Wednesday, October 20, 2010

Medical center has more than 6000 "issues" with Cerner CPOE system in four months - has patient harm resulted?

As I have written at Healthcare Renewal before, computerized physician order entry systems (CPOE's) are known to present risks to patients through induction of medical errors.

This technology is held out to be ready for national diffusion, right up to the POTUS. Per ONC director Blumenthal in the July 13, 2010 NEJM:

The widespread use of electronic health records (EHRs) in the United States is inevitable. EHRs will improve caregivers’ decisions and patients’ outcomes. Once patients experience the benefits of this technology, they will demand nothing less from their providers. Hundreds of thousands of physicians have already seen these benefits in their clinical practice.

Vendors deny major problems with their CPOE and other health IT products.

The true story is a bit more complex.

Fortunately, there are some medical centers who are open and honest about HIT problems. These medical centers seem a rarity. However, those that do share are actually conducting themselves in an honorable and mission-true manner, per Joint Commission Safety Standards, the ethics of the medical profession, and the expectations of the public. They should be commended.

One such example is Munson Medical Center in Michigan.

From the October 2010 "News for Physicians affiliated with Munson Medical Center" newsletter, a large medical center in Northern Michigan, about more than six thousand "issues" with their Cerner CPOE:

POE Program Continues to be Improved, Enhanced

The Provider Order Entry (POE) program continues to be improved. Since implementation in June [four months ago - ed.], more than 6,000 issues have been reported. Issues are defined as an aspect of the program not working as intended [does that include medication and treatment errors and 'near-misses'? - ed.], process issues [can these 'issues' kill? - ed.], education needs, or PowerPlan [Cerner - ed.] change requests.

About 600 of these remain open. Issues are prioritized by the POE Team and addressed according to existing standards.

One wonders how many of those 6,000, and how many of the 600 remaining "issues" fall into categories of "likely to cause patient harm in short term if uncorrected" or "may cause in patient harm in medium or long term."

I note that Cerner CPOE is not a new product, nor are similar products from other vendors also afflicted with long lists of "issues." That there could be more than 6,000 "issues" at a new site suggests deep rooted, severe problems with CPOE specifically and health IT design and implementation processes in general.

Did patient harm result here or at other CPOE sites (using products of any vendor, not just this one) that had hundreds or thousands of "issues"? We may never know.

That national rollout is mandated as if this technology were proven, safe, and plug and play is a scandal of UK NPfIT-like proportions.

-- SS

Tuesday, October 19, 2010

21st century EMR experiments: messing around with people's lives in a broke city, while not having a clue what you're doing

I was astounded to read the following passage in an interview of the current chief medical information officer at Detroit Medical Center ("DMC") Detroit, MI:

DMC tried CPOE in 2003 and said it would regroup and try it again. What lessons were learned from that first attempt?

In 2003 we did try at one hospital — a more community-based hospital — on two units. We did it on our rehab unit, the psych unit. I think the first lesson we learned there was that it was really just designed as, or worked out as, an IT project. I mean, it was really IT-led and there wasn’t clinical involvement from the get-go.

There wasn’t really a leadership pattern that had physician and nursing components to it. There wasn’t a design phase that included a lot of clinicians. There wasn’t leadership buy-in from the hospital. We took the product from the vendor and implemented what they gave us. It was really doomed to fail from the start. [Doomed, that is, due to inexcusable health IT illiteracy for the year 2003 - ed.]


This is striking for a number of reasons, least of which is the tone in which the failure is presented, a tone that suggests this failure and its "lessons" were banal in character and something that "just happens." It's as if by 2003 there was no other way to have done due diligence and learned these lessons, other than by actual experimentation on hospital floors with live patients and busy clinicians.

If this story had appeared about a health IT project in, say, 1983 or 1993, it would have been less remarkable. By 2003, however, the literature on how do do health IT "right" (and on how not to do it, including all the faults mentioned about DMC's efforts), was quite voluminous.

The medical informatics literature from AMIA and IMIA, textbooks such as Lorenzi and Riley's "Organizational Aspects of Health Informatics: Managing Technological Change" (ed. 1 - 1995), sites such as my own on HIT failures (freely available and one of the first hits one received via google on searches on "Healthcare IT failure" and similar concepts even then), and other resources could have prevented the CPOE failure - if someone at DMC or their consultants had had the meta-knowledge to know of their existence or the managerial savvy to ask, and the initiative to actually read the materials and heed the advice of experts.

Instead, this sounds like a classic example of hospital mismanagement, via not knowing what you don't know, and not caring.

What is described is a failure due to HIT naivete and managerial dyscompetence (or incompetence) around technology management that should not have existed in hospitals in an American city in 2003. One should wonder what other mishaps occured in other domains of medical technology under this type of "leadership."

Clinical personnel and patients are the potential victims - not laboratory rats. The story is certainly remarkable in terms of risk presented by this experiment on live patients, and again for its banal tone regarding that crucial issue. It is well known that poorly done CPOE is associated with medication errors, not a happy event on a psychiatry unit or PM&R/rehab unit (where elderly frail patients often abound).

The story is also remarkable due to the waste of money it represents in a city not exactly rolling in money, looking somewhat like Dresden after the WW2 firebombing and with wide sections of former residential land designated for demolition and "return to nature."

Instead of spending money on "let's try to figure out CPOE today, all by ourselves!" health IT experiments, perhaps the money could have been used for better care of Detroit's poor.

The "lessons learned" in 2003 could and should have been learned for free and without risk to patients - in a public library.

I ask:

  • Did patients get injured in this debacle? If they did, are the records sealed? We may never know.
  • Has DMC truly learned the lessons of 2003 fully, or do similar problems continue?
  • Were the executives responsible for this failure held accountable in any meaningful fashion?

Finally - and this is my major point - how many organizations in 2010 and beyond are similarly stuck in the stone age regarding how to "do health IT well"?

I believe the answer is "far too many."

-- SS

Monday, October 18, 2010

More on Hospital Market Dominance, Enabled by Secret Pricing

This week two more articles appeared describing how large hospital systems use market dominance to charge more.  Naturally, both were in news publications, not scholarly health services research journals.

San Francisco

Kaiser Health News (via the Contra Costa [CA] Times) discussed hospital market dominance in the San Francisco area.  The article documented how particular systems can command higher prices. Consider the example of John Muir Health vs San Ramon Medical Center:
Often, a hospital's dominance in an area helps determine how much it can charge, experts say. Consider John Muir Health, a two-hospital nonprofit system in the East Bay. With campuses in Concord and Walnut Creek, John Muir has the biggest footprint in the local hospital market, accounting for 54 percent of all the acute care inpatient stays in 2009, more than any other hospital group, according to state data.

The hospital with the weakest market penetration is San Ramon Medical Center, a Tenet-owned, for-profit hospital, with 10 percent of the acute care inpatients.

The least the insurer Aetna paid John Muir for an outpatient colonoscopy was $3,185, according to Aetna's website, which tracks two years of payments. Aetna paid $1,483 to San Ramon Regional Medical Center for the same service. The least Aetna paid John Muir for an uncomplicated birth was $7,722, while its lowest price for a birth at San Ramon was $5,278.

Yet on broad quality measures, John Muir's hospitals generally score no better than San Ramon's, according to the California Hospitals and Reporting Taskforce, a nonprofit that produces hospital report cards published at Calhospitalcompare.org.

San Ramon ranks equal to John Muir's Walnut Creek campus in most major measures, including mortality rates in the intensive care units, overall patient satisfaction and maternity care. John Muir's Concord campus ranks below San Ramon on several measures, including mortality rate and patient experience, though John Muir was rated better in avoiding complications for patients on ventilators.

Then there is Sutter Health:
[Stanford University associate vice president for Benefits Les] Schlaegel says so many employees like to see doctors at the Palo Alto Medical Foundation, a doctors' organization affiliated with Sutter with a clinic near the Stanford campus, that the university feels obliged to keep offering insurance networks that include Sutter.

'Sutter basically has a stranglehold on Northern California,' says Schlaegel. 'They are strategically situated, both for hospitals and medical groups. They know purchasers need them. When you are strategically located, you can say 'this is our price and you can pay it.''

Secret Pricing
The ability of dominant hospitals to charge higher prices is facilitated by secrecy in which hospital pricing is cloaked
The hospitals haven't made it easy for consumers to comparison shop. State law requires hospitals to reveal their charges for specific services. But those charges don't reflect the lower negotiated rates insurers actually pay - rates hospitals usually insist be kept secret. The California Hospital Association has opposed legislation to ban such 'gag clauses'; the most recent of these bills died in the state Assembly in August.

Hospitals have also resisted a four-year campaign by the Pacific Business Group on Health, an employer coalition, and CalPERS to create a 'hospital value initiative' that would allow hospital comparison based on cost and quality of care.


Summary
In many cases, hospitals are able to keep raising prices beyond inflation because their sizes or reputations give them clout in negotiating rates with insurers, researchers say. Yet high prices don't always equate with superior care.

Quality measures for some of the Bay Area's most prestigious hospitals, including Stanford and John Muir, show that in some instances, less expensive competitors perform as well or better in their basic responsibilities, such as avoiding infections and high death rates for patients in intensive care.

'Some hospitals are able to charge higher prices than the market normally would bear, even without providing higher quality,' says Dr. R. Adams Dudley, a professor of medicine and health policy at the University of California, San Francisco. 'That means they're getting those higher prices without really offering more to patients or the rest of society.'
New York City


Meanwhile, a long feature story in New York magazine about the demise of St Vincent's hospital (see our post here) also discussed the market power of its competitors as one factor in its decline:
The city’s largest and most powerful hospitals, which are crucial to an insurer’s customers, exert their leverage to secure deals that are believed to pay well above the average margin; smaller hospitals, which are often located in low-income neighborhoods, have little choice but to accept the dismal rates dictated by insurers if they want to remain in the insurers’ plans. 'When the big players take their cut, there are only scraps left for everyone else,' says the CEO of an outer-borough hospital. “'United HealthCare couldn’t care less about having my hospital in their network. They tell me to take it or leave it.
Secret Prices

Like in California, market dominance is enabled by secret pricing:
the rates negotiated between hospitals and insurance providers are withheld from public scrutiny—even state health and insurance regulators are denied the information
Free Markets?

Secret prices determined by market power hardly sound like characteristics of a free market. Yet in New York, at least, they seem partially to be the result of the free market ideology of previous political leaders:
Then George Pataki took office in 1995, determined to allow hospitals to test their mettle in the free market by negotiating their own terms with insurers. It turned out to be an exercise in shock-therapy capitalism. Inexperienced at the bargaining table, hospitals engaged in intramural rivalry with each other, cutting unfavorable deals with insurers in order to hold on to patients in the short term. With their already thin margins pared down further by deregulation, many hospitals soon built up paralyzing debt loads. Even the largest and seemingly least vulnerable facilities decided that their best hope for survival was to get bigger. A flurry of mergers and buyouts ensued, and by the end of the nineties, the hospital system began to assume its current bewildering patchwork of partnerships and affiliations. Columbia Presbyterian and New York Hospital, both attached to elite medical schools, joined forces. NYU and Mount Sinai forged a deal (it later came undone). On the eastern edge of the city, North Shore hospitals merged with nearby Long Island Jewish, staking out an enormous swath of the hospital market on Long Island, Queens, and Staten Island. Beth Israel and St. Luke’s–Roosevelt, debt-ridden and left on the sidelines by the major academic hospitals, decided to try making a go of it together. It was unclear if bigger was actually better—for patients or the bottom line—but size seemed to offer hospitals a buffer against collapse.

By 2005, less than a decade into its dalliance with free enterprise, the city’s hospital system had taken on something of a post-Soviet tinge, with winners ruling the roost like oligarchs and losers reduced to a state of grim dependency. A pecking order emerged, with elite academic centers at the top, well-regarded independent hospitals like Lenox Hill in the middle, and community hospitals on the bottom.
Summary

We have previously written (for example, here and here) about how increasing market dominance by large, sometimes strategically located, and sometimes politically well-connected (e.g., see here) hospital systems run by conflicted leaders. This seems like another unintended consequence of the "free markets solve all problems" ideology, possibly fueled by conflicts of interest that has done so badly in our financial arena (see here). What some of these free market enthusiasts seem to forget, their forgetfulness perhaps fueled by payments received from the large corporations that have profited from this movement, are that true free markets are hard to maintain. This is particularly so in health care, in which knowledge is asymetric, outcomes are uncertain, and sick and anxious patients have trouble making cool, rational choices (as per Arrow, see this post.)

But if the free market enthusiasts really believe in free markets, why have they not been out campaigning to prevent the "unfree" characteristics, like secret pricing, of current health care markets?  Of course, ending secret pricing might compromise the ability of their financial sponsors to keep earning their millions

Sunday, October 17, 2010

Last Week's Scandals

The march of settlements and other unfavorable legal results for health care organizations continued last week, in alphabetical order

CVS Settles for $77.6 Million for Violating the Controlled Substances Act

As reported by Bloomberg,
CVS Caremark Corp. agreed to pay $77.6 million to settle claims that some of its stores in California and Nevada allowed criminals to buy cold medications that were used to make methamphetamine.

The pharmacy chain will pay a $75 million fine, the largest civil penalty ever paid under the Controlled Substances Act, and forfeit $2.6 million in profits from the illegal sales, the U.S. Attorney’s Office in Los Angeles said today in a statement.

Between September 2007 and November 2008, CVS failed to ensure that stores in Southern California complied with laws limiting sales of over-the-counter drugs made with pseudoephedrine, which allowed methamphetamine traffickers to buy large amounts of the drugs, according to the statement. CVS changed its sales practices only after it became aware of the investigation, prosecutors said.

What was unusual about this case is that the company's CEO actually seemed to acknowledge that it did something wrong, and vowed change:
'While this lapse occurred in 2007 and 2008 and has been addressed, it was an unacceptable breach of the company’s policies and was totally inconsistent with our values,' CVS Chief Executive Officer Thomas Ryan said in a statement. 'We have strengthened our internal controls and compliance measures and made substantial investments to improve our handling and monitoring of PSE.'
Amazing, a CEO acknowledging that his corporation's values include complying with the law... [sarcasm off]
Note that we most recently posted about a settlement by CVS, one by CVS Caremark for improperly charging a public entity, in September, 2010, here.

Johnson & Johnson Found Liable for $257.7 Million for Fraud

As reported by Bloomberg,
Johnson & Johnson lost a $257.7 million jury verdict in Louisiana for making misleading claims about the safety of the company’s Risperdal antipsychotic drug.

J&J officials defrauded the state’s Medicaid system by wrongfully touting Risperdal as superior to competing antipsychotic drugs and minimizing its links to diabetes, said jurors in state court in Opelousas, Louisiana.

Specifically,
The jury found 35,542 violations of the state’s Medical Assistance Programs Integrity Law and imposed a penalty of $7,250 for each. The total $257.7 million verdict is the fifth- largest in the U.S. so far in 2010, according to data compiled by Bloomberg.

'You can’t come into Louisiana and disseminate false and misleading information,' Patrick Morrow, who represented the state, said after the verdict in a phone interview. 'I’m sure this matter will be in the appellate courts for years to come. This is the first step.'

The state’s case centered on drug safety claims that J&J and Ortho-McNeil Janssen made in November 2003 correspondence to 700,000 doctors. In those letters, J&J touted Risperdal as safer than competing antipsychotics such as Indianapolis-based Eli Lilly & Co.’s Zyprexa and London-based AstraZeneca Plc’s Seroquel. Risperdal global sales peaked at $4.5 billion in 2007, declining after the company lost patent protection.

The U.S. Food and Drug Administration responded with a warning letter saying J&J made false and misleading claims that minimized the potentially fatal risks of diabetes and overstated the drug’s superiority to rival medicines.

Lawyers for the state asked jurors to hold J&J liable for the 7,604 letters it sent to Louisiana doctors and regulators making those claims along with more than 27,542 sales calls in the state made by the drugmaker’s representatives in 2003 and 2004.

Note that we last discussed problems at Johnson and Johnson, those being manufacturing issues leading to contaminated drugs, in September, 2010, here.

Medtronic Settles for $268 Million for Personal Injuries

As reported by the Minneapolis Star Tribune,
Medtronic Inc. has agreed to pay $268 million to settle thousands of lawsuits that patients filed after a 2007 recall of a faulty heart defibrillator wire that caused at least 13 deaths.

The settlement announced Thursday covers some 8,100 personal injury lawsuits in both federal and state courts over Medtronic's popular Sprint Fidelis lead, which was implanted in some 235,000 people when the company recalled the device after a small number fractured. The malfunction could cause the defibrillator to stop working or to inappropriately shock patients -- a frightening and uncomfortable experience, but usually not life-threatening.

The cases had been lingering in a kind of legal limbo that began with a 2008 U.S. Supreme Court decision involving another Medtronic case that prevented many patients with faulty medical devices from filing suit against the makers of those products.

Rather than wait for a definitive resolution to various legal appeals, the Fridley-based medical technology giant agreed to end the three-year legal battle with a settlement.

Note that we last discussed Medtronic's payments to physicians, in June, 2010, here.

Summary

Ho-hum, another week, another set of settlements, convictions, and/or verdicts unfavorable to large, important health care organizations. Although all the actions above would result in seemingly large payments by the companies involved, all of the payments were trivial in size compared to the companies' revenues. Note that in none of the cases above did any individual pay any penalty. In only one of the cases did a corporate leader acknowledge that bad things were done, but should be done no more.

As we have noted infinitum, penalties that only appear to be (relatively small) costs of doing business are unlikely to deter future bad behavior. Until the people who actually authorized, directed and implemented the bad behavior have to suffer some negative consequences, expect the bad behavior to continue.  Note that each of the companies discussed above have had their previous ethical lapses discussed in previous Health Care Renewal posts.

The continuing march of settlements, and sometimes criminal convictions involving major health care organizations should be regarded merely as providing a floor to estimates of the extent of bad behavior by large health care organizations. Bad behavior may not be reported, or lead to legal action, and legal action may not lead to settlements or convictions. However, it is amazing how many organizations that were once regarded as exemplary have had to settle, or plead guilty, or been convicted.

When it comes to health care's leadership, society seems to have acceded to defining deviancy down. Until we start holding health care leaders to high standards, expect their organizations not to uphold high standards.

Friday, October 15, 2010

More Contaminated Heparin, But Who Leads the Company Who Supplied It?

We have posted multiple times over the last two years about the deadly contaminated heparin from China. (See the case summary and link at the end of this post.)

One of the key players in this case was a company called Scientific Protein Laboratories (SPL). The company that sold the heparin in the US under its logo, Baxter International, had outsourced production of the active ingredient to a long, and ultimately mysterious supply chain. Baxter got the active ingredient from Scientific Protein Laboratories, which in turn obtained it from a factory in China operated by Changzhou SPL, which in turn was owned by Scientific Protein Laboratories and by Changzhou Techpool Pharmaceutical Co. Changzhou SPL, in turn, got it from several consolidators or wholesalers, who in turn got it from numerous small, unidentified "workshops," which seemed to produce the product in often primitive and unsanitary conditions. None of the stops in the Chinese supply chain had apparently been inspected by the US Food and Drug Administration nor its Chinese counterpart.

Even More Contaminated Heparin?

Now it looks like SPL may have sold contaminated heparin elsewhere, after the above story of the contaminated heparin sold by Baxter became public, as reported by Alicia Mundy in the Wall Street Journal:
A major U.S. heparin wholesaler received a complaint from a corporate customer about a contaminated batch of blood thinner in October 2008, but didn't investigate for almost a year, according to a recent Food and Drug Administration notice to the company.

Scientific Protein Laboratories LLC got the customer complaint months after the FDA announced nationwide recalls of many heparin products.

In more detail,
In a report last month, reviewed by The Wall Street Journal, the FDA told SPL that it 'did not adequately investigate a complaint that affected product quality.' The report said SPL didn't begin a probe of the contamination complaint until September 2009, and failed to investigate 'other lots of heparin that may have been associated with the complaint.'

The FDA said Wednesday it cited SPL for 'violations of current good manufacturing practice' and is still investigating. 'FDA believes the issue does not present a significant public-health risk,' it said. An FDA spokeswoman said the batch in question never reached patients.

After SPL looked into the October 2008 complaint, it found that the contaminated raw material was used in two processed batches of heparin , the FDA report said. SPL ended its review of one batch in June 2010. It didn't investigate the second, the FDA said.

It looked like this instance of contaminated heparin did not pose a public health hazard because the company to whom it was shipped, possibly alerted by the case above, tested and rejected the SPL heparin
SPL said Wednesday the heparin lots in question 'passed all the then-required, state-of-the-art testing' to detect contamination, however trace amounts of contaminant, oversulfated chrondroitin sulfate, were found by a customer using their own specialized testing. The company also said no adverse events were reported involving the batch in question. [Ed - apparently because the buyer realized the problem and never used the batch in its products that were provided to the public.]

So even after the whole problem of oversulfated chrondroitin sulfate contaminated heparin had become a public scandal, the company that passed along the heparin that became subject of that scandal had "state-of-the-art testing" that could not adequately detect that specific contaminant, although the company to whom it sold the heparin apparently was able to test for it.

Providing pure, unadulterated products is the most elementary responsibility of drug companies. The US Food and Drug Administration was set up mainly to ensure the purity of drugs (and only later, to ensure their effectiveness and then safety). Yet some US companies have proven unable to assure the purity of their products. (For another prominent case, go here.)  Now we have an instance in which a company still seemed unable to check their products for impurities even after they knew dangerous impurities could be present and had been present in other batches of the products they sold, and even after other companies had figured out how to perform such checks.

As we have said before, seemingly infinitum, if we want a health care system that provides good quality, affordable, accessible care, we need health care leaders who put the wellbeing of patients ahead of their own pocketbooks, and to hold them accountable for doing so.

Holding Leaders Accountable, If Only One Could Find Them

By the way, this case further illustrates how far from that ideal we are, because it is not even obvious who the leaders of SPL who ought to be held so accountable actually are.  The SPL web-site says nothing about corporate governance or leadership. 

After some Google searching, it turns out that the reason for this is that SPL was bought out by private equity firm American Capital Strategies Ltd in 2006, two years before the contaminated heparin scandal became manifest.  Although American Capital Strategies Ltd is publicly traded, its 2010 proxy statement and most recent publicly available annual report (of 2008) say almost nothing about SPL.  Private equity firms are known for acquiring troubled companies and trying to turn quick profits from them, often from stringent cost-cutting and selling off assets.  They are not particularly known for their devotion to better patient care.  None of the top executives and directors of American Capital Strategies Ltd seem to have health care backgrounds or experience or any other reason to sympathize with the core values of health care professionals.

Further Google searching did suggest that the CEO of SPL is one David G Strunce, but revealed little biographical information about him.  How he and other executives of that company might better be held accountable is not obvious.

So what will it take to get the leaders of pharmaceutical companies to take their responsibility to provide pure, unadulterated drugs more seriously? How will society be able to better hold those leaders accountable?  How can we get leaders of health care to put the health of the people ahead of their own financial returns? 

The case of the adulterated heparin suggests these questions will not be easily answered.

Case Summary

In summary, Baxter International imported the "active pharmaceutical ingredient" (API) of heparin, that is, in plainer language, the drug itself, from China. That API was then sold, with some minor processing, as a Baxter International product with a Baxter International label. The drug came from a sketchy supply chain that Baxter did not directly supervise, apparently originating in small "workshops" operating under primitive and unsanitary conditions without any meaningful inspection or supervision by the company, the Chinese government, or the FDA. The heparin proved to have been adulterated with over-sulfated chondroitin sulfate (OSCS), and many patients who received got seriously ill or died. While there have been investigations of how the adulteration adversely affected patients, to date, there have been no publicly reported investigations of how the OSCS got into the heparin, and who should have been responsible for overseeing the purity and safety of the product. Despite the facts that clearly patients died from receiving this adulterated drug, no individual has yet suffered any negative consequence for what amounted to poisoning of patients with a brand-name but adulterated pharmaceutical product.



(For a more detailed summary of the case, look here.)

Dr Coca-Cola, Meet Dr Butterfinger

First, it was the American Academy of Family Practice accepting money from Coca-Cola to support educational programs to foster a "healthy lifestyle," (see our post here, and the post by Dr Howard Brody here that also linked to his article in Annals of Family Medicine.)

Now, it is the American Academy of Pediatrics accepting money from Nestle, specifically, the NestleNutrition Institute, to support "obesity prevention and care."  The AAP news release (here) said: 
HEALTHY ACTIVE LIVING FOR FAMILIES (HALF): RIGHT FROM THE START is a program of the American Academy of Pediatrics (AAP). It is sponsored through the generous support of the Nestlé Nutrition Institute (NNI). The goal of the HALF project is to develop and test a series of positive, family-focused messages specific to obesity prevention and care for the following developmental stages: infancy, toddlerhood, and early childhood/preschoolers, which can be used at pediatric well-child visits. These messages and materials will be unique from those already in existence because they will be crafted using the medical home framework, a developmental approach to children’s care, and parent-tested.

Nestle, of course, is the manufacturer of all sorts of delicious, gooey chocolate candies.  (Full disclosure: I have been known to eat Nestle chocolate products.)

So far, this notable collaboration has drawn some criticism in the blogsphere, e.g., in the Breastfeeding Medicine blog, by DrAlison Stuebe:
The AAP should not be taking money for an anti-obesity project from an institute whose parent company sells candy and ice cream — and hawks flawed advice designed to undermine breastfeeding mothers.

If the AAP is really 'dedicated to the health of all children,' they should send that check back to Nestle and start over. American families deserve nothing less.

Also, consumer advocates have come out against this dubious alliance, as mentioned in the WalletPop blog.

So far, I have seen nothing in the main-stream media about this. 

Clearly, this raises the same sorts of issues that the alliance between the AAFP and Coca-Cola raised.  In summary, pediatricians are trusted by parents to give advice not just about drugs, vaccines, and surgery, but about diet, exercise, life-style, etc.  Having the most respected pediatric professional society hawking a diet and life-style program paid for by a chocolate manufacturer risks biasing the advice that its members give, and threatening the trust parents and children have in their pediatricians.  The AAP has been previously criticized for providing guidelines advocating extremely aggressive drug treatment for childhood hyperlipidemia amid questions about whether support from the pharmaceutical industry, including "$433,000 from Merck, $835,250 from Abbott Laboratories’ Ross Product Division and $216,000 from the Bristol-Myers Squibb company Mead Johnson Nutritionals," biased these guidelines. (Amounts were from 2007, per the New York Times)  Once a medical society becomes accustomed to living off corporate largess, it may not be a big leap to add funding from Nestle to that from drug companies. 

I respectfully submit that professional organizations which wish to be seen as upholding physicians' professionalism should not be taking money from corporations that may see physicians' advice and prescriptions as means to market their products.  Professional organizations that do take such money risk being viewed more as arms of corporate marketing than as upholders of physicians' ideals.  (And the medical home they advocate may be seen as a house made of chocolate.)

Tuesday, October 12, 2010

Synthes and its Subsidiary Plead Guilty, Boss Remains Billionaire.

In December, 2009, we updated the story of Swiss-based medical device company Synthes and the marketing by its Norian division of a bone cement.  At that time, US authorities charged the company with use of an unapproved product in about 200 patients, three of whom suffered untimely deaths.  At that point, four US based Synthes executives had pleaded guilty to charges related to this affair. 

Last week, another shoe dropped.  As reported by the Associated Press,
A medical devices company will admit criminality and pay the maximum $23 million fine for illegally testing bone cement on about 200 spinal patients, three of whom died in surgery, U.S. prosecutors said Monday.

Norian Corp. trained surgeons to conduct unapproved clinical tests of its bone cement from 2002 to 2004, subverting U.S. Food and Drug Administration safeguards, prosecutors said. The trials were stopped after the third patient death, they said.

The cement, which is used to fill in bone defects, is approved for use in the arm but not the load-bearing spine, authorities said. The surgeries often involved older patients with compression fractures, they said.

The results are:
Norian will plead guilty to conspiracy to impede FDA functions, a felony, and 110 misdemeanor counts of interstate shipping of misbranded Norian XR. Synthes will plead guilty to the same misdemeanor shipping count.

As part of the agreement, Norian will be sold to an outside buyer, the parent company said.

Imposing divestiture of the offending subsidiary was unusual, according to the Philadelphia Inquirer:
Forcing a divestiture of a business unit in a plea agreement was precedent-setting for the U.S. Attorney General's Office in the Philadelphia area, spokeswoman Patricia Hartman said Monday.

Officials with the Office of the Inspector General in DHHS said the divestiture should send a message to other health-care companies that Synthes' behavior had grave consequences.

'Criminal conduct can result in a company getting rid of part of their business,' Greg Demske, a top official with the Inspector General, said Monday. 'This is an egregious case, and it made us firm in our belief that we should draw a line here,' he said.

If it remained a subsidiary of Synthes, Norian would be excluded from participating in Medicare and other government-funded health care programs, which would be potentially devastating to its business. According to a divestiture agreement released Monday by the U.S. Attorney in Philadelphia, Synthes has to sell Norian by May 24.

The assets of Norian would not be allowed to be transferred to another part of the Synthes 'corporate family' as part of the divestiture, Demske said.

Synthes will update the government monthly on its plans to divest Norian, and if it fails to sell the company by the May deadline, it can be fined $10,000 a day.

So does this case signal a new toughness by US authorities in cases of bad behavior by health care corporations?

According to the Wall Street Journal, Synthes officials were not exactly quaking in their boots because of these penalties, as their spokesperson said Synthes "does not expect this settlement to have any significant financial impact." Synthes would only be liable for fines of "about $24.3 million in total." That pales in comparison to the "company['s] posted total sales of $3.4 billion last year." As for the divestiture of Norian, the WSJ reported, "a spokesman said Monday that the Norian unit is mostly active in product development and isn't actively selling products. That business has fewer than 100 employees,...."

In fact, company leadership did not seem to realize that they did anything wrong, despite the company and four executives pleading guilty to crimes, actions involving the death of three patients,
'Synthes remains committed to operating in accordance with the highest legal and ethical standards, and bringing closure to this matter will permit the company to focus on its mission to improve patient care,' the company said.
Furthermore, while this is one of the few cases in which some company executives actually may have to pay penalties (after pleading guilty to at least misdemeanors), the big fish appeared to get away. As we discussed last year, an unindicted "person no. 7" was alleged to have set up the scheme to "test" the bone cement in a clinical series. Person No. 7 was at that time identified as the company CEO. That CEO, according to the Philadelphia Inquirer last year, was one Mr Hansjorg Wyss, noted to have a fortune estimated at $5.7 billion, making him the richest man in Philadelphia, and the 83rd richest man in the world, according to Forbes magazine.  (See this post.)   The settlement of this case would apparently have no impact on his immense wealth.

So although this case has some unusual wrinkles, and may yet yield some negative consequences for some of the people involved in the direction and implementation of the wrong-doing, it would appear to leave unscathed the person who has personally profited the most from the company, and its actions, including its less savory actions.  There is progress here, but only a little.

Once again, it appears that in the eyes of the law, top corporate leaders are different from you and me.  They appear immune from the penalties that lesser individuals may suffer.  They have impunity to continue to amass wealth even wealth that results from actions that were deemed illegal.   Real health care reform needs to make health care leaders accountable, and especially accountable for the bad behavior that helped make them rich.

Friday, October 08, 2010

Another Wheel Already Invented (in 1988) - the WHO Ethical Criteria for Medicinal Drug Promotion

At the 2010 Gezonde Scepsis (Healthy Skepticism) "Selling Sickness" conference, I was made aware of another wheel invented a long time ago, the 1988 WHO Ethical Criteria for Medicinal Drug Promotion, a document about which few now seem to be aware.  Were this code to have been widely followed, it might have prevented some of the problems afflicting the pharmaceutical industry today.

Some relevant quotes follow:

Drug Promotion

6. In this context, 'promotion' refers to all informational and persuasive activities by manufacturers and distributors, the effect of which is to induce the prescription, supply, purchase and/or use of medicinal drugs.

7. Active promotion within a country should take place only with respect to drugs legally available in the country. Promotion should be in keeping with national health policies and in compliance with national regulations, as well as with voluntary standards where they exist. All promotion-making claims concerning medicinal drugs should be reliable, accurate, truthful, informative, balanced, up-to-date, capable of substantiation and in good taste. They should not contain misleading or unverifiable statements or omissions likely to induce medically unjustifiable drug use or to give rise to undue risks. The word 'safe' should only be used if properly qualified. Comparison of products should be factual, fair and capable of substantiation. Promotional material should not be designed so as to disguise its real nature.

8. Scientific data in the public domain should be made available to prescribers and any other person entitled to receive it, on request, as appropriate to their requirements. Promotion in the form of financial or material benefits should not be offered to or sought by health care practitioners to influence them in the prescription of drugs.

9. Scientific and educational activities should not be deliberately used for promotional purposes.

Note that these provisions would seem to prohibit promotional efforts begun before a drug is legally approved (e.g., ghost-writing as in this case), the use of "key opinion leaders" without full disclosure of their role as marketers of drugs, suppression of clinical research sponsored by pharmaceutical companies whose results did not support these companies' marketing interests, e.g. studies which failed to show efficacy of their products, nearly all kinds of payments to physicians, and nearly all pharmaceutical sponsored continuing medical education.

Medical Representatives

17. Medical representatives should have an appropriate educational background. They should be adequately trained. They should possess sufficient medical and technical knowledge and integrity to present information on products and carry out other promotional activities in an accurate and responsible manner. Employers are responsible for the basic and continuing training of their representatives. Such training should include instruction regarding appropriate ethical conduct taking into consideration the WHO criteria. In this context, exposure of medical representatives and trainees to feed-back from the medical and allied professions and from independent members of the public, particularly regarding risks, can be salutary.

18. Medical representatives should make available to prescribers and dispensers complete and unbiased information for each product discussed, such as an approved scientific data sheet or other source of information with similar content.

19. Employers should be responsible for the statements and activities of their medical representatives. Medical representatives should not offer inducements to prescribers and dispensers. Prescribers and dispensers should not solicit such inducements. In order to avoid over-promotion, the main part of the remuneration of medical representatives should not be directly related to the volume of sales they generate.

Note that these provisions appear to prohibit the current cheer leader/ ex-athlete model of the drug representative, and to prohibit many of the current activities of such representative, including providing gifts, meals, travel to meetings, honoraria, etc  (e.g., see posts here and here).

If only these standards had gotten some traction, think of the trouble that could have been averted.  On the other hand, it is obvious that such traction would have threatened some peoples' lucrative incomes and power, who may have worked hard to make sure it did not happen.

Wednesday, October 06, 2010

What a Conflicted Web We Weave: Academic Economists, Finance, the Global Economic Meltdown, and the Impending Health Care Collapse

We have been writing about conflicts of interest in health care now for a long time.  We started with a focus on academic physicians'  and leaders' financial ties to pharmaceutical/ biotechnology/ device companies, then went on to the intense conflicts generated by academic medical and other health care non-profit leader who also sit on boards of directors of for profit health care corporations, and to conflicts affecting various kinds of respected not-for-profit health care organizations, like medical societies and patient advocacy groups.

Meanwhile, we uncovered the curious dominance of the boards of some health care organizations by leaders in the finance world, including some of the leaders of the failed companies that brought us the "great recession."  This did seem like a leadership problem for health care, in terms of the dominance of health care leadership by the elite of another industry that did not exactly seem to share the values we physicians swear to uphold.  However, it did not seem to be a conflict of interest problem, until now.

The Chronicle of Higher Education just published an article by the director of a soon to be released documentary on conflicts of interest and academics, but this time academic economics.

Charles Ferguson, the author, used as an example the Larry Summers, the former President of Harvard University (and hence leader of the Harvard Medical School, School of Public Health, and Harvard's teaching hospitals).  We had commented here about Summers' poor fit for the role of an academic medical leader, and here and here about the dominance of Harvard leadership by leaders of (sometimes failed) financial institutions.  Ferguson summarized (bad pun, sorry) the problem thus:
Summers is unquestionably brilliant, as all who have dealt with him, including myself, quickly realize. And yet rarely has one individual embodied so much of what is wrong with economics, with academe, and indeed with the American economy.

The problem is essentially one of huge conflicts of interest:
the revolving door is now a three-way intersection. Summers's career is the result of an extraordinary and underappreciated scandal in American society: the convergence of academic economics, Wall Street, and political power.

Summers bear huge responsibility for the current economic mess:
Consider: As a rising economist at Harvard and at the World Bank, Summers argued for privatization and deregulation in many domains, including finance. Later, as deputy secretary of the treasury and then treasury secretary in the Clinton administration, he implemented those policies. Summers oversaw passage of the Gramm-Leach-Bliley Act, which repealed Glass-Steagall, permitted the previously illegal merger that created Citigroup, and allowed further consolidation in the financial sector. He also successfully fought attempts by Brooksley Born, chair of the Commodity Futures Trading Commission in the Clinton administration, to regulate the financial derivatives that would cause so much damage in the housing bubble and the 2008 economic crisis. He then oversaw passage of the Commodity Futures Modernization Act, which banned all regulation of derivatives, including exempting them from state antigambling laws.

Also,
Over the past decade, Summers continued to advocate financial deregulation, both as president of Harvard and as a University Professor after being forced out of the presidency.

Not only did Summers set up the structure that allowed reckless bets with other people' money on opaque financial derivatives by finance leaders who stood to make huge gains if they won their bets, but could foist all losses on others, but he actively attempted those who tried to warn us all of the impending economic collapse.
Summers remained close to Rubin and to Alan Greenspan, a former chairman of the Federal Reserve. When other economists began warning of abuses and systemic risk in the financial system deriving from the environment that Summers, Greenspan, and Rubin had created, Summers mocked and dismissed those warnings. In 2005, at the annual Jackson Hole, Wyo., conference of the world's leading central bankers, the chief economist of the International Monetary Fund, Raghuram Rajan, presented a brilliant paper that constituted the first prominent warning of the coming crisis. Rajan pointed out that the structure of financial-sector compensation, in combination with complex financial products, gave bankers huge cash incentives to take risks with other people's money, while imposing no penalties for any subsequent losses. Rajan warned that this bonus culture rewarded bankers for actions that could destroy their own institutions, or even the entire system, and that this could generate a 'full-blown financial crisis' and a 'catastrophic meltdown.'

When Rajan finished speaking, Summers rose up from the audience and attacked him, calling him a 'Luddite,' dismissing his concerns, and warning that increased regulation would reduce the productivity of the financial sector. (Ben Bernanke, Tim Geithner, and Alan Greenspan were also in the audience.)


Amazingly, rather than ending up an economic pariah after that, Summers regained power over the economy in the last few years.
Then, after the 2008 financial crisis and its consequent recession, Summers was placed in charge of coordinating U.S. economic policy, deftly marginalizing others who challenged him. Under the stewardship of Summers, Geithner, and Bernanke, the Obama administration adopted policies as favorable toward the financial sector as those of the Clinton and Bush administrations—quite a feat. Never once has Summers publicly apologized or admitted any responsibility for causing the crisis. And now Harvard is welcoming him back.

Summers was tightly aligned with the finance world, and benefited from the dominance of financial leaders on Harvard's board (see post here):
After Summers left the Clinton administration, his candidacy for president of Harvard was championed by his mentor Robert Rubin, a former CEO of Goldman Sachs, who was his boss and predecessor as treasury secretary. Rubin, after leaving the Treasury Department—where he championed the law that made Citigroup's creation legal—became both vice chairman of Citigroup and a powerful member of Harvard's governing board.

Yet in between his government and academic leadership roles, Summers got rich from finance firms' money.
Summers became wealthy through consulting and speaking engagements with financial firms. Between 2001 and his entry into the Obama administration, he made more than $20-million from the financial-services industry. (His 2009 federal financial-disclosure form listed his net worth as $17-million to $39-million.)

Ferguson went on to list several other conflicted academic economists:
The route to the 2008 financial crisis, and the economic problems that still plague us, runs straight through the economics discipline. And it's due not just to ideology; it's also about straightforward, old-fashioned money.

Prominent academic economists (and sometimes also professors of law and public policy) are paid by companies and interest groups to testify before Congress, to write papers, to give speeches, to participate in conferences, to serve on boards of directors, to write briefs in regulatory proceedings, to defend companies in antitrust cases, and, of course, to lobby. [Ed: they are thus the "key opinion leaders" of economics and economic policy.]  This is now, literally, a billion-dollar industry. The Law and Economics Consulting Group, started 22 years ago by professors at the University of California at Berkeley (David Teece in the business school, Thomas Jorde in the law school, and the economists Richard Gilbert and Gordon Rausser), is now a $300-million publicly held company. Others specializing in the sale (or rental) of academic expertise include Competition Policy (now Compass Lexecon), started by Richard Gilbert and Daniel Rubinfeld, both of whom served as chief economist of the Justice Department's Antitrust Division in the Clinton administration; the Analysis Group; and Charles River Associates.

In my film you will see many famous economists looking very uncomfortable when confronted with their financial-sector activities; others appear only on archival video, because they declined to be interviewed. You'll hear from:

Martin Feldstein, a Harvard professor, a major architect of deregulation in the Reagan administration, president for 30 years of the National Bureau of Economic Research, and for 20 years on the boards of directors of both AIG, which paid him more than $6-million, and AIG Financial Products, whose derivatives deals destroyed the company. Feldstein has written several hundred papers, on many subjects; none of them address the dangers of unregulated financial derivatives or financial-industry compensation.

Glenn Hubbard, chairman of the Council of Economic Advisers in the first George W. Bush administration, dean of Columbia Business School, adviser to many financial firms, on the board of Metropolitan Life ($250,000 per year), and formerly on the board of Capmark, a major commercial mortgage lender, from which he resigned shortly before its bankruptcy, in 2009. In 2004, Hubbard wrote a paper with William C. Dudley, then chief economist of Goldman Sachs, praising securitization and derivatives as improving the stability of both financial markets and the wider economy.

Frederic Mishkin, a professor at the Columbia Business School, and a member of the Federal Reserve Board from 2006 to 2008. He was paid $124,000 by the Icelandic Chamber of Commerce to write a paper praising its regulatory and banking systems, two years before the Icelandic banks' Ponzi scheme collapsed, causing $100-billion in losses. His 2006 federal financial-disclosure form listed his net worth as $6-million to $17-million.

Laura Tyson, a professor at Berkeley, director of the National Economic Council in the Clinton administration, and also on the Board of Directors of Morgan Stanley, which pays her $350,000 per year.

Richard Portes, a professor at London Business School and founding director of the British Centre for Economic Policy Research, paid by the Icelandic Chamber of Commerce to write a report praising Iceland's financial system in 2007, only one year before it collapsed.

And John Campbell, chairman of Harvard's economics department, who finds it very difficult to explain why conflicts of interest in economics should not concern us.

I once naively thought that the primary conflict of interest problems affecting academia involved health care, the dependence of medical schools and academic medical centers on commercial research funding, the emphasis these schools placed on faculty ties to commercial firms, leading to faculty "key opinion leaders" functioning as marketers of drugs and devices operating under the cloak of academia, and the major conflicts of academic leaders who also sit on health care corporate boards.

Now I wonder if all this came to pass because academic leaders already were comfortable with conflicts of interest after having profited from conflicts generated by relationships with the finance industry.

This now suggests that the dominance of university boards of trustees by finance leaders is a conflict of interest issue, too.

It also suggests that we in medicine should be paying more attention to how conflicts of interest shape not only the marketing of drugs and devices, but the health care policy that has lead to our currently dysfunctional system. If economists paid by finance companies could have been a major cause of the global financial meltdown, could health care policy experts paid by health care corporations be a major cause of our collapsing health care system?

Hat tip to the Naked Capitalism blog. See additional comments on the University Diaries blog and on Felix Salmon's blog.

Monday, October 04, 2010

Pay for What? - Redux: Surrealistic Pay for Health Care Corporate CEOs

Pay-for-performance has been a persistently fashionable mantra for health care business leaders and policy advocates, particularly as applied to physicians to control costs and perhaps even improve quality.  We have been highly critical of current methods proposed to measure performance and tie pay to it (e.g., here), and other bloggers, notably Dr Robert Centor at DB's Medical Rants, have vigorously pursued this issue (e.g., here).

It is beyond ironic that meanwhile, the pay of health care organizations' leaders seems less and less related to their performance.  For example, in a recent series on local executive pay in the Boston Globe there were these examples:

Hologic
Hologic Inc. gave its chief executive, John W. Cumming, a $1.5 million “retention payment’’ as part of his $10.5 million pay package last year. He was promised the payment in mid-2006 if he remained with the company through the end of 2008. At the same time, the Bedford women’s health care products company posted a $2.2 billion loss, largely resulting from a big write-down related to the 2007 purchase of Cytic Corp. Cumming has since stepped down as chief executive, but remains chairman. Hologic declined to comment.

Charles River Laboratories
Charles River Laboratories International Inc. chief executive James C. Foster received $1.3 million in deferred compensation in a year when the company disclosed plans to cut 300 workers, or 3 percent of its workforce. Charles River declined to comment.

Note that a Charles River board member was one of the authors of an Institute of Medicine report advocating P4P for physicians, as we posted here. Ah, the irony.

Boston Scientific
New Boston Scientific Corp. CEO J. Raymond Elliott started midyear and received a $1.5 million bonus. Boston Scientific posted a $1 billion loss last year.
Elliott got a lot more than that, as reported in a companion Boston Globe article:
Elliott, whose experience includes running another medical device company, Zimmer Holdings Inc., was paid a performance bonus of nearly $608,000 last year, in addition to a $1.5 million signing bonus and $29.4 million in stock awards and options.

Meanwhile, the company's losses continue to mount:
And in February, Boston Scientific agreed to pay $1.7 billion to settle patent infringement charges from rival Johnson & Johnson, making it likely the company will post another loss this year.
Note that Boston Scientific has had its ethical as well as financial failings, especially involving the case of the faulty implantable cardiac defibrillators, which resulted in settlements of civil lawsuits alleging that it hid data about the defects, and two guilty pleas by a company subsidiary to charges that it did not notify the FDA about these problems (see post here).

Vertex Pharmaceuticals Inc
At Vertex Pharmaceuticals Inc., chief Matthew W. Emmens, who took over five months into the year, received $2.8 million performance award last year, a year in which the company lost $642 million.

He actually got a lot more than that, too, as per the second Globe article:
His pay package included more than $15 million in restricted stock and options.

Cephalon

At the same time, an op-ed by Michael Hiltzik in the Los Angeles Times noted that a health care company had the most unfairly paid CEO, according to "veteran compensation consultant Fraef Crystal,"
Cephalon Inc., ... CEO, Frank Baldino, Crystal identifies as the most overpaid chief executive in his database. (Baldino's $11.1 million pay last year is 832% of what would be fair, Crystal calculated.)

Note that Cephalon settled charges of off-label promotion of narcotics for over $400 million in 2008 (see post here).

Summary

So the general rule seem to be that top executives of health care organizations make large, sometimes enormous amounts of money, and that occurs regardless of company or personal performance. The riches keep flowing even if the company loses millions or billions, or lays off significant chunks of its workforce.

Hiltzik identified corporate executive pay as:
the No. 1 scandal of American business — executive pay that bears scant relationship to what these people are worth.

The CEO pay curve has been galloping out of control for so long that it has achieved the status of a cliche. In 1965 the average U.S. CEO earned 24 times the pay of the average worker. Four decades later the ratio was 411 to 1..

Furthermore,
The dismal reality of CEO pay is that it comprises two problems, not one. Top executive pay generally is too lavish in the U.S. no matter what performance standard you apply. Good performance or bad, the pay disparity between the CEO and the rank and file is larger than in any other country, contributing to rising income inequality and to its consequent social pathologies.

It's also based on several flawed assumptions, argue Jay Lorsch and Rakesh Khurana of Harvard Business School in a recent article for Harvard Magazine. One is that money is the only motivating factor behind executive performance.

Another is that shareholders are the only stakeholders in corporate performance whose interests matter. This is a relatively recent paradigm, they observe; as late as 1990 business groups recognized the importance of a corporation's responsibility to stakeholders such as employees, customers, suppliers and the community.

The flaw in the latter assumption is that it ties CEO pay to stock prices, which they can't influence on their own. But the picture of the CEO as virtually the sole auteur of a corporation's fate permeates American society. Listen to a Meg Whitman campaign ad talking about 'the EBay Meg created.' If you pay attention you may catch a reference to the 15,000 employees who were there when she left, at least a few of whom must have had something to do with the company's success.

A further problem is that the pay of top corporate leaders is generally set not by the share-holders, that is, the owners of the company, but by boards of their cronies, many of whom are also members of the CEO club.  As Hiltzik noted,
although most corporate boards make a show of placing pay decisions in the hands of a committee of 'independent' directors, the members are almost always current or former top executives themselves, members of a tight club.

By the way, as we posted here, a member of both the Hologic and Vertex boards was a former hospital CEO who got a generous retirement package despite its financial straits.

So while their policy flacks continue to push pay-for-performance for physicians, maybe health care corporate leaders should set an example by embracing real pay for performance themselves.

To repeat, again, again, again,.... Until they do, top executives remain really different from you and me.  If we do not hold health care leaders accountable, if we do not provide them with incentives that are proportional to their actual performance, why should we expect health care organizations to do any more than satisfy their leaders' self-interest?

Wright Medical Settles, ... But Wait, There is Less

Everyone loves a parade, and so the parade of legal settlements by prominent health care organizations continues.  The latest to march into view is Wright Medical Group, as reported by Bloomberg:
Wright Medical Technology Inc. agreed to pay $7.9 million to resolve U.S. criminal and civil investigations into whether it paid kickbacks to induce doctors to use its hip and knee devices.

Prosecutors in Newark, New Jersey, today charged Wright with conspiring to violate a federal anti-kickback statue through consulting contracts with orthopedic surgeons. The U.S. agreed to drop the case in 12 months if a monitor agrees that Wright has reformed the way it hires consultants.

Wright, based in Arlington, Tennessee, also agreed to a $7.9 million civil settlement with the Justice Department and inspector general of the Health and Human Services Department to resolve fraudulent-marketing claims. The company entered into a five-year corporate integrity agreement.

Here we go again. A company is accused of giving kickbacks, aka bribes, to individual doctors, in this case orthopedic surgeons, to get them to use the company's products. Such payments clearly violate medical ethics (especially doctors' obligations to put the interests of patients ahead of their personal financial interests), leading to decision making not in the best interests of the patients. However, the penalty to the company itself is minuscule, only a fraction of the company's revenue, according to Google Finance, in 2009, just under $500 million. As we have noted endlessly before, financial penalties to corporations are diffused among all shareholders and employees, and possibly customers and patients.

Do we really expect that this penalty will change anything, or deter future bad behavior by this or any other company?

But our government continues to treat the corporate employees who authorize, direct, or implement bad behavior like this as essentially above the law. In this case, like in many others we have discussed previously, no one who authorized, directed or implemented the bad behavior will have to pay any sort of penalty or suffer any sort of negative consequences.  Does anyone in their right mind believe that Wright Medical really is
pleased to announce these agreements and look[ing] forward to working with the independent monitor as we continue our commitment to the highest standards of ethical and legal conduct

That was a quote from Wright Medical CEO Gary D Henley. He may be pleased to announce the agreements, since they really amount to such a tiny pinprick of a penalty. After all, Mr Henley will be able to to continue to use Wright Medical's revenues, virtually unaffected by this penalty, to justify his compensation (per the 2009 proxy statement, $2,036,517 in 2009, and his continuing accumulation of wealth, e.g., 436,601 shares of stock, currently valued at $13.86/ share according to Google Financial.)

I leave an assessment of what the company's previous commitment to "the highest standard of ethical and legal conduct" was to our dear readers.

We will not have true health care reform until we end the unholy alliance between big government and big health care organizations, that is, health care corporatism. Then, maybe, we can make health care leaders accountable, and especially accountable for the bad behavior that helped make them rich.

Friday, October 01, 2010

Cart before the horse, again: IOM to study HIT patient safety for ONC; should HITECH be repealed?

In my July 2010 post "Meaningful Use Final Rule" I pointed out the cart-before-the-horse problem of creating "meaningful use" rules for health IT before usability issues were resolved:

From the HIMSS EHR Usability Task Force, June 2009:

Electronic medical record (EMR) adoption rates have been slower than expected in the United States, especially in comparison to other industry sectors and other developed countries. A key reason, aside from initial costs and lost productivity during EMR implementation, is lack of efficiency and usability of EMRs currently available. Achieving the healthcare reform goals of broad EMR adoption and “meaningful use” will require that efficiency and usability be effectively addressed at a fundamental level.

These "usability" problems require long term solutions. There are no quick fix, plug and play solutions. Years of research are needed, and years of system migrations as well for existing installations.

Yet we now have an HHS Final Rule on "meaningful use" regarding experimental, unregulated medical devices the industry itself admits have major usability problems, along with a growing body of literature on the risks entailed.
For crying out loud, talk about putting the cart before the horse...

Something's very wrong here...


Here we go again.

"Ready ... fire ... aim" seems the postmodern approach to healthcare IT:

Institute to study HIT patient safety for ONC
Mary Mosquera

Government Health IT, Thursday, September 30, 2010


The Institute of Medicine (IOM) announced it will conduct a year-long study for the Office of the National Coordinator for Health IT to identify best policies and practices for improving healthcare safety when using electronic health records.

The IOM, an arm of the National Academy of Sciences, will examine prevention of health IT-related errors, rapid reporting of patient safety concerns [To whom? The vendor, as now, so they can sit on the problems until it suits them to fix it? In the face of contractual gag clauses, I'm not sure where else such reports can go - ed.] and methods to promote safety-enhancing features of electronic health records (EHRs), said Dr. David Blumenthal, the national health IT coordinator.

The IOM will also make recommendations about the potential effects of government policies and private sector efforts to make the most of patient safety and avoid medical errors through health IT.

[In reading the hype right up to the ONC Director Blumenthal and the POTUS, one would get the impression that medical error-prevention was an inherent, deterministic characteristic of this 100% beneficent technology, so much so that simply putting it in will revolutionize medicine. Now, we all of a sudden need to study its safety? - ed].


... “This study will draw on IOM’s depth of knowledge in this area to help all of us ensure that HIT reaches the goals we are seeking for patient safety improvement,” Blumenthal said.

Earlier this year, the Health IT Policy Committee, a federal advisory group, conducted hearings about patient safety and EHRs. It recommended creating a national database to which healthcare providers can report patient data errors and unsafe conditions they encounter using EHRs.

[To reiterate, there is a major problem with this proposal: "providers" cannot do this with contractual gag clauses in effect. It also seems such databases belong at the state level, since the control of medicine traditionally resides in the states, but these days the Federal government seems to know no bounds - ed.]


The committee also urged the establishment of a patient safety organization to analyze the reports and share information from the database to make healthcare a learning system.


So, in the midst of a National Program for Health IT in the United States (NPfIT in the U.S.), with tens of billions of dollars earmarked for health IT already (money we don't really have, but it can be printed quickly, or borrowed from China) the IOM is going to study health IT safety, prevention of health IT-related errors, etc. ... only now?

Perhaps these studies should have been initiated, say, ten years ago, or at least before the beneficence of health IT and its capacity to revolutionize medicine was openly promoted by the past and current Administrations (the current one going so far as to institutionalize penalties for non adopters)?

A move like this suggests someone's blown the whistle on the purveyors of the NPfIT in the U.S. They are now attempting to cover their tracks regarding this glaring deficiency (unknown risk) in an already-initiated, extremely expensive national program based on equivocal studies and literature, an increasing amount of which is now refuting the grandiose claims made about health IT. The purveyors would seem to have a figurative gun at their heads causing them to ask the IOM for assistance at this rather late date in the scheme of things (could that gun be named Grassley?)

A tidbit of common sense regarding IT, all too lacking in today's national leadership:

  • You should not need year-long IOM studies to study the safety of supposedly safe devices already slated for national rollout.

Finally, the sudden interest in health IT safety suggests the HITECH act on health IT with its timelines and penalties, 'smuggled' in under the auspices of the ARRA, is premature. HITECH's timelines should be delayed delayed until this technology and its safety is truly understood (or it should be repealed entirely and redone in a non-cavalier fashion).

-- SS

10/2/10 addendum:

I recall that we already have the 2009 National Research Council HIT study. It reported that HIT in its present form does not support physician cognitive needs and that our approaches to HIT are "insufficient" to achieve stated goals...


The U.S. National Research Council’s "Current Approaches to U.S. Health Care Information Technology are Insufficient" is here. A full report on an investigation of healthcare IT lack of progress is here (PDF).

From the NRC/NAS/IOM sites:


"The National Research Council (NRC) functions under the auspices of the National Academy of Sciences (NAS), the National Academy of Engineering (NAE), and the Institute of Medicine (IOM)." ... "The IOM is the health arm of the NAS."


The National Research Council report on HIT was basically buried. HITECH happened anyway.

ONC seems to now be going back to the same source(s), presumably for either a glowing report, or a report that it can safely ignore.

Finally:

That HIT effectiveness issues, safety issues, admittedly poor usability but "meaningful use" criteria crafted anyway, lack of clinician cognitive support requiring years of multidisciplinary research to correct, etc. - have had no inhibitory effect on grandiose, autocratic and highly expensive plans for national HIT also suggest political agendas far beyond "improving patient care."

-- SS


Novartis Settles..., But Wait, There's More

Back in January, 2010, we posted about Novartis' settlement of charges that it promoted its anti-seizure drug, Trileptal, (Oxcarbazepine) for off-label uses, agreeing to plead guilty to one charge of violating the US Food, Drug and Cosmetic Act.  This week, the full story of the settlement just came out, and yes, but wait, there's more.  Per the New York Times article by Duff Wilson, the story is not only about Trileptal:
The Swiss drug giant Novartis is paying $422.5 million to settle criminal and civil investigations into the marketing of the antiseizure medicine Trileptal and five other drugs, federal officials said on Thursday.
The other drugs were:
Diovan, a hypertension drug that is the company’s top-selling product, at $6 billion last year; Sandostatin, a drug to treat a growth hormone disorder that had worldwide sales of $1.2 billion last year; Exforge, a hypertension drug that sold $671 million; Tekturna, a blood pressure medicine that sold $290 million; and Zelnorm, a medicine for irritable bowel syndrome and constipation that was later withdrawn from the United States market.

And the issue was not solely off-label marketing:
Federal prosecutors accused Novartis of paying illegal kickbacks to health care professionals through speaker programs, advisory boards, entertainment, travel and meals. But aside from pleading guilty to one misdemeanor charge of mislabeling in an agreement that Novartis announced in February, the company denied wrongdoing.

While the allegations were much more broad than those originally announced, the penalties were the usual suspects:
The settlement includes a $170 million criminal fine and $15 million in criminal forfeiture by Novartis Pharmaceuticals, its United States subsidiary.

Also,
Novartis settled the investigation into the other drugs for $237.5 million.

However,
Prosecutors said top management at Novartis had approved illegal marketing from July 2000 to June 2004. No individual, however, was named or charged.

Back in June, we posted about how US law enforcement was supposedly going to start getting tougher with the people who authorized, directed or implemented wrong doing by health care organizations. Back then, federal officials said that executives would be held accountable, and forced to leave their jobs or even be disbarred from working in the industry.

However, here we are, four months later, and even a case that mushroomed from involving allegations of off-label promotion of one drug to off-label promotion of six drugs, allegations of kickbacks to physicians, and allegations that top management knew about what was going on results in no negative consequences to any individuals.

So it still seems that if misdeeds, such as promotion of drugs for off-label uses, and giving kickbacks to doctors disguised as honoraria for talks, consulting fees, and meals and travel payments, are done under the auspices of a large health care organization, no one is ultimately responsible for them.  The organization may have to pay what appears to be a big fine, but one that pales against the profits to be made from the misdeeds.

So, if an ordinary person commits fraud, he or she is likely to have to pay a big fine and go to jail.  If a physician commits fraud, he or she is likely to have to pay a big fine and go to jail, and incidentally to lose his or her medical license.  But if a corporate executive authorizes a fraudulant practice, he or she is likely not to pay any penalty (but may well have already collected a big bonus).

We have repeated endlessly that by limiting penalties to only modest increases in the costs of doing business for organizational malfeasance in health care, we just encourage more bad behavior.  But with each new example like this, I agree more that the fundamental problem has become corporatism, (or Corpocracy, as Robert A G Monks put it).  Government and corporate leaders find that they have more in common with each other than with the little people.  Or as Barry Ritholtz just blogged:
The new dynamic, however, has moved past the old Left Right paradigm. We now live in an era defined by increasing Corporate influence and authority over the individual. These two 'interest groups' – I can barely suppress snorting derisively over that phrase – have been on a headlong collision course for decades, which came to a head with the financial collapse and bailouts. Where there is massive concentrations of wealth and influence, there will be abuse of power. The Individual has been supplanted in the political process nearly entirely by corporate money, legislative influence, campaign contributions, even free speech rights.

This may not be a brilliant insight, but it is surely an overlooked one. It is now an Individual vs. Corporate debate – and the Humans are losing.

Furthermore,
There is some pushback already taking place against the concentration of corporate power: Mainstream corporate media has been increasingly replaced with user created content – YouTube and Blogs are increasingly important to news consumers (especially younger users). Independent voters are an increasingly larger share of the US electorate. And I suspect that much of the pushback against the Elizabeth Warren’s concept of a Financial Consumer Protection Agency plays directly into this Corporate vs. Individual fight.

But the battle lines between the two groups have barely been drawn. I expect this fight will define American politics over the next decade.

Keynes vs Hayek? Friedman vs Krugman? Those are the wrong intellectual debates. Its you vs. Tony Hayward, BP CEO, You vs. Lloyd Blankfein, Goldman Sachs CEO. And you are losing . . .

Wednesday, September 29, 2010

That Wheel Was Already Invented: the UN Special Rapporteur's Guidelines for Pharmaceutical Companies

For five years now, we have been writing about concentration and abuse of power in health care, and on specific tactics used predominantly by large health care organizations that threaten the values that physicians and other health care professionals once swore to uphold.

Pharmaceutical companies may not have been the worst offenders when it came to threatening these values, but they have not been laggards.  Specific issues we have discussed included (in a peculiar order that I will explain in a minute): failure of the companies' boards of directors to be accountable for misbehavior by its management, sometimes associated with conflicts of interest affecting these board members (e.g., this recent case); outright crime and corruption (e.g., this case); use of key opinion leaders paid by the company to market products cloaked in the mantle of academia; payments made by the companies to patient advocacy groups (e.g., this one), medical societies, and academic institutions that induce institutional conflicts of interest, and enlist these well-reputed organizations as stealth marketers; ridiculously high prices charged for particular medicines, often to particularly vulnerable patients (e.g., this case); suppression and manipulation of clinical research evaluating the companies' products; and deceptive drug marketing practices.

Many other bloggers have written about these issues.  Some of them have been widely taken up in the mainstream media.  A few have even made it into the medical and health care literature. 

But those of us who bring them up have been attacked as a tiny group of pharmascolds (e.g., here), who get in the way of the needed innovation and scientific advances that the pharmaceutical industry generously brings to the public.  Despite such attacks, it may be that our concerns are somewhat more universal, although those with vested interests in maintaining the status quo might not want that publicized too much.

A new issue of PLoS Medicine included several articles on drug companies' responsibilities for human rights.  One was by a former United Nations Special Rapporteur on the right to the highest attainable standard of health.  I, and I suspect most of even our Health Care Renewal readers were not familiar with that office.  I also confess to being unaware that he had published a report to the UN General Assembly entitled Human Rights Guidelines for Pharmaceutical Companies in Relation to Access to Medicines, which included 47 specific guidelines. 

Amazingly enough, it turns out that some of these guidelines seemed to directly address the issues raised above, to wit:

Board of Directors' Accountability
11. The company should have a governance system that includes direct board level responsibility and accountability for its access to medicines policy.

Anti-Corruption
15. A company should publicly adopt effective anti-corruption policies and measures, and comply with relevant national law implementing the United Nations Convention against Corruption.

Disclosure of Financial Support
18. The company should annually disclose its financial and other support to key opinion leaders, patient associations, political parties and candidates, trade associations, academic departments, research centres and others, through which it seeks to influence public policy and national, regional and international law and practice. The disclosure should extend to amounts, beneficiaries and channels by which the support is provided.

19. When providing any financial or other support, the company should require all recipients to publicly disclose such support on all appropriate occasions.

Drug Pricing
33. When formulating and implementing its access to medicines policy, the company should consider all the arrangements at its disposal with a view to ensuring that its medicines are affordable to as many people as possible. In keeping with Guideline 5, the company should give particular attention to ensuring its medicines are accessible to disadvantaged individuals, communities and populations, including those living in poverty and the very poorest in all markets. The arrangements should include, for example, differential pricing between countries, differential pricing within countries, commercial voluntary licences, not-for-profit voluntary licences, donation programmes, and public private partnerships.

34. The arrangements should take into account a country’s stage of economic development, as well as the differential purchasing power of populations within a country. The same medicine, for example, may be priced and packaged differently for the private and public sectors within the same country.

35. The arrangements should extend to all medicines manufactured by the company, including those for non-communicable conditions, such as heart disease and diabetes.

Suppression and Manipulation of Clinical Research
39. The company should take effective measures to ensure that all information bearing upon the safety, efficacy and possible side effects of a medicine are easily accessible to individuals so they can make informed decisions about its possible use.

Deceptive Drug Marketing
41. The company should publicly disclose its promotional and marketing policies and activities, including costs.

Needless to say, I can see no evidence that any big pharmaceutical companies are trying to adhere to any of these guidelines.  Somehow I suspect that those who are supporting the vested interests of big pharmaceutical corporations may not all have that much respect for the United Nations.  However, I think that the Special Rapporteur's guidelines lend more credibility to the argument that we need better leadership of health care organizations, and specifically that such organizations should follow clear ethical precepts, and their leadership should be held accountable when they do not.

So the next time someone calls you a "pharmascold," you can say, "yeah, yeah, so is the UN Special Rapporteur."