UnitedHealth Declares "The Health Care System Isn't Healthy" - But Is the Company Part of the Problem?

Those who read the print version of the Wall Street Journal opened it yesterday (19 March) to find a full page advertisement from UnitedHealth Group, with a dramatic red background. The advertisement is not on the web, as far as I can tell, but its text is below:

The health care system isn't healthy. There's no denying it. A system that was designed to make you feel better often just makes things worse. Costs are out of control, access is inconsistent, quality is too variable and the entire process has become unwieldy.

Every day, more Americans are added to the rolls of the uninsured. This is an epidemic and it's time we found a cure.

At UnitedHealthcare, we are committed to improving the health care system. We aim to take what's wrong and make it right.
> Simplifying everything and eliminating red tape.
> Ensuring access to the right care anywhere in the U.S.
> Empowering you to make better decisions about your health 24/7.
> Providing information to doctors to better support people.
> Rewarding first-rate physicians for first-rate medicine.

All while making your health care more affordable.

Will all this be simple? No. Simple doesn't mean simple-minded. Sometimes simple means ingenious. Sometimes it means revolutionary. And no one is better prepared to lead this revolution with you than the strongest, most commited health care company in the nation. Simpler process, smarter solutions, better results for you.

UnitedHealthcare Healing health care. Together.

Say what?

On one hand, the advertisement's statement of the problem in the first two paragraphs is hard to argue with, although it did leave out demoralized health care professionals as one of the primary manifestations of the problem.

The rest might be barely credible if UnitedHealth were a brand-new company.

Instead, it is a company that has been around a long time, and there are plenty of reasons to think that up to now it has been part of the problem, not the solution. UnitedHealth's claims about affordable health care are particularly suspect.

For example, we have discussed the amazingly generous compensation awarded to UnitedHealth's previous CEO, Dr William McGuire, at a time when the company's mission statement already included the goal of "making health care more affordable." Later, we discussed how McGuire had become more than a billionaire, at least on paper, due to the value of the stock options the grateful company bestowed upon him, while the company pursued an ever more concentrated health insurance market. Then it turned out that these stock options were back-dated (see post here), and McGuire was eventually forced to resign (see post here). Meanwhile, it turned out there have been allegations of conflicts of interest affecting the UnitedHealth board, and that at least one of the members of the board's compensation committee. Note that one member of that committee who had been most gushing in her support of McGuire and his outsized compensation was also the Dean of a major US nursing school (see post here).

Of course, McGuire has left, and so it's possible that UnitedHealth has changed its ways. But I should note that in the last few days, the American Medical Association is trying to block UnitedHealth's acquisition of Sierra Health Services Inc., charging that the acquisition would give UnitedHealth a near monopoly in the state of Nevada (see AP story via the Houston Chronicle); and here in Rhode Island, UnitedHealth is being criticized for trying to transfer a big chunk of profits out of state, given that it already spends less of its total revenue on actual health care than is typical (see story in the Providence Journal).

Meanwhile, beware of full-page advertisements bearing hype, much less vividly red advertisements touting revolution.

Patient or Pharmaceutical Company Advocates?

We have previously blogged (here and here) about ties among pharmaceutical companies and patient advocacy groups.

The Boston Globe just reported how a patient advocacy group was entangled with the pharmaceutical industry. The story was about Elzora K Brown, founder of the Breast Cancer Resource Committee:

Elzora K. Brown could stand before a microphone and calmly describe the swath of devastation that cancer has cut through five generations of her family.

"My own story is replicated in the lives of high-risk families across the globe," Brown told an audience of Food and Drug Administration advisers considering a controversial application to allow wider sales of silicon gel breast implants....

Brown's message about the need to reduce disproportionately high mortality rates among African-American women, like herself, resonated whether she was testifying before the FDA, addressing the nation's mayors, or speaking with members of Congress, where she was a staff assistant to former US House Majority Leader Jim Wright.

Through speaking engagements for the Breast Cancer Resource Committee, a patient-advocacy group Brown founded in 1989 , she highlighted the benefits of early cancer screening, offered a support group for African-American women, and called attention to the need for diversity among participants in clinical trials for new treatments.

Patient advocates like Brown regularly testify at FDA public hearings, packing an emotional punch as advisers vote on controversial drug and device approvals.

Although Brown's committee billed itself as an organization for patient advocacy, it was heavily supported by pharmaceutical company funds, and Brown herself made quite a nice living running it.

What few in Brown's audiences knew is that the patient advocate personally profited from her cancer-survival message, accepting funding from major pharmaceutical companies that produce cancer treatments, according to tax records.

'As a survivor, I want a healthy life after breast cancer, so the long-term side effects of treatment must figure into the treatment decision,' Brown said in a press release touting Ellence (epirubicin), a breast cancer drug that showed lower heart risk. The release, distributed by Pfizer Inc., did not disclose the funding that Brown's group received that year from the drug giant.

From 1996 to 2004 , the years for which Internal Revenue Service records are available, the Breast Cancer Resource Committee raised about $3.4 million from mostly corporate donors, including hundreds of thousands of dollars from such drug firms as Amgen Inc. , AstraZeneca Pharmaceuticals LP , GlaxoSmithKline PLC, and Pfizer Inc. As her nonprofit's coffers swelled, Brown's salary jumped from $40,100 to $162,500 --roughly one-third of every dollar raised. During that time, the group paid up to $2,600 a month for a four-story Washington, D.C., townhouse, assessed at $788,510 , where Brown lived and worked. She also made liberal use of the committee's American Express card for 'incidental, personal expenses,' according to tax records, leaving the balance unpaid.

The nonprofit's accountant, James Dunn , of White Hall, Md ., declined to respond to questions about liens the IRS filed against Brown in 2003 , which allege she underpaid taxes by $179,257 from 1997 to 2002.

Brown's highest salary was in 2002 , when she was paid $162,500 and the organization raised $554,993 . Brown's salary would have ranked her among the highest-paid chief executives for nonprofit advocacy groups of that size, according to a 2005 compensation survey of 1,660 nonprofits. It compares with a median salary of $72,000 paid to chief executives of nonprofit advocacy organizations with annual revenue from $500,000 to $1 million , according to Abbott, Langer & Associates Inc. , a firm that conducts salary surveys.

In 2002 , Brown also was reimbursed $37,246 for expenses and tallied $2,682 in personal charges on the committee's American Express card, according to the IRS filing. By 2004 , that unpaid card balance was $4,414.

The behavior of some groups ostensibly advocating for patients has drawn criticism.

Public Citizen's Peter Lurie , who testifies frequently before FDA panels, noticed a shift as public hearings 'were becoming contaminated by people who didn't represent the public in any way. They represented particular moneyed interests.' Lurie, deputy director of the consumer advocacy organization's health research group, said, 'It's a fair question: Who represents patients and how they come to call themselves' patient representatives?

The Globe interviewed others who were specifically critical of Brown.

'In a vacuum, Elzora Brown's salary is, arguably, not outrageous,' said Thomas A. McLaughlin , a consultant at Grant Thornton LLP and author of 'Streetsmart Financial Basics for Nonprofit Managers,' which coaches nonprofit leaders on how to read and use financial data. 'What is far less defensible is the fact that she is paid nearly one-third of every dollar that comes through the door.'

'It's looking like this is her own piggy bank,' said Daniel Borochoff , president of the American Institute of Philanthropy , a charity watchdog based in Chicago. 'You need to separate business and personal expenses; that's a pretty common principle.'

When patient advocacy groups are heavily funded by pharmaceutical companies that make products likely to be used by the patients the groups advocate for, and when the leaders of these groups are very well recompensed out of these funds, one wonders whether the groups' allegiance are first with patients or with their pharmaceutical company sponsors. At least they should disclose their sources of support and let their audience decide for themselves.

UK Doctors Protest "Modernising Medical Careers"

We have posted several times, most recently here, about the controversy over the new system developed by the UK National Health Service (NHS) to select physicians for senior specialty training positions, part of the the new "Modernising Medical Careers" (MMC) program. Since the last post, criticism of the selection process, called the Medical Training Application Service (MTAS), has been growing. The Telegraph, which has been providing most of the coverage of this story, reported,

Prof John Bell, president of the Academy of Medical Sciences, and Prof Sir John Tooke, chairman of the Council of Heads of Medical Schools, criticised the scheme for undervaluing applicants' research experience and academic potential. In an open letter released yesterday, Prof Bell and Sir John said: 'Academic trainees - those doctors wishing to pursue careers which encompass research as well as patient care - have been particularly badly affected by the decision to anonymise applications and deprive the assessors of details of previous clinical and research experience. Without a scientifically informed and research-orientated medical workforce throughout the country, the Government's vision of the UK as a world-class centre for biomedical research and healthcare cannot be realised.'

Prof Ian Gilmore, the President of the Royal College of Physicians, added his voice to the criticism, saying the system was 'at the point of breaking down.'

Nine out of 10 doctors who have taken part in an online poll called for the resignation of those responsible for the MMC/MTAS debacle.

Meanwhile, The Lancet called for MTAS to be suspended and said the new system, combined with EU laws preventing junior doctors from working longer than 48 hours per week, would produce inexperienced consultants.

Many phases of the MTAS have been criticized. A Telegraph physician columnist, Dr Max Pemberton described his personal experience with the interview phase of the MTAS.

I am one of the lucky ones. I am here for one of the much coveted Medical Training Application Service (MTAS) interviews....

Any doctor awaiting an interview and hoping that the interview process will in some way be superior to the ludicrous, Kafkaesque application form should be warned: it isn't.

The grey man led me into a room filled with work stations manned by confused, bewildered looking interviewers. Some of them were doctors, some, I learned later, were not. None was properly introduced to me. It was clear they hadn't read my form and knew nothing about me. Each asked a series of formulaic questions to which I had a few minutes to provide equally formulaic answers.

There was no provision for me to discuss anything, to show my strengths and qualities, or to talk about the things that interest me. The bland questions were designed to elicit responses that could be ticked off on a form.

In all honesty, I wouldn't trust this system to select someone to water my plants, let alone look after me when I'm sick.

Dr Pemberton came to a clear realization what the larger problem is.

This is a clear attempt to undermine the medical profession; to ensure that we become compliant, unquestioning automatons in a system that can be presided over by managers and politicians.

He has hit the nail on the head. This seems to be the same problem that plagues us here in the US, and maybe plagues health care around the world.

When I interviewed physicians about what they thought was wrong with health care, many cited cases of bad decisions by, and conflicts of interest and outright corruption affecting health care leaders, who were often managers and politicians. Yet at the time, most of the physicians saw thess as their unique local problems, not as part of a largersystemic problem. Perhaps because physicians see the problems only as local, are too busy just trying to keep up with their patients' needs, or tend to be conflict-averse and apolitical, few physicians have protested the systemic problem. But maybe in the UK that is changing. Pemberton also wrote,

Doctors are notorious for being apathetic when it comes to fighting their corner. Not this time. We are so horrified by what is happening that there is now even talk of a strike.

In fact, doctors' protests were planned today in both London and Glasgow. The Telegraph reported on preparations for the London rally,

Speakers at the march in London and rally in Glasgow will call for the new online selection system, Medical Training Application Service (MTAS), to be suspended.

Andrew Lansley, shadow health spokesman, who will address the London march, says that MMC is 'an appalling shambles.'

'It risks undermining the morale and the future of the medical profession. What is the point of expanding medical school places and then destroying the career progression of juniors?'

'We cannot, we must not, abandon thousands of junior doctors; we must ensure that they can fulfil their vocation, for them and for our patients,' he said.

The junior doctors have increasingly been supported by senior doctors including some of the most eminent names in medicine.

The demonstrations have been organised by a grassroots doctors’ group, RemedyUK.

The BBC just reported that 200 doctors rallied in Glasgow today. And NHS Blog Doctor has a first report on the London march with some video. Maybe doctors in other countries should think about following their example. Grumbling to ourselves hasn't done much good.

Product Placement for Pharmaceuticals on Television Shows: the Newest Form of Stealth Marketing

For the latest version of pharmaceutical company stealth marketing, see Brandweek.com. Here are the salient quotes from an article entitled, "This is Your Show on Drugs":

A source told Brandweek that some of the 'biggest' drug companies had successfully placed "disease awareness" messages in reality TV shows. Non-branded mentions of diseases and conditions are useful to drug companies because they make patients more comfortable talking to their doctors about problems, and doctor visits lead to category-wide prescription sales increases.

Because the area is so controversial—no company wants to be scrutinized by the FDA—executives declined to say which brands were being placed.

The Nielsen statistics, however, imply that their efforts have paid off. There were 337 visual or audio mentions of prescription drug brands in 2006, according to Nielsen. That's up from 231 in 2005. The length of those occurrences also increased, from 607 seconds in 2005 to 1,548 seconds last year.

While a normal background level of drug mentions is to be expected—Viagra and Prozac are cultural touchstones as well as brands—some drug brands stick out in unusual ways.

Take, for instance, Dey Pharma's EpiPen, the injectible for people with potentially fatal allergic reactions. In the Jan. 16 episode of Boston Legal (ABC), a school teacher failed to administer the anti-allergy injectible to a child who ate peanut candy and died of anaphylactic shock.

The script read like an ad for the Dey brand: 'Anaphylactic shock can come on suddenly, which is what happened here,' said the boy's father, testifying on the show. 'If the EpiPen isn't administered, it can be fatal.'

EpiPen also was mentioned five times on the Feb. 8 episode of NBC's ER, per Nielsen.
The Napa, Calif.-based Dey has previously denied that it engages in product placement. Last week, a source confirmed that when TV producers request branded props, the pharmaceutical company fulfills the requests.

The only drug company that has come out of the closet regarding product placement is Organon. In 2005, the Roseland, N.J., firm placed posters for its Nuvaring contraceptive in the backgrounds of NBC's Scrubs and CBS' King of Queens. Since then, it has added ABC's Grey's Anatomy to its list, according to brand director Lisa Barkowski.

And pharmaceutical company executives wonder why the public and physicians don't trust their companies? If they want to develop some trust, maybe they should start by plaining labeling every one of their marketing efforts as such.

Actonel, Procter and Gamble, and Things That Go Bump in the Night

We had posted a while back and again here and here about the story of Dr Aubrey Blumsohn's dispute with Procter and Gamble (P&G) and the University of Sheffield in the UK. In summary, Blumsohn and Professor Richard Eastell had done clinical research on the risedronate (Actonel), sponsored by P&G, the drug's manufacturer. P&G refused Blumsohn access to the original data from the study he was ostensibly running, and hired a ghost-writer to write abstracts in his name. Blumsohn protested to Eastell, who advised him not to make waves because P&G "is a good source of income" for the university. When protests to other university officials produced no results, Blumsohn told the story to the press, whereupon the university suspended him.

This story, like those of other cases of research suppression and health care whistle-blowers, has not received a lot of press coverage, given their broad implications about the creation, as Wally Smith would call it, of pseudoevidence. To counter this version of the anechoic effect, Dr Blumsohn has his own blog, the Scientific Misconduct Blog, where he has posted updates on his ongoing efforts to get the word out about his dispute with Procter and Gamble and the University of Sheffield.

He just posted a fascinating new story. It seems that Dr Blumsohn submitted an abstract to The International Bone and Mineral Society (IBMS) Meeting (to be held in Montreal) which featured a re-analysis of some of the data of his original study of risedronate. This work failed to show a "plateau effect" in measures of bone resorbtion and fracture. The presence of such an effect was a point of contention between Dr Blumsohn and Procter and Gamble, and the failure to find such an effect did not help arguments the company was making in favor of risedronate.

At the bottom of the abstract, Dr Blumsohn noted that the study was funded by Procter and Gamble, as indeed was the original study from which this data which was re-analyzed had been derived. Blumsohn later received a message that one Dr Christopher Purple, of Medical & Technical Affairs, Procter & Gamble Pharmaceuticals had sent to the IBMS. Dr Purple, who has no known relationship to Blumsohn's study of risedronate, requested that the statement that disclosed support from Procter and Gamble be removed from the abstract. When the IBMS meeting staff learned they had been misled, they restored the funding disclosure statement.

This appears to be a new variant on ghost authorship, in which a ghost author managed temporarily to alter a manuscript without the knowledge of the manuscript's true authors. I have not previously heard of a case in which a disclosure statement was altered with the effect of erasing the support of a commercial sponsor for a project that did not turn out to provide data that fit that sponsor's vested interests.

Add this to the catalog of how pseudo-evidence is created. Add this also as a reminder that those who truly want to practice evidence-based health care need to heed this old Scottish poem:
From ghoulies and ghosties,
And long-leggedy beasties,
And things that go bump in the night,
Good Lord, deliver us!

See also this post on the Clinical Psychology and Psychiatry blog.

Problems found in UC Davis EMR project

In a previous post "Yet another clinical IT controversy: UC Davis" , I wrote about the clinical IT efforts at UCD apparently being subject to the same types of problems noted at other UC schools, as posted by Roy Poses for instance here, here and here.

An audit was done of the clinical IT project. At this location is a PDF of a Sacramento Business Journal article about the health IT problems and a believed massive overuse of consultants at UC Davis. (The audit report itself can be found at this link.)

A key observation is that "there's nothing to show why existing staff was not assigned to do what the university paid outside consultants $17 million to do."

Indeed.

I have stated that it is absurd to believe outsiders can know your business better than you, and it's even more absurd to believe it OK for outsiders to know your business better than you. While this pithy advice can be debated as a matter of strategy, I have also stated that healthcare IT is an experiment and a "work in progress" for the foreseeable future and that healthcare organizations need significant in-house expertise to keep up with the necessary changes, adjustments, modifications, extensions, interfaces, etc. that are a constant feature of this somewhat chaotic oil-and-water mix of IT and the "hiding in plain sight" complexities (a phrase coined by informatics researchers Nemeth & Cook) of clinical medicine. Heavily outsourcing these functions is unwise.

One can only speculate on the rationale for the $17 milllion of outsourcing, but "quid pro quo", behind-the-doors, golf-course handshake wheeling and dealing comes to mind as a possibility. Or perhaps it occurred due to a profound misunderstanding of what is tactical and what is strategic in healthcare IT.

The audit itself was somewhat superficial in scope, in that it excluded the product produced by the consultants and in sampling expenses used a time frame after the major consultant expenses incurred. It is interesting in that it showed that the project, due to be completed in December 2006 at $76 million, is only half done with current cost at $85 million. The audit alleges "no wrongdoing." You can be the judge of whether wrongdoing, mismanagement, or other ills affected this project.

In a sad footnote to this story, the outspoken health IT blog HISTalk had posted some of my commentary on this matter and on the former head of the health IT project at UC Davis. I had pointed out what I took as that person's lack of appreciation of the value of formally-trained medical informatics specialists based on my interactions with him a decade ago when he was a senior executive at Cerner. He confidentially negotiated with and hired a physician who was just finishing a postdoc at Yale's Center for Medical Informatics (which was certainly his right), where I was a faculty member with significant IT and management experience prior, while not wishing at all to speak to me and deflecting me to HR who gave me the traditional HR runaround (which was also his right, but I felt was revealing about strategic attitudes re: informatics expertise).

As a result of my HISTalk comments, I received the following unsolicited email from the former postdoctoral fellow -- a physician who I had helped select for the fellowship, and had always treated with the utmost respect and collegiality. This physician now runs his own obstetrics health IT company (just a year ago I had as a personal favor to him initiated referrals to several hospitals I thought might be interested in his company's products). Here is what he had to say:

From: DrMiller@eNATAL.com
Date: 01/06/2007 09:22PM
Subject: HISTalk

You are a horse's ass, and a pariah beyond rehabilitation. And I've tried on numerous occasions to help you get beyond your paranoid fantasies and fabrications (when no one else would even talk to you, much less be seen with you).

Almost every statement you wrote in HIStalk is either totally wrong or your own pufffed up delusions.

Don Miller

I pointed out to my former student that while those who "wouldn't talk to me" had reasons of their own making related to my ethics and temerity in actually defending myself against academic abuses, and while I admit I'm opinionated about MD's actually leading their profession and leading health IT via moving past stale business-computing-style thinking, I thought his message was way over the top and that apologies were due.

None came.

Healthcare IT is indeed still an area where angels should fear to tread.

-- SS

Strange Contracting at UCI

Well, it's been a while, but the medical school at the University of California - Irvine (UCI) is back in the news. We had posted last year about various management problems at the same institution, involving its liver transplant service, cardiology division, and bone marrow transplant service, (see posts here and here) which lead the new chancellor of the campus to "acknowledge a failure of leadership and accountability" (see post here.) Slightly more recently, we noted the almost 20 year history of questionable financial relationships that involved one of UCI's "biggest stars" in clinical researach and several pharmaceutical companies (see post here).
Last week, the Los Angeles Times reported about questionable relationships between the medical school and a local orthopedic practice.

UC Irvine's School of Medicine has hired an auditor to review the orthopedics department's finances in response to concerns about a contract with a private medical practice that has cost the school more than $1 million in lost revenue, UCI officials said.

The medical school entered into the contract with Mission Orthopedic Medical Associates and its well-known chief surgeon, Bernard Reimer, to help the school expand into the lucrative southern Orange County market, according to physicians in the orthopedics department.

But the contract immediately raised concerns among UCI's attorneys because of large sums paid up front to Reimer and his wife, Dawn, his office manager, which later triggered controversy within the department, according to UCI records obtained by The Times and interviews with UCI staff members.

'We are looking at things that don't make any fiscal sense,' said Dr. Ranjan Gupta, who took over as chairman of UCI's orthopedics department at the beginning of the year. 'I'm supposed to ensure that the university is giving the highest level of care and is getting the most for its money.'

The contract with Mission Orthopedic Medical Associates was negotiated in 2003 by Dr. Harry Skinner, then chairman of the orthopedics department, and Dr. Thomas Cesario, then dean of the medical school.

Skinner was forced to step down as department chairman in January. UCI had concluded he had made racially inappropriate comments to medical school employees. He remains on the faculty.

Cesario took early retirement late last year after an 11-year tenure marred by doctors stealing women's eggs and embryos, bodies missing from the medical school's willed-body program, and serious failings in the hospital's liver, kidney and bone marrow transplant programs.

In devising the contract with Mission Orthopedic, Skinner and Cesario agreed to cover part of the practice's overhead, pay Reimer's wife more than $100,000 to serve as its office manager, and give Reimer a place on the medical school faculty. In return, Reimer's patients would all be billed for their care through UCI Medical Center in Orange.

Both Reimer and his wife declined repeated requests for comment.

At the time the contract took effect, Reimer had been diagnosed with cancer and was working only part time, which enabled him to collect disability insurance payments, according to internal medical school e-mails and other records obtained by The Times.

He was eligible to receive insurance benefits as long as he earned no more than $100,800 a year, the UCI records show.

Skinner found ways to pay him for items other than salary to stay within that salary cap, the records show. For example, he agreed the university would pay Reimer and his wife $50,000 for attorney fees and an extra $10,000 a month for the first three months of his contract.

The Times also found that built into the overhead for the Mission Viejo office was a significant sum for Reimer's wife, the office manager. In addition to her $38,400 annual salary, Dawn Reimer received between $6,000 and $7,500 a month from UCI in additional payments described as 'general expenses,' the records show. As a result, UCI paid Dawn Reimer about $128,000 in 2005, more than what the school was paying her husband to treat patients, teach students and perform surgeries.

UCI's Credentials Committee placed Reimer on a list for "administrative termination" after noting that he had been on the faculty for more than a year without having been 'proctored,' a process in which a new faculty member's work is reviewed by a senior staff member.

The deal with Mission Orthopedic has been so expensive for the hospital that costs far exceed revenues from Reimer's patients, according to financial records reviewed by The Times.

As of the end of December, the losses were more than $1.2 million on total revenues of about $4.5 million over the previous three years and three months.

When all the numbers are tallied, expenses are expected to outstrip revenues by more than $1.7 million through June 2007.

As I noted the last time I posted about UCI...

It seems the more one looks, the more management problems one finds at the UCI medical school. This saga is another example of the complex financial relationships that pervade medical schools and academic medical centers. This recently revealed set of relationships is not about research or the pharmaceutical industry. However, it seems to be another demonstration that far too many leaders of health care organizations, including medical schools and academic medical centers, seem to have something other than the organizations' core mission in mind when making decisons.

On Disparities Between Reimbursement of Primary Care and Proceduralist Physicians

A recent post inspired some discussion about physicians' reimbursement in the US. Last month, an article in the Annals of Internal Medicine offered a clear explanation about how the disparity in reimbursement between primary care (and other "cognitive") physicians and procedural specialists came to be, and why it is important. [Bodenheimer T, Berenson RA, Rudolf P. The primary care-specialty income gap: why it matters. Ann Intern Med 2007; 146: 301-306.]

Its main points were:

• The widening income gap between primary care and other physicians correlates with declining interest in primary care.
• Medicare's Resource-Based Relative Value Scale (RBRVS) system was advertised as a way to make reimbursement more equitable, and particularly fairer for primary-care, but it has had the opposite effect, for three main reasons
• Proceduralists are often able to learn how to do their procedures more quickly, and thus increase the volume of procedures done, while office and hospital visits can only be sped up so much.
• The process used to update the RBRVS system is biased towards procedures for three main reasons: 1. "specialty society influence in proposing RVU [relative value unit] increases," 2. the specialist-heavy RUC [Relative Value Scale Update Committee] membership," and 3. "the desire of RUC specialists to avoid increases in evaluation and management [that is, cognitive, or non-procedural] RVUs."
• Medicare now uses a formula to limit increases in overall spending. The use of this formula leads to across the board cuts in all reimbursements. Since cognitive services reimbursements were never high to begin with, and have rarely been individually increased, these cuts tend to have disproportionate decreases.
• Private insurers and managed care organizations tend to follow Medicare's lead in their reimbursement procedures, but tend to tilt the playing field even more in favor of procedures versus cognitive services. Several studies showed that such payers paid more for procedures than did Medicare, but about the same for office and hospital visits.

The authors concluded that "primary care practice is not viable without a substantial increase in resources available to primary care physicians." Yet primary care is an extremely important, albeit neglected part of the health care system. Most patients value "having a primary care physician who knew their medical problems." Furthermore, "patients with a regular generalist physician have lower overall costs than those without a generalist physician."

This article presents the clearest summary I have seen to date of what has gone wrong with the reimbursement of primary care and cognitive physicians in the US. (Although we have discussed Medicare's generally wooden-headed reimbursement system before, here. See also the Health Affairs article cited in that post for a more general discussion of why the system is wooden-headed.)

What is disturbing, although no reflection on the article's authors, is how long it has taken for someone to write about this problem. The RBRVS system has been going wrong since 1992. Managed care, which was supposed to come up with creative ways to control costs and improve quality, seems to have seen fit to simply ape Medicare's wooden-headed reimbursement for at least a decade. Meanwhile, primary care is slowly being throttled.

Of course, one reason it has taken so long to talk about it is doing so may threaten vested financial interests and settled ideological convictions. The justification for the first part of the assertion is obvious. Furthermore, the article is an indictment of government-run single payer health insurance, which may offend many on the left. After all, Medicare is such a single-payer system. The article also is an indictment of using the "competitive market-place" to control health care costs, which may offend many on the right. After all, managed care is supposed to be such a market-based solution.

Thus, let's see how many choose to continue to ignore the issues raided by Bodenheimer et al.

Instead, we should consider...

WHAT IS TO BE DONE -

1. If you are a primary care or cognitive physician, realize why your financial position is becoming untenable and stop feeling guilty about protesting an unfair system.

2. If you are a procedural specialist, realize that you are in the same boat as the primary care and cognitive physicians. If our part of the boat sinks, yours will not long stay afloat.

3. If you are a health care researcher, think about addressing this elephant in the living room which many of you have so long ignored.

4. All others, tell your political representatives that fair physician reimbursement and a viable primary care system are both worth having.

"Modernising Medical Careers" Goes into the [Trash] Bin

We have posted several times, most recently here, about the controversy over the new system developed by the UK National Health Service (NHS) to select physicians for senior specialty training positions, called "Modernising Medical Careers." Now, after having a spokesperson say "it would be irresponsible to halt the interview process at this late stage," the NHS has decided to cancel the whole new system and go back to the traditional method of selection. As reported by the Guardian,

The computerised application system for the training posts that lead to consultant jobs was scrapped by a review set up this week to establish why many of the best-qualified candidates had been left without a single interview.

The review, led by the Academy of Medical Royal Colleges, took just three days to bin the online system, which was supposed to deliver a centralised and fairer application process. Junior doctors who have not got interviews in round one will be re-assessed the old way, through scrutiny of their CV and a structured interview.

Last night the Royal College of Surgeons said the computerised selection process had 'clearly failed and has caused deep distress.'

The article gave a bit of insight into what was wrong with the new system.

The online application form, (Medical Training Application Service) was supposed to be fairer. Doctors were scored for their answers to generalised questions about their attitude, motivation and approach to their work - which had to be answered in 150 words. Shortlisters saw the responses to a single question without the context of the rest of the form. More weight was given to these questions than to the CV.

In some parts of the country, the scoring system was leaked, enabling some candidates to tailor their answers.

To make the folly of the Medical Training Application Service (MTAS) system clearer, take a look at some of the questions a surgical candidate would have to answer, as found in a post by the redoubtable NHS Blog Doctor:

• B6 What experience of delivering teaching do you have?
• B7 Which of your research or audit studies has made the greatest contribution to your practice and why? Clearly describe your level of involvement and the outcome.
• C1 Describe a recent example from your surgical experience of a time when you found it difficult to make an effective judgement in a challenging situation. How did you overcome this difficulty, and how has this experience informed your subsequent practice?
• C2 Provide a recent example from your surgical experience of when you have had to co-ordinate the activities of a team in a critical situation. What approach did you take to get the best out of the team? How has this experience developed your ability to direct others effectively?
• D1 Mistakes can and do happen in medical practice. Describe a specific example where the outcome of action you took in response to a clinical mistake/error (made by you or someone else) caused you to reassess how you subsequently dealt with similar situations. What action did you take at the time and how has your practice now changed?

Each answer was limited to 150 words. The system had no capacity to verify the truthfulness of the responses.

An editorialist in the Telegraph summarized the problems.

With the new computerised system, which also encouraged numerous applicants from abroad, already hard-pressed consultants were frequently asked to plough through 500 or 600 applications. Instead of being trusted to use their well-honed professional judgment, they were required to grade these applications according to a bizarrely rigid, illogical points system. Many of the questions were somewhat pious and woolly, and consultants thus found it almost impossible to discern the best candidates from the answers. [And that assumes that the answers were completely honest and accurate, which could not be assured - Ed] The result is that many extremely competent candidates weren't shortlisted for any job in any region. Now 8,000 British junior doctors, each of whom cost the British taxpayer £250,000 to train, have been left jobless and deeply demoralised. Growing numbers of principled consultants are flatly refusing to interview shortlisted candidates because the process thus far has been so fatally flawed.

The editorialist, Jenny McCartney, summarized some of the larger issues.

But surely no one can have seen this disaster coming? Yes, they did.

Last summer, the British Medical Association openly pleaded with the government to delay the MTAS, on the basis that the reforms were incomplete and that "information necessary for selection will not be adequate." A contemptuous Department of Health ignored the warning.

This fiasco contains virtually all the elements that have contributed to the dismal failure of numerous Blairite policies: the urge for sweepingly radical gestures without intelligent planning for the aftermath, the failure to listen to experts in a given field and the naive enthusiasm for vast, unwieldy, centralised computer systems.

The political mediocrities in New Labour are instinctively suspicious of professional elites, whether those elites are composed of Oxbridge dons or hospital consultants. No matter that members of such elites are largely there by dint of cleverness and hard work: this Government's instinct is to wrest decision-making power from them in the name of 'fairness.'

'Fairness' - as the Government dully conceives of it - essentially means that the direction of one's life is determined not by graft or intelligence but by crude chance.

The Government's abject failure to understand such basics makes me think that in Britain we have got matters entirely the wrong way round. Instead of doctors being forced to obey rules set by politicians, should we not have politicians compelled to follow the time-honoured rules of doctors? After all, the most famous edict of medicine is the very one that New Labour so constantly and disastrously forgets: 'Primum non nocere: first, do no harm.'

I don't want to comment on British politics, which would be like stepping into quicksand for an American. But I would conclude by noting that the faults attributed to "Blairite" policies by this editorialist also describe in general a lot that has gone wrong with American (and probably other countries') health care.

The idea of breaking the medical "guild," and handing power over to managers and bureaucrats (see here for the American version) has had terrible consequences for every health care system to which it has been applied.

Kudos, though, to British doctors, who were willing to stand up and refuse to take any more.

Flash: Harvard Medical School to Start Paying Faculty to Teach Clinical Medicine

The Boston Globe just reported on an amazing new development. Harvard Medical School is going to try to pay its faculty something, even more than $30/hour to teach medical students.

Harvard Medical School will increase by millions of dollars a year its payments to doctors for teaching students, a recognition of how difficult it has become to persuade busy physicians to devote time to educating the next generation of care givers.

The medical school, Harvard University, and three major Harvard teaching hospitals -- Massachusetts General, Brigham and Women's, and Beth Israel Deaconess -- have agreed to double the funds for hospital-based instructors from $8 million to $16 million a year starting July 1.

There is wide variation in what the roughly 7,000 full-time instructors at Harvard Medical School are paid to teach the school's 771 students in classrooms, labs, and hospitals. Some are paid at well below going rates for doctors' services -- $30 an hour for some courses -- and many who provide on-the-job teaching at the hospitals are not paid at all. Under the new plan, the goal is to pay doctors $100 an hour to teach. The amount is comparable to the hourly rate that a typical primary care doctor earns, though far less than what some surgeons and other specialists make.

Medical school faculty are required to teach or volunteer on committees 50 hours a year, but Harvard does not track how many hours doctors teach and does not actively enforce the policy.

'The pressures of clinical practice make it harder for faculty to free up their time for teaching,' said Cynthia Walker, executive dean for administration at the medical school. 'Now it will be easier for them.'

'It's the single biggest problem facing virtually every course director,' said David Cardozo, a neurobiology professor who headed a medical school task force created to study the problem. Cardozo is course director for the study of the human nervous system that students take during their second year. As in most Harvard Medical School courses, the students are divided into small groups of six to 10, requiring about 50 teachers. The job pays $1,500 for 48 hours of work over eight weeks -- about $30 an hour. 'It's almost embarrassing for course directors to tell tutors and lab instructors what it pays,' Cardozo said.

Ha, and I bet that readers who are not in academic medicine actually thought that medical school faculty members were paid, probably quite well, to teach.

In fact, at many medical schools, hospital-based faculty are not paid much, if at all, specifically for teaching. At Harvard, as noted above, up to now medical school faculty who were paid at all to teach were paid at a rate lower than the hourly rate received by public school teachers. Many faculty are judged, instead, by how much "external" income they bring in, either by practicing medicine, for which the hospital, or medical school, or some other umbrella organization bills, or through grants and contracts, usually for research. Since there is often unrelenting pressure to see and bill more patients, or get more grants to "support one's salary," teaching, which is usually "required," but which the school often pays for little or not at all, gets short shrift.

We have posted before about the strange disparity between ever rising medical school tuition (at Harvard, currently $37,200/year) and how little medical schools actually spend on teaching clinical medicine.

What has been going on at most schools seems oddly in conflict with the fundamental mission of the institutions. One would think that the primary mission of a medical school is to teach. Therefore, a medical school ought to invest a reasonable amount in the people who do the teaching.

What is going on here? Where does the tuition money go? Why do the private schools have endowments, and the state supported schools get state support, if not to teach? (Yes, I know that academic medical centers have important patient care missions, and often important research missions, but they are called academic medical centers for a reason, aren't they?)

This has been going on for so long, at least for 20 years, that only a few people in academic medicine recognizes the absurdity of the current situation. We need to start thinking about where these emperors' clothes have gone.

UK "Modernising Medical Careers" Initiative Spirals Downward

Last week we discussed the controversy over the new UK system for selecting physicians for senior specialty training positions. Things only seem to be going downhill. Again, commenting at risk of misunderstanding the context in the UK...

A group of senior surgical consultants suspended interviews of "short-list" candidates because they had no confidence in the system that selected them. Per the Daily Telegraph, Bob Spychal, the Chair of the interview panel, said,

The 10 surgeons were unanimous. We know we have disappointed the candidates and we have spoken to all of them, but we have no confidence that the system is robust and fair. It is not fit for purpose. Someone had to do something. Perhaps other panels in other specialities will do the same thing.

Meanwhile, the Academy of Medical Royal Colleges urged the Ms Patricia Hewitt, the Health Secretary, "to undertake an urgent review of the process of selection." Dr Jonathan Fielden of the British Medical Association warned "we now have no faith in the system."

Then, the Department of Health did agree to review the system, but, according to the Guardian, it did not agree to stop or immediately modify the interview process. In fact, according to the Telegraph, a government official insisted the system continued to work "well." This provoked the British Medical Association to accuse the government of arrogance. Said Dr Fielden,

The arrogance of the department in ignoring this has resulted in the most devastating effect on a generation of junior doctors.

And the Dean of the Royal College of Psychiatrists, alarmed at the "total lack of transparency" in the selection process, warned of the effect on the "human rights and mental health of trainees."

Meanwhile, in a separate report in the Guardian, "the British Medical Association accused the government yesterday of instilling a 'culture of fear' across the NHS to stop doctors revealing how health service reforms are putting patients' lives at risk." Dr Fielden said, "there is a culture of fear in the NHS and doctors are under severe pressure to meet targets and keep their mouths shut."

What a mess. Of course, it appears to be a perfect example, writ large, of the effects of transferring power over health care from physicians and other health professionals to executives, managers, and bureaucrats. In the UK, most of these health care leaders are government employees. In the US, many of them are executives of for-profit and not-for-profit corporations. But, in general, putting in charge people with inflated ideas of their own managerial powers and little notion of how health care works or the values of health care professionals seems to have the same effect whether they are in charge of government agencies or private, for-profit or not-for-profit corporations. We see disorganization, seeming lack of concern for effects on the health of patients or the morale of physicians, lack of transparency, and attempts to silence critics and restrict free speech, in sum, mission-hostile management

At least in this case, the UK doctors have had the courage to speak up, maybe before things go irreversibly wrong. In the US, we physicians seem afraid to hold our heads up individually, lest we be hammered down. But we are hammered down anyway.

Johns Hopkins Administration Attempts to Outlaw Rudeness

We have posted before about institutional threats to free expression at Johns Hopkins University, home to one of the most renowned medical schools and teaching hospitals in the US. The story continues, as per the Johns Hopkins Newsletter,

Members of the Student Council (StuCo) expressed frustration with some of the University's newest policies concerning equality and respect in the workplace -- including those endorsed by President William Brody himself -- in a meeting with members of the administration Tuesday night.

The council met with administrators to discuss alleged ambiguities of the Principles for Ensuring Equity, Civility and Respect policy endorsed by Brody and the Johns Hopkins Committee on the Status of Women.

In a letter sent in Dec. to Susan Boswell, dean of Student Life, the Student Council expressed their confusion with the policy.

'How ought a student act in order to abide by this code? A student feels pressured to avoid communicating any idea that could be considered offensive in any way to anyone at any time ... this is counterintuitive to the nature of a research university, which should be a source of free, independent thought,' Student Council said in its letter.

The new principles are the basis for future policies and plans in hopes of promoting equity, equality, civility, and respect at Hopkins and throughout Baltimore. A commission chaired by Vice President of Human Resources Charlene Hayes and Chairman of the Department of Medicine Myron Weisfeldt has been organized to implement these principles.

'It's difficult to develop specific guidelines on rudeness, but there is common sense. We have to choose what's rude, disrespectful, and civil. That's our starting place,' Hayes said.

'One main question is rudeness versus racism,' another council member said. 'Where's the line that you draw that equals harassment?'

Student Council's frustrations centered on five of the principles established by the policy [including, in particular]:

- rude, disrespectful behavior is unwelcome and will not be tolerated

- every member of the community will be held accountable for creating a welcoming workplace for all

FIRE (the Foundation for Individual Rights in Education), a watch-dog with increasingly big teeth on behalf of civil liberties in academia, has kept on top of this case. Giving a university administration the power to punish students for "rude, disrespectful behavior," and enforce the creation of a "welcoming" workplace is antithetical to an academic mission that requires free enquiry. After all, disagreeing with someone else's facts, theories or ideology could be considered "rude" or "disrespectful." Honest disagreement may be interpreted as not being "welcoming."

Thus, for an academic administration to propose such a code of conduct is yet another example of mission hostile management.

Parenthetically, one wonders whether academic administrators who may be affected by conflicts of interest are particularly prone to favor speech codes that might discourage anyone from questioning their financial ties. We previously posted about the Dr Brody, the President of Johns Hopkins University, who also as a director has fiduciary responsibility for Medtronic Inc, a large manufacturer of medical devices. We wonder whether any Hopkins student or faculty member would dare publicly question the President's apparent dual allegiance, for fear of being branded "rude," "disrespectful," and failing to create a "welcoming" environment.

A Medical School and Tobacco Money

Reported in the media, and perhaps best on Inside Higher Ed, was the story of how the University of Virginia accepted $20 million from tobacco company Philip Morris USA for research on how to prevent children from smoking.

Medical researchers at the University of Virginia believe they have identified an enormously promising way to stop kids from taking up smoking. So when a company was willing to pony up $20 million to finance the research, they seized the opportunity.

The fact that the company was Philip Morris USA, the largest cigarette manufacturer in the United States, has raised some eyebrows nationally, given the tobacco industry’s history of sponsoring research that suited its own commercial purposes.

'The historical record going back to the mid-’50s of the industry using funding to manipulate the scientific process is too strong,' says Stanton A. Glantz, a professor of medicine at the University of California at San Francisco, who has led the campaign at the UC system to ban such funds. 'To accept a gift like this, you have to completely suspend belief in the entire historical record, and assume that [the company has] suddenly decided to become the National Institutes of Health.'

Virginia officials bristle at such a characterization, which they say is an oversimplification. Administrators who crafted the agreement say that the university has complete control over the research that will be done and that Virginia had consulted with leaders across the medical school, including on the faculty, before deciding to accept the funds. 'It was potentially controversial enough that I went and discussed it with our entire leadership,' says Arthur Garson, dean of UVa’s School of Medicine and a professor of pediatrics. The bottom line for UVa, he says, was that 'a company has offered us $20 million to develop better ways so kids don’t smoke. Period.'

Rank and file faculty members at the university, including some who work on tobacco issues or specialize in ethics, tend to agree that the university is on solid ground in accepting the funds. But some also say they are made uncomfortable by the idea that the gift is likely to help Philip Morris’s image, at a time when the company has a continuing interest in the sale of cigarettes to kids, in the United States and, especially, abroad.

Garson says that Virginia officials had discussed the gift, which was more than a year in the making, with the 'entire leadership of the School of Medicine,' including all department chairs. They were assured, he says, that the university would be 'completely in charge of the science,' and that Philip Morris would play no role other than to be apprised of the 'broad outcomes' of the work.

Anti-smoking activists, however, cite several concerns. The most absolutist of them believe that tobacco industry money should be off-limit purely because of its source. 'We think it’s inherently wrong that the money, regardless of how much good it’s going to do, is coming from a source that is inherently tainted,' says Jerome Yates, national vice president for research at the American Cancer Society, explaining why the nonprofit group will not give its own research funds to individual scientists who have accepted grants from the tobacco industry.

'We believe the tobacco industry is a source of a lot of morbidity and mortality in the United States, and that promotion of cigarette smoking is inherently wrong.' Tobacco companies, even if they sponsor some anti-smoking research, still spend much more of their time and money promoting smoking and tobacco use, he notes.

The American Legacy Foundation, a nonprofit group created as part of the federal tobacco settlement, has an even tougher grants policy, barring its funds from flowing to any unit or school at which any researcher is receiving tobacco industry money. 'There is no such thing as a free lunch, and we believe that if you take money from a funder, you have a relationship with that funder,' says Ellen Vargyas, general counsel and corporate secretary for American Legacy. Secondly, a primary reason that tobacco companies like Philip Morris sponsor research like that at Virginia is 'to rehabilitate their corporate image,' Vargyas says. 'Universities should not be a party to that.'

The grant to Virginia is part of Philip Morris’s larger “external research program,” which materials on its Web site describe as “committed to continuously researching and developing new technologies with the potential to reduce the harm associated with our products. The company also finances a Center for Smoking Cessation Research at Duke University (which, like UVa, also resides in the heart of tobacco country), which has received two grants of $15 million, the Philip Morris spokesman says.

A 2006 study in the British Medical Journal’s Tobacco Control examined the first round of grants from the company’s external research program. The authors found that a majority of peer reviewers and of grant applicants had previous ties to the tobacco industry, and concluded that the program 'appears to exist less as a conduit for critical scientific inquiry than to fit into a corporate strategy intended to burnish PM’s public image.'

I'm afraid that this story illustrates how academic medicine's focus on finding more external funding has diluted its attention to its primary mission. We have discussed how academic medicine's financial entanglements with pharmaceutical, biotechnology, and medical device companies have too often lead to arrangements in which academics while cloaked in their academic regalia appeared to be helping these companies market their products.

But at least these companies make products that are meant to improve health, and often have health benefits that outweigh their harms.

There is no doubt that smoking cigarettes leads to severe health risks, and has never been shown to provide any important health benefits. In my humble opinion, acceptance by a medical school or academic medical center of research money from a tobacco company is an affront to the academic medical mission. Academic medicine should not be a party to helping a tobacco company improve its image.

Maybe the university's Board of Visitors should awake from their "slumber" and put a stop to this example of mission-hostile management.

We have discussed before how academic medical centers have been willing to give up their faculties' control over research products to pharmaceutical, biotechnology, and device companies in exchange for financial support

While Hospital Board Members "Slumber"....

With some reading between the lines, a story in the Boston Globe by Christopher Rowland helps explain some of the problems that afflict the leadership of health care organizations. To summarize the story, in quotes,

Hospitals increasingly are expecting volunteer trustees to go beyond the role of community boosters and tackle an imposing medical issue: preventing errors that lead to patient injuries and deaths.

Trustees traditionally have used their positions on hospital boards for social networking with other business executives and raising money through events such as fashion shows and golf tournaments. But expanding the scope of their responsibilities and time commitment is seen by hospital officials as key to improving patient safety because it would focus more attention on flawed policies and procedures that lead to mistakes.

'Board seats in American hospitals have traditionally been relatively honorific positions,' said Donald M. Berwick , chief executive of the Institute for Healthcare Improvement , a Cambridge nonprofit that is considered a leader in national efforts to reduce hospital errors. He said it is time for hospital boards of directors -- along with executives and physicians -- to 'rise from slumber and view safety as an urgent matter.'

Doctors caution against volunteer board members delving too deeply into areas that require medical expertise, but they generally support the increased focus on safety. Greater involvement can help board members recognize that safety improvements require more resources and better technology, they said.

'We don't want them micromanaging, but it promotes an interaction between the board and the medical staff that we would like to see happening,' said Dr. Kenneth R. Peelle , president of the Massachusetts Medical Society , which represents 18,000 Massachusetts doctors.

Until the last several years, individual hospital boards in Massachusetts and other states had not paid much attention to the issue of preventable deaths, leaving oversight to doctors and administrators.

Not to minimize the issue of patient safety, I believe this article brings up a larger issue affecting hospital governance, and, more broadly, the governance of health care organizations. The issue is that the boards of many health care organizations have not taken their fiduciary responsibilities seriously. Boards of not-for-profit corporations or NGOs are responsible for keeping the organizations' activities focused on their missions. Instead, this article suggests that hospital boards are often peopled by local business-people interested in "social networking" and glitzy events. Boards need to arise from their "slumber," not just to worry about patient safety - although they surely should worry about that - but to make sure the organizations for which they are responsible are adhering to their missions.

On Health Care Renewal we have seen multiple cases of hospitals, academic medical centers, and health care systems whose managers have been mission-hostile, conflicted, or even corrupt. In many of these cases, there was little evidence that the organizations' boards were aware of the problem, or did much about it until it created headlines, if then. We need board members who can not only arise from their "slumber," but who are willing and able to make sure the hired management understands, respects, and operationalizes the mission.

Hospital grows a pair, tells commercial insurer to get lost

The hospital where I did my residency, Abington Memorial Hospital in suburban Philadelphia (founded in 1913 in memorial to Montgomery County, PA socialites lost on the Titanic), has done something that I hope sets a trend. Magellan, the regional insurance administrator for mental health plans for Blue Cross and several Medicaid HealthChoices plans, has become less of the risk-taking explorer represented by its namesake and more of a miser of late. Hospitals are losing money on providing psych care to commercially-insured patients.

The hospital decided "were not going to take it anymore." Bravo. May more follow.

Mental-health contract expires at Abington

The hospital and Magellan disagree over reimbursement rates.
By Stacey Burling, Inquirer Staff Writer

March 6, 2007

A key contract for payment of mental-health services at Abington Memorial Hospital expired yesterday, leaving Independence Blue Cross and some Medicaid subscribers with the prospect of higher bills or disrupted care.

Hospital officials said Abington's reimbursement rates from Magellan Behavioral Health have been fixed since 2002. Magellan administers managed-care mental-health plans for Blue Cross and several Medicaid HealthChoices plans.

Last year, the hospital lost $1.2 million providing psychiatric care to Magellan patients, said Richard L. Jones Jr., Abington's president and chief executive officer.

The hospital provides a range of outpatient and inpatient psychiatric care ... Abington's chief financial officer said the hospital received about $1 million in reimbursements from Magellan last year. It asked for an increase of more than 100 percent to cover its costs.

Denny Moody, senior vice president of network services for Magellan, said Magellan initially proposed a 20 percent increase in reimbursement to Abington and then added "substantial increases above that."

Magellan could not justify more, he said. "We can say with absolute confidence that the rates Abington had received are market competitive," (market competitive. meaning, everyone gets paid the same ridiculous rates -- ed.) he said. "We weren't in a position where we could justify a significantly aberrant reimbursement rate to the marketplace." (yes, it might decrease profits - ed.)

[The hospital CFO] said mental-health payments traditionally had been poor. "I don't know that our costs are a whole lot different than other providers," he said. "It's an issue of us taking a stand that we're not going to lose money on commercially insured patients."

... Patients covered by Magellan can continue to receive mental-health treatment at the hospital, but could be faced with out-of-network deductibles and other charges.

The health plans affected by the contract expiration include Medicaid plans through AmeriChoice of Pennsylvania, HealthPartners and Keystone Mercy Health Plan. Independence Blue Cross plans affected are Keystone Health Plan East, Personal Choice, Personal Choice High Deductible, Keystone Point-of-Service, Keystone Direct, Personal Choice 65, Keystone 65 and Security 65.

"It's an issue of us taking a stand that we're not going to lose money on commercially insured patients." What a thought. Now, if only private practitioners grew the same cojones.

-- SS

A Medical School Joins the Pepsi Generation

We just discussed a story from late 2006 about the Dean of the University of Minnesota Medical School joining the board of directors of PepsiAmerica.

It turns out that this has been generating continuing controversy at the institution. This controversy has shed light on some serious misconceptions among medical school leaders about what service on the board of directors of a publi, for-profit corporation entails. According to the Pioneer Press,

University of Minnesota Medical School Dean Dr. Deborah Powell expected questions after joining the board of PepsiAmericas, one of the world's largest sellers of Pepsi and Mountain Dew.

Three months after Powell signed on with PepsiAmericas, though, the questions haven't ebbed. Outside critics continue to ask why a high-profile state health official would join with a firm whose main products are linked to childhood obesity and diabetes. One U researcher wants a 'serious conversation' about the ethics of corporate consulting.

Powell said she wanted to be a voice for nutrition in the boardroom. She and her boss — who backs her decision — say the PepsiAmericas position is proper and valuable to the university.

A recently completed internal review, standard for any U employee involved in outside work, found no conflict of interest in her service to PepsiAmericas, a publicly traded company that is the world's second-largest bottler of PepsiCo. brands.

'If I didn't think I could make a difference on this board, I wouldn't stay on it, and I wouldn't go on it in the first place,' Powell said Friday. 'I'm trying the best I can to do something that I think will be valuable for the school and valuable for this company.'

'What better way to get knowledge about obesity into the company than by bringing it into the boardroom?' said Dr. Frank Cerra, senior vice president for health sciences at the U. He oversees all aspects of medicine and health research at the U, including the medical school and the school of public health.

'It seems to me like a very appropriate role for the university, providing there are no conflicts of interest that haven't been disclosed.'

Each director of a public, for-profit corporation has fiduciary responsibility to the stock-holders of the company for the company's financial performance and general management.

From Monks RAG, Minow N. Corporate Governance, Third Edition. Malden MA: Blackwell Publishing, 2004. P. 195.

In theory, at least, the law imposes on the board a strict and absolute fiduciary duty to ensure that the company is run in the long-term interests of the owners, the shareholders.

Members of the board are not simply advisors. The notion that Powell's main role on the board is to provide "knowledge about obesity," or to be "a voice for nutrition" is naive at best. Powell is supposed to protect the stock-holders financial interests. If PepsiAmerica wanted Powell to provide advice about obesity or nutrition, it could have hired her as a consultant or put her on a scientific advisory board.

It's noteworthy that even some of Powell's critics seemed to misunderstand her responsibilities as a board member.

But Robert Jeffery, a nationally known researcher and a director of the Obesity Prevention Center in the U's school of public health, worries Powell's PepsiAmericas duty ultimately may hurt the university.

The U, he said, needs to have a 'more serious conversation about where the ethical lines lie in corporate consulting. Whenever you get into a paid relationship with a commercial enterprise, there is an implied or maybe even explicit agreement that you're doing things for their benefit.'

With public concern rising about marketing and overconsumption of soft drinks and the health problems that can result, 'I think the university does run the risk of being seen in a less favorable light by having a high-profile person taking a high-profile consulting job … in an industry that people are trying hard to regulate,' Jeffery said.

Were Powell hired as a consultant, these objections would make sense. But Powell's relationship with the company is supposed to be much stronger than that of a consultant. And as a board member she certainly has an obligation to be "doing things for their benefit."

Powell also seemed to have an odd misconception about the remuneration of board members.

Like other outside directors, Powell will be paid in cash and PepsiAmericas stock for her service on the beverage company's board, including a $30,000 annual retainer, $2,000 for each board meeting attended and $60,000 in stock.

Powell said the money didn't factor into her decision. 'I didn't know before I went on the board that I would be paid,' she said.

One critic has suggested Powell donate her PepsiAmericas board money to obesity and health research. Powell said she makes charitable contributions but that her philanthropy was her own business.

Of course, board members of large US for-profit corporations tend to be paid handsomely, sometimes well into six figures a year. It is amazing that Powell did not seem to know that. Maybe it is not so amazing that having found out her good fortune, she seemed reluctant to part with it.

Again, it is striking to me that there is this much naivete, or denial about what being on the board of directors of a for-profit corporation entails among the top leaders of academic medicine.

Once they understand what obligations they have as for-profit corporate board members, they need to re-think whether these obligations pose severe and unmanageable conflicts of interest with respect to their responsibilities as academic health leaders.

As long as academic health leaders remain on the board of corporations, which are, unlike PepsiAmerica, directly involved in health care, (e.g., pharmaceutical, biotechnology, medical device, managed care, and contract research corporations), questions will be raised about conflicts between the obligations of their day jobs and the fiduciary responsibilities entailed by their board memberships.

Computer debacle: a Broken down process at the agency - or beyond?

A story in the WSJ has many familiar, recurrent themes to those who know the health IT sector well:

Report on FDA Blasts New Effort To Track Drugs; Four-Year Delay Is Said To Hinder Safety Work; Agency Disputes Claims

Anna Wilde Mathews. Wall Street Journal. Mar 3, 2007. pg. A.1

The Food and Drug Administration has bungled its effort to build a new system for detecting the side effects of medicines after they go on the market, delaying its implementation by at least four years, according to a report commissioned by the agency itself.

As a result, the agency must continue to rely on its existing "dysfunctional" computer system as a primary tool for tracking the safety of medications sold in the U.S., according to the November 2006 report, which hasn't been made public.

A dysfunctional computer system? Computer systems do exactly what they're designed to do. Perhaps its designers and implementers were the ones who were "dysfunctional?"

The situation is "frustrating and undermining . . . the post- marketing drug safety work" of its staff "because they lack some of the basic tools they need to perform their jobs, e.g. a computing system that meets their requirements," says the report. It was prepared by the Breckenridge Institute, a research and consulting firm in Breckenridge, Colo.

You'd think designing such a computer system were magic.

The FDA's drug-tracking system, called the Adverse Event Reporting System, consists of a database and other software and hardware that amass and help sift reports of potential side effects that have been filed by drug makers, doctors and others. The data are the FDA's main way to detect drug-related hazards, and can lead to changes in label warnings or even withdrawals of drugs from the market.

But, the report says, FDA safety experts waste time -- an average of 45 minutes per day -- dealing with the inefficiencies and snags caused by the current software. The Adverse Event Reporting System is overwhelmed by the growing volume of adverse-event reports, which exceeds 400,000 a year, the report says.

If that's an average, I wonder what the topside values are....considering the threats to the public and the drug industry from drug adverse events, one might think this would have been fixed by now...

Then again, there's stories like this that may help explain some of these problems ...

I recall an interview I had last year with the head of an adverse events department at Merck in a rehire situation. I came highly recommended by an Executive Director in the department, to whom I had shown my prior work. This included well-accepted, novel human-computer interaction designs I'd developed for use by busy biomedical researchers for a large clinical study in the Middle East , as well as my work modeling invasive cardiology and leading the development and implementation of a comprehensive information system to detect new device and treatment modality risks in a regional center performing more than 6,000 procedures/year. In addition, I'd worked with the wife of the Executive Director in years prior, when she ran the E.R. of the hospital where I was director of occupational medicine.

Despite all this in my favor, the Executive Director's boss, himself formerly one of the most senior FDA adverse events official in the Office of Drug Safety, dismissed me in five minutes as I was showing him the cardiology project, saying flatly "we don't need a medical informatics person here." I had driven 80 miles to Rahway for this interview to save the executive a trip to Pennsylvania, where I was originally scheduled to come for the interview, since the executive's father was ill in the hospital. In an instance of profound social ineptness, my effort was not even acknowledged. Perhaps he was in a bad frame of mind, but the dismissal under the circumstances was all the more disappointing.

(As an aside, this former FDA person who blew me off is a Hasidic Jew. Ironically, despite my being of the same basic tribe, I was treated better by the Saudi head of research during my locum at King Faisal Specialist Hospital & Research Centre in Dec 1995, who was polite and even took my colleagues and I out to dinner and to his family's shops although his own relative was sick and in the hospital at that time. How absolutely, positively perverse it was to be glibly dismissed by the former FDA official-now-at-Merck under these circumstances, I thought.)

... The FDA has sought to upgrade the technology used in its safety- tracking program for years. But efforts that date back at least to 2003 haven't produced the planned successor to the Adverse Event Reporting System, dubbed AERS II. Instead, the Breckenridge report says a new system isn't likely to be up and running until 2009 at the earliest, and that the FDA has wasted an estimated $25 million through its efforts.

Considering some of the failed health IT stories to appear in the news in recent years, we should perhaps be thankful it's only $25 million.

... A document prepared by FDA officials in response to the report, which is marked as a draft, said it is "riddled with editorial conclusions based on misleading or incorrect facts." Douglas Throckmorton, deputy director of the agency's drug center, said the current Adverse Event Reporting System "is a system that is working" despite "exploding" amounts of data. "Is it the best it can be? Of course not," he said. The FDA wants to develop a replacement "as quickly as anyone else does, but we want it to be done right."

Based on my own observations on health IT failure, blame-shifting and excuse-making, I'd place more credibility on the consultant's reports.

Echoing other recent outside examinations of the FDA, the Breckenridge analysts say the "root cause" of the problems can be found in the culture of the agency's drug regulators. More specifically, the report largely blames a "lack of effective leadership and management" by the center's Office of Information Technology, which it says mishandled the initiative through bureaucratic infighting, flawed planning and duplicative work performed by outside contractors.

Mark Bodnarczuk, executive director of the Breckenridge Institute, said he stands by the contents of the document. After it was completed, the FDA asked him to delete much of it, he said: "What they asked me to do was gut the report, and I refused to do it." The FDA's Dr. Throckmorton said he believes Breckenridge was asked by FDA to extend its work, at no cost, which would have "given us an opportunity to talk about those misunderstandings, those inaccuracies."

These themes are quite familiar to readers of HC Renewal. (Will the Breckenridge Institute get less federal work as a result of their refusal?)

FDA contracting practices, as well as the agency's handling of drug safety, are already the focus of congressional investigations. Senate Finance Committee Chairman Max Baucus, a Montana Democrat, and ranking Republican Charles Grassley of Iowa have sent a letter to the FDA about the computer-system issue. Mr. Baucus said the report raises "troubling questions," and Mr. Grassley said the report is evidence of a "broken-down process" at the agency. In the House Energy and Commerce Committee, Democrats John Dingell and Bart Stupak, both of Michigan, are also examining FDA contracting.

I believe it's more than a "broken down process at the agency." It's a "broken-down process" in the world of IT, i.e., the belief that IT is a homogeneous industry where expertise in business computing equips one to do all computing. I would be curious to know the backgrounds of those IT personnel who were involved in the leadership, planning and development of AERS II. I would bet most had a technical focus, and I would also bet none had expertise in medical informatics.

Perhaps one day the drug industry, including the FDA, will accept the IOM's recommendations on medical informatics.

-- SS

Mission-Hostile Management: "Chaos" as the UK NHS Implements "Modernising Medical Careers"

A year ago we posted bout the problematic new system, called "Modernising Medical Careers," (MMC) that UK National Health Service (NHS) managers had put in place to match junior physicians with specialized training positions (called specialist registrar positions). Concerns at the time centered on importance in the matching process of applicants' responses, in the form of very short essays, to standardized questions posed on a web-site. It seemed there would be no way to check the accuracy of their answers, that the relevance of the questions to one's ability to practice in a given specialty was questionable, and that the whole system devalued traditional measures of clinical competence and educational performance.

I wrote last year's post with some trepidation, fearing that I may have not adequately understood the context of the new system in the UK (although I spent some time in the UK in the 1990's gaining experience with the generally excellent medical education system there.) Now MMC is up and running, and the results don't seem pretty, perhaps validating my concerns. Per the BBC,

Doctors' training was revamped in 2005, with the aim of speeding up progress so juniors could reach consultant level in an average of 11 years, rather than the current 14.

However doctors who have been through their initial stage of training under both the old and the new systems are all competing for a limited number of specialist training posts.

Remedy UK says early results from a survey of over 1,300 doctors suggest an overwhelming majority do not think the system is a fair way of selecting new doctors.

There are also concerns that the website set up under the Modernising Medical Careers system to co-ordinate job applications simply cannot cope.

Problems reported range from people being unable to upload application details to not being able to access the site to see if they have an interview - which started just two days after being announced via the site - and the potential staffing problems on wards caused by junior doctors heading off to interviews at the same time.

Doctors also report that some highly experienced colleagues had not been selected for interview, and that the way the system is organised means only a limited number of posts are available for doctors with the most experience, including those who have taken PhDs.

Jamie Wilson, a London-based psychiatry student - one of many who has contacted the BBC to raise concerns about the system - said: "The whole system is a shambles, and the applications process is chaotic."

A spokesman for the BMA said the reason for the problems boiled down to the new training system being rushed in.

"It's a huge task to get these tens of thousands of doctors into new jobs."

He added: "There is evidence that very competent and able doctors have had no interviews at all."

But a Department of Health spokeswoman said: "Medical employment, like any other employment, is competitive."

[However,] doctors are set to take to the streets to protest about what they say is a "shambolic" system which could see at least 6,000 without training posts.

A grassroots movement is organising the march in London on March 17, and claims 1,000 doctors have already signed up.

When doctors threaten to march in the streets, things must be getting really bad.

In two articles in the Telegraph (here and here), there was additional emphasis on the new system's apparent inability to identify the most experienced and qualified physicians.

[A Professor of Plastic and Reconstructive Surgery said] They have spent an enormous amount of money creating this new system and the whole thing is spiralling into chaos. It is quite immoral to inflict this on motivated young doctors. I cannot find a single doctor who is happy with this flawed process and ultimately it is the patients who will suffer.

Bernard Ribeiro, the president of the Royal College of Surgeons, wrote to all members on Thursday listing five 'fundamental difficulties' in the system.

'For 18 months I have tried to get this system modified and the number of surgery places expanded,' Mr Ribeiro said. 'I have not succeeded. This system must be reviewed urgently.' [Note that in the UK, surgeons are referred to as 'mister.']

Problems listed by the royal college are: 'woolly' questions on the application forms; concern that qualifications have not been taken into account; concern about the adequacy of training for assessors; inconsistent rating and errors in reporting the results.

As I noted earlier, one wonders if this chaos reflects the preference by modern managers, be they in the UK or the US, for computer based solutions for every problem. The tendency to believe automation is the magic solution to every problem may create particularly unhappy results when the computerized system is set up by people who seem to have little understanding of the clinical and educational context in which it is to be deployed. But modern management philosophy in the US (and I suspect in the UK) seems to believe managers can succeed even if they have little knowledge of the specific context and values of the organization which they seek to manage. It seems to be a recipe for the mission-hostile management that we now see so often in health care.

To get an idea how upset UK junior doctors are, see NHS Blog Doctor.

Medical Schools Go Better With Pepsi?

This is not a new story, but one I just discovered thanks to one of our helpful correspondents. The Associated Press reported this controversy late last year.

The dean of the University of Minnesota Medical School is defending her decision to join the corporate board of PepsiAmericas, even though doctors and public health officials increasingly name Pepsi and other sugary drinks as a major factor in rampant childhood obesity and tooth decay.

Medical School Dean Deborah Powell said it's fair to question why she would join the board of the world's second-largest maker of soft drinks.

'I really thought about that a lot,' Powell told the St. Paul Pioneer Press. 'I thought it was an opportunity for me as a health professional to have my voice heard by the leadership of a major beverage distributor with a global reach.'

Pepsi, Diet Pepsi and Mountain Dew remain its most important brands, accounting for $3 billion in U.S. sales. That could put Powell in a delicate position, on the board of a company whose success rests on products often reviled by her medical peers.

But Powell believes she can bridge the two worlds.

'The issue of children and adolescents being exposed to carbonated, sugar-filled soft drinks is one that everybody is talking about, and I think (corporate) boards have to reflect about,' Powell said. 'I think we can do it in a responsible way to ensure that the company is successful and shareholder value is maximized and people take into account responsible stewardship.'

Like all outside directors, Powell will be paid in cash and company stock for her board service. That includes a $30,000 annual retainer, $2,000 for each board meeting she attends and $60,000 in stock.

With all due respect, I do not believe Dean Powell understood the responsibilities of a director of a public, for-profit company. Her job is not to "make her voice heard" about or thus advise the company about public health or health care policy. Her job is to take fiduciary responsibility for the company for the benefit of its stockholders. Her job is to maximize the financial performance of the company, whether or not doing so is in accord with her, or anyone's ideas about ideal health policy. That is why her new position could lead her into conflicts of interest.

I wonder whether leaders of academic health care who have more acute conflicts of interest, because they also are directors of pharmaceutical, biotechnology, medical device, managed care, or contract research companies, may similarly misunderstood, or rationalized their corporate responsibilities.

If so, they ought to be better informed. But as long as they accept fiduciary responsibility for for-profit health care companies, they are liable to acute conflicts of interest between those responsibilities and their responsibilities to uphold the academic health care mission, which requires putting the care of individual patients first, and creating and disseminating knowledge through free enquiry.