Why Did the "Dean of Health Care Economics" Urge Reforms that "Appeal to Some Special Interests?"

We have often discussed, some would say belabored, the importance of the "anechoic effect" in health care.  Particular issues which would make those who benefit the most from our current dysfunctional health care system uncomfortable are often considered not to appropriate for polite conversation. 

A prominent recent article in JAMA provided a great example of  how there are certain topics that health care, services, and policy experts avoid discussing.

Summary of the Article

The article was by Victor R Fuchs, who has been called the" dean of health care economics."  His topic was why US health care is so expensive compared to those in other countries, but provides little additional value for the extra expense.  [Fuchs VR. How and why US health care differs from that in other OECD countries.  JAMA 2013; 309: 33-34.  Link here.]

His explained the differences as follows:
-  "US individuals appear more distrustful of government...."  Thus presumably they shun government operation of health systems, which can lead to lowering administrative costs, and more effective negotiating "with drug companies and physicians and to control investment in hospitals and equipment."
-  "reluctance to achieve more equal outcomes for the population through redistributive public policy."  He attributed this to attitudes stressing personal responsibility for success, and the heterogeneity of the population leading to decreased sympathy to those who are unfortunate but "whose identity may differ greatly from one's own."
- "the opposition [to health care reform] of 'special interests,' such as pharmaceutical and device manufacturers, physicians (especially those in high-income specialties), and hospitals."  He noted that other countries have special interests, but attributed the power of US special interests to the country's system of government, especially "checks and balances," which provide "'choke points' for special interests to block or reshape legislation."

He ended with three policy prescriptions for more and better health care reform:


-  "government's role should be limited to what is necessary, not just desirable."
-  "provision of basic coverage for all should not require equality for obtaining additional coverage."
-  "reform should have features that would appeal to some special interests, or to some elements within each special interest group (for example, some physicians or some health plans."


I believe this essay, because it is in a prominent journal and by the supposed dean of US health care economists, provides a good example of some of the things that ail the discussion of health care policy. First, the author made rather cavalier use of evidence to support his points.  Second, he avoided even mentioning any of the unpleasant issues we discuss on Health Care Renewal.  Third, he not only failed to challenge any of those who benefit the most from the current system, but also suggested further appeasement at least of some of them.

Cavalier Use of Evidence

Prof Fuchs' justification for the role of distrust of government was based on a rather casual review of American history, and a single survey.  In fact, the proportion of people who appear to trust the government appears to depend on who asks the question and how it is asked.

For example, Gallup polling from 1998 to 2012 showed from 65% to 80% of people expressed “a great deal/ fair amount of trust in state and local government.”  Gallup polling from 1997 to 2012 showed from 51% to 83% of people had “a great deal” or “fair amount” of “trust in federal government to handle international problems.”  On the other hand, the Pew Research Center for the People and the Press showed public trust in government peaking at nearly 80% during the administration of President Johnson, then precipitously declining, rarely exceeding 50% over the ensuing years, and now around 20%. Furthermore, although Prof Fuchs argued that distrust of government is uniquely American, he provided no data comparing such poll results from the US with those from elsewhere.

Nor did he compare results of polls about trust of the government with those about trust of other organizations involved in health care.  However, while people in the US may be distrustful of government, polling shows even bigger distrust of health care special interests (like pharmaceutical companies and health insurance).    While Edelman marketing showed relatively constant trust in the pharmaceutical industry at around 50% from 2009-2012), a Harris Interactive 2010 poll showed that only about 10% of people thought the pharmaceutical industry was honest and trustworthy from 2003 to 2010, while health insurance companies and managed care companies were trusted by even fewer.

Avoiding Unpleasant Issues

While Prof Fuchs acknowledged the role of "special interests," he avoided mentioning how these special interests might negatively affect health care, and thus how their role could be altered or countered.

Some issues we discuss on Health Care Renewal, but which he ignored were:

Concentration of Power

We have frequently discussed how health care organizations have grown ever larger, increasing their market power, and hence their ability to command revenue.  Although we often hear arguments that larger organizations are more efficient, this historic excuse of monopolists has little evidence in support.  In fact, large organizations seem mainly efficient in extracting money for the benefit of their insiders.  For a recent discussion of the push toward monopolies that has some health care angles, see this post on Naked Capitalism.   


Commercialization of Health Care 

The US seems to be unique in that it allows a larger role for private, for-profit corporations in health insurance and the actual provision of health care.  In the US, many health insurance companies, some hospitals and hospital systems, and many other types of health care providers, like hospices and dialysis centers, are now for-profit.  Furthermore, the physicians who provide direct patient care are more frequently employed by corporations (rather than being in solo or small group practice), and these corporations are increasingly for-profit  (look here).

This increase in the provision of health insurance and direct health care by for-profit corporations is a historical change.  Through the 1970s, the American Medical Association declared "the practice of medicine should not be commercialized, nor treated as a commodity in trade." (Look here)   In most states, the corporate practice of medicine used to be banned.


Commercialization in an Age of Financialization -

This commercialization took place in an era in which economists were advocating that corporate leaders ignore all goals other than increasing "shareholder value" (look here).  This de facto meant increasing short-term stock price and/or revenue.  Clearly focusing only on short-term revenue increased the risk of management that ignored or was even hostile to the health care mission.  The focus on short-term revenue lead to strong incentives for employees to "make their numbers," that is, to achieve financial goals, no matter what it took (see examples here).  This likely lead to many examples of unethical behavior.  Furthermore, physicians were not immune to such requirements (look here).

 Abandonment of Government Regulation

As was noted in the comments on the post on Naked Capitalism,enforcement of anti-trust law that could prevent concentration of power has generally been abandoned by recent US administrations.  Furthermore, as we have discussed here, enforcement of laws against fraud, kickbacks, etc have lead to numerous legal settlements, but almost never any penalties against individuals who authorized, directed or implemented such actions within large health care organizations.  Thus, the leaders of health care organizations, particularly large health care corporations, have experienced impunity.  In some cases, there has been outright regulatory capture.  Conflicted regulators have proliferated, often through the mechanism of the "revolving door."

Executive Compensation 

Thus protected by such impunity, executives of large health care organizations often have become rich, and seem to be able to do so without any accountability for their organizations' actions.  As noted above, their incentives push them to put short-term financial goals ahead of the health care mission.  Furthermore, another currently fashionable business school doctrine is that health care managers may and perhaps should be generic, and thus need not know anything about health care, have experience caring for patients, or have sympathy for health care values.  All this has lead to health care management that ignores or even is hostile to the health care mission. 

Deception Undermining Clinical Research and Education 

Furthermore, this impunity and lack of accountability has been correlated with a rising tide of unethical behavior.  In particular, corporations that make drugs and devices have taken over clinical research meant to evaluate their own products.  They have often manipulated research to favor their products, and suppressed research that even when manipulated does not favor these products.  Thus they have corrupted the clinical research base on which physicians and patients rely to make the best possible health care decisions.  Marketers have launched stealth campaigns that have also included corruption of medical education.  In particular, they have paid influential health care professionals, called key opinion leaders, to support marketing under the guise of medical education.  Thus distorting health care and medical research and education decision making has distorted decision making, likely leading to increased costs and decreased quality.  

Other examples of poor, that is ill-informed, unaccountable, self-interested, conflicted and corrupt leadership are strewn around Health Care Renewal.  He have also shown how the governance of health care organizations often lacks accountability, integrity, transparency, and honesty.  All these problems can lead to increased costs, and decreased quality and access.  Yet almost never do any of these issues make it into polite discussion within health care research and policy circles.

Appeasement of Special Interests

Over eight years of  effort by a few dedicated academic researchers, health care professionals, investigative reporters, whistle-blowers, and watch dog organizations,  chronicled to some extent on this blog and by other bloggers and commentators, has shown bad leadership and governance of, and resulting unethical behavior by health care "special interests."  Yet, the example essay by Prof Fuchs failed to deal with any of these issues.  Instead of discussing how they might be approached, he suggested continuing appeasement of special interests, which would likely make our problems even worse.  Why he ignored all the privileges the leaders of special interest have, and felt the need to treat them even more nicely, remains unclear. 

Thus it appears that the anechoic effect is leading to failure to grapple with the real reasons for health care dysfunction, thus ensuring that health care costs will continue to rise while access and quality fall.

Real health care reform will first require honest, unflinching consideration of what has gone wrong.  As long as the conversation seeks to avoid offending those who benefit the most from the current system dysfunction, that dysfunction will only get worse. 

US President Theodore Roosevelt had the courage to challenge the "malefactors of great wealth" who engineered the first gilded age, at the expense of the public at large.  During this second gilded age, will we have the courage to take on the new malefactors of great wealth, including those who benefit from health care's dysfunction?

Don't Ask, Don't Tell: Health Affairs Interviews Guidant CEO Ron Dollens

Health Affairs, which bills itself as " the leading journal of health policy thought and research," just published a lengthy (18 page in the PDF version) interview of Guidant CEO Ronald W. Dollens by Founding Editor John K. Iglehart. The interview was notable for the interviewer's extreme deference to the interviewee, and more for what the interviewer didn't raise that what he did.

The Case of Guidant's ICDs

An accompanying editor's note stated, "On May 24, 2005, one month after the interview that follows was conducted (25 April), the New York Times reported that an implantable cardiac defibrillator (ICD) sold by the Guidant Corporation had failed to operate properly while a twenty-one year old college student who had the device implanted in his chest was suffering a cardiac arrest. The student later died. Following the Times report, John Iglehart posed an additional question...." Furthermore, the note stated that Guidant had issued a press release on June 17, 2005, that Guidant was "volunatarily advising physicians about important safety information regarding certain devices [three ICD models]"; and that the Associated Press quoted a US Food and Drug Administration spokesman as saying "This is a voluntary recall." It also noted that Guidant confirmed reports of 45 failures of ICDs out of 63,000 implanted worldwide. Finally, the note quoted Dollens, "Patient safety is paramount and our highest priority."
The question that Iglehard asked Dollens about this issue was:

• "A recent New York Times story, which focused specifically on ICDs, raised broad questions relating to the inherent risk associated with invasive procedures and the understanding of various groups of risk. Could you share with us your thoughts on the specific issues addressed in the Times article?"

Dollens replied,

• "The article focused on the communications issues surrounding the continuous evaluation of patient risk when using novel, life-sustaining medical technology. We encourage public debate and discussion about the pros and cons of broader dissemination of infomation about product safety. Guidant looks forward to participating in that discussion."

This interview and the accompanying editor's note, however, left out some important information. In particular, the New York Times article of May 24 reported not only on the failure of the defibrillator that was associated with the death of the young patient, but also that Guidant had known for three years of a flaw in the design of that particular defibrillator, the Ventak Prizm 2, that could cause the unit to short-circuit and fail, and that the company had made changes in its manufacturing process three years earlier to correct this flaw. We posted about this New York Times article on Health Care Renewal, and concluded, " there seems to be no good excuse to hide data about this device's flaws from the public and from doctors."
Furthermore, there was other news about Guidant that appeared after the May 24 but before the June 17, 2005 press release. On June 2, the New York Times reported that Guidant continued to sell ICDs from stock manufactured before the flaw was corrected after it had started manufacturing an upgraded version that corrected the flaw. (See our post here.)
A day after the Guidant press release, the New York Times published another article disclosing flaws in additional models of Guidant ICDs, that Guidant had also failed to previously disclose these flaws to doctors as soon as it knew of them, and also that Guidant continued to ship the old version of these models of ICDs from stock after it started manufacturing new models which corrected the flaw. (See our post here.)
Thus, the prominent, lengthy interview in Health Affairs of Guidant CEO Dollen, done by the most senior Health Affairs editor, avoided mentioning most of the serious criticisms made of how Guidant handled the problem of faulty ICDs. Iglehart characterized the problem only in the most general terms, and allowed Dollen to provide an answer that was equally vague. Although the editor's note suggested that Health Affairs editorial personnel were aware of news about Guidant made public from May 24 to June 17, 2005, it failed to mention that the news after May 24 had raised additional issues about Guidant ICDs.

The Case of the Ancure Endograft System

Iglehart asked Dollens to opine about such diverse matters as "the era of evidence-based medicine," how Guidant provides health care coverage to its employees, and how "the American way of delivering and financing health care is flawed." Yet he never mentioned another serious problem in Guidant's past that eerily presaged the ICD problem.
In 2003, Guidant agreed to plead guilty to multiple felony counts for hiding, as the New York Times put it, "serious health problems, including 12 deaths, caused by one of its products." Guidant agreed to pay over $90 million in civil and criminal penalties, the largest fine ever paid by a device-maker for concealing problems with one of its products.
In summary, the facts reported by the Times in 2003 were as follows. In 1999, Guidant began marketing a new type of aortic graft that was inserted via a catheter, the Ancure Endograft System. Soon after the device was marketed, physicians who inserted it began complaining that the device would be become lodged prior to achieving correct positioning, requiring abdominal surgery to repair the problem. Guidant sales represented began instructing doctors to break the device into pieces and then extract them, even though this method had never been clinically tested, and despite the sales representatives' lack of qualifications to give such clinical advice. Guidant eventually reported 172 reports of problems with the device to the FDA, but later prosecutors charged that Guidant had concealed more than 2000 of the the reports it had received. The FDA heard of the scope of the problem in 2000 after seven anonymous whistle-blowers sent it a letter. Guidant pulled the aortic graft system off the market in 2001, and then revealed it had received thousands of reports of problems with the device. (See summaries of other news articles here, but most original articles are no longer on the web.)
Yet the Iglehart interview never mentioned the case of the Ancure Endograft System, which was undoubtably important, and seemed relevant not only to the more recent case involving ICDs, but indicative of the extent that Guidant really regards safety as "paramount."

In Summary

A prominent editor of a prominent health policy journal devoted considerable effort to and published considerable pages of an interview with the CEO of a large device manufacturing firm, yet avoided asking skeptical or probing questions about a current problem that raises substantive concerns about the quality of the company's products, and even bigger concerns about how the company has dealt with quality problems. The interviewer avoided asking any questions about a similar case from a few years ago.
This is only one article, but it seems to indicate how deferentially the health services and policy literature may treat leaders of large health care organizations. This literature is a major source of information about the health care system and health care policy for physicians, researchers, and policy-makers. While it may show deference to leaders of large organizations, however, this literature often includes pointed criticisms of physicians.
Here is another example of the "anechoic effect," the curious lack of echoes resulting from cases that show the down-sides of concentration and abuse of power.
But to fix these problems, we will at least have to start talking about them.
To help us do that, journals about health services and health policy should begin to show skepticism of the powers that be befiting these journals' scholarly aspirations.