit that is being pressed by the federal government over allegations it provided doctors with paid speaking engagements, fancy meals, and alcohol in exchange for writing prescriptions for its drugs.

The case is being closely watched because the company has been accused of being a repeat offender. How so? In 2010, Novartis paid $422.5 million in penalties and pleaded guilty to a misdemeanor to resolve criminal allegations that it improperly promoted several medicines.

At the time, the company was already operating under a Corporate Integrity Agreement, which required establishing an internal compliance program and reporting violations, among other things. That agreement was signed in September 2010, yet the lawsuit alleged the infractions occurred afterward, suggesting Novartis might face a stiff penalty should it attempt a settlement with the government.

Moreover, those who follow Health Care Renewal would realize that Novartis' record of ethical misadventures is much more extensive than that.


In October, 2016, Novartis settled charges that from 2002-2009 it promoted use a skin cream for pediatric patients for unapproved indications and in ways that could have endangered patients (look here).  

In March, 2016, Novartis settled charges by the US Securities and Exchange Commission (SEC) under the Foreign Corrupt Practics Act (FCPA) thatfrom 2009-2013 it bribed Chinese health care professionals to increase sales (look here).  

In November, 2015 we discussed what were then the latest misadventures by Novartis and its leadership.  At that time, our post included these section headings covering 2014-15:

-  Japanese Health, Labor and Welfare Ministry Found that Novartis Concealed Serious Adverse Effects
- Novartis Executive Pleads Guilty to Bribing Polish Official
- Novartis Subsidiary Sandoz Settles Allegations that it Misrepresented Pricing Data to US Medicaid
- Express Scripts Settles Allegations that it Accepted Kickbacks from Novartis
- Novartis Settles US Allegations of Kickbacks to Enhance Sales of Multiple Drugs

Furthermore, in that post we also documented Novartis' previous record.   In March, 2014, we had noted:
- Italian authorities had fined Novartis and Roche for colluding to promote the use of an expensive opthamologic treatment
- the NY Times published interviews with physicians ostensibly showing how Novartis turned them into marketers for the drug Starlix
- Japanese investigators charged Novartis with manipulating clinical research
- Indian regulators canceled a Novartis import license, charging the company with fraud.

Also,  in 2013, Novartis was fined for anti-competitive practices in its marketing of Fentanyl by the European Commission (look here), and in 2011 its Sandoz subsidiary settled allegations of misreporting prices in the US for $150 million (look here)   Other Novartis misadventures from 2010 and earlier, including the two described in the Stat News article, appear here.  So Novartis has quite an impressive, if not infamous record of ethical failures.

Note that through all these cases, Novartis leadership enjoyed impunity.  No Novartis top manager suffered any negative consequences from any of them (although one apparent mid-level company manager at the Polish subsidiary did plead guilty), and all these previous episodes apparently did not suggest a pattern of recidivism to US authorities this time sufficient to attempt to impose any negative consequences on higher level managers.

So is it at all surprising that the previous Novartis CEO did not see a big problem paying Donald Trump's lawyer and former corporate counsel to a little access to The Donald?

Discussion

Most corrupt actions require two parties.  While it is understandable that there has been tremendous recent interest in evidence that the Trump regime is corrupt (look here), any such corruption had to have been enabled by unethical actions on the parts of others.  Those others likely included large numbers of leaders of large corporations, including health care corporations.  We have shown repeatedly that top leaders of US health care organizations have enjoyed impunity that has allowed them to foster a host of unethical actions, including crimes such as bribery, fraud, and kickbacks, and true health care corruption.

Our societal tolerance of health care (and other forms of) corruption probably enabled the currently breathtaking scope of executive branch corruption.  For a long time we have argued that health care corruption is a major cause of health care dysfunction.  As we wrote in August, 2017, Transparency International (TI) defines corruption as

Abuse of entrusted power for private gain

In 2006, TI published a report on health care corruption, which asserted that corruption is widespread throughout the world, serious, and causes severe harm to patients and society.

the scale of corruption is vast in both rich and poor countries.

Also,

Corruption might mean the difference between life and death for those in need of urgent care. It is invariably the poor in society who are affected most by corruption because they often cannot afford bribes or private health care. But corruption in the richest parts of the world also has its costs.

The report got little attention.  Health care corruption has been nearly a taboo topic in the US, anechoic, presumably because its discussion would offend the people it makes rich and powerful. As suggested by the recent Transparency International report on corruption in the pharmaceutical industry,

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

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

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

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


The continuing festering of widespeard amorality and corruption at the top of US business has fostered a situation in which now corruption appears to have spread to the top of the US government.
 The only way we can now address health care corruption is to excise the corruption at the heart of our government.

Will the New Conscience and Religious Freedom Division of the US Department of Health and Human Services Help Health Care Professionals Challenge Morally Objectionable Acts - Like Bribery, Fraud and Other Criminal or Corrupt Practices?

For a long time we have argued that health care corruption is a major cause of health care dysfunction.  We have documented numerous cases in which health care professionals were exposed to or involved in actions, including fraud, bribery (also known as kickbacks), and other corrupt or criminal practices, to which they likely had moral objections.  We have also noted that in such situations, health care professionals often have little recourse, particularly in academic institutions.

The New Conscience and Religious Freedom Division of the US Department of Health and Human Services

So perhaps a new initiative of the US Department of Health and Human Services could relieve health care professionals besieged by unethical and immoral practices.  Per the Washington Post (on January 18, 2018),

The Trump administration on Thursday announced the creation of a new conscience and religious freedom division aimed at protecting doctors, nurses and other health-care workers who decline to participate in care that goes against their moral or religious convictions.

Speaking at an event featuring Republican lawmakers and religious leaders, Acting Health and Human Services Secretary Eric Hargan noted that many of the nation's hospitals, clinics and hospices are run by faith-based groups. And many have found themselves forced to provide services or referrals that violate what they believe.

'For too long, too many of these health-care practitioners have been bullied and discriminated against,' he said.

While federal officials did not immediately offer details about the new enforcement office, a Conscience and Religious Freedom section appearing Thursday on the HHS site — showing a female health-care worker in a Muslim headscarf — provides some hints. The description of the division's mandate cites abortion, sterilization and assisted suicide as examples of the types of procedures that would be covered. But the language is broad, and health experts said it appears likely to also cover a host of other scenarios, such as treating transgender patients or those seeking to transition to the opposite sex.

HHS said the protections will apply to discrimination or coercion of  'providers who refuse to perform, accommodate or assist with certain health-care services on religious or moral grounds.' They would also apply to training and research activities, according to the department.

Immoral Practices to Which Health Care Professionals Might be Exposed

On Health Care Renewal, we have focused on unethical, self-interested, conflicted and corrupt or criminal practices of the leadership of health care.  So, for example, we have seen cases in which -

- Physicians and other health care professionals were lured into financial relationships with large health care corporations which created obvious conflicts of interest, especially when they were induced to help market those corporations' products (often in the guise of "key opinion leaders,"), and often without disclosing their conflicts, making their marketing deceptive.  Health care professionals might resist such relationships, or be morally offended by their colleagues' and supervisors' acceptance of such relationships.

 - Top executives of hospitals, hospital systems, and other health care provider organizations may have perverse incentives that lead them to put short-term revenue ahead of good patient care, education or research.  Health care professionals might be morally offended by such mission hostile management, and its effect on the quality of patient care, and the integrity of education and research.

-  Leaders of government agencies may transit to or from commercial entities which might be subject to their agencies' regulations or policies.  This has been called the revolving door, and can be considered a form of health care corruption.  Health care professionals might be morally offended by the regulations or policies of agencies led by people who have come through, or will go through the revolving door.

-  Health care professionals have often been affected by outright crime, such as fraud, bribery or kickbacks, or other criminal or corrupt practices.  For example, there have been many cases in which the marketing of drugs, devices, or other health care products and services to which health care professionals are exposed has been fraudulent. There have been many cases in which health care professionals have received bribes or kickbacks to use or prescribe certain products. Health care professionals might be morally offended by fraudulent marketing, being pushed to accept bribes or kickbacks, or working with colleagues who have accepted same.

Keep in mind that many health care professionals come from mainstream Judaism, Christianity or Islam.  All accept the Old Testament as a fundamental guide.  The Bible contains many exhortations to avoid immoral behavior, most famously the Ten Commandments.

[The Ten Commandments - in an ancient synagogue in Tzfat, Israel]

Some quotes from the Old Testament about the sorts of immoral behavior listed above:

Do not pervert justice or show partiality. Do not accept a bribe, for a bribe blinds the eyes of the wise and twists the words of the innocent. [Deuteronomy 16:19]

Justice, justice shalt thou follow, that thou mayest live, and inherit the land which the LORD thy God giveth thee. [Deuteronomy 16:20]

Bread of falsehood is sweet to a man; But afterwards his mouth shall be filled with gravel. [Proverbs 20:17]

He that walketh righteously, and speaketh uprightly; He that despiseth the gain of oppressions, That shaketh his hands from holding of bribes, That stoppeth his ears from hearing of blood, And shutteth his eyes from looking upon evil; He shall dwell on high; [Isaiah 33:15 -16]

A wicked man taketh a gift [bribe] out of the bosom, To pervert the ways of justice. [Proverbs 17:23]

So for most health care professionals, the actions in health care that may be most morally repugnant would be bribery, kickbacks, fraud, and other forms of corruption or criminality going on around them.  In theory, and on paper, the new Conscience and Religious Freedom Division ought to be a powerful force to combat health care corruption.

Summary - What Were They Thinking?

Somehow, though, I am guessing that the people who came up with this new initiative were not thinking about anti-corruption efforts.

First I would note that the announcement was made by Acting Health and Human Services Secretary Eric Hargan.  We discussed Mr Hagan here. A hint: the post was entitled, "Worst Health Care Revolving Door Case So Far? - From Lobbyist to Acting Secretary of Department of Health and Human Services."  Mr Hargan is a lawyer who spent years as a lobbyist for health care corporations prior to being nominated to be acting secretary.

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

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

So I must say I am morally offended that Mr Hargan is now the Acting Secretary of DHHS.  So I really do not think he and his cronies in the department were thinking about people morally offended by fraud, bribery, kickbacks or other criminal or corrupt practices, including the revolving door, when they set up this new division.  Moreover, as the Post article stated,

The description of the division's mandate cites abortion, sterilization and assisted suicide as examples of the types of procedures that would be covered. But the language is broad, and health experts said it appears likely to also cover a host of other scenarios, such as treating transgender patients or those seeking to transition to the opposite sex.

Also,

The announcement, which comes one day before abortion opponents' annual March for Life, represents the latest move by the Trump administration to allow individuals and institutions to opt out of providing certain services or benefits based on such objections. In 2017, the administration issued new rules allowing exemptions for more employers, including for-profit businesses, from providing no-cost contraceptive coverage through their health insurance plans.

So,

House Majority Leader Kevin McCarthy (R-Calif.), for one, said the previous administration expected health care workers 'to conform' rather than follow their religious beliefs. 'What a difference a year makes,' he added.

Roger Severino, director of the department's Office for Civil Rights, echoed that theme, saying that 'HHS has not always been the best keeper of this liberty.' Health-care workers' complaints to his office have increased in recent years, he said.

'Governments big and small have treated conscience claims with hostility instead of protection, but change is coming, and it begins here and now,' Severino said.

And Montse Alvarado, executive director of the Becket Fund for Religious Liberty, a nonprofit law firm, stressed, 'It is important to recognize that we have come to a point where a division like this would be necessary.' What happened under the previous administration, she said, resulted in 'forcing Americans to choose between their beliefs and their livelihood.'

IMHO, the people who came up with the idea of this new division completely ignored the religious and moral beliefs of a majority of Americans.

Many health care professionals have had to choose between their beliefs - that fraud, bribery, kickbacks or other corrupt practices are morally wrong - and their continued employment.  I would submit that their are more cases of health care professionals offended by such actions than their are health care professionals offended by abortions and the provision of contraception.

Furthermore, given the description of the Division's statement of conscience rights:

Conscience protections apply to health care providers who refuse to perform, accommodate, or assist with certain health care services on religious or moral grounds.

Federal statutes protect health care provider conscience rights and prohibit recipients of certain federal funds from discriminating against health care providers who refuse to participate in these services based on moral objections or religious beliefs.

It seems that it ought to provide protections to people who object to fraud, bribery, kickbacks or other corrupt practices on religious or moral grounds.  So maybe those of us who are exposed to such practices ought to see whether the division itself is real, or some new kind of fraud. 

As US Attorney, Labor Secretary Nominee Enabled Drug and Biotechnology Executives' Impunity

The new Trump administration nominee for US Secretary of Labor is a former US Attorney for the southern district of Florida.  In that role, he seemed to uphold the ideas that certain big corporations, particularly big pharmaceutical and biotechnology corporations, are too big to jail, and that top executives of big corporations should not be held accountable for their corporations' actions.

He had central involvement in three big settlements of charges of corporate misbehavior which held no individuals accountable for enabling, authorizing, directing or implementing the bad behavior.  The settlements imposed only monetary penalties on the corporations as a whole, accompanied at times by corporate integrity agreements.  In some cases, the failure to charge any individuals at the corporation occurred despite the corporations' history of previous bad behavior.  In each case, the penalties seemed unable to deter more bad behavior by the corporations going forward.  It was not obvious that any of the corporate integrity agreements were enforced. Thus, he enabled the continuing impunity enjoyed by the leadership of large health care organizations. 

The three cases, all discussed on Health Care Renewal, were, in approximate chronologic order:

2005 - GlaxoSmithKline Settled Charges of Overbilling Medicare and Medicaid for Zofran and Kytril

As we discussed in 2005, GlaxoSmithKline has settled for $150.8 million US Department of Justice charges that the company fraudulently overbilled Medicare and Medicaid. The alleged scheme involved inflating average wholesale prices for Zofran and Kytril used to set reimbursement rates.  According to the 2005 Department of Justice news release, "GlaxoSmithKline has agreed to enter into an addendum to its existing Corporate Integrity Agreement with the Office of Inspector General of the Department of Health and Human Services that, among other things, will require the company to report accurate average sales prices and average manufacturer's prices for its drugs covered by Medicare and other federal healthcare programs."

No individual who authorized, directed, enabled or implemented these alleged actions suffered any penalty.  The decision not to prosecute any individuals was made after the first (2004) famous Paxil case.  Paxil is the anti-depressant whose marketing lead GlaxoSmithKline (GSK) to settle allegations of fraud brought by then New York Attorney General Elliott Spitzer.  That case included allegations of suppression and manipulation of clinical research, and was discussed in great detail in the book Side Effects by Alison Bass.  We posted about various aspects of this case, e.g., here, here, and here. 

Since 2005, we have discussed myriad examples of misbehavior by GSK.  Notably the company made a $3 billion settlement in 2012 for all sorts of allegations involving multiple drugs, (see this post).  Its most recent settlement was in 2016 for bribing Chinese doctors (see this post).  Other cases included the manipulation of Study 329 (see this post), the manipulation and suppression of evidence about Avandia (see this post).  So the 2005 settlement seemed to have little deterrent effect.

The 2005 DOJ press release included this quote

'As our nation struggles to contain healthcare costs, we must ensure that drug manufacturers do not take advantage of the poor, the elderly or the sick by illegally inflating the price of prescription drugs. That a manufacturer would fraudulently inflate the cost of a drug used primarily to reduce the side effects of cancer treatments is unconscionable,' said U.S. Attorney R. Alexander Acosta of the Southern District of Florida.      

2007 - Bristol Myers Squibb Settled Charges of Kickbacks to Physicians and Fraudulent Marketing of Abilify 

As we discussed in 2007, BMS was charged by the US government for promoting the atypical anti-psychotic drug Abilify for use by children and the elderly absent any good evidence that it provided benefits that outweighed harms for these group. So such patients who received these drugs due to the overpromotion might have been harmed, and probably did not benefit.   One means used to promote the drug was giving kickbacks to physicians.  The settlement included monetary penalties to the company totaling $515 million, and a five-year corporate integrity agreement to ensure its compliance with the law.

Note that the corporate integrity agreement did not appear to have improved subsequent BMS behavior.  Since 2007, we have noted that:
 - In 2014, BMS settled allegations its subsidiary Lantheus Medical Imaging Inc evaded state taxes (per the Corporate Crime Reporter)
 - In 2015, BMS settled allegations by the US Securities and Exchange Commission (SEC) that it bribed physicians in China to induce them to prescribe its drugs.  (Look at our post here).

No individual who authorized, directed, enabled or implemented the actions alleged in the 2007 settlement suffered any negative consequences. The decision not to charge any individuals seemed to be made despite the company's history of previous bad behavior, which included:
 - In 2003, for $617 million, BMS settled suits alleging it tried to prevent competition from low cost generic versions of its products Taxol and Buspar (per the NY Times).
- In 2004, for $150 million, BMS settled suits by the SEC alleging accounting fraud (per the NY Times here).
- In 2007, BMS paid a $1 million dollar penalty while pleading guilty to lying to federal agents about a deal with the Canadian drug company Apotex (per Law360).   In 2009, it paid additional financial penalties in response to a US Federal Trade Commission charge about this case (per the FTC).

According to the 2007 Department of Justice news release,  one of the two US Attorneys involved in the 2007 BMS settlement was R Alexander Acosta of Florida.

2007 - Sanofi-Aventis Settled Charges of Overcharging Medicare for Anzemat

Per a 2007 post, Sanofi-Aventis settled allegations that it overcharged the US government for the drug Anzemet.  Of course, no individual who authorized, directed, enabled or implemented these alleged actions suffered any negative consequences.

As described by a Law360 post in 2007, he settlement also included yet another corporate integrity agreement.  This did not deter further misbehavior by Sanofi-Aventis.  It  settled charges of overcharging the US Medicaid system in 2009 for over $90 million  (see post here), and charges that it gave doctors kickbacks to induce them to prescribe the drug Hyalgan in 2012 (see post here).  In 2014, Sanofi's Genzyme subsidiary settled charges it promoted a surgical film product for unproven uses (see post here), and settled further charges from this case in 2015 (see post here).

Law360 also reported,

 U.S. Attorney for the Southern District of Florida R. Alexander Acosta said the lawsuit proved that corporations could not get away with misleading the government by exploiting a health care system based on honesty.

'Again, a corporation has been caught fraudulently inflating the cost of a drug used primarily to reduce the side effects of cancer treatments without regard to the increased costs borne by government health care programs or elderly and indigent patients,' Acosta said. 

Summary

President Trump promised time and again that he would stand up for the forgotten working people and families of the US, and would reduce the power of big corporate interests.  Now, his nominee to be Labor Secretary is an attorney who seemed unwilling to personally challenge top management of big drug and biotechnology companies when their companies misbehaved.  He did not hold management accountable even when their companies had previously and repeatedly misbehaved.  His failure to hold individuals accountable apparently failed to deter future bad behavior by the same companies.

There are many more examples on this blog of legal settlements, and even episodes involving bribery, fraud, kickbacks, and other crimes that demonstrate the continuing impunity of leaders of large health care organizations.  It is likely that such impunity has led to the general concerns that the system is "rigged" in favor of the wealthy, the well-connected, and the insiders.

And we have a President who has promised to act against the "rigged system," but seems to be bent on appointing wealthy, well-connected people to run his executive branch. Now he has just nominated someone who failed to hold wealthy, well-connected corporate executives accountable for their corporations bad behavior.  So, in any case, as we have said before...)

We once again see the perverse incentives at work that drive bad behavior by health care oragnizational leaders.  One can obviously become very rich by directing this bad behavior.  Up to now, the likelihood that one would eventually pay any penalty for doing so was tiny.  Now it is slightly higher.  Whether those up the ladder, who might have authorized the behavior, turned a blind eye to it, or avoided enquiring about anything that could be bad behavior, as long as the money came in, will suffer any negative consequences from these actions or inactions in the future is still unclear.

We will not make any progress reducing current health care dysfunction if we cannot have an honest conversation about what causes it and who profits from it.  True health care reform requires ending the anechoic effect, exposing the web of conflicts of interest that entangle health care, publicizing who benefits most from the current dysfunction, and how and why.  But it is painfully obvious that the people who have gotten so rich from the current status quo will use every tool at their disposal, paying for them with the money they have extracted from patients and taxpayers, to defend their position.  It will take grit, persistence, and courage to persevere in the cause of better health for patients and the public. 

Suppose the Pope Condemned Health Care Corruption - and Hardly Anyone Noticed?

Introduction - Health Care Corruption as a Taboo Topic

We have frequently discussed outright corruption in health care as one of the most important causes of health care dysfunction.  Transparency International (TI) defines corruption as

Abuse of entrusted power for private gain

In 2006, TI published a report on health care corruption, which asserted that corruption is widespread throughout the world, serious, and causes severe harm to patients and society.

the scale of corruption is vast in both rich and poor countries.

Also,

Corruption might mean the difference between life and death for those in need of urgent care. It is invariably the poor in society who are affected most by corruption because they often cannot afford bribes or private health care. But corruption in the richest parts of the world also has its costs.

The report did not get much attention.  Since then, health care corruption has been nearly a taboo topic in the US.  When health care corruption is discussed in English speaking developed countries, it is almost always in terms of a problem that affects benighted less developed countries.  On Health Care Renewal, we have repeatedly asserted that health care corruption is a big problem in all countries, including the US, but the topic remains anechoic.

Yet somehow, a substantial minority of US citizens, 43%, seemed to believe that corruption is an important problem in US health care, according to a TI survey published in 2013 (look here).  But that survey was largely ignored in the media and health care and medical scholarly literature in the developed world, and when it was discussed, it was again in terms of results in less developed countries.  Health Care Renewal was practically the only source of coverage in the US of the survey's results.

"Corruption is Cancer to Health Industry, Pope Tells Hospital Staffers"

Yesterday, this story appeared in the Catholic News Service. It opened with:

VATICAN CITY (CNS) -- Corrupt business practices that seek to profit from the sick and the dying are a cancer to hospitals entrusted with the care of the most vulnerable, especially children, Pope Francis said.

Doctors, nurses and those who work in the field of health care must be defined by their ability to help their patients and be on guard against falling down the slippery slope of corruption that begins with special favors, tips and bribes, the pope told staff and patients of Rome's 'Bambino Gesu' children's hospital Dec. 15.

'The worst cancer in a hospital like this is corruption,' he said. 'In this world where there is so much business involved in health care, so many people are tricked by the sickness industry, 'Bambino Gesu' hospital must learn to say no. Yes, we all are sinners. Corrupt, never.'

One might think that this condemnation of health care corruption by the leader of a huge Christian religious group would get considerable attention, but one would be wrong. The only other coverage of the Pope's message was an extremely brief (6 sentences) item by the AP (see here via Business Insider.)

Note that Pope Francis not only condemned corruption in the strongest terms, but he linked it the transformation of medicine and health care into a business, with the presumptive result in an era of the "shareholder value principle" that revenue has become more important than caring for patients.  He also implied that the road to corruption begins with conflicts of interests.

Note that Pope Francis' predecessor, Pope Benedict XVI, also decried the transformation of medicine and health care into a business.  As we noted here, he wrote

during the current economic crisis 'that is cutting resources for safeguarding health,'... Hospitals and other facilities 'must rethink their particular role in order to avoid having health become a simple 'commodity,' subordinate to the laws of the market, and, therefore, a good reserved to a few, rather than a universal good to be guaranteed and defended,'

Furthermore,

'Only when the wellbeing of the person, in its most fragile and defenseless condition and in search of meaning in the unfathomable mystery of pain, is very clearly at the center of medical and assisted care' can the hospital be seen as a place where healing isn't a job, but a mission,...

Pope Benedict's call for health care to be restored to being a calling, not a business, remained anechoic too.   

Discussion

Recently, I became just a bit more optimistic that health care corruption would start getting the attention it deserved.  That may have been premature.  The world seems to becoming ever more friendly to market fundamentalism or neoliberalism.  The notions that every human activity, including medicine and health care, should be conducted as a business, and that in business, revenue come first is likely to be helped by the election of an ostensibly billionaire businessman to the presidency of the US.  That said president-elect once called Pope Francis "disgraceful" after the Pople questioned how Trump's proposal to "build a wall" to keep out supposedly deplorable Mexican immigrants squared with Christian beliefs (look here).

Yet as suggested by the recent Transparency International report on corruption in the pharmaceutical industry,  there is so much money to be made through pharmaceutical (and by implication, other health care corruption) that the corrupt have the money, power, and resources to protect their wealth accumulation by keeping it obscure.  In the TI Report itself,

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

Keep in mind that the money made from corruption does not just go to innocent peoples' retirement funds that are invested in pharmaceutical stocks.  It predominantly goes to top corporate executives and managers, and their cronies who preside over the corrupt practices.


I might as well repeat myself once again.  As I wrote in 2015,

If we are not willing to even talk about health care corruption, how will we ever challenge it? 

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