Affinity RNs Call for Halt to Flawed Electronic Medical Records System Scheduled to Go Live Friday

At my May 30, 2013 post "Marin General Hospital's Nurses are Afraid a Defective EMR Implementation Will Harm or Kill Patients ... CEO Cites Defective HHS Paper and Red Herrings As Excuse Why He Knowingly Allows This To Continue" at http://hcrenewal.blogspot.com/2013/05/marin-general-hospitals-nurses-are.html, I lamented that hospital management felt they could ignore clinicians calling for implementation postponement of what they viewed as bad health IT, dangerous to patients, with impunity.

Finally, medical professionals stand up to imperial hospital management that, in a perhaps criminally negligent fashion (e.g., see my post on the ECRI Deep Dive Study on Health IT harm at this link), ignores its clinicians over too-rapid deployment of health IT.

Also see newspaper article at http://www.cantonrep.com/news/x393137745/Affinity-nurses-seek-delay-on-electronic-records#axzz2WcOMZpvF.

(The hospital management is extolling the safety of the new Cerner system.  What could possibly go wrong?  -- I'd bet the executives, despite their fiduciary duties towards maintaining a safe hospital environment, have no idea about Cerner defects such as at the FDA MAUDE database; see "MAUDE and HIT Risks: What in God's Name is Going on Here?" at http://hcrenewal.blogspot.com/2011/01/maude-and-hit-risk-mother-mary-what-in.html or are familiar with "Medical center has more than 6000 'issues' with Cerner CPOE system in four months" at http://hcrenewal.blogspot.com/2010/10/medical-center-has-more-than-6000.html.  Instead, unpaid bloggers do their work for them to protect patients....)

See this:

-----------------------------

For Immediate Release - June 18, 2013

For more information: Michelle Mahon, RN, 234-207-6706 or Liz Jacobs, RN, 510-273-2232

Affinity RNs Call for Halt to Flawed Electronic Medical Records System Scheduled to Go Live Friday

Affinity Medical Center RNs in Massillon, Ohio are calling on hospital officials to delay the planned June 21 implementation of the Cerner electronic medical records (EMR) system, until the hospital bargains with the nurses and proceeds in a safe manner.

The direct-care RNs, represented by the National Nurses Organizing Committee (NNOC) in Ohio, an affiliate of National Nurses United (NNU), say that nurses, the primary users of the complex system, have had insufficient training, which will put patients at risk. The implementation, which has been done without bargaining with NNOC, reflects yet another violation of federal labor law by Affinity, nurses say.

Nurses have documented their concerns in a detailed letter to hospital officials. Those concerns include woefully inadequate training, short staffing in the first days of the roll out, and the subsequent risk of harm to their patients.  The system, they say, has the potential of violating the Ohio Nursing Practice Act because it doesn’t permit RNs to communicate individualized, potentially life-saving information about their patients.

The letter, which RNs attempted to deliver to hospital officials on Friday, cites nationally recognized experts in health information technology who reinforce the RNs’ concerns. Most notably, the Institute of Medicine (IOM) has concluded that the failure to include RNs in all steps of this transition is one of the most significant barriers to successful, safe implementation of electronic health records systems.

Hospital officials have continued to refuse to meet with nurses, and would not accept the letter.  [Willful ignorance? - ed.] Without bargaining with the union or acknowledging the nurses’ concerns, the hospital added a few more trainings late Friday, but the RNs say that remains far from adequate.

Over the last few years, American healthcare corporations have invested heavily in information technology (IT) systems, which make up a multi-billion dollar market.

“RNs who actually use these systems day in and day out have found that the kind of care they can provide with this new technology is limited,” said NNOC Co-president Cokie Giles, RN. “The programs are often counterintuitive, cumbersome to use, and sometimes simply malfunction. Nurses are finding that the technology is taking time away from patients and fundamentally changing the nature of nursing.”

NNOC/NNU has successfully negotiated clauses in its contracts that allow RNs to play a greater role in reviewing and approving new technologies before they are introduced, and that the new technologies will not supersede RN professional judgment. 

“I have been chosen as a ‘super-user,’ said Amy Pulley, an RN who works in the endoscopy unit of the hospital. “I’m not sure what makes me ‘super’ with the limited training for this complex system that I’ve received. I’m concerned that the manner in which this technology is being implemented may pose serious disruptions in patient care.”

Highlights of RN Concerns on the Implementation of the Cerner Electronic Medical Records System at Affinity Medical Center

Inadequate Staffing

·        Several units will be severely short staffed for the transition, despite the fact that the hospital has been planning on the “go live” date for several months.

·        The entire hospital and all portions of the system will go live at once, referred to as the “big bang” approach, which has a very low rate of success, rather than implementing it in trial, pilot stages.

·        They are utilizing the ‘super-user’ model which will pull nurses from direct-care so they can be available to teach, leaving several units without enough nurses to care for patients.

·        The hospital refuses to decrease the number of elective procedures or provide additional staff during the transition time.

Lack of training

·        Some nurses have received only one day of training.

·        Super-users have received no education or training in the system beyond what is provided to the other users.

Design flaws

·        Placement of the workstations are ill conceived—RNs must turn their back to patients while documenting.

·        During one education session, the system crashed because 17 users at one time overloaded it.

Failure to consult nurses

·        Several concerns were brought to management’s attention which they were unable to answer. One example— how will RNs override the system in the event of an emergency?

Affinity is one of five hospitals in California, Ohio, and West Virginia that are part of one of the nation’s largest for-profit hospital chains, Tennessee-based Community Health Systems where affiliates of NNU are pursuing federal action for significant violations of RN rights.

The National Labor Relations Board held a five-day hearing in May in a complaint filed by the nurses and NNOC over Affinity’s refusal to bargain a first contract and retaliation against RNs for advocating for their patients and their colleagues. A decision by an NLRB administrative law judge is pending. CHS affiliated hospitals in West Virginia and California are facing similar sanction from federal officials. At one of the California hospitals last week, a U.S. District Court judge issued an injunction ordering the hospital to return to negotiations with the RNs.

CHS is the second largest for-profit hospital chain in the United States, and one of the wealthiest. Over the past five years, CHS reported over $1.5 billion in profits to the Securies Exchange Commission.

Michelle Mahon, RN

National Representative

National Nurses United

mmahon@nationalnursesunited.org

234-207-6706

I believe the nurses should strike if their concerns are not heeded.

I once worked in a highly-unionized city Transit Authority; I believe the unions would have shut the Authority down in the face of even a fraction of concerns like this that could impact pubic safety - and their own memberships' careers and lives.

-- SS

6/20/13 addendum:

I note that this EHR medical device (per FDA) is non-FDA approved, nor vetted by any regulatory agency.  Apparently the hospital believes it has the prerequisite skills and expertise to vet this device for safety.  Who, exactly, will take responsibility for bad outcomes?

FDA's Chair of the Center for Device and Radiological Health, Jeffrey Shuren, MD JD, stated explicitly that EHRs were medical devices on Feb. 25, 2010 (see testimony to the HHS Health Information Technology HIT Policy Committee at this PDF) that:

... Under the Federal, Food, Drug, and Cosmetic Act, [that regulates all drug, medical devices, etc. in the United States - ed.] HIT software is a medical device. Currently, the FDA mandates that manufacturers of other types of software devices comply with the laws and regulations that apply to more traditional medical device firms. These products include devices that contain one or more software components, parts, or accessories (such as electrocardiographic (ECG) systems used to monitor patient activity), as well as devices that are composed solely of software (such as laboratory information management systems)... To date, FDA has largely refrained from enforcing our regulatory requirements with respect to HIT devices.

I also note that patient informed consent to its use in their care is likely not being sought.  Should it?  If not, why not?

-- SS

9/2/2013 addendum

The comment by "Anonymous August 20, 2013 at 11:24:00" has many characteristics of a sockpuppet (see http://hcrenewal.blogspot.com/2010/01/more-on-perversity-in-hit-world.html) - ignoring everything written in the post and expressing perverse and deranged views.  See it, and my response, in the comment section.  A post about an anti-health IT union dispute such as this is a strong potential sockpuppet magnet.

-- SS

"Computer problems" force docs back to paper charts at Memorial Hospital - From June 11 until at least June 24?

More on the wonders and dependability of commercial health IT, as implemented in hospitals, which are generally an IT backwaters:

Computer problems force docs back to paper charts at Memorial Hospital

Published: June 17, 2013 

BELLEVILLE (Illinois) — Computer problems have caused Memorial Hospital (http://www.memhosp.com/Pages/Home.aspx) staff back to the old days of using paper to chart patients' treatments.

The hospital's computer system, Meditech, went down late on Tuesday, June 11 and is not expected to be fully restored until at least Monday, June 24, according to the hospital. In the meantime, staff will be recording patients' medical records unto traditional paper charts.

"While the duration of this down time is unfortunate, all hospital services continue utilizing the backup process we have in place for occasions such as this," Memorial President Mark Turner said in a prepared statement. "I am extremely proud of the way our employees and medical staff have pulled together to maintain quality care and patient safety."

Once the system is up and running again, the information from the paper charts will be transferred into each patient's electronic medical record. The same standards for patient confidentiality and safety are being met, according to the hospital.

The computer problems are believed to result from upgrades added to the system in preparation for a major upgrade in July.

"The duration of this down time is unfortunate?"  This mission-critical system went down June 11 and won't be fully restored until June 24?  How is this even possible?  What, exactly, were their maximal-uptime, redundancy, disaster recovery and business continuity strategies?  Was there a natural disaster in that area I don't know about?

Regarding the hospital President's statement that:

"I am extremely proud of the way our employees and medical staff have pulled together to maintain quality care and patient safety."

I would translate that to read:

"Our IT incompetence is all on you, clinicians.  You're liable for any patient harm that results in the messy transitions from IT to paper, and back from paper to IT."

-- SS

Addendum - a question I've asked before - if everything is just fine, business as usual, with no safety impediments after reverting to paper due to emergency ... then why spend $100 million+ on EHRs?

Read more here: http://www.bnd.com/2013/06/17/2660472/computer-problems-force-docs-back.html#storylink=cpyA

A Call to Restore the Integrity of Clinical Research - but Will Anyone Heed it?

Concerns about suppression and manipulation of clinical research to serve vested interests have finally gotten a little more mainstream.

Background: Suppression and Manipulation of Clinical Research

For a long time, we have decried and discussed examples of manipulation of clinical research done to increase the likelihood that its results would please vested interests, often drug, device or other corporations that sponsored the research and often exerted considerable control over its design, implementation, analysis, and dissemination.  We have also decried and discussed examples of suppression of research whose results offended such vested interest, sometimes done when manipulation did not succeed in producing such pleasing results.


I wrote about suppression of research in my 2003 paper on health care dysfunction,(1)

The integrity of medical research has been violated by the deliberate suppression of its results.

That assertion was based on several important, although understandably largely anechoic cases.

I first wrote about systematic attempts to manipulate clinical research in 2005, based on Richard Smith's PLoS Medicine commentary which listed specific tactics that vested interests could use to make it more likely that research studies would provide them with favorable results.

Although striking cases of manipulation and suppression appeared more frequently starting in the 1990s, in the last few years it has become more apparent that these are widespread problems.

A Call to Restore Integrity

This week, the British Medical Journal published a special article calling for restoration of suppressed or manipulated clinical trials(2), accompanied by an editorial entitled, "restoring the integrity of the clinical trial evidence base."(3)

The article used slightly different terminology than we do, replacing suppression with invisibility, and manipulation with distortion, thus,

Two basic problems of representation are driving growing concerns about relying on published research to reflect the truth. The first is no representation (invisibility), which occurs when a trial remains unpublished years after completion. The second is distorted representation (distortion), which occurs when publications in medical journals present a biased or misleading description of the design, conduct, or results of a trial.

The article boldly asserted

Both go against the fundamental scientific and ethical responsibility that all research on humans be used to advance knowledge and are symptomatic of a general culture of data secrecy. The end result is that the healthcare, biomedical research, and policy communities may, despite best intentions and best practices, end up drawing scientifically invalid conclusions based on only those parts of the evidence base they can see.

The editorial went further, asserting that

This crisis of hidden or misreported information from clinical trials—and the resulting distortion of the clinical evidence base—is widely recognized and commonly decried. It is one of the leading scientific problems of our time, but few solutions have been put forward.

Furthermore, it concluded with a warning about the immorality of continuing on the current course,

The results of clinical trials are a public, not a private, good. The public interest requires that we have a complete view of previously conducted trials and a mechanism to correct the record for inaccurately or unreported trials. If we do not act on this opportunity to refurbish and restore abandoned trials, the medical research community will be failing its moral pact with research participants, patients, and the public. It is time to move from whether to how, and from words to action.

Thus the notion that suppression and manipulation of clinical research is a systemic, severe problem that confounds health professionals and hurts patients is no longer a concern of only a few fringe dissidents, but a matter for discussion in the foremost mainstream medical journals.

Will Anyone Heed the Call?

Furthermore, this dire problem formulation suggests the need for a strong solution, as proposed by the article, and seconded by the editorial.  Using the term "abandoned trials" for " unpublished trials for which sponsors are no longer actively working to publish or published trials that are documented as misreported but for which authors do not correct the record using established means such as a correction or retraction (which is an abandonment of responsibility)," Doshi and colleagues wrote,

We call on institutions that funded and investigators who conducted abandoned trials to publish (in the case of unpublished trials) or formally correct or republish (in the case of misreported trials) their studies within the next year.

Starting in 2005, we have repeatedly called for protection of " researchers' rights to speak truth to power," but then noted that "right now, it is more often power that speaks to truth."  The question is whether without some bigger allies, individual clinical researchers will stand up on their own to restore the integrity of clinical research.

The big reason to worry is that most of these researchers work within a context which strongly favors vested interests, rather than scientific truth, or the rights of research subjects.  The researchers who would be most likely to be able to heed the call by Doshi et al are those within academic medicine. Yet clinical research in the academic medical world now functions within a strong and deep web of individual and institutional conflicts of interests, subjects that we also have written about incessantly.

There is evidence suggesting that the majority of medical faculty,(4) and the majority of their academic departmental leaders(5) have important financial ties to the health care corporations most likely to have reason to want to suppress or manipulate research.  Furthermore, most academic medical institutions have stated their interest in increasing "collaboration" with industry, usually giving the rationale that this will lead to "innovations" that will bring better tests or treatment to patients. (See posts here,  here and here for some examples.)  Such collaboration also tends to bring a lot of money to institutional budgets.  Further collaboration with industry is likely favored by academic leaders' own financial ties to the same sorts of corporations discussed above.  Thus it should be no surprise that a study by Mello et al in 2005 suggested that most of the managers of academic medical institutions who control research contracts are willing to give significant control of of research design, implementation, analysis, and dissemination to the sponsors, not the researchers.  (See this post.) (6)


Thus, a researcher who volunteers to restore suppressed or manipulated clinical studies might become suddenly very unpopular with his or her colleagues or supervisors, and perhaps with people who are already paying him or her.

So as long as health care professionals, policy makers, and the public at large are willing to go along with the notion that academic medical institutions' "collaboration" with "industry" is absolutely necessary to foster "innovation" and hence medical progress, it is very unlikely that academic medical researchers will be willing to help restore the integrity of clinical research.  In fact, while we continue on our present course, the integrity of clinical research will probably get even worse.
 
Since questioning the integrity of contemporary clinical research might make those with vested interests who have been willing to suppress or manipulate research very uncomfortable, perhaps it should be no surprise that the paired articles in the British Medical Journal have been relatively anechoic.  For example, while one might think the publication of these simultaneous articles might get at least a little coverage in the "main-stream media," I can find not a single mention of them there.  (So far, only the Chronicle of Higher Education, MedScape the Science Insider blog and The Scientist blog have provided news coverage.)


So I hope the brave people who wrote the article and editorial are also willing to join us in decrying the web of individual and institutional conflicts of interest that have entangled health care professionals and academic medicine.  Individuals and institutions who make medical or health care decisions, or who are involved in medical and health care education and research should reveal all their conflicts of interest, at least in the interests of honesty.  Furthermore, in the interest of patients' and the public's health, clinical research meant to assess medical tests, treatments, and programs should be done completely independently from the corporations that sell them.  


References

1.  Poses RM.  A cautionary tale: the dysfunction of American health care.  Eur J Int Med 2003; 14: 123-130.  Link here..
2.  Doshi P, Dickersin K, Healy D et al.  Restoring invisible and abandoned trials: a call for people to publish the findings.  Br Med J 2003;  BMJ 2013; 346 doi: http://dx.doi.org/10.1136/bmj.f2865  Link here.
3.  Loder E, Godlee F, Barbour V et al.  Restoring the integrity of the clinical trial evidence base.  Br Med J 2003;  BMJ 2013; 346 doi: http://dx.doi.org/10.1136/bmj.f3601  Link here.
4. Campbell EG, Gruen RL, Mountford J et al.  A national survey of physician–industry relationships. N Engl J Med 2007; 356:1742-1750. Link here.
5. Campbell EG, Weissman JS, Ehringhaus S et al. Institutional academic-industry relationships. JAMA 2007; 298: 1779-1786.  Link here.
6.  Mello MM, Clarridge BR, Studdert DM. Academic medical centers' standards for clinical-trial agreements with industry. N Engl J Med 2005; 352:2202-2210. Link here.

PROFESSOR NEMEROFF GOES TO LONDON

THREE STRIKES AND …

Professor Charles Nemeroff is being honored today in London. He will deliver a high profile lecture at the Institute of Psychiatry, King’s College London, a component of The University of London. IoP and its associated Maudsley Hospital have long been at the forefront of psychiatric research in Britain. The occasion today is the establishment of a new program on mood disorders, and Professor Nemeroff’s topic will be “The Neurobiology of Child Abuse: Treatment Implications.” He will be introduced by Professor Allan Young and the vote of thanks will be proposed by Professor Sir Robin Murray, a former dean of IoP-Maudsley. In the chair will be Professor Carmine Pariante, a onetime colleague of Professor Nemeroff. The current dean, Professor Shitij Kapur, seems to be staying in the background.

On this side of the pond we are depressingly familiar with Professor Nemeroff. He is the poster boy for conflict of interest in academic psychiatry. I will not rehearse here all the ethics issues in which he has been compromised over the past 15 years. Suffice it to say that as a result of those issues he was dismissed from his departmental chairmanship at Emory University; he was required to resign as editor of the journal Neuropsychopharmacology; he was banned from involvement in NIH grants at Emory University for 2 years; he received an unprecedented sanction from the Ethics Committee and Council of The American College of Neuropsychopharmacology (ACNP), which included a 2-year ban on participating in ACNP meetings and committees; the Accreditation Council on Continuing Medical Education (ACCME) issued a punitive sanction on a program that he directed, finding commercial bias and requiring the program to be withdrawn; and he was referred by Senator Charles Grassley of the US Senate Finance Committee to the Inspector General of the US Department of Health and Human Services for investigation of grounds for criminal charges.

The administrators of IoP-Maudsley apparently ignored these warning signals when they announced over a month ago that they had tapped Professor Nemeroff for today’s honorific lectureship. Many other professionals were shocked, however, and they voiced their disapproval widely – directly to the IoP, in the mainline press, in the British Medical Journal, in on-line comments, and even in a video critique. University Diaries ran a critical commentary, as did the respected weblogs Pharmalot and 1Boringoldman. Significantly, the letter to British Medical Journal came from a psychiatrist affiliated with IoP itself.

The IoP responded with typical academic stonewalling. Professor Carmine Pariante and Professor Allan Young wrote to the Critical Psychiatry Network, defending the decision to engage Professor Nemeroff. Unfortunately for them, their letter contained 2 fatal mistakes. First, they highlighted the perceived academic distinction of Professor Nemeroff as justification for his selection, thereby confusing an ethics issue with a competency issue. Who cares about Professor Nemeroff’s supposed expertise? When such a compromised individual is given honorific status it sends the wrong message to junior faculty members and to trainees. It also sends the wrong message about the institution's values, as I have discussed before. The IoP will be tainted by this episode for years to come, and the responsible administrators deserve all the frowns and brickbats that will come their way.

The second fatal error in the IoP response was to cast the issue in terms of academic freedom. That claim is rank hypocrisy. The protests are ethics complaints, not disagreements about content or professional turf. Professor Nemeroff was impeached by his peers for ethical lapses, as the record of sanctions clearly shows. That is what sparked the protests. The IoP administrators are displaying glass eyes and tin ears.

We should also question the scientific judgment of the IoP administrators. Treatment implications of child abuse is a featured focus of Professor Nemeroff’s lecture. How much do the IoP administrators really know about Professor Nemeroff’s work in this area? Do they know how little he has published in this area? Do they know that he is on the public record with at least 2 instances of misrepresenting his work in this area?

Professor Nemeroff’s sole publication of original data in this area appeared in 2003 (PubMed ID 14615578). It was a secondary analysis of a large clinical trial, first reported in 2000, that originally did not consider child abuse as a moderating variable in the response of chronically depressed patients to an antidepressant (nefazodone) or to cognitive behavior therapy (CBASP). The 2003 report claimed that, in patients with a history of childhood trauma, response to CBASP was superior to response to nefazodone. At the same time there was no significant difference in response rates to drug or to CBASP between patients with or without childhood trauma histories. A portion of this report was later retracted (see PNAS 2005 November 8;102(45):16530) because the data concerning reduction of Hamilton depression scores had been misrepresented.

Notwithstanding the retraction, Professor Nemeroff discussed the retracted data without the necessary qualification in a 2008 Continuing Medical Education program – the same one that was sanctioned by ACCME. Use of retracted material in this way is inconsistent with ethically grounded teaching. It also is inconsistent with FDA standards for scientific reference publications. Among other requirements, the FDA standards state that scientific reference publications may not “be false or misleading, such as a journal article or reference text… that has been withdrawn by the journal or disclaimed by the author, or…” Professor Nemeroff then went further, stating in the video record that a history of childhood abuse or neglect “predicts poor outcome… particularly to pharmacotherapy.” That claim is outright false. The data simply do not support that claim.

Professor Nemeroff repeated these same misrepresentations on the video record a second time in January 2012 when he presented Psychiatry Grand Rounds at New York University. Once again Professor Nemeroff displayed sleight of hand in palming off a nonsignificant difference as both statistically and clinically significant. To reiterate, Professor Nemeroff’s own data do not show a statistically or clinically significant difference between chronically depressed patients with and without a history of child abuse in their responses to drug or to CBASP.

The question for today is, will Professor Nemeroff repeat these misrepresentations in his lecture at the IoP-Maudsley? Should he do that, then the 3-strike rule needs to be invoked. I nominate the administrators at IoP-Maudsley for the job of lowering the boom finally on Professor Nemeroff. That would be one way they might redeem themselves in this fiasco.

Oh, and by the way, Professor Nemeroff has apparently done nothing more in this area since the 2003 partially retracted secondary analysis of an earlier study. But others have been looking at his claims and have not confirmed them – see, for instance the Canadian study that found no difference in response rates to pharmacotherapy or cognitive behavior therapy in patients with and without histories of severe childhood maltreatment (PubMed ID 22428942). Will Professor Nemeroff acknowledge this non-confirmation of his narrative when he speaks today at the IoP-Maudsley? We are agog.

If the administrators of IoP-Maudsley wish to continue defending their selection of Professor Nemeroff as a world expert on the treatment implications of child abuse, then who am I to argue? I don’t need to argue… the record speaks for itself.

One final point: the IoP response to the Critical Psychiatry Network stated that Professor Nemeroff “will not be presenting any research that was funded by commercial companies or affected by commercial implications. Obviously, he will be declaring any relevant conflicts of interest prior to his lecture.” The administrators at IoP should be aware that Professor Nemeroff’s data on treatment implications of child abuse (such as they are) do, in fact, come from a commercially sponsored clinical trial. I would also bet dollars to donuts that Professor Nemeroff declares no relationship to Bristol Myers Squibb, the sponsor of that trial.

What are the larger lessons of this new affaire Nemeroff? Academic institutions like IoP-Maudsley need spine and due diligence to maintain decent standards and to put the hand wavers where they belong – not on center stage. Raise the bar, chaps!

BERNARD CARROLL

UPDATE 06-18-2013

We are waiting for a response from the Institute of Psychiatry… it could be a long wait. We have learned that Professor Nemeroff was unwilling to make publicly available the slides he used in his lecture yesterday. Hmmm.

Meanwhile, I should clear up some potential confusion about the data in Professor Nemeroff’s 2003 publication that I discussed yesterday. When I said the data showed no significant difference in response to cognitive behavior therapy (CBASP) between patients with and without early life trauma, I said that because Professor Nemeroff had made no claim that there was a difference. He made a variety of other claims, but not this one. I took this to mean that he had looked for a significant difference but didn’t find one. It is not possible for anyone to make an independent determination of what he found because he did not report the data transparently – there was no positive statement of sample sizes for different treatments, for example, and the remission rates were not consistently reported: some were stated numerically while others were only displayed graphically. For what it is worth, there might actually be a significant difference in response to CBASP between patients with and without early life trauma. We just cannot be sure. Let the record stand corrected. Maybe Professor Nemeroff can clear that up?

None of this alters the fact that Professor Nemeroff’s data show no significant difference in response to nefazodone between patients with and without early life trauma. And, none of this alters the misrepresentations by Professor Nemeroff that I discussed yesterday. In the sanctioned CME presentation in 2008 he positively stated on the video record that a history of childhood abuse or neglect “predicts poor outcome… particularly to pharmacotherapy.” That claim is outright false. The data simply do not support that claim, and, once again, he made no such claim in the 2003 publication.

Likewise, in the 2012 Grand Rounds presentation at NYU, Professor Nemeroff positively stated that patients with chronic depression but without a history of childhood trauma “did better with drug than with CBASP.” That also is a false statement (see Figure 1B of the 2003 publication). There is no significant difference and none was claimed in the paper.

Meanwhile, in both these misleading presentations that are on the video record Professor Nemeroff used the retracted material that I mentioned yesterday. He used it in classic hand waving fashion to embellish his narrative, but he used it without the required qualification that was given in his retraction notice!

Aren’t we all justified in asking the Institute of Psychiatry to release Professor Nemeroff’s slides from yesterday’s much publicized lecture?

BERNARD CARROLL

IT Specialist and the job he wouldn't take: hospital management's health IT "plan" is a checklist for failure

Received unsolicited on June 14, 2013 from a computer professional whose identity I am redacting.  Posted with his permission:

Dr. Silverstein,

Thank you very much for the many insights and helpful references provided on your "Contemporary Issues in Medical Informatics" (http://www.ischool.drexel.edu/faculty/ssilverstein/cases/) web site! In performing my due diligence for a position as an IT Director at a small rural hospital, I have come across your writings. 

I originally applied for this position in the hopes of leveraging my IT, project management, compliance and security experience to gain new expertise in healthcare IT. After my initial phone interview with the "CIO" and HR Director, at which I discovered that I would have the responsibility to implement a poorly conceived new EMR project, without the authority or resources to make it successful, additional red flags were raised which required further research. This led me to you.  

I cannot help but chuckle at the organizational, social and project management dysfunctions in medical IT, as described in your "Ten Critical Rules for Applied Informatics..."  (http://www.ischool.drexel.edu/faculty/ssilverstein/cases/?loc=cases&sloc=tenrules).   I have encountered similar dysfunctions in the world of military and commercial IT.  With a little tweaking, your lessons learned are applicable across a wide range of IT disciplines and a good reminder of how to avoid IT project and career failures and achieve successes.

Yet, I understand and have come to appreciate your thesis that medical IT is fundamentally different from business IT. Even though I am convinced that I could do better than most, I have concluded that it is probably wiser for a competent healthcare informaticist to lead HIT implementation projects. I wonder how many such competent informaticists there can be! Unfortunately, since I have no background in medicine, it is probably a little late for me to become one. 

I certainly will not engage in this particular opportunity. What I know of the hospital management's "plan" at this point is a checklist for failure. The reality of this rural hospital, and apparently thousands of similar situations, is unnecessarily and depressingly tragic for patients and clinical professionals. I appreciate your crusade to raise the bar for healthcare IT, and therefore IT in general. Thank you for saving me from jumping in to an untenable situation.

Ironically, and sadly, this letter is similar to others I have received dating to 1999.  Little has changed in nearly 15 years, except that with the rush to implement this unregulated, experimental technology thanks to the HITECH Act, there's likely going to be a lot more patient harm, especially at smaller hospitals new to this endeavor.

-- SS

The Financialized Medical Center - Executives of Non-Profit Wake Forest Baptist Medical Center Make an "Investor Call," but Have no Investors

We recently discussed the uncomfortable situation of Wake Forest Baptist Medical Center, the non-profit health system/ academic medical center of Wake Forest School of Medicine.  The organization suffered acute monetary losses after a problem plagued roll out of its new electronic health record.  Presiding over this mess were some extremely well paid executives who had been hailed as "visionaries" by their own public relations people. (Look here and here.)

An Even Bigger Financial Loss

The resourceful Richard Craver, writing in the Winston-Salem Journal, just documented that the financial losses due to this cybernetic chaos now seem even bigger,

The center said Monday in a report submitted to bond agencies that it had a $62.8 million operational loss and an overall loss of $3.2 million in the third quarter of fiscal year 2012-13, which ended March 31.

Stock investment gains of $54.6 million helped offset much of the operational revenue loss.

Still, the operational loss was $13.2 million higher than the $49.6 million it reported Dec. 31. At that time, the center reported $7.4 million in overall excess revenue because of investment gains.  

A Call to Non-Existent Investors
 
That, however, was not the big news.  Mr Craver further noted,

Wake Forest Baptist chief executive Dr. John McConnell and chief financial officer Edward Chadwick held an investors call on Monday to discuss the financial performance. It is the third such presentation of the fiscal year, according to the Municipal Securities Rulemaking Board’s www.emma.msrb.org website.

Mr Craver noted that there was something distinctly odd about this. 

The investor call represents a potential blurring of the lines between how not-for-profit hospitals and corporations operate, which also includes executive compensation as a hot-button topic.

Analysts said the call is comparable to an earnings warning that corporations provide when they try to soften the negative reaction from a poorer-than-projected financial performance.

Wake Forest Baptist did not comment when asked how long has it made investor calls and who receives notifications of the presentations. According to emma.org, the center did not have investor calls listed prior to the first quarter of the current fiscal year.

A search of Wake Forest Baptist’s public website did not find any references to investor calls or quarterly and annual financial reports. Spokesman Chad Campbell said the quarterly financial calls are in the public domain.

While US publicly traded for-profit companies usually do schedule quarterly conference calls with investors to inform them about recent developments, Wake Forest Baptist Medical Center is clearly not a publicly held for-profit company.  It is a non-profit organization.  Non-profit organizations do not have investors or shareholders,

For-profit corporations also may do periodic calls with bondholders.  Wake Forest Baptist Medical Center does have bondholders.  But the posted notice for the call discussed above clearly refers to an "investor call," not a bondholders call.  One can now listen to the call (+1 855 859 2056, conference ID 90279604), and when I did, I heard the call was introduced by the operator, and by the Wake Forest Baptist Medical Center CFO as an "investor call."  

A Financialized Mindset?

So what in the world is going on here?  So why would its CEO and CFO make a quarterly call to "investors?"  The idea is absurd on its face. 

Mr Craver was able to find one person to comment, who seemed to assume that the calls were truly "investor calls," not mislabeled calls to bondholders:

Ken Berger, president and chief executive of Charity Navigator, said a not-for-profit hospital holding an investors call 'is the antithesis of why a nonprofit exists.'

'Nonprofits are not supposed to be trying to maximize shareholder value, but maximize their benefit to the communities they serve,' Berger said. 'Transparency is great, whether corporation or nonprofit, for shedding light on financial performance.'

'In this instance, the investor call doesn’t represent full transparency, but only represents more morphing of a not-for-profit into a for-profit organization where only a select few investors are chosen to have access to pertinent current information.'

My guess is that Mr Berger got it right.  It may be that the top executives of Wake Forest Baptist Medical Center have the mindsets of executives of a big for-profit corporation in an era of financialization. 

In the New York Times Economix blog, Bruce Bartlett, an economist who has served in the administration of two Republican Presidents, Ronald Reagan and George HW Bush, and has worked for two Republican legislators, Jack Kemp and Ron Paul, cited financialization as the big largely anechoic reason for the global economic malaise.  He wrote,

 According to research by the economists Jon Bakija, Adam Cole and Bradley T. Heim, financialization is a principal driver of the rising share of income going to the ultrawealthy – the top 0.1 percent of the income distribution.

Research by the University of Michigan sociologist Greta R. Krippner supports this position. She notes that financialization exacerbates the well-known problem of corporate ownership and control: while corporate assets are owned by shareholders, they are controlled by managers who often extract an excessive share of corporate profits for themselves.

 As we have discussed, for a generation business schools have taught managers that there primary goal is to maximize shareholder value, which has been interpreted to mean short-term financial performance.  Large corporations now give top managers tremendous incentives to maximize such performance, such that top managers have become rich, often the richest members of society.  Many top managers of health care organizations now come from a business background, and health care managers, even of non-profit organizations, also get large incentives. 

Note also that the two executives on the "investor call" both had outsize compensation in 2011, the latest year for which the non-profit Wake Forest Baptist Medical Center has released the disclosure form (990 form) required by the US government.  The CEO, Dr McConnell, received over $2 million, while the CFO, Mr Chadwick, received just short of $1 million. (Look here.)  So it looks like they have a good reason to continue to operate a financialized organization so they can keep extracting sufficient revenue to make themselves rich.

Clearly, though, if we want our health care organizations to preserve and protect patients' and the public health, we need them to be lead by leaders who care much more about health care than about short-term revenue and making themselves rich.


As we have said endlessly,  true health care reform would put in place leadership that understands the health care context, upholds health care professionals' values, and puts patients' and the public's health ahead of extraneous, particularly short-term financial concerns. We need health care governance that holds health care leaders accountable, and ensures their transparency, integrity and honesty.

A Legal Settlement of One Aspect of the Fall of AHERF, Only 15 Years Later

It only took 15 years, but litigation related to one of the most important, but obscure cases of bad health care leadership and governance from the 1990s was finally settled.   

Background

The Allegheny Health Education and Research Foundation (AHERF) was a large integrated health care system formed out of multiple mergers.  AHERF went bankrupt in 1998, leading to massive layoffs, hospital closures, and the near dissolution of a medical school (which ended up taken over by Drexel University).  We last discussed the case in 2012 here.. A summary of other important points about it is appended below. 

As we noted in 2008, although the AHERF bankruptcy appears to be the largest failure of a not-for-profit health care corporation in US history, its story has produced remarkably few echoes for doctors, other health care professionals, health care researchers, and health policy makers. I often use the fall of AHERF as an example in talks, at least the few talks I am allowed to give on such unpleasant subjects. Rarely have more than a few people in the audience heard of AHERF prior to my discussion of it.

I only could locate one article in a medical or health care journal that discussed the case in detail, but was written too early to address it very completely [Burns LR, Cacciamani J, Clement J, Aquino W. The fall of the house of AHERF: the Allegheny bankruptcy. Health Aff (Millwood) 2000; 19: 7-41.]  I doubt the case is used for teaching in most medical or public health schools, although it.was a formative influence on my 2003 article on health care dysfunction [Poses RM. A cautionary tale: the dysfunction of American health care. Eur J Int Med 2003; 14: 123-130] and on this Health Care Renewal blog.  (A book about the case, Merger Games, by Judith Swazey, was published in 2012, and is available here as  a set of PDF files from Project Muse for those with the proper password, but it has not yet had much of an impact, and I confess I have not yet read it.)  The lack of discussion of such a significant case is a prime example of the anechoic effect. 

One Legal Settlement, 15 Years Later, for a Secret Amount

But a brief echo of the case did appear in a brief article in the Pittsburgh Tribune Review published in April, 2013:

Lawyers would not say Tuesday how much money an accounting firm will pay to settle a 13-year-old lawsuit claiming it helped destroy one of the state's largest health care systems. 

'It will result in a very significant recovery,' James Jones, one of the lawyers representing the unsecured creditor of the Allegheny Health Education and Research Foundation, said during a settlement hearing in Pittsburgh federal court.

The creditors in 2000 sued Coopers & Lybrand LLP, the predecessor of PricewaterhouseCoopers LLP, claiming that if auditors in 1996 and 1997 had informed AHERF's board about the foundation's true financial condition, it would have acted to avoid a bankruptcy that resulted in huge losses. The foundation's assets included the Allegheny General Hospital system.

It seems only fitting, given how anechoic this case has been, that much about this settlement remains obscure,

U.S. District Judge David Cercone, in a joint session with U.S. Bankruptcy Judge Judith Fitzgerald, approved the settlement with PricewaterhouseCoopers. 

The company disputes the method the committee used to calculate losses and denies liability in the settlement.

Joseph McDonough, a lawyer for PricewaterhouseCoopers, agreed the settlement amount is significant. He and Jones declined comment.

Jones said during the hearing that a trial could have lasted 40 days. Preparation for the case generated more than 200 depositions, 19 expert opinions and more than a million documents, he said.

The committee sent more than 3,500 notices to creditors about the proposed settlement, and none objected, he said.

Both sides agreed to keep the amount secret, and they discussed with Fitzgerald how to avoid releasing the amount in filings for related bankruptcy action.

Maybe if the case had somehow generated more echoes, health care professionals and policy makers, and patients and the public at large might have learned some of its lessons.  The story of AHERF is not merely that of an unlucky bankruptcy. It shows what can go wrong when health care is taken over by generic managers who adapt the latest management fads, and health care decision making is ruled by marketing, public relations and propaganda instead of evidence and logic, and allows power to be concentrated in organizations run by imperial CEOs.  .

 

We did not get a chance to learn this history, so we seem bound to repeat it.  

Appendix

Some important points about AHERF not found above (see also this narrative, starting on page 5):

• AHERF, one of the largest health care systems of its day, was built by the poster-boy for health care imperial CEOs, Sherif Abdelhak.
• Abdelhak, who started as food services purchasing manager at Allegeheny General Hospital, was repeatedly hailed as a "visionary" (in the March, 1997, ACP Observer) a "genius," and the like. His plans to create a huge integrated health care system were part of the wave of the future. Abdelhak was even invited to give the prestigious John D Cooper lecture at the annual meeting of the American Association of Medical Colleges (AAMC), which was published in Academic Medicine [Abdelhak SS. How one academic health center is successfully facing the future. Acad Med 1996; 71: 329-336.] He proclaimed that "we will need to create new forms of organization that are more flexible, more adaptive, and more agile than ever before." And he announced that "my aim as chief executive has been to unleash the creativity and productive potential of every individual and to provide an environment that encourages teamwork"
• While Abdelhak was making these grandiose promises, he paid himself and his associates very well. For example, he received $1.2 million in the mid-1990s, more than three times the average then for a hospital system CEO. He lived in a hospital supplied mansion worth almost $900,000 in 1989. Five of AHERF's top executives were in the top 10 best paid hospital executives in Philadelphia.
• Although Abdelhak talked of teamwork, he warned the combined faculty of the new Allegheny University of the Health Sciences (AUHS): "Don’t cross me or you will live to regret it."
• As AHERF was hemorrhaging money, Abdelhak continued to pay himself and his cronies lavishly.
• After the AHERF bankruptcy, which was at the time the second largest bankruptcy recorded in the US, Abdelhak was charged with numerous felonies involving receiving charitable assets. In a plea bargain, he pleaded no contest to misusing charitable funds, a misdemeanor, and was sentenced to more than 11 months in county prison.

Posted by Roy M. Poses MD to the Health Care Renewal blog

Is the Cystic Fibrosis Foundation a Charity or a Venture Capital Firm?

We have often discussed how health care organizations now seem prone to diversion from their stated missions, often when money is the object.  While the organizations in question are frequently academic, teaching hospitals, academic medical centers, or medical schools in particular, in May, the Milwaukee Journal Sentinel presented an example of a disease specific charity.  This article deserves considerably more attention than it apparently initially received.

Background

The background was,

What happens when a disease-fighting charity dives into venture capitalism?

In the first case of its kind, the results include one of the planet's most expensive pills, huge sales projections for a drug company and windfalls for executives who sold stock in the glow of enthusiastic news releases about the drug.

Kalydeco is a breakthrough drug designed from knowledge of the genetic roots of cystic fibrosis, a lung disease that kills most victims before they reach middle age. Developed by Vertex Pharmaceuticals with a $75 million investment from the Cystic Fibrosis Foundation, it is an early example of 'venture philanthropy,' where a nonprofit helps finance development of a treatment in return for a cut of sales.

Remember that while disease specific charities often sponsor basic and clinical research, in this case, the CFF sponsored drug development.  In fact, much of the research on which this development was based was sponsored by charities and the US National Institutes of Health:

In the 1980s, Francis Collins, now director of the National Institutes of Health, was a researcher at the University of Michigan and on his way to becoming a renowned gene hunter.

Collins and a team headed up by Lap-Chee Tsui at the Hospital for Sick Children in Toronto collaborated to identify the gene responsible for cystic fibrosis. That breakthrough involved funding from the NIH, the Cystic Fibrosis Foundation and the Howard Hughes Medical Institute, said Collins.

Another decade of intense basic science followed, much of it funded by NIH.

The Price to Patients 

Despite, or perhaps because of the funding provided by CFF, Vertex chose a stratospheric price for its new drug.

 Yet it costs each patient $307,000 a year to take two Kalydeco pills a day - a price borne by taxpayers through Medicaid and other government programs and by the workers and companies who finance employee health insurance plans.

In 2012, with less than a full-year on the market, Vertex sold $172 million worth of Kalydeco....

To put that in perspective, the yearly cost of Kalydeco is approximately six times the median family income in the US.


Minimizing the Harms

To put it further into perspective, keep in mind that for the moment, the data from the single best published clinical trial on Kalydeco suggests that while the drug seems to help the average patient, it is not without risks, and it is certainly not a cure.

The largest published trial that followed patients for a reasonable amount of time appeared in 2011 in the New England Journal of Medicine.  [Ramsey BW, Davies J, McElvaney G et al.  A CFTR potentiator in patients with cystic fibrosis and the G551D mutation. N Engl J Med 2011; 365: 1663-1672.  Link here.]  The study followed 161 patients for 48 weeks.  The patients treated with Kalydeco on average showed improved lung function (increase of FEV1 [forced expiratory volume in one second] of 10% compared to essentially no change (-0.2 percent) in the placebo group.  Treated patients were less likely to have an exacerbation of their pulmonary disease requiring hospitalization (31% vs 49%).  So the drug certainly seems to have benefits at least in the short term.  The number needed to treat to prevent one exacerbation requiring hospitalization in one year is five, which seems quite respectable.

On the other hand, the drug may have significant harms, even thought the report of the study seems to have attempted to minimize them.  The article stated

there was a lower rate of serious adverse events in the ivacaftor [Kalydeco] group than in the placebo group (24% vs 42%).  

However, this statement depended on a rather peculiar definition of severe adverse events.  In particular, pulmonary exacerbations of cystic fibrosis were included among severe adverse events.  Yet these are, as the term suggests, manifestations of the disease that is being treated.  Reduction of pulmonary adverse events should be and was considered a measure of efficacy.  So placing exacerbations within the definition of adverse events essentially double counts these incidents. 

Furthermore, the presence of these within the category of adverse events swamps out other events which may in fact be adverse results of the study drug.  If one subtracts pulmonary exacerbations and hemoptysis from the counts of serious adverse events, what remains is that patients on Kalydeco were more likely to have a serious adverse event (10%) than those on placebo (4%).  Thus the apparent number needed to harm was 17.  Thus, using this peculiar definition of adverse events appears to be a way to manipulate the analysis to minimize the apparent harmfulness of the drug.

While the study did appear to show that more patient received the benefit of avoiding a hospitalization due to a pulmonary exacerbation of cystic fibrosis than had a serious adverse event, the study did not show that the drug had overwhelming efficacy, or tremendous safety.   The study did not last long enough to show long term advantages, or to rule out rare but severe side effects.

This is the only drug available of this type, and it may well provide benefits that outweigh harms, at least over the short-term, but it is not a wonder drug, and the rationale to charge so much money for it, other than that is what the market will bear, is not obvious.  

A Windfall for Corporate Executives, and a Question of Insider Trading

The drug's approval has lead to a lot of financial success for stock holders, particularly Vertex executives:

 Last month, news about success of the drug sent Vertex stock soaring more than $6 billion in a single day. That surge and a similar one last May allowed top executives and directors of the company to sell stock and options worth more than $100 million.

The executives' lavish windfall occurred in somewhat questionable circumstances:

Vertex and its executives have benefited greatly from Kalydeco and foundation funding.

Last May, when Vertex and the foundation reported positive results from a clinical trial involving Kalydeco and whether it could be combined with another drug to treat more patients, the company's stock jumped more than 70%, from $37.41 to $64.85 a share.

Five executives and two directors sold off more than $35 million in shares, mainly at prices from about $55 to $64 a share. Many of the options were priced between $16 and $40 a share.

Three weeks later, the company said it overstated the effectiveness of the drug in that trial and the stock dropped about $7 a share, ultimately falling back under $40 by December.

Vertex spokeswoman Nikki Levy said in an email the company does not comment on individual stock sales.  She said the executive stock sales either were part of pre-existing 10b5-1 plans or followed the company's internal stock trading policy. A 10b5-1 plan is an automatic trading tool in which executives specify timing or pricing of sales to avoid questions about inside information the seller had at the time.

U.S. Sen. Chuck Grassley (R-Iowa) wrote a letter to the U.S. Securities and Exchange Commission, saying it could appear that Vertex executives took advantage of the situation, knowing the overstated clinical trial results would eventually be made public and cause the stock price to drop.

The letter said the stock sales were troubling for industry investors and the federal government, which pays billions of dollars a year for drugs through Medicaid and Medicare.

Judith Burns, a spokeswoman for the SEC, declined to comment on the Grassley letter.

Last month, the company's stock shot up more than 60% again, from $52.87 to $85.60, after positive early data from a clinical trial of Kalydeco and another drug it is developing with funding from the foundation. On April 19, the day after the news was released, the company's market value jumped by more than $6 billion.

That same day, two company executives sold huge chunks of stock options. Executive Vice President and Chief Financial Officer Ian Smith alone sold 745,685 shares worth more than $60 million. Most shares were sold at $81.50, with options purchased from $29 to $39.

So at least Senator Grassley raised the question of whether Vertex executives may have taken advantage of their insider knowledge to personally profit even more from this useful but not miraculous drug meant to be used on vulnerable patients.

Keep in mind that those huge trading gains were layered on top of already lavish compensation.  The 2013 Vertex proxy statement, the total compensation and stock holdings of its top executives in 2012 was:

Jeffrey M Leiden, CEO                                $5,656,684      441,160 shares
Ian F Smith, CFO                                           $3,109,193      795,434
Stuart A Arbuckle, Chief Commercial Officer   $4,808,697         66,477
Kenneth L Horton, Chief Legal Officer             $2,802,735         41,161
Peter Mueller, Chief Scientific Officer              $3,614,890        997,651
Matthew W Emmens, Former CEO                  $6,896,029    1,486,748
David T Howton Jr, Fomer Chief Legal Officer $3,447,898           3,105



So the top executives of Vertex, while their company got $75 million from an ostensible charity to develop what became an extremely expensive drug, got very rich in the process, although how they got rich may yet attract attention from the SEC.

A Windfall for the Cystic Fibrosis Foundation and its Executives

Furthermore, it appears that the supposedly charitable Cystic Fibrosis Foundation also made quite a bit of money, and its executives, while not getting quite as rich as their associates in Vertex, did not do at all badly.

As the Journal Sentinel noted,

the foundation cashed in by selling future royalties from the drug to an undisclosed firm for $150 million.

Keep in mind that since the CFF was to receive royalties, the money it gave for drug development was not a grant, but an investment.

Furthermore, according to the Foundation's 2011 form 990 (the latest available), its executives received the following total compensation from the foundation and its affiliated organizations:

Robert J Beall, CEO                                                      $1,073,725
C Richard Mattingly, COO                                              $759,799
Preston W Campbell MD, Exec VP of Medical Affairs     $736,031
Vera H Twigg, CFO                                                         $445,183
Ann Palmer, Senior VP                                                     $276,029 
Daniel Klein, Senior VP                                                    $277,300
Gregory August, CIO                                                       $262,698
David McLoughlin, Senior VP                                          $316,122
Glen Goldmark, VP                                                          $253,215
Amy DeMaria, Senior VP                                                 $241,672
Mary Dwight, Senior VP                                                   $246,232

These compensation amounts may be much lower than the gargantuan pay dealt out to for-profit health care corporate executives, but they are very high for those who are managing a supposed charity meant to help vulnerable patients.

A More Complex Web

While profiting from its underwriting of the development of Kalydeco, the CFF also sponsored guidelines about the treatment of cystic fibrosis, with not unexpected results.

Last month, new treatment guidelines for doctors who handle cystic fibrosis patients strongly recommended use of Kalydeco. The guidelines were funded by the Cystic Fibrosis Foundation.

Three of the 10 authors of the guidelines were employees of the foundation and four others worked for institutions that received grants from the foundation. The chairman, Peter Mogayzel, is a professor of pediatrics at Johns Hopkins University, which foundation tax records show received more than $2 million in grants from 2009 through 2011.

These guidelines hardly look like they would be deemed trustworthy according to the Institute of Medicine's standards (look here).  However, they certainly look like they might help sell ivacaftor, and hence help justify higher pay for the executives listed above.

Criticism of Venture Philanthropy

Merriam-Webster online suggests one definition of a charity is an institution funded by a gift for public benevolent purposes.

The Cystic Fibrosis Foundation appears to be such a charity, but now one that functions more as a venture capitalist.  In this case, it did provide venture capital to develop a new drug for its disease of interest.  However, the foundation appeared to have done so not to provide public benevolence, but to generate a  return on its investment.  It is using that return not for public benevolence, but to provide more venture capital to other drug companies, presumably with the goal of getting further returns.  Meanwhile, its executives make generous compensation for people who are supposed to be running a charity.  Finally, the drug has an astronomical price, and its pricing has helped make investors in and executives of the company supported by the CFF very rich.

This has not been lost on some dissidents, per the Journal Sentinel,

'The concept of a charitable, not-for-profit taking on the role of a venture capitalist is new and difficult to digest at the moment,' said Paul Quinton, a cystic fibrosis researcher at the University of California, Riverside and the University California, San Diego.

Quinton, who has cystic fibrosis, is one of 28 doctors and scientists who sent a letter to Vertex calling the price of Kalydeco 'unconscionable.' A copy of the letter was provided to the Journal Sentinel and MedPage Today. Kalydeco, the doctors wrote, costs 10 times more than what a typical cystic fibrosis patient pays in total drug costs.

'This action could appear to be leveraging pain and suffering into huge financial gain for speculators, some of whom were your top executives who reportedly made millions of dollars in a single day,' the doctors wrote.

Vertex responded with seeming contempt,

 Since receiving the letter last July, Vertex has raised the annual price of Kalydeco another $13,000.

The funding by the supposedly charitable CFF of guidelines that promote the drug it financed has also drawn criticism,

 'It is definitely a conflict of interest,' said Eric Campbell, an associate professor at Harvard Medical School who has researched conflicts of interest in patient treatment guidelines.

In the past, drug companies have been criticized for funding treatment guidelines that recommend their drugs. It is no different if the guidelines are funded by a foundation that gets royalties from drug sales, Campbell said.

Also,

'It is concerning that the organization now stands to profit when patients choose to use the drug,' ... [Prof Lisa Schwartz of Dartmouth Medical School] said. 'Financial entanglement with industry, even with the best of intentions, creates a conflict of interest.'

However, the very well paid CEO of the CFF pooh poohed concerns about conflicts of interest,

Robert Beall, president of the Cystic Fibrosis Foundation, said that without its financial support, drugs such as Kalydeco would never get to patients. Neither insurance companies nor patients have voiced any concern to him about conflicts of interest, he said.

'They applaud the decision and our business model to the utmost,' Beall said. 'The patients are excited.'

He rejected the idea of using the royalty money to help patients pay for the medical care, noting that the foundation needed the money to entice drug companies to get involved in risky cystic fibrosis drug research.

One wonders when patients would ever have the opportunity to voice any "concerns" to Mr Beall, who also disdained any restraints on the price of the drug,

.Beall said the foundation did not ask Vertex to price the drug more affordably.

'That would have been a deal-breaker,' he said.

That seems to put making money ahead of patients' needs.  Was this venture philanthropy, or vulture philanthropy? 

 Summary

We have discussed numerous cases in which non-profit health care organizations seem to put short term revenue ahead of their missions to further patients' and the public's health.  In this case, a disease specific charity seems to have foregone its mission to directly support patient care, teaching, or research to provide venture capital, an action which lead to a profit for the organization, huge profits for a drug company, large rewards for the charity's executives, and even greater wealth for the drug company's executives.  It did also lead to the marketing of a beneficial drug, but at a breathtaking price that no middle-class patient without exceedingly good insurance could afford.  

Where is the public benevolence here?  Where is the charity?  How much is about patients and how much is about  making insider executives wealthy? 

As we have said until blue in the face, true health care reform would ensure health care organizational leadership that upholds the health care mission, not their personal finances.  

Long After the Start of the "War on Terror," a Conflict of Interest about an Anthrax Scare Comes to Light

In May, David Willman writing for the Los Angeles Times broke a story of a somewhat new variant on the conflict of interest theme, one that has not gotten a lot of attention, but should.

The issue was medical, with a twist, - how to best treat a bioterror attack with anthrax engineered to be resistant to multiple drugs, an event that luckily is not known to ever have occurred.  The story came from the bad old days of the "war on terror," but only has now come to light years later.

The Alarm Raiser

The story opened thus,

Over the last decade, former Navy Secretary Richard J. Danzig, a prominent lawyer, presidential advisor and biowarfare consultant to the Pentagon and the Department of Homeland Security, has urged the government to counter what he called a major threat to national security.

Terrorists, he warned, could easily engineer a devastating killer germ: a form of anthrax resistant to common antibiotics.

In particular,

Danzig began warning about antibiotic-resistant anthrax after the terrorist attacks of Sept. 11, 2001, and the mailings of anthrax-laced letters that fall.

The powdered anthrax in the letters killed five people but was not resistant to common antibiotics. Asked what gave rise to his concern about resistant strains, Danzig cited conversations with 'people whose technical skills exceed mine.' One of them, Dr. Robert P. Kadlec, a bioterrorism advisor in the Bush White House, said he and others were concerned that terrorists could develop such a weapon.

Danzig has sounded the alarm in published papers and in private briefings and seminars for biodefense and intelligence officials.

In a 2003 report funded by the Pentagon, "Catastrophic Bioterrorism — What Is To Be Done?" he wrote that it would be 'quite easy' for terrorists to produce antibiotic-resistant anthrax. He has expanded on that theme over the years, including in a 2009 paper for the Pentagon.

In the 2003 report, published while raxi [raxibacumab, an anthrax anti-toxin] was in development at Human Genome, Danzig said a drug to combat resistant strains of anthrax should be produced 'as soon as possible' and that stockpiling such a treatment, 'even if expensive and in limited supply' would deter an attack.

John Vitko Jr., a top Homeland Security official during the Bush and Obama administrations, said he turned frequently to Danzig for advice on biodefense matters — and read and 'paid attention to' his 'Catastrophic Bioterrorism' report.

Note that while Danzig is a lawyer, and certainly not a physician or biomedical researcher, he had major credibility in the defense field, particularly in anti-terrorism, so his recommendations had great influence.

He served as a Pentagon appointee during the Carter administration and as undersecretary and then secretary of the Navy under President Clinton. He has a long-standing interest in biowarfare.

During the 2008 presidential campaign, Danzig advised then-Sen. Barack Obama on national security and bioterrorism. After Obama's election, Danzig was named to the Pentagon's Defense Policy Board and the President's Intelligence Advisory Board, in addition to his consulting positions with the Defense Department and Homeland Security.

So apparently at least partly due to Mr Danzig's persistent warnings, the government took action,

 In 2004, President Bush signed into law Project BioShield, which provided billions of dollars for biodefense drugs.

The contracts are administered by the Department of Health and Human Services, based on advice from federal agencies and consultants. Homeland Security must certify the need for a drug before the government can buy it.

 Danzig, through his seminars, writings and consulting duties, has helped frame the discussion over whether a given biological threat is 'material' and whether the government should stockpile medicines to defend against it.

Also,

Speaking of Danzig's broader role as a government advisor, Vitko said: 'Richard's got incredible insights into this and I think has made major contributions'

He called Danzig one of 'the major bio player' and said his views had informed a range of policy considerations, including 'how many countermeasures do you need, of what kind.'

It was in response to advice from Vitko and his staff that Homeland Security Secretary Tom Ridge in 2004 declared anthrax a 'material threat,' the certification required for the government to buy drugs to fight it.

The drug the government bought was raxibacumab, or raxi, an anthrax anti-toxin made by Human Genome Sciences Inc.  

In 2006, the Department of Health and Human Services finalized its first order of raxi — 20,000 doses at a cost of $174 million.

That year, Ridge's successor, Michael Chertoff, signed a second, more specific declaration, adding 'multi-drug-resistant' anthrax to the government's list of material threats.

Asked the basis for the second declaration, Vitko said: 'I think the concern was more forward-looking, and saying, 'How could the threat evolve, and are we prepared for that?''

Since 2009, the Obama administration has ordered an additional 45,000 doses of raxi for $160 million.

There was just one catch.

The Undisclosed Conflict

Mr Danzig had a largely undisclosed conflict of interest.  He was on the board of directors of Human Genome Sciences Inc, the company whose drug his constant warnings and exhortations lead the government to buy.

When Human Genome named Danzig to its board on May 24, 2001, the company's chief executive said his high-level federal experience would 'serve us well.'

He thus was on the board on September 11, 2001, and later when the events on that day and soon after apparently induced him to start sounding the alarm about resistant anthrax, and he stayed on the board as he continued sounding alarms, and after the government started buying his company's drug.

During his 11-year tenure on the board, which ended in August, Danzig collected at least $1,054,255 in director's fees and by cashing in grants of Human Genome stock and stock options, according to Fred Whittlesey of Compensation Venture Group, who reviewed the company's Securities and Exchange Commission filings for The Times.

Nearly half of Danzig's compensation came from the stock options, of which he had been granted 184,000 by the end of 2011, Whittlesey said.

Danzig did not seem to think that serving on the board of the company which made the primary drug directed at the perhaps hypothetical disease about which Danzig was sounding the warning constituted any sort of conflict of interest.

Danzig said in an interview that he believed his position at Human Genome posed no conflict.

He said he had tried to improve policymakers' understanding of biodefense issues, including the threat of antibiotic-resistant anthrax, but never lobbied the government to purchase raxi.

'My view was I'm not going to get involved in selling that,' Danzig said. 'But at the same time now, should I not say what I think is right in the government circles with regard to this? And my answer was, 'If I have occasion to comment on this, it ought to be in general, as a policy matter, not as a particular procurement.'

'I feel that I've acted very properly with regard to this'' he said.

He also apparently did not feel he needed to disclose his board membership to most of the people he was trying to persuade to be alarmed about resistant anthrax, and to pursue a treatment, such as that made by the company on whose board he sat.

 A number of senior federal officials whom Danzig advised on the threat of bioterrorism and what to do about it said they were unaware of his role at Human Genome.

Dr. Philip K. Russell, a biodefense official in the George W. Bush administration who attended invitation-only seminars on bioterrorism led by Danzig, said he did not know about Danzig's tie to the biotech company until The Times asked him about it.

Also,

 Vitko said he knew nothing of Danzig's involvement with Human Genome until a Times reporter asked him about it.

'I'm surprised I didn't,' Vitko said. 'I'm not aware of it.'

Five other present or former biodefense officials who conferred with Danzig said they, too, had been unaware of his position with the company. Danzig, they said, made no mention of it in their presence during group discussions he led or in smaller meetings.

Furthermore,

A Times search found seven papers Danzig had written on bioterrorism since 2001. In only one of those did he disclose his tie to Human Genome.

As an advisor to the federal government, Danzig is required to file confidential forms annually, revealing any outside affiliations but not his related compensation. Danzig said he had noted his position with the biotech firm on the forms.

Asked whether he mentioned his corporate role during contacts with government officials, Danzig replied: 'If I thought any of it posed a potential conflict that might cause somebody who knew about it to discount my views, I would tell them.'

Some people disagreed with Danzig's failure to perceive a conflict of interest

 'Holy smoke—that was a horrible conflict of interest,' said Russell, a physician and retired Army major general who helped lead the government's efforts to prepare for biological attacks.

The Take-Over by a Familiar Corporation

By the way, Human Genome Science was eventually bought out by a bigger company which has had its own sets of issues regarding conflicts of interest, GlaxoSmithKline,

 Human Genome was acquired by GlaxoSmithKline in August [presumably 2012] for $3.6 billion.

It may yet stand to make even more money from raxi,

 Because raxi loses its potency after three years in storage, the government's supply will expire as of 2015, according to federal documents and people familiar with the matter. 

Summary

This appears to be a variant on the "key opinion leader" (KOL) theme writ large.  Mr Danzig clearly functioned as a very major key opinion leader about bioterrorism.  Like many KOLs we have previously discussed, he had financial interests that favored the company whose drugs his key opinion leadership seemed to be favoring.  His influence seems to have lead to huge purchases of these drugs. Like many KOLs who are physicians or health care academics, Mr Danzig seems utterly blind to the possibility that his multiple efforts to emphasize the importance of the supposed disease for which his company made a drug could somehow be viewed as a conflict of interest, or to why failure to tell his audiences about his major relationship to this company might have appeared just a small bit dishonest.  We have seen many medical/ health care KOLs who deny that somehow their opinions could have been influenced by their financial relationships, or that their audiences deserved at least to be aware of these relationships.  Yet, of course, Mr Danzig is not a doctor, and he was trying to influence government purchasers of drugs, not physician prescribers of it.

It does seem that the leadership of health care organizations, particularly but certainly not limited to pharmaceutical and biotechnology companies, have no lack of imagination about how to construct financial relationships with influential people who could help sell their products, whether or not they acknowledge what amounts to their marketing roles.

Given that this story involved influencing the government, it will be interesting to see at this late date whether it results in any legal action.  After all, as David Willman pointed out,

 Federal law bars U.S. officials, including consultants, from giving advice on matters in which they or a company on whose board they serve have 'a financial interest.'

It will also be interesting to see if it gets any more attention.  Only a few blogs have noted it, but at least they included The Scientist.


Yet our country has an unfortunately very long history of corporate leaders getting close to political leaders who then may overlook the legal niceties when their friends' interests are at stake.  Nonetheless, true health care reform would require all those who have decision making power over patients, health policy, or the public health to be completely transparent about their conflicts of interest, and would ban the more serious variants of conflicts of interest, even if that might cost some already rich people a bit of money.  I am not holding my breath, however, about when this might happen.

Want to help a hospital go bankrupt? Get a bad EHR - Westchester hospitals' sale price over $54 million, Hospitals' debt about $200M

- Posted at the Healthcare Renewal Blog on June 3, 2013 - 

Sound Shore Medical Center (New Rochelle, NY) is filing for bankruptcy protection:

Montefiore Medical Center is offering to buy Sound Shore Health System for $54 million plus furniture and equipment, according to the latter’s bankruptcy filing — which also reveals just how far the troubled Westchester health network had fallen into the red.

Sound Shore Medical Center in New Rochelle, Mount Vernon Hospital and five related entities have about $200 million in debts owed to more than 3,000 creditors, while possessing only $159.6 million in assets, the U.S. Bankruptcy Court documents show. Sound Shore filed for Chapter 11 bankruptcy protection Wednesday as the first step in discharging its debts and selling itself to the Montefiore system.

Why were they in the red?

You can read the full article "Westchester hospitals' sale price over $54 million; Hospitals' debt about $200M" in The Journal News for yourself at this link: http://www.lohud.com/article/20130530/NEWS/305300081/Westchester-hospitals-sale-price-over-54-million?odyssey=tab|topnews|text|News&gcheck=1, but there's this interesting passage:

... Beginning in 2006, the hospitals saw falling patient volume and a change in their case mix. That led to “significant” losses in recent years, negative cash book balances and bills paid more than 225 days late. A 2011 electronic medical record and billing system conversion caused major delays in billing and cash collection that still haven’t been fully solved.

(This passage has a familiar ring to it; e.g., see SEC Count 9 at "Florida Hospital gets an 'F' on Informatics" at  http://www.ischool.drexel.edu/faculty/ssilverstein/cases/?loc=cases&sloc=miami.)

A 2011 EHR and billing conversion?  It's now 2013.

How many hospital IT personnel does it take to screw in implement a light bulb new EHR?

-- SS