Making Abusive Contracts Great Again - Non-Disclosure Agreements, Which Have Bedeviled Employed Physicians, Go From Anechoic to Viral Courtesy Omarosa

Introduction: Confidentiality Clauses, Non-Disclosure Agreements, Non-Disparagement Clauses

In 2016, Dr Wally Smith and I published an article on how contracts employed physicians sign may threaten their patients and professionalism.(1)  At the time, we wrote,

clauses in the contracts that physicians sign with their employers or that their employers sign with third parties may be part of a growing class of subtle but protean and pernicious restrictions on employed physicians' professionalism and autonomy.  These provisions may financially benefit employers and their management. No clear arguments that they benefit patients or support physicians' professionalism have been made.

The first such provision we listed was the worst one, in our opinion.

The most pernicious threats created by employed physicians' contracts may arise from blanket confidentiality clauses. For example, a hospital system subjected physicians to an 'ironclad confidentiality clause' under which 'the doctors could not publicly discuss their situations or, for that matter, anything else of significance about the corporation' that employed them....

These were particularly troubling because

Such clauses do not obviously benefit physicians or patients; instead, they may bury evidence of poor quality or safety problems, choke whistleblowers, or conceal mismanagement and malfeasance.

The clauses had a self-referential aspect

Because these clauses [themselves] are confidential, they have rarely been discussed in public, and corporate managers have never been called to justify their existence.

Finally,

Blanket confidentiality clauses could also hide other obnoxious contract provisions.

Up to 2016, obnoxious clauses in physicians contracts were, as noted above, quite anechoic, if not mostly totally secret.  I am afraid our article did not have many echoes.  But in our brave new political era, things have changed.

Donald Trump's and Associates' Use of Confidentiality Clauses, aka Non-Disclosure Agreements

By July, 2016, it became clear that the Trump campaign was requiring staffers to sign non-disclosure agreements similar to the blanket confidentiality clauses described above.  An Associated Press article stated that the campaign meant to enforce such agreements,

Republican presidential candidate Donald Trump is seeking $10 million in damages from former senior campaign consultant Sam Nunberg, alleging that Nunberg leaked confidential information to reporters in violation of a nondisclosure agreement.

Furthermore,

Trump requires nearly everyone in his campaign and businesses to sign legally binding nondisclosure agreements prohibiting them from releasing any confidential or disparaging information about the real estate mogul, his family or his companies. Trump has also said he would consider requiring such agreements in the White House.

That prediction proved to be correct.  In March, 2018, Washington Post editor Ruth Marcus started by quoting an interview Trump had given to Post reporter Robert Costa in 2016,

Costa: 'One thing I always wondered, are you going to make employees of the federal government sign nondisclosure agreements?'

Trump: 'I think they should. . . . And I don’t know, there could be some kind of a law that you can’t do this. But when people are chosen by a man to go into government at high levels and then they leave government and they write a book about a man and say a lot of things that were really guarded and personal, I don’t like that. I mean, I’ll be honest. And people would say, oh, that’s terrible, you’re taking away his right to free speech. Well, he’s going in.'

Reader, it happened. In the early months of the administration, at the behest of now-President Trump, who was furious over leaks from within the White House, senior White House staff members were asked to, and did, sign nondisclosure agreements vowing not to reveal confidential information and exposing them to damages for any violation. Some balked at first but, pressed by then-Chief of Staff Reince Priebus and the White House Counsel’s Office, ultimately complied, concluding that the agreements would likely not be enforceable in any event.

The nondisclosure agreements, said a person who signed the document, 'were meant to be very similar to the ones that some of us signed during the campaign and during the transition. I remember the president saying, ‘Has everybody signed a confidentiality agreement like they did during the campaign or we had at Trump Tower?’ '

Again, this implied that Trump and his business associates had long had a policy of requiring non-disclosure agreements (confidentiality clauses) of most if not all employees..

In addition, the agreements apparently were supposed to be valid in perpetuity.

Moreover, said the source, this confidentiality pledge would extend not only after an aide’s White House service but also beyond the Trump presidency. 'It’s not meant to be constrained by the four years or eight years he’s president — or the four months or eight months somebody works there. It is meant to survive that.'

The provisions were extremely broad, blanket if you willl .

It would expose violators to penalties of $10 million, payable to the federal government, for each and any unauthorized revelation of 'confidential' information, defined as 'all nonpublic information I learn of or gain access to in the course of my official duties in the service of the United States Government on White House staff,' including 'communications . . . with members of the press' and 'with employees of federal, state, and local governments.' The $10 million figure, I suspect, was watered down in the final version, because the people to whom I have spoken do not remember that jaw-dropping sum.

It would prohibit revelation of this confidential information in any form — including, get this, 'the publication of works of fiction that contain any mention of the operations of the White House, federal agencies, foreign governments, or other entities interacting with the United States Government that is based on confidential information.'

These agreements were apparently required even though they appeared to be blatantly unconstitutional.

Unlike employees of private enterprises such as the Trump Organization or Trump campaign, White House aides have First Amendment rights when it comes to their employer, the federal government. If you have a leaker on your staff, the cure is firing, not suing.

'This is crazy,' said attorney Debra Katz, who has represented numerous government whistleblowers and negotiated nondisclosure agreements. 'The idea of having some kind of economic penalty is an outrageous effort to limit and chill speech. Once again, this president believes employees owe him a personal duty of loyalty, when their duty of loyalty is to the institution.'

A New York Times article again from March suggested that these agreements were required not just from White House staff, but from journalists who embarked on official administration trips.

Mr. Trump’s White House has also broken with convention in trying to impose written nondisclosure agreements in other instances. A small group of journalists scheduled to travel on a trip to Afghanistan with Vice President Mike Pence were instructed in December to sign a confidentiality agreement before they would be given the details of the trip, for security reasons.

The issue of blanket confidentiality agreements now being used in government despite Constitutional free speech guarantees caused a brief ripple in the force, but that soon faded away, until Omarosa, that is.

Omarosa's Case Puts Non-Disclosure Agreements in the Headlines

This month it seemed impossible to avoid the saga of Omarosa Manigault Newman whose tell-all book about the president and his administration was just published to great tumult.  Ms Manigault Newman was the former reality television villain of Trump's Apprentice program.  She became a campaign aide (and somewhat infamously warned us that all Trump's critics would be forced to bow down to him, look here), then a White House aide with unclear duties, only to leave abruptly.  The story was everywhere in the media, and soon involved her allegations that she was pushed to accept "hush money" not to reveal goings on in the White House.  In fact, it became apparent that a blanket confidentiality agreement was one means Trump meant to use to keep her quiet.

On August 12, 2018, per Politico, KellyAnne Conway, erswhile WH drug czar (look here) said in an interview

'It is typical, and you know it, to sign an NDA … in any place of work,' Conway, counselor to the president, said to host Jonathan Karl on ABC’s 'This Week.' 'I’d be shocked if you didn’t have one at ABC.'

'I’m told she signed them when she was on 'the Apprentice,’ certainly at the campaign. We’ve all signed them in the West Wing,' she added. 'And why wouldn’t we?'

Again, Ms Conway did not seem to recognize that there should be any differences in what goes on in the government and in a private business.  Furthermore, the implication was that non-disclosure agreements, or blanket confidentiality agreements, are now standard practice in private business, and are worthwhile and objectionable.  Of course, she did not give any reasoned justification for their use in business, much less any explanation how their use in the executive branch was not a blatant violation of the First Amendment.  But onward,...

Just to underline the similarity with practices were originally discussed in 2016, the White House agreements were required of everyone, and were self-referential in that they made their own existence secret.  On August 14, 2018, the Weekly Standard reported

President Trump’s escalating digs at ex-aide Omarosa Manigault Newman over her gossipy new tell-all have brought new scrutiny to this White House’s unconventional—and, arguably, unconstitutional—policy of requiring staffers to sign non-disclosure agreements to prevent them disparaging the president.

The rule extended not just to those public-facing West Wing regulars, like Apprentice star Manigault Newman or former press secretary Sean Spicer—but also to lower-level recruits less likely to shop a White House memoir.

'We had to sign them when we went into the building,' said one former White House and former Trump campaign staffer, who described the practice as just a part of this president’s modus operandi going back many years.

Furthermore, one staffer stated,

'When we all got onboarded one of the things we had to do for our official ethics briefing was sign an NDA,' the staffer said—but they could not keep a signed copy for themselves. 'Everything got taken away as soon as we signed it.'

Just as in the case of the contracts handed to physicians, Trump's White House confidentiality agreements made their own existence a secret.

Summary and Discussion

In 2016 we published an article decrying the requirement that employed physicians sign contracts containing confidentiality clauses as well as other obnoxious provisions in order to practice.  We asserted the confidentiality clauses, also known as non-disclosure agreements, did no good for physicians or their patients, but did allow the managers of the physicians' corporate employers to hide embarassing information, poor quality care, and malfeasance.  At the time we urged physicians to carefully review their contracts and get legal advice before signing.  But we worried that little could be done to stop the use of exploitive contracts without wholesale changes in health care, which would probably require the organization of employed physicians.  Our concerns were inspired not a little by the lack of recognition of exploitive contracts as a problem.

Now the phrase "non-disclosure agreement" is frequently in the headlines.  The confidentiality clauses in contracts that Donald Trump has forced his private employees, then his campaign workers, and now White House staffers to sign are apparently very similar to those physicians had to sign.  They are extremely broad in what they make confidential.  They make their own existence, and other obnoxious contract provisions secret.

What is to be done?  Maybe the new publicity surrounding this problem will embolden physicians to address the issue in their own bailiwick.  Maybe it will suggest that blanket confidentiality clauses, and other obnoxious contracts provisions we had discussed should be rigorously regulated, if not outlawed by state and the US governments.  However, as long as we have the confidentiality clause imposer-in chief in charge of the US government little is likely to be done.


Reference

1. Poses RM, Smith WR. How Employed Physicians' Contracts May Threaten Their Patients and
Professionalism.  Ann Int Med 2016; 165: 55-57.  Link here.

Reminder: Frontline trailer that includes Omarosa's "bow down" warning

"Can't This be Avoided?" - How Corporate Marketers Manipulated a Clinical Research Report to Avoid "Undermining" Marketing Messages

Documents newly made public in the course of litigation about the drug Pradaxa show granular details about how clinical research may be manipulated by corporate research sponsors intent on marketing their products.

Background

As reported by the New York Times, the litigation is over allegations by thousands of patients and families that privately held Boehringer Ingelheim concealed the bleeding risks of the anticoagulant drug Pradaxa. 

Pradaxa and two other recently approved drugs, Xarelto and Eliquis, are in a race to gain market share from warfarin, a generic drug that for decades has been the standard treatment for preventing blood clots and strokes. Many patients viewed the older warfarin as a nuisance because it requires frequent blood tests and careful attention to diet and other drugs.

The new drugs do not require such monitoring, yet claim to be as good, or better, at preventing strokes and blood clots in patients with a heart-rhythm disorder known as atrial fibrillation.

However,

 

Since its approval in 2010, the drug, which can cause fatal bleeding, has brought in more than $2 billion in sales in the United States, according to the research firm IMS Health.

It has been prescribed to 850,000 patients, but has also been linked to more than 1,000 deaths. 

Internal Documents Show the Influence of Marketers on a Clinical Research Report

As summarized by the NY Times, 

 The makers of the blood-thinning drug Pradaxa were so worried that an internal research paper would damage drug sales that some employees not only pressured the author to revise it, but suggested it should be quashed altogether, according to newly unsealed legal documents.

In particular,

 

The documents show that Boehringer Ingelheim employees openly fretted when it appeared that the results of the research paper, written by Paul A. Reilly, a clinical program director at the company, indicated that some patients could benefit from monitoring of their blood. A certain segment of patients, the paper found, absorb too little of the drug to effectively prevent strokes, while another group absorbs so much that they are at a higher risk for bleeding.

In a draft version of the paper included in the court records, Dr. Reilly and his co-authors detailed specific levels of how much Pradaxa should be in a patient’s bloodstream, and said that keeping some patients within that range would help prevent strokes and bleeding.

As Dr. Reilly’s draft paper circulated within the company, some employees questioned what the marketing implications of such a conclusion would be.

One company supervisor, Dr. Jutta Heinrich-Nols, wrote in an email to other employees that she could not believe the company was planning to publish research that would negate a decade’s worth of work proving that patients taking Pradaxa would not need regular tests.

Publishing the research results, she warned, could make it 'extremely difficult' for the company to defend its long-held position to regulators that Pradaxa did not require testing.

And, Dr. Heinrich-Nols added in the email, the research, if known, would 'undermine' the company’s efforts to compete with other new anticoagulants, such as Xarelto and Eliquis.

 'I would like to ask you to check again whether this is really wanted,' she wrote about publishing the research.

A second NY Times article added more details,

In one email, from June 2012, an employee wonders about the implications of internal research showing that blood levels of Pradaxa could vary significantly in a single patient.

'This may not be a onetime test and could result in a more complex message (regular monitoring), and a weaker value proposition … vs. competitors,' wrote the employee, whose name was redacted in accordance with privacy laws in Germany, where the company is based.

In another, an employee — whose name was also removed — asks about whether a newly available blood test in the United States might be useful for doctors treating patients with Pradaxa, which is also known as dabigatran. Another replies that such a test could be developed 'in-house,' but '2 years ago there was an informed decision NOT to develop this.' The employee continued, 'this would go against the ‘no monitoring’ idea/claim.'

Employees also continued to question the merits of allowing a research paper to be published showing that some patients could benefit from monitoring of their blood. The paper was published on Tuesday but with some details removed.

'This publication will more harm than be useful for us, neither in the market but be especially harmful in the discussions with regulatory bodies,' one email read. 'Can’t this be avoided?'

 

So, in summary, Pradaxa has been marketed basically on its convenience, as a drug whose dosage need not be customized according to frequent blood tests, in contrast to cheaper generic warfarin whose dosage may need adjustment according to frequent blood tests.  Yet a clinical trail sponsored by Boehringer Ingelheim, the manufacturer of Pradaxa, seemingly showed that its risk of bleeding might be dependent on its blood level, and hence perhaps that its dosage should be varied according to blood test.  

However, the manuscript reporting the results of this trial was apparently subject to vetting by multiple company managers whose specific concerns were whether the results of this research "undermined" the marketing message, and hence whether these results should be changed or suppressed to avoid contradicting the company's intended marketing message.  

Let me try to add some context, based on my experiences in academic medicine writing research papers, commenting on colleagues' papers, and reviewing papers for journals.  Considerable discussion among the researchers and clinicians involved in research projects about how manuscripts are worded is the norm.  However, working a perhaps more innocent era, input from people with vested interests in the project producing a particular result was unheard of.  Many health care professionals thus may still act based on the idealistic assumption that clinical research reports are all about science, and not about marketing.

Was the Manipulation Successful?

A Medscape article noted that the published version of the research article 

found ischemic stroke and bleeding risks were correlated with plasma concentrations of the drug in 9183 patients treated with dabigatran 110 mg or 150 mg twice daily (the available European doses). In their logistic regression analysis, the risk of ischemic stroke was inversely associated with trough concentrations of dabigatran.

The researchers concluded that 'the magnitude of the effect of dabigatran plasma concentrations on outcomes in atrial-fibrillation patients in RE-LY depends strongly on demographic factors, most importantly increasing age.' However, the results also confirmed a wide therapeutic range among those treated with dabigatran, with a more than fivefold variation in plasma concentrations. The researchers concluded there might be a subset of patients who could improve their risk/benefit profile by tailoring the dose of dabigatran. 

However,

In the paper, there are no references to the optimal plasma concentration of dabigatran, although such statements were in various drafts that circulated throughout the company, according to the New York Times.  When the paper was published online in October, Reilly told Reuters news  that the 'there is no single plasma concentration range that provides optimal benefit-risk for all patients" and that "no monitoring is necessary.' [see relevant Medscape article here.]

So it does appear that the final version of the article included a discussion that was influenced by the marketers' wishes that the results would not appear to contradict the marketing party line. 

A rigorous review of the article might have suggested that varying the dosage of the drug according to its blood level might reduce bleeding risk, and hence increase its benefits versus its harms.  However, a casual reading might not have revealed that the data in the study undermined the marketing message that Pradaxa is a better drug than warfarin because it can be given at a fixed dose without the need for inconvenient blood tests.  Thus, the efforts by the marketers to alter the dissemination of the clinical research to support marketing messages and increase sales of the drug and resulting revenues - never mind what the data showed - appeared to be successful. 

Conclusions

This case study, only made possible by the public release of internal corporate documents in the course of litigation, suggests that in retrospect the dissemination of the results of one particular clinical trial were manipulated in a somewhat subtle way so that the data would not contradict a marketing message that now appears rather fictional.

In the absence of litigation, and of a judge willing to make public documents that one party to the litigation doubtless wanted to hide, the manipulation of this particular study might never have been apparent.  Most clinical research is now sponsored by health care corporations with vested interests in how the research turns out.  Much of this research could be manipulated by corporate marketers who wish it to support their marketing messages, the truth be damned.  We (and others) have discussed many examples of apparent manipulation of clinical research, 

However, it is unlikely that we, physicians, health care professionals, health care researchers and policy makers, and the public, will ever know for such which studies were manipulated.  At best, very critical, skeptical, rigorous review can suggest which studies might have been manipulated. In the absence of such review, we are in danger of being swamped in a morass of manipulated research, and thus lead to make clinical decisions that are based mainly on hucksterism, not science.

Thus, I strongly advocate that those who author authoritative systematic reviews, meta-analyses, and clinical practice guidelines base their work on extremely rigorous, skeptical reviews that assume the likelihood that all commercially sponsored published clinical research has been manipulated (and that research that even post manipulation could not be twisted to support marketing many have been suppressed)  Reviews, meta-analyses, and guidelines that were not so based on extremely critical review should also be viewed with a jaundiced eye. 

Perhaps it is possible to devise legal and regulatory methods to at least make such manipulation more transparent.  Maybe this case, however, should again suggest that clinical research, that is, research on human beings, should be completely separated from those with vested interests in selling products or services which could be better hyped were the research turn out in their favor. 

Why Trust Drug Company Executives After One Admits Commercially Sponsored Clinical Research Is All About "Competitive Advantage?"

Mickey, the semi-anonymous blogger on 1BoringOldMan, wrote a righteously angry post in support of transparent clinical research.  As we have noted frequently, clinical trials done on human subjects are often manipulated to increase the likelihood of results favorable to commercial sponsors, or suppressed when even such manipulation does not produce the desired results.

Note that such suppression and manipulation degrade the scientific value of the studies, impede the evidence-based medicine process to rationally apply clinical research evidence to improve the health of patients and the public, and violate the trust of research subjects who volunteer to participate based on the assumption that clinical research is meant to improve patient care and public health, and contribute to science, not just secure commercial advantage.  

A European initiative to combat suppression of clinical research has been opposed by a lawsuit from US pharmaceutical manufacturers AbbeVie, spun off from Abbott Laboratories, and Intermune.  The European Medicines Agency had been willing to to make public unpublished patient level data from commercially sponsored clinical trials.  The lawsuit has shut down the process, and is meant to shut it down permanently, claiming that the clinical data, obtained from volunteer research subjects, includes "trade secrets."

As summarized by Mickey, their motivation seems to be to conceal how pharmaceutical manufacturers and other commercial sponsors of human research use this research for promotional, rather than scientific purposes.

An AbbeVie lawyer asserted that some adverse effects data should be kept confidential, and that "internal tactical decisions on how we are going to run a study, engage with regulators, and confront and solve problems and challenges we have uncovered during clinical trials" should also be kept secret because revealing them could "give other companies a tremendous competitive advantage," never mind whether keeping secrets could undermine science, decrease the study's usefulness to aid clinical and policy decision making, and break the implicit contract between researchers and study subjects.

It is becoming more obvious that many drug company executives, and other leaders of large health organizations, may care more about "competitive advantage" than patients, science or the public good, as Mickey points out.  So much for that advertising puffery  about drug development to improve patient health.  Thus it may be ridiculous to think that these executives they will negotiate to improve transparency of clinical research in good faith when doing so could decrease such advantage, again no matter what the effect on patients, public health, or science.

On this case there is an opportunity to speak out, Dr David Healy has a petition up on Change.org to oppose the AbbeVie and Intermune lawsuit which might get some notice if there are enough signatures.

Back to the Future - Another Medical Device Company Accused of Hiding ICD Defects

Suppression of data about defects in and failures of implantable cardiac defibrillators (ICDs) was one of the big issues we featured in the early days of Health Care Renewal (2005-06). 

At that time, Guidant, later acquired by Boston Scientific, was accused of hiding data that certain of its defibrillator models failed, possibly leading to preventable patient deaths (see this post and follow links backward).  Boston Scientific, which acquired Guidant, settled a civil lawsuit and was put on probation in 2011 after it pleaded guilty to misdemeanor charges of failing to file required reports with the US Food and Drug Administration (see post here).   Similarly, in 2010, Medtronic settled multiple patients' lawsuits charging that it knowingly marketed a faulty ICD (see post here).

St Jude and the Obscure Riata Data

Now in 2012, A Wall Street Journal article suggested that St Jude Medical Inc hid problems with its Riata implanted cardiac defibrillator (ICD) for years.   

In December, 2010, St Jude Medical Inc issued a warning letter to doctors: Wires inside Riata defibrillator leads—cables that connect the heart to implantable defibrillators—were sometimes breaking through their insulation from the inside out.


The problem, which ultimately led to a recall last year, could cause defibrillators to send unnecessary jolts to the heart or fail to deliver lifesaving shocks to return chaotic heart rhythms back to normal. The company said it had identified dozens of cases with visible signs of the problem, and pulled Riata from the market.

For many doctors, this was the first notice of a problem with Riata.

But before that 2010 warning, physicians including Alan Cheng, director of Johns Hopkins Medicine's arrhythmia service; Samir Saba, chief of electrophysiology at the University of Pittsburgh Medical Center; and Ernest Lau at the Royal Victoria Hospital in Belfast, Ireland, say they had encountered this so-called "inside-out abrasion" in their own practices between 2006 and 2009. When these doctors brought the incidents to the attention of St. Jude they say they were told by company officials and field representatives that the incidents were isolated. The malfunctions described by the doctors didn't result in deaths.

St. Jude had been tracking the problem for several years, according to company documents collected by the Food and Drug Administration and reviewed by The Wall Street Journal. Cases involving the so-called inside-out abrasion date to at least October 2005, the documents show. Inside-out abrasion became a focus of an internal St. Jude audit, which examined multiple cases of the failure before April 2008.

The Journal article noted that more transparency about device failures might allow physicians to spot problems earlier and prevent harm to patients.

more than a dozen physicians and device-safety experts say that if St. Jude had acknowledged the inside-out failure earlier, physicians might have identified the scope of the problem sooner.


In some cases, doctors concede that they, too, believed the failures were isolated and therefore didn't act quickly to report problems to St. Jude or the FDA, which may have made it harder to spot the growing trend of failures. The leads were implanted in more than 13,000 patients since July 2008.

'Every time you have a failed lead, you assume it's an isolated event, but, you start to string together isolated events, and then you have a recall,' said Dr. Saba.

Summary

So, for Health Care Renewal, this is a straightforward case, at least so far.  Yet another health care organization, this time, a medical device company, failed to reveal data that might have reflected unfavorably on one of its products, and hence lead to decreases in short-term revenue.  However, by suppressing the information, the company may have allowed doctors to keep implanting a potentially faulty device, and exposed patients to risk, possibly of fatality. 

We have discussed many at least somewhat parallel cases of suppression of research (here), and many cases of other kinds of deception by health care organizations (here).  Yet these cases continue to occur, physicians and other health care professionals continue to be fooled by secrecy and data suppression, and patients continue to be harmed by drugs, devices, or other interventions made by people who knew, or ought to have known that they were more dangerous than they appeared to be. 

One problem may be that the people with the most influence on medical practice and health policy continue to cheer lead for the veracity of information about drugs, devices, and other health care interventions supplied by the people who most stand to gain from selling same.  A few weeks ago, the editor of the august New England Journal of Medicine, Dr Jeffrey M Drazen MD, scoffed at physicians' skepticism of pharmaceutical industry funded clinical research, claiming that there were only "a few examples of industry misuse of publications...." [Drazen JM. Believe the data. N Engl J Med 2012;  367:1152-1153.  Link here.]  In doing so, Dr Drazen seemed to ignore all the stories about suppression of medical research (some of which we have discussed here), manipulation of medical research (some discussed here), and deception (some discussed here) and secrecy (some discussed here) practiced by large health care organizations, including but not limited to drug, device, biotechnology, and health care information technology companies.

Instead, the possibility that St Jude kept hidden data about the failings of one of its ICD models reminds us how skeptical we ought to be about the information provided, or not provided by those with vested interests in selling health care goods or services.  Physicians, health care professionals, those interested in health policy, and the public at large need to collectively exert pressure on the leaders of health care organizations to promote greater transparency, especially about data reflecting on benefits and harms of health care goods and services.  . 

The Case of the Vanishing Graduate Medical Education Funds

While primary care falters in the US, those who teach it seem to feel increasingly poverty stricken.  Now it appears that one reason for this is an amazing example of multiple failures of transparency and accountability.  Let me work through it, begging your pardon for a little bit of "inside baseball," medical education style.  The results suggest how we desperately need some medical disciples of Sherlock Holmes.

Background

My personal experience and increasing data suggests that most medical school faculty believe that their teaching is not valued by their institutions because teaching brings in no external funds.  In 2004, Dr Catherine DeAngelis, then the editor of JAMA, wrote "few medical schools provide adequate, if any, reimbursement for teaching time."(1)  (See this 2005 post.)   This seems absurd on its face, since what are medical schools for if it is not to provide teaching. 

However, there is evidence of this mission-hostile behavior.  In 2007, we quoted from a revealing interview with Dr Lee Goldman, Executive Vice President for Health and Biomedical Sciences at Columbia University,(2) who stated that "taxpayers," faculty who "generate more [money] than they cost," are valued most, and implied that faculty who focus on teaching are regarded as "welfare recipients," who bring in less external funding, and are valued least.  In 2010, we noted the results of a large-scale survey presented by Dr Linda Pololi in which 51% of faculty felt that the administration only valued them for the money that they brought in, and half felt that their institutions did not value teaching.(3)

Yet while faculty seem to believe that educational institutions receive little if any money to pay for teaching, it is not clear why the believe something so counter intuitive, and it is less clear what money actually goes to pay for medical education.

US Government Funding for Graduate Medical Education

However, several recent publications affirm that actually a lot of money goes towards one important form of medical education, yet the specifics of the money flows are shrouded in secrecy.  In the May, 2012, SGIM Forum, Dr Mark Liebow and colleagues summarized some of what is known about federal support of graduate medical education, that is, education of interns, residents, and other house officers.(4)  There are two streams of money that flow from Medicare to US hospitals:

Direct GME (DGME) payments help hospitals pay the salaries of residents, teaching faculty, and support staff. DGME is the product of three numbers: a per resident amount that varies by hospital, adjusted annually for inflation; the number of residents in the hospital (capped for each hospital at 1997 levels); and the fraction of discharges from the hospital that are Medicare beneficiaries. The Indirect Medical Education (IME) payment is a percentage amount added on to each DRG payment. The percentage is calculated via a complex formula (the only US statute containing an exponent!), where the key factor is the ratio of interns/residents to beds (IRB ratio).

These two streams are of considerable size:

Of the $9.2 billion Medicare paid for GME in 2010, $3 billion was for DGME and $6.2 billion for IME. The money is paid to hospitals sponsoring training programs rather than to the training programs or other hospitals where training occurs. While about 1,100 hospitals receive GME payments, 66% goes to the 200 hospitals that have the largest numbers of residents.

So, the 200 largest hospitals get about $2 billion in direct GME money (and presumably about another $4 billion in indirect money). This averages then to about $10 million DGME and $20 million indirect GME per hospital.

Thus, teaching, at least the teaching of interns, residents, and other house-staff does pay, and much more than trivial amounts. (Note that these amounts are not for teaching of medical students, which ought to be supported by other funding streams.)

Why then do faculty think that teaching does not bring in any money?

The GME Money Vanishes

An article by Dr Saima I Chaudhry and colleagues in the American Journal of Medicine begins to explain, although the explanations are found between the lines.(5)

First of all, while the graduate medical education money is paid by the government to the hospitals, the government does not publish what it pays to individual hospitals:

It has been previously reported that the amount of GME funding individual hospitals receive is not publicly reported by the Centers for Medicare and Medicaid Services,....

The government also does not hold the hospitals accountable for how they spend this money, nor for the quantity or quality of education they supply in exchange for it.

Remarkably, Chaudhry et al imply that that the people who run graduate medical education teaching programs also may not know how much money their hospitals receive from the government to fund their programs. The introduction to their article noted:

It is unclear how much program directors know about the amount and flow of DME funds to their programs. Program directors' beliefs about the transparency of funding to their programs, or their desire to influence how funds are distributed to them, also are unknown.

The article reported on a survey of internal medicine residency program directors which asked about "their knowledge of D[G]ME funding for their programs, the transparency with which funds are distributed to them, and their desire to influence this disbursement." The researchers sent surveys to 372 member programs, representing 97.1% of all US internal medicine residencies. They got 268 responses, a 72.0% response rate.

The main results were that only 159/268 (59.3%) of program directors had tried to find out how much DGME money their programs received, and of those, only 84 (52.8% of those enquiring, but only 31.3% of all respondents) actually knew how much money their programs got.

Of the 92 program directors who did not even try to discover how much money their programs received, approximately 21% said that "no one would tell me," 21% said that the "information would be inaccurate," 14% said they "don't know who to ask," and 2% were "afraid to ask."

Summary

US medical school faculty, especially those in primary care, increasingly feel pressured to perform activities that they perceive brings in money from external sources. They tend to believe that their own teaching somehow does not bring in any money, and that their careers will fail if they do not put more emphasis on other activities that the institution views as more profitable.

However, literally billions of US government dollars go to support the education of house staff, including the salaries of faculty who teach interns and residents, who probably are the majority of physician faculty. Faculty probably do not know this, because the government does not publish the amounts given to individual hospitals, nor demand of the hospitals any accountability for how they spend the money they receive.

Presumably, the top executives of each hospital know how much money the government gives them. Nonetheless, the majority of physician leaders of residency programs are never told these amounts, apparently because their hospital executives kept the amounts secret. Many of those educators who have tried to find out the figures were unsuccessful. Some did not even try to find out based on beliefs that their attempts would be unsuccessful, any amounts they discovered would be inaccurate, the people who knew the amounts were hidden, or that it would be dangerous to their careers to even try.

Thus billions of dollars of money flowing from the government to fund graduate medical education seems to have vanished in an amazing example of widespread deficiencies in accountability and transparency.

There are many people who blame government for many social ills. In this case, one can blame the US Congress for not writing a law that makes the money flows transparent and hospitals accountable for providing good educational value for the money provided. One can also blame the executive branch, particularly the Center for Medicare and Medicaid Services (CMS) of the US Department of Health and Human Services (DHHS) for not making the money flows and the values received for them transparent.

There are a few people, including this author, who also blame the leadership of health care organizations for many of the problems besetting health care. In this case, one can blame top leadership, presumably CEOs and chief financial officers (CFOs) of hospitals for hiding the amounts of money they receive from Medicare to finance graduate medical education. One can also blame the physician leaders of residency programs for not insisting that they know the true sources of financial support for their programs, obtain budgets that reflect this support, and recognition that their faculty really do bring in external funds for their teaching of house staff (and are thus valuable "taxpayers" in Dr Goldman's parlance.)

It is amazing that such amounts of money have been flowing for years mostly in secret. The secrecy has fueled incorrect, and in retrospect, bizarre ideas about the funding of medical education, and the value of medical educators to their institutions. This secrecy, in turn, has helped suppress the morale of medical educators, support the control of managers of health care professionals, and distort the flow of money within academic institutions and to compensation for certain favored individuals.

Would our dysfunctional health care system not be better off if we demanded transparency and accountability from its leaders?  In particular, the US government should make payments to hospitals for graduate medical education completely transparent, and develop a system to hold these hospitals accountable for how they spend the money.  Meanwhile, top leaders of hospitals receiving this money should make the amounts transparent, first to the people who are supposed to be doing the education that the money pays for, and to the public at large.  This would allow those running the relevant educational programs to develop reasonable and realistic budgets, to treat their faculty with respect, and to demonstrate what value they provide for the money received. 
The ongoing anechoic effect, and related deception and secrecy fostered by leaders in health care are major reasons our health care system is so dysfunctional, that costs are so high, and access and quality so poor.  True health care reform would ensure health care leaders put the mission before their personal enrichment, and act ethically with accountability, transparency, and honesty. 
References
1.   DeAngelis CD. Professors not professing. JAMA 2004; 292: 1060-1.  Link here.
2.  Goldman L, Halm EA.  A view from the top: general internal medicine from the perspective of a chair and dean.  SGIM Forum, April, 2007.  Link here.
3.  Pololi L, Ash A, Krupat E.  Faculty Values in the Culture of Academic Medicine: Findings of a National Faculty Survey. Link here.
4.  Liebow M, Jaeger J, Schwartz MD. How does Medicare pay for graduate medical education? SGIM Forum, May, 2012.  Link here.
5. Chaudhry SI, Khanijo S, Halvorsen AJ, McDonald FS,Patel K. Accountability and transparency in graduate medical education expenditures. Am J Med 2012; 125: 517-522. Link here.

Rendering Unto Caesar - What the Abramson Family Cancer Research Institute vs Thompson Says About the Loss of the Academic Medical Mission

A case, reported by the New York Times as involving an intellectual property dispute, should create a lot of cognitive dissonance about the state of the academic medical mission.

Litigation Involving the Abramson Family Cancer Research Institute and Dr Craig B Thompson

Here is how the Times outlined the story:

The president of Memorial Sloan-Kettering Cancer Center in New York is in a billion-dollar dispute with his former workplace, a cancer institute at the University of Pennsylvania, over accusations that he walked away with groundbreaking research and used it to help start a valuable biotechnology company.

In a lawsuit, the Leonard and Madlyn Abramson Family Cancer Research Institute at Penn described its former scientific director, Dr. Craig B. Thompson, as 'an unscrupulous doctor' who 'chose to abscond with the fruits of the Abramson largess.'

In particular,

In the suit, the Abramson cancer institute, which has received more than $100 million from the philanthropist Leonard Abramson and his family, says that Dr. Thompson concealed his role in starting Agios, which has attracted investors with a potentially new way to treat cancer. The institute says Dr. Thompson’s actions deprived it of proceeds that could support future research, causing it damages that could exceed $1 billion.

So presumably the Abramson Institute is alleging that Thompson took its intellectual property and put it into Agios, and the Institute therefore wants compensation. Note that the Institute does not appear to be alleging either that Thompson was supposed to be its employee, but actually was working for Agios at the time he was supposed to be working for the institute; or that Thompson hid a a conflict of interest created by his financial relationship with Agios that could have affected how he fulfilled his professional responsibilities there.

Note further that certain other parties declared that they are not part of this dispute. These included Dr Thompson's current employer:

Sloan-Kettering declined to comment, saying it was not a party to the lawsuit....

These also included the University of Pennsylvania:

Susan E. Phillips, senior vice president for Penn Medicine, said that the suit had been filed not by the university but by the research institute, a separate entity. She said the university was investigating the accusations.

The nature of this dispute ought to generate several kinds of cognitive dissonance.

Protecting Intellectual Property vs Upholding the Academic Mission at the University of Pennsylvania

On one of its web pages, the Abramson Family Cancer Research Institute describes its history:

The Abramson Cancer center of the University of Pennsylvania provides each patient with exemplary care though a comprehensive team approach, personalized service, education and outreach, and nationally recognized cancer research programs.

The web page describes the institute as simply part of the larger University of Pennsylvania cancer center, which came to be named for the Abramson family:

Penn's Cancer Center was renamed in 2002 as the Abramson Cancer Center of the University of Pennsylvania, recognizing the Abramson family's $100 million commitment to support comprehensive cancer research and care.

Thus it seems that the Abramson institute is simply a piece of a traditional academic medical center.

The academic mission is traditionally described as the creation and teaching of knowledge. Thus, if an academic institution creates new knowledge, its should then disseminate it, not own it. Of course, in the US, since the Bayh-Dole act was passed, academic institutions were given the ability to patent their discoveries, and began to protect and sequester the knowledge they contained, rather than disseminating it.

In this case, however, one part of a large university and a large academic medical center seems to be concentrating entirely on its right of ownership of intellectual property, not the traditional academic mission. The fact that this dispute has lead to litigation suggests that the academic organization is now intent on protecting, rather than disseminating knowledge. The dispute appears to be between a commercial research company and its allegedly errant former hired manager.

The Abramson Institute: Part or Independent of the Academic Medical Center?  

A little more digging suggests that the nature of the Abramson institute is not as clear as is described in its web-page. A GuideStar search revealed that the institute is actually legally independent from the university. It filed its own 990 form (latest version, covering 2009-2010, here.)

The filing did list various entities, including the Clinical Care Associates of the University of Pennsylvania Health System, and the Trustees of the University of Pennsylvania as "related tax-exempt organizations."

However, this filing should create cognitive dissonance about what the underlying nature of the Institute? Is it part of the University of Pennsylvania and its medical center, or is independent but cooperating?

This dissonance is only enhanced by the ambiguous response of the University of Pennsylvania to the lawsuit. If the Institute is part of the University, then the University ought to be party to the lawsuit, it would seem.

This filing with the US government did underline the Institute's commitment to disseminating research. A description of its tax "exempt purposes" included:

Education - scientists at the Institute actively share their discoveries with the research community, physicians, and students.

As above, this statement of purpose appears not to fit with the filing of a lawsuit to obtain damages due to the alleged taking of intellectual property. If this really were the Institute's mission, would not they want the intellectual property liberated so it could be actively shared? The cognitive dissonance about the mission of the Institute and of the University versus the protection and sequestration of intellectual property is thus increased.

Upholding the Academic Mission vs Staying Uninvolved at Memorial Sloan-Kettering Cancer Center

As an aside, note that Dr Thompson is now not just working for Agios. In fact, he has been President of the Memorial Sloan-Kettering Cancer Center since 2010 (look here). Just like the Abramson Cancer Center, Sloan-Kettering is an academic medical center with the traditional mission of teaching, research, and patient care. Here is its mission statement:

As one of the world's premier cancer centers, Memorial Sloan-Kettering Cancer Center is committed to exceptional patient care, leading-edge research, and superb educational programs.

So one would think that people there ought to be concerned by allegations that its current president took intellectual property without authorization, and that he is "an unscrupulous doctor." If these allegations were to be proven false, they seemingly would represent a major, unwarranted slur on its and his reputation. If they were to be proven true, they would indicate that current leadership might not have the character to uphold the mission. Either outcome would be serious and have serious implications. However, at the moment, this noted academic medical institution has expressed neither outrage about possibly false accusations nor resolve to investigate the matter and then weed out any leaders not devoted to the mission.

Thus, the apparent intention of the leadership of Memorial Sloan-Kettering to stay uninvolved with this case ought to generate more cognitive dissonance.


Summary

The cognitive dissonances evoked by the case of the Abramson Institute vs Dr Thompson ought to inspire questions about what our academic medical institutions have become.  While they proclaim their devotion to research and teaching to improve health and health care, and advance science, they may increasingly act like commercial research organizations whose main goal is to generate increased revenue from products and services, and in this case, from intellectual property. 

It is hard to see how this emphasis on holding onto rather than disseminating new knowledge will be good in the long run for science, learning, or patient care.

We are now a good 30+ years into our ill-fated American experiment about the effects of turning medicine commercial and making health care a commodity. So far, it has yielded the highest costs in the world, but declining access, mediocre quality, and demoralized professionals.  Squabbling among top researchers and leading academic medical institutions over the ownership of intellectual property for the sake of revenue, not dissemination, is the latest symbol of the decline of our health care.

I can only hope that all the parties involved suddenly remember that they are supposed to be creating and disseminating knowledge, not just getting rich. 

How the Anechoic Effect Is Institutionalized - A Hospital Policy Against Unsupervised Discussion with the Media

In a single sentence, a short, obscure article in the Worcester (MA) Business Journal on life at a community hospital after a for-profit corporate take-over:

Several Nashoba employees, who didn't want their names used because it's against hospital policy to talk to the media without authorization, said they're happy with the new insurance plan.

We have often discussed the anechoic effect, how cases involving or discussions of the topics we address on Health Care Renewal, the concentration and abuse of power in health care, fail to produce any responses, or echoes.  It was almost an aside, but the sentence above provides evidence of the existence of apparently blanket hospital policies against unsupervised discussion with the media. Here is an example of the institutionalization of the anechoic effect.

This example raises three immediate questions. How prevalent is this? How long has it been going on? What is it meant to hide?

Prevalence

This article is only about a single hospital. However, the context of the article is the take-over of Nashoba Hospital by Steward Health Care. Steward Health Care is a for-profit health care corporation that grew out of the take-over of the formerly not-for-profit Caritas Christi health system by the private equity firm Cerberus Capital Management. Steward Health Care now comprises  eight hospitals, and also owns physician practices (apparently including over 2000 doctors based on a quick search using its "doctor finder" function.) Thus it is likely that the policy at Nashoba Hospital that prevents unsupervised discussion with the media also applies at seven other hospitals, and perhaps to the practices of over 2000 doctors. Thus it is very likely that this hospital gag policy is not unique, and may be widespread. However, recursively, the existence of such gag policies will make it hard to determine their own prevalence.

Note that we have posted a few times about confidentiality clauses mainly within physicians' contracts here.

Duration

This policy is likely relatively new, since the take-over of Caritas Christi by Cerberus occurred in 2010. My guess is that the rise of such policies may parallel the resurgence of for-profit hospitals and hospital systems, and perhaps the new involvement of private equity firms in such organizations.

In my humble experience, gag policies and confidentiality clauses at least within non-profit teaching hospitals were virtually unheard of from the time I began medical school (1974) to when I left my last full-time academic medical position (2005).

Note that we recently found out (because of investigative journalism about presidential candidate Mitt Romney's previous involvement with private equity firm Bain Capital) that such firms are generally rebranded leveraged buy-out firms. They have become known for their secretiveness. Therefore, maybe it should not be surprising that they have imposed such secretiveness on hospitals and health care professionals.

Rationale 

The big question is why should hospital employees not be allowed to talk to the media without management supervision? I can only speculate.

In this case, perhaps such secretiveness is just the habit of the private equity executives who now run the hospital system. Even if this is the reason, they ought to reconsider. Hospitals and health care professionals due have a solemn obligation to keep confidential their patients' medical information. However, otherwise health care organizations and health care professionals ought to be as transparent as possible.

Maintaining such a level of secrecy could lead to some suspicions, for example, that the generic managers of the organization distrust the professionals they hire who actually provide patient care; worse, that the managers fear discussion that might question their actions or abilities; worse, that the managers want to silence whistle-blowers; or even worse, that the managers have something unethical or illegal to hide. That is all speculation, of course.

On the other hand, we have discussed again and again how the anechoic effect has stifled discussion of what is wrong with health care, and hence prevented meaningful health care reform. Gagging hospital employees is an obvious extension and institutionalization of the anechoic effect. It should not be done, because we need honest discussion of what is really wrong with health care so we can come up with some real solutions.

CEO Compensation: Nothing to See Here, Just Move Along

An article in the Washington Post showed how uncomfortable executives of big corporations, including health corporations, are about making their outsize compensation transparent. 

Here’s one financial figure some big U.S. companies would rather keep secret: how much more their chief executive makes than the typical worker.

Now a group backed by 81 major companies — including McDonald’s, Lowe’s, General Dynamics, American Airlines, IBM and General Mills — is lobbying against new rules that would force disclosure of that comparison.

The lobbying effort began more than a year ago. It involved some of the biggest names in corporate America and meetings with members of both parties on the House Financial Services Committee and Senate banking committee.

The companies and their Republican allies in Congress call comparisons between the chief and everyone else in the company 'useless.'

It's not just useless, they also claimed:

Disclosing such comparisons 'can mislead or confuse investors,' said Rep. Nan A.S. Hayworth (R-N.Y.), who filed the bill to repeal the disclosure. 'It creates heat but sheds no light.'

She also said the calculation of the ratio would be a burden for companies, especially those with global operations.

One apparent reason for their discomfort is that the pay of top hired executives has been skyrocketing while the pay of most other employees stagnates:

'The real reason House Republicans want to keep the typical worker’s pay secret is that it may embarrass some companies to reveal that they pay their CEO in the range of 400 times what they pay their typical worker,' said Sen. Robert Menendez (D-N.J.), who added the requirement to the financial regulatory overhaul bill that passed last year.

Executive compensation at the nation’s largest firms has more than quadrupled in real terms since the 1970s, according to research by Carola Frydman of MIT’s Sloan School of Management and Raven E. Molloy of the Federal Reserve, even as pay for 90 percent of American earners has stalled.

In 1970, average executive pay at the nation’s top companies was 28 times the average worker income, according to the Frydman-Molloy data and numbers provided by Emmanuel Saez at the University of California at Berkeley. By 2005, executive pay had jumped to 158 times that of the average worker.

Behind the repeal effort are some of the largest US companies:

The Center on Executive Compensation has led the criticism of the provision. The group is part of the HR Policy Association, which represents the human resources executives at 325 large companies.

The thrust of the group’s criticism is that the information would have little value for investors comparing firms, because companies have workforces that differ in skills and expected pay. Wages also vary across regions and industries.

Current rules already require disclosure of executive compensation; the new requirement calls for the additional disclosure of median worker pay. Critics say that would add little to what is already known.

'You can already tell where a CEO falls relative to his peers,' said Tim Bartl, senior vice president and general counsel for the Center on Executive Compensation. 'You can already tell where he falls relative to the average worker in the industry. What is this number going to tell us?'

Last year, the HR Policy Association paid Bartl’s law firm, McGuiness & Yager, more than $1.5 million for lobbying, according to OpenSecrets.org.

The HR Policy Association's board of directors includes executives from some of the biggest health care corporations, including pharmaceutical and device firms (Amgen, Johnson and Johnson, and Merck), commercial health insurance companies and managed care organizations (Aetna, CIGNA, and Humana), and other firms with major health care interests (General Electric, Procter and Gamble).

Note that Mr Bartl's concession that calculation of the ratio would be simple seemed to contradict Rep Hayworth's claim that the calculation would be burdensome.

Summary

It certainly appears that top hired managers of big corporations are not happy about the common people seeing how huge their pay is compared to that of other workers. They seem particularly unhappy to have their own stockholders, the common people who actually own their companies and to whom they theoretically report see how much they are making. Perhaps they fear the realization that they may be running their companies more for their personal advantage than in the interests of their supposed owners, much less the other, lesser employees, much less their customers, clients and patients, much less the public at large.

The ability of small cabals of top executives at big corporations to set their own pay independent of the wishes and interests of the corporations' owners would seem to be the fundamental threat to the capitalistic and free market ideal. After all, in my humble and perhaps naive opinion, private ownership is central to capitalism, and the apparent managers' coup d'etat seems to be a existential challenge to private ownership. (For much more informed commentary on how executives have wrested control from owners, see the blog Naked Capitalism and Robert A G Monks' website.) One wonders why so few of the many vocal supposed supporters of capitalism and free markets fail to see this as a problem.

Even though it is increasingly informative to see what has happened to health care within the context of the larger political economy, Health Care Renewal, however, is about health care issues first. So to put this in health care terms....

First, we see again how top leaders of health care organizations prefer opacity to transparency, especially when that opacity increases their ability to put self-enrichment ahead of their organizations' missions and ultimately individuals' and the public's health. They embrace opacity when it protects the perverse incentives that likely are the major cause of increasing health care costs, declining access, and worsening quality.

To repeat, and repeat, and repeat.... to reform health care, we must reverse the managers' coup d'etat, and restore leadership of health care organizations that puts the mission, and the health of patients and the population first, and is accountable to corporate owners (when applicable) and to patients and the public.  But that will mean now going up against those who have made themselves the richest and most powerful people in the country and the world, who will not lightly give up their oligarchy.

VCU President Rao's Previous Code of Silence

We recently posted about the code of silence imposed by Virginia Commonwealth University President Stephen Rao on his staff.  It turns out now that this was not his first exercise in imposing a code of silence. Before he was at Virginia Commonwealth University, Rao was President of Central Michigan University.  Central Michigan Life just reported:

While serving as CMU president, Rao required all office employees to sign a similar confidentiality agreement stating all names, places, dates or incidents that happened in his office were not to be shared with anyone or discussed outside the office.

'I understand that the information and all files, letters, projects, telephone calls and anything relating to the work performed in the President’s Office and in my capacity as an employee is highly confidential,' stated the agreement, which was obtained through a Freedom of Information Act request. 'I understand that it may not be discussed with anyone outside this office who does not have a need to know, which includes any other CMU employee, as well as my family members, friends, etc.'

The CMU confidentiality agreement extended past any employee’s tenure at CMU, stating that the contract must not be broken past the term of employment. If an employee were to break the confidentiality agreement past employment, possible consequences included personal liability and potential lawsuits.

Note that just as was the case in Virginia, this agreement placed employees at risk not only of losing their jobs, but of being sued were they to violate the agreement.

By the way, while Central Michigan University does not include a medical school and academic medical center, as does VCU, it does have, and therefore the previous agreement affected the operations of multiple health related programs (see here) including allied health, health administration, physical therapy, and psychology.

As we wrote previously, such a code of silence subverts the university's central mission, and directly opposes the transparency I believe is necessary for good governance in health care.  The discovery of this previous confidentiality agreement at CMU suggests that such agreements may not be rare in health care. 

We have long discussed the anechoic effect in health care, how certain topics and issues are just not to be discussed, especially those that might embarrass or oppose the personal interests of health care leaders.  We have postulated that the effect operates through fear of offending supervisors, colleagues, or those who provide one's pay.  It may be, however, that the anechoic effect has been codified through confidentiality clauses.  As noted above, such codification can mean whistle-blowers may risk lawsuits as well as job loss and ostracism.

If there are other codes of silence operative in health care, I hope that sunlight soon shines upon them. 

That sunlight may cause such codes to shrivel is suggested by President Rao's rescinding of the code at VCU soon after it was made public, as reported by the Richmond Times-Dispatch:

With the board of visitors meeting yesterday to evaluate his performance, Virginia Commonwealth University President Michael Rao rescinded the confidentiality agreements he required employees working in his office to sign.

Rao sent employees a letter Wednesday that said the confidentiality agreements were intended "to protect the privacy of my family, particularly my children, in my home."

'The confidentiality agreements have been the subject of recent scrutiny and criticism and, unfortunately, have been misinterpreted in terms of what I sought to be accomplished by these agreements,' he wrote. 'I sincerely regret any undue burden or ill will that these agreements may have caused. Therefore, I have decided to withdraw all such confidentiality agreements.'

Such codes ought to be perceived as unethical, and perhaps should be made illegal.  Meanwhile, though, the anechoic effect continues.

A Confidentiality Clause or an Oath of Fealty?

The advancement of modern scientific medicine depends on the search for and dissemination of truth. Academic medicine, like the rest of academia, ought to be based on openness, transparency, and academic freedom. The 1940 American Association of University Professors (AAUP) Statement of Principles on Academic Freedom and Tenure opened with:

The common good depends upon the free search for truth and its free exposition.

Yet we have written about dark clouds of secrecy spreading over medicine and health care. The increasingly powerful leaders of health care increasingly use opacity and secrecy to keep what they are doing out of the public eye. We have frequently discussed the anechoic effect, how it is just not done to discuss certain topics, particularly those related to the adverse effects of bad (ill-informed, incompetent, self-interested, conflicted, or corrupt) leadership and bad (opaque, unaccountable, mission-hostile, unethical) governance of health care organizations.  People may feel it is unseemly to speak badly of renowned institutions such as hospitals and universities.  People with conflicts of interest may not be inclined to criticize those who pay them.  Now people employed by contemporary health care organizations may have to pledge theri silence to keep their jobs.

The latest story in this regard comes from Virginia Commonwealth University (VCU), which includes VCU Health Systems, and MCV Hospital and Physicians.  (Full disclosure: I was a VCU full-time faculty member from 1987-1994, and still am on the adjunct faculty.)  In 2008, the VCU President resigned after the university's secret research contract with a tobacco company, and the President's own position on the board of directors of another tobacco company were revealed (see blog post here and others here).

Michael Rao, the President since 2008, is now under outside review after it was revealed that he required his staff to sign a secrecy pledge.  The story appeared in the Richmond Times-Dispatch:

Virginia Commonwealth University President Michael Rao asks employees who work in his office to sign an unusual confidentiality agreement that bars them from talking about what they observe about him or his family.

The prohibition goes beyond the standard agreement that university employees sign acknowledging that they can't disclose personal or proprietary information.

The agreement, a copy of which was obtained by the Richmond Times-Dispatch, covers interactions at Rao's office and at his residence. It bars disclosure not just to the news media, family or friends, but also to colleagues, 'clergy and attorneys, or to any other person not otherwise identified.'

'I agree that any such disclosure in violation of this nondisclosure agreement could result in irreparable damage and harm to VCU, President Rao, and/or his family'" the agreement states. 'Any such violation or anticipated violation' would entitle Rao to seek 'injunctive relief' in Richmond or Henrico County circuit courts.

VCU spokeswoman Pam Lepley said she could not comment immediately yesterday.

Several current or former employees of the president's office confirmed that they had been asked to sign the agreement, including Kimberley Busch, Rao's former scheduler.

She described it as a 'what happens in the president's office stays in the president's office' agreement.

The newly uncovered confidentiality clause provoked strong criticism:

Raymond D. Cotton, a Washington attorney who specializes in higher-education governance, said such a confidentiality agreement is highly unusual and goes against the culture of openness and transparency in higher education.

'There is this concept of academic freedom that is broader than the First Amendment,' he said.

In fact, since Virginia Commonwealth University is a state-supported institution, the confidentiality clause may be unconstitutional, as reported by WTVR:

Kent Willis with the Virginia American Civil Liberties Union said the agreement doesn't pass constitutional muster.

'A public employee, no matter where they are in the government, has a right to speak out on matters of public concern,' Willis said. 'That's a U.S. Supreme Court case, it's guaranteed to every public employee by the First Amendment to the Constitution.'

Willis said there are numerous legal issues raised by the contract. But, he said, the bottom line problem with the contract 'is the attitude. This is a contract that says 'I'm not transparent. I don't want you to know what is going on. I'm running a closed shop.''

Times-Dispatch columnist Michael Paul Williams wrote:

VCU, we have a problem. This confidentiality agreement does not inspire confidence. The lack of transparency only gives the appearance that someone's hiding something.

He also further quoted Kent Willis:

Rao's contract 'fails to address this whistle-blower right and could create conflicts for employees, who are silenced by the employment contract,' yet have a constitutional right to speak out on some matters, Willis said.

And as Willis points out, even if a person's constitutional right trumps the contract, how many employees are willing to take that risk?

'Particularly disturbing is the prohibition against talking to an attorney,' he said. 'If an employee believes something illegal is going on at work, an attorney is precisely the person he or she should be talking with.'

We just posted about how a pharmaceutical company included a confidentiality clause in a consulting contract, suggesting the deliberate creation of a conflict of interest in order to prevent criticism of the company's products or practices. 

However, in several ways, the present example is more insidious.  First, it involves a university, whose mission is to discover and disseminate the truth.  Thus, as noted above, the confidentiality agreement subverts the university's core mission.  Second, it was required of full-time employees who wanted to keep  their jobs, making choose between secrecy and unemployment.  Third, it was particularly harsh, addressing incipient as well as actual disclosure, and including injunctive relief as well as the threat of  termination.  Fourth, it protected not just the organization and its products, but personally protected the organization's leader and his family.  It was not just a contract, but an oath of fealty, as if the CEO were nobility, or even royalty.

The good news is that this confidentiality agreement now sits in the glare of sunlight.  One does wonder, however, how many other such agreements are already in force so that the would be nobility who now run too much of health care to avoid any embarassing revelations about what their leadership really is about.

We are a long way from the transparency that true health care reform requires. 

About to be Bought-Out Non-Profit Hospital System Tries to Hide Executives' Golden Parachutes

A report from FloridaToday (in Brevard County) about the sale of a not-for-profit Florida hospital system to a for-profit corporation raises some interesting questions. The background is that the non-profit Wuesthoff Health System was bought by for-profit Health Management Associates (HMA):

HMA, a for-profit hospital management company in Naples, bought the not-for-profit Wuesthoff Oct. 1 for $145 million. Wuesthoff lawyer William Kopit has said it was forced to sell because the hospital system lacked the capital to compete.

The question is about the conditions of the sale:

A foundation formed to manage the proceeds of the sale and continue providing indigent health care has refused to disclose the executive packages to the state, claiming it constitutes a trade-secret exemption under Florida law.

This was despite the state Attorney General's authority to oversee sales of charitable non-profit organizations to for-profit entities:

Under its statutory obligation to oversee charities registered in the state, the Attorney General's Office requested the executive pay information from Wuesthoff, Wiggins said. Wuesthoff's lawyers submitted 40 pages of heavily redacted material. Negotiations led to Wuesthoff agreeing to redact only the names and compensation details of the executives.

The materials submitted suggested a lot of executives getting golden parachutes, but not the amounts or conditions involved:

The unredacted portions show as many as eight former executives receiving three years of salary paid out over 12 months, a pay-to-stay retention bonus for continuing to work for the company during sale discussions, a senior executive retirement package and regular retirement pay and extended health benefits. Based on Wuesthoff's tax returns, those payouts will be in the millions.

So, legal action will ensue:

'Therefore we will look to the court for guidance and abide by any judicial ruling on the public record and trade secret issues,' said Ryan Wiggins, communications director for the attorney general.

The notion that how much a for-profit corporation will pay in golden parachutes to former executives of a not-for-profit hospital system is a "trade secret" just boggles the mind.  What could a competitor possibly gain from this information that could lead to specific action that would disadvantage Wuesthoff?

On the other hand, it might be that the size of these golden parachutes, if revealed, would lead to some raised eyebrows, or worse.  Consider first the contrast between payments made and to be made to fortunate executives and the performance of the health care system. 

Note that what is available on the public record (via the hospital system's latest available, that is, 2008 form 990 disclosures to the US Internal Revenue Service) suggests that in the past, Wuesthoff executives were already quite well-paid. On that form we found the following total compensation reported:
Emil Miller, President: $927,543 ($523,069. compensation; $342,130, benefits; $62,344, benefits)
Brian Bodi, Controller: $184,789
George Fayer, CFO: $439,580
Johnette Gindling, Senior Vice President: $236,975
Marchita Marino, Senior Vice President: $264,529

Nearly a million dollars was a lot of compensation for the CEO of a small, non-profit hospital system in 2007.  Although there is no easily publicly available information about executive compensation since 2007 (the year covered by the 2008 report noted above), these high rates of compensation were paid by a hospital system that now apparently has so little capital that it no longer can "compete" without being bought by a for-profit corporation.   Now the executives who could not amass a competitive amount of capital will amass quite a sizable amount of personal riches.

Consider second the contrast between the extraordinary assertion that these golden parachutes should remain secret, and the hospital system's stated interest in "transparency," or its stated devotion to "five core values that drive our hospital and its mission: integrity, courtesy, compassion, competence and stewardship." It seems that preventing embarrassment about executive enrichment may trump transparency and integrity.

Health care, probably infected by the finance industry that brought us the global financial collapse, aka "great recession," seems to have been overcome by "compensation madness."  A central value of many health care organizations seems to be enriching their top leaders/ managers/ executives, no matter what the financial condition of the organization, or the performance of the leaders in terms of fulfilling the organization's mission.  From these perverse incentives, the perverse incentives favoring short-term financial performance over patient care seem to have sprung.  As Prof Mintzberg wrote, "All this compensation madness is not about markets or talents or incentives, but rather about insiders hijacking established institutions for their personal benefit."

If we truly want health reform that addresses spiraling costs, declining access, and threatened quality of care, we need to give health care practitioners and leaders positive incentives for being caring, competent, well-informed, and honest, not for clever financial manipulation and short-term profits, or just for managing to show up for work.

ADDENDUM (2 December, 2010) - 4 days after the above post, Florida Today reported that details about the golden parachutes were released:

[Emil] Miller, who ran Wuesthoff for more than a decade, received $6.25 million total. Of that, $2.2 million was severance pay and $3.2 million was retirement pay. The balance was the cost of his employee benefits.

Former CFO George Fayer has the next highest exit pay at $973,000, which includes a $171,000 for staying through the sale and transition. Fayer is a consultant to the foundation, Gindling said.

Chantal LeConte, who ran the Rockledge hospital, received the third highest payout, $553,000. LeConte's package included about $138,000 for staying through the transition.

Given that the health system was merged out of existence because it supposedly no longer had enough capital to "compete," now we see why system leaders were so reluctant to reveal the amounts.