August, 2019, Update: How to Challenge Health Care Corruption Under a Corrupt Regime?

After a lull, a new report on conflicts of interest and corruption permeating the Trump administration has appeared, prompting us to again consider how one can challenge health care corruption under a corrupt regime.


Background: Health Care Corruption

As we wrote in August, 2017, Transparency International (TI) defines corruption as

Abuse of entrusted power for private gain

In 2006, TI published a report on health care corruption, which asserted that corruption is widespread throughout the world, serious, and causes severe harm to patients and society.

the scale of corruption is vast in both rich and poor countries.

Also,

Corruption might mean the difference between life and death for those in need of urgent care. It is invariably the poor in society who are affected most by corruption because they often cannot afford bribes or private health care. But corruption in the richest parts of the world also has its costs.

The report got little attention.  Health care corruption has been nearly a taboo topic in the US, anechoic, presumably because its discussion would offend the people it makes rich and powerful. As suggested by the recent Transparency International report on corruption in the pharmaceutical industry,

However, strong control over key processes combined with huge resources and big profits to be made make the pharmaceutical industry particularly vulnerable to corruption. Pharmaceutical companies have the opportunity to use their influence and resources to exploit weak governance structures and divert policy and institutions away from public health objectives and towards their own profit maximising interests.

Presumably the leaders of other kinds of corrupt organizations can do the same. 

When health care corruption is discussed in English speaking developed countries, it is almost always in terms of a problem that affects some other places, mainly  presumably benighted less developed countries.  At best, the corruption in developed countries that gets discussed is at low levels.  In the US, frequent examples are the "pill mills"  and various cheating of government and private insurance programs by practitioners and patients.  Lately these have gotten even more attention as they are decried as a cause of the narcotics (opioids) crisis (e.g., look here).  In contrast, historically the US government has been less inclined to address the activities of the leaders of the pharmaceutical companies who have pushed legal narcotics (e.g., see this post). 

However, Health Care Renewal has stressed "grand corruption," or the corruption of health care leaders.  We have noted the continuing impunity of top health care corporate managers.  Health care corporations have allegedly used kickbacks and fraud to enhance their revenue, but at best such corporations have been able to make legal settlements that result in fines that small relative to their  multi-billion revenues without admitting guilt.  Almost never are top corporate managers subject to any negative consequences.

We have been posting about this for years at Health Care Renewal, while seeing little progress on this issue.

Health Care Corruption in the Context of a Corrupt Government

Instead, things now only seem to be getting worse, given the increasing evidence that the Trump administration is corrupt at the highest levels.   In January, 2018, we first raised the question about how health care corruption could be pursued under a corrupt regime.  We noted sources that summarized Trump's. the Trump family's, and the Trump administration's corruption..  These included a website, entitled "Tracking Trump's Conflicts of Interest" published by the Sunlight Foundation, and two articles published in the Washington Monthly in January, 2018. "Commander-in-Thief," categorized Mr Trump's conflicted and corrupt behavior.  A Year in Trump Corruption," was a catalog of the most salient cases in these categories in 2017.

In July, 2018, we addressed the Trump regime's corruption again  By then, more summaries of Trump et al corruption had appeared.   In April, 2018, New York Magazine published "501 Days in Swampland," a time-line of  starting just after the 2016 presidential election. In June, 2018, ProPublica reviewed questionable spending amounting to $16.1 million since the beginning of Trump's candidacy for president at Trump properties by the US government, and by Trump's campaign, and by state and local governments. Meanwhile, Public Citizen released a report on money spent at Trump's hospitality properties.


In October, 2018, we summarized the content of the Tracking Corruption and Conflicts of Interest in the Trump Administration from the Global Anti-Corruption Blog. The blog organized corrupt activities within the Trump administration into the following categories:

1. U.S. Government Payments to the Trump Organization

2. Use of the Power of the Presidency to Promote Trump Brands

3. U.S. Government Regulatory and Policy Decisions that Benefit Business Interests of the Trump Family and Senior Advisors

4. Private and Foreign Interests Seeking to Influence the Trump Administration Through Dealings with Trump Businesses

The voluminous 26 page report showed  that many examples of corruption by Trump et al were not one-offs, but were long-term activities.  For example, every time President Trump travels to on of the properties he owns through the Trump Organization, like the Mar-a-Lago resort in Florida, the US government is obligated to pay the Trump Organization, hence Trump himself for expenses like the Secret Service renting golf carts.  Each such payment seems to violate the "domestic emolument clause" of the US Constitution, which prohibits state or US government payments to a President for anything other than his salary.  Also, every payment made by a foreign government to the Trump Organization, such as for hotel accomodations or events at Trump Organization properties, appears to violate the "foreign emoluments clause" of  the US Constitution, which prohibits payments by a foreign government to the US President.

In April, 2019, we noted more new and updated sources on Trump administration corruption, including Bloomberg's interactive guide, and updated versions of the Global Anti-Corruption Blog's tracker (see above), and the Sunlight Foundation's "Tracking Trump's Conflicts of Interest" project.

Updates on the Corruption of the Trump Administration

The Trump regime continues to spin off a chaotic barrage of news and distractions, making it hard to concentrate on any one topic.  Unfortunately, discussion of conflicts of interest and corruption has been muted as news media, the pundit class, and everyone else has scrambled to keep up.  Nevertheless, there have been a few recent developments.

Updates of the Sunlight Foundation's "Tracking Trump's Conflicts of Interest"

 The Sunlight Foundation's "Tracking Trump's Conflicts of Interest" project is frequently updated, most recently in August, 2019.  Posts have appeared generally weekly, with the most recent examples focusing on: White House adviser KellyAnne Conway's alleged violations of the Hatch Act, and the properties owned by Trump's son-in-law Jared Kushner's real estate company (look here); an ongoing lawsuit against the Trump Organization (look here); and the continuing battle to obtain financial disclosures from Trump and the Trump Organization (l.ook here)


New Source: the New CREW Report

CREW is the Citizens for Responsibility and Ethics in Washington, a non-profit watchdog organization formed after the 2016 election.  We noted their blog in the April, 2019 update.  Now CREW has published a report on Trump's and colleagues' conflicts of interest, headlined: Trump's 2,000 Conflicts of Interest (and Counting).

The document was organized into these chapters:

- Visits to Trump properties by Trump, White House officials, members of Congress, foreign officials, and corporate executives

-  Political events and spending at Trump properties

- Blurring the line between the White House and the Trump Organization

- International travel and businesses

The report also included an updated summary of over 2300 of Trump's, Trump's family's, and Trump's business' conflicts of interests and apparent corrupt activities, showing the huge scope of the problem:

The president has visited his properties 362 times at taxpayer expense during his administration, sometimes visiting more than one of them in a single day. In 2019 alone, he has visited his properties 81 times, helping to further establish them as centers of political power. The number of days where President Trump has spent time at a Trump-branded property account for almost a third of the days he’s been president.

One-hundred eleven officials from 65 foreign governments, including 57 foreign countries, have made 137 visits to a Trump property, raising the question of how much foreign money has been spent at Trump’s properties.

Additionally, CREW has recorded 630 visits to Trump properties from at least 250 Trump administration officials. This includes high-level White House staff, members of Trump’s cabinet, and individual agency employees. So far this year, CREW has recorded 198 visits by White House officials. Ivanka Trump—who has an ownership interest in the Trump hotel in D.C.—and her husband Jared Kushner, both senior White House advisors, are the most frequent executive branch officials to visit Trump properties, other than the president himself. Jared has made 28 known visits, while Ivanka has made 23.

Members of Congress have flocked to President Trump’s properties, despite their constitutional oversight responsibility to provide a check on the executive branch as it relates to President Trump’s conflicts of interest. Throughout his two and a half years as president, 90 members of Congress have made 188 visits to a Trump property.

Forty-seven state officials, including 20 Republican governors, have made 64 visits to Trump properties, sometimes resulting in state taxpayer funds being spent there.

President Trump has used the presidency to provide free publicity for his properties, which he still profits from as president. Over the course of his presidency, Trump has tweeted about or mentioned one of his properties on 159 occasions, and White House officials have followed suit: Members of Trump’s White House have mentioned a Trump property 65 times, sometimes in the course of their official duties.

Political groups have hosted 63 events at Trump properties since President Trump took office, selling wealthy donors access to the administration while also enriching the president. Seventeen of these have been for Trump-linked groups, and another six have been hosted by groups linked to Vice President Mike Pence. Trump Victory, the joint fundraising arm of Trump’s 2020 election committee and the RNC, has hosted six events at Trump properties just this year, four of which were attended by the President himself. In all, the RNC and other Republican Party groups have had 28 events at Trump properties.

Twenty Trump administration officials have attended 38 political events at a Trump property, giving wealthy donors who fund spending at the president’s businesses access to top officials to discuss their pet issues while they enrich President Trump personally.

Political groups have spent $5.9 million at Trump properties since President Trump took office. So far this year, political groups have spent $1.1 million at Trump properties. In more than a decade prior to his run for president, Trump’s businesses never received more than $100,000 from political groups in a single year.

The Trump Hotel in Washington, D.C. is the top beneficiary of this political spending. In just over two and a half years, the hotel has raked in $2.4 million in traceable political spending.

Foreign governments and foreign government-linked organizations have hosted 12 events at Trump properties since the president took office. These events have been attended by at least 19 administration officials.

Thus it appears that the Trump administration functions as a giant marketing operation for Trump and the Trump Organization.  Furthermore, elected officials, almost entirely from the Republican party, and appointed administration officials have had significant roles in enriching Trump and the Trump Organization.  This appears to be corruption at a breath-taking level unheard of in US history.

This amazing record should also be considered in light of Trump and family's record of legal and ethical issues prior to the presidency.  Despite accusations of ties to organized crime, kickback, fraud, violations of gaming regulations, violations of rules governing non-profit organizations, violations of rules about money laundering, perjury, Trump and his family members often escaped investigation and always escaped any negative consequences, thus demonstrating impunity (look here). 

Summary

We now have had continuous reporting for years of massive conflicts of interest and extensive corruption permeating the executive branch of the US government.  Nonetheless, this topic has been virtually buried under the flood of chaotic news that emanates from the Trump administration every day.

To underscore what we wrote in October

So the driver of US health care corruption may now be the executive branch of government and its relationship with the Trump family and cronies, trumping even the influence of health care corporate corruption.

That corruption appears to be ongoing, worsening, and remains largely anechoic. 

In November, 2017, we noted a report by Transparency International of an international survey of corruption perceptions showing substantial minorities of US respondents thought that US corruption was increasing, and was a particular affliction of the executive and legislative branches of the national government, other government officials, and top business executives.  There was virtually no coverage of these results in the US media, just as there was virtually no coverage of a 2013 survey that showed 43% of US respondents believed that US health care was corrupt.

Similarly, despite, or perhaps because of their tremendous scale, the reports about Trump related corruption listed above have generated little discussion.  Despite the extensive and ever-increasing list of apparently corrupt acts by the Trump and cronies, grand corruption at the top of US government, with its potential to corrupt not just health care, but the entire country and society, still seems like a taboo topic.  The US news media continues to tip-toe around the topic of corruption, in health care, of top health care leaders, and in government, including the top of the US executive branch.  As long as such discussion seems taboo, how can we ever address, much less reduce the scourge of corruption?  The first step against health care corruption is to be able to say or write the words, health care corruption.

So we welcome any additional attention to health care corruption, or the larger corruption within the US government that is making health care corruption even harder to address.

But even if we can take that step, when the fish is rotting from the head, it makes little sense to try to clean up minor problems halfway towards the tail. Why would a corrupt regime led by a president who is actively benefiting from corruption act to reduce corruption? The only way we can now address health care corruption is to excise the corruption at the heart of our government.

It is now over 30 months since Trump was inaugurated, and there has been no real progress.  The fish is still rotting, and so is health care.  What will it take to make something happen?

A Sale of One Residency Program - the Commercialization of Health Care and now Residents Treated Like "Assets"

We recently posted (here and here) about the decline and impending closure of a once major urban safety-net teaching hospital, the Hahnemann University Medical Center.  This was the final common pathway of a downhill progression for an over 170 year old institution.

[Hahnemann Hospital in 1925]

Since the 1990s, it had been a non-profit university academic medical center, which was then merged into a non-profit health care system (Allegheny Health Education and Research Foundation, or AHERF), which was mismanaged into a bankruptcy of historic proportions (look here).  After that, the hospital wound up part of the  for-profit Tenet chain.  Two years ago, after reportedly losing millions of dollars a year for its corporate owner, it was sold to a private equity group, Paladin Healthcare, and made part of their American Academic Health System LLC.   Now, the new owner decided it was losing too much money, and declared bankruptcy.

The final closure of Hahnemann left patients, often indigent or vulnerable, with no ready source of health care, and thousands of health care professionals and staff without their jobs.  New coverage of these events revealed in particular the plight of the hospital's nearly 600 house staff.

The Plight of the Residents

On July 10, 2019, a Medscape article summarized the state of play:

The 570 residents who started their programs just more than a week ago at Hahnemann University Hospital in Philadelphia, Pennsylvania, are scrambling to find new positions in light of the announced closing of the hospital.

Third year medical resident Thomas Sibert MD described their situation. He had:

just started his third year as an internal medicine resident at Hahnemann. Now, instead of focusing on finding a fellowship, he must simultaneously find another residency as well.

'The people we are counting on for recommendations are themselves also looking for jobs,' he told Medscape Medical News. 'The attendings have been endlessly supportive. They've been working for the fellows at the same time they're working for their residents interested in fellowships and looking for their own jobs.'

He described some of the worries the residents are facing.

Many have signed full-year leases for housing and some landlords have been unwilling to break them, he said. Because the areas near Philadelphia can only at this point — depending upon pending solutions — take a percentage of the displaced, others will need to move across the country and some states will require getting a new medical license with potentially months of background checks.
The consequences are especially severe for interns, Sibert said.

'They are going to enter their new hospitals with very little clinical exposure because the number of patients and the resources at Hahnemann have been so severely reduced,' he said.

A few days later, on July 15, a Philadelphia Inquirer article revealed another threat to some of the house staff:

Fifty-five Hahnemann University Hospital residents holding J-1 visas face the possibility of deportation if they cannot secure a position in an accredited program within 30 days of the hospital’s closure.

The visas enable foreign physicians to come to the U.S. for training at accredited medical schools.

The Solution: Sell the Residency?

The current and final owners of Hahnemann had a solution, of sorts.  The Philadelphia Business Journal reported their plan as of July 10, 2019, was to sell the residency program.

Hahnemann University Hospital and Tower Health said Wednesday they have entered into a letter of intent to transfer the majority of the residency and fellowship programs at Hahnemann/Drexel University to Tower Health.

Under the letter of intent, Tower Health will assume the responsibility for the continued training of the more than 550 residents and fellows in these programs — while giving those physicians-in-training the right to be placed in one of Tower Health’s six hospitals.

Also,

Tower Health said it will seek to hire the faculty who are currently training the residents and fellows to ensure continuity of the Hahnemann and Drexel training programs.

The July 15, Inquirer article noted that it really was a sale, not a "transfer,"

Tower Health has offered $7.5 million to buy Hahnemann’s 500-plus residency and fellowship slots, as well as the hospital’s Medicare ID number, which dictates the number of medical residents for which the hospital can receive federal funding.

However, that article also suggested that this plan might need some work. To begin, Tower Health had no structure to take on the complexity of the Hahnemann program:

But Tower has only eight accredited programs — significantly fewer than the 35 programs currently operating at Hahnemann, according to a court filing in the Hahnemann bankruptcy case. That’s a problem for many residents, but especially for those with J-1 visas.

'We are very concerned about them,' said Jaime Sanders, an anesthesiologist at Hahnemann. Under the terms of their visa, they cannot have any 'gaps' in their program, which will end when the hospital closes. Closure is slated for September.

Another question was would Tower have the faculty to teach and supervise the residents? On July 18, 2019, an Inquirer article noted that a lot of the Drexel University faculty who were involved in the Hahnemann residency program were slated to lose their jobs:

About 40 percent of Drexel University physicians and clinical staff will lose their jobs as a result of the planned closure of Hahnemann University Hospital, Drexel president John Fry announced in an email to the university staff Thursday morning.

Tower Health was supposed to take on some of them, but the details were unclear.

Fry said that Tower Health Medical Group will become the college’s new partner and will be able to offer approximately 60 percent of the 800 clinical faculty and staff within the program employment in their current jobs. Tower also expects to be able to offer about half of the remaining 40 percent comparable positions at similar pay at Tower locations in Reading, Chestnut Hill, and the Philadelphia suburbs, said Jill Tillman, CEO and associate dean of Drexel University Physicians.

The 800 clinical faculty and staff include 245 physicians who received severance notices on Thursday, though many of them will be offered employment through Tower, Tillman said. Tower has offered to keep all primary care physicians, she said, minimizing disruption to patients.

And again, where exactly would these faculty fit in at Tower Health?

that six-hospital system does not have all the accredited training programs it would need to accommodate Hahnemann’s 500-plus residents. The plan is also subject to approval by U.S. Bankruptcy Court, which has scheduled a hearing for Friday.

Drexel plans to eliminate certain health-care service lines as a result of the closure, Fry said.

In a separate email to staff on Thursday, Drexel senior vice president for medical affairs Daniel V. Schidlow provided some details about which medical services Tower would seek to retain. Family medicine and internal medicine, including primary care, would continue in their current Drexel Medicine practice locations. Tower wants to meet with physicians and clinical staff in emergency medicine, surgery, cardiology, and other specialties 'about employment opportunities' within Tower’s system.

Tower’s Chestnut Hill Hospital — its only property in Philadelphia — does not have a maternity unit, but Schidlow said Drexel’s obstetricians and midwives may be offered jobs within the Tower system.

Many of the residents were totally unconvinced that this plan would work, or that it had their interests at heart.  A Bloomberg article on July 19, 2019, described their plea to the bankruptcy judge,

The bankruptcy sale of Hahnemann University Hospital’s education program is treating more than 570 doctors as financial assets and threatening their ability to complete the final stage of their specialized medical training, a group of hospital residents told a judge overseeing the case.

About 20 hospital residents, most wearing medical coats bearing the Drexel University College of Medicine logo, asked U.S. Bankruptcy Court Judge Kevin Gross to force the hospital’s owner Philadelphia Academic Health Systems LLC to guarantee the doctors have continued access to the federal Medicare money that pays their salaries.

'The residents of Hahnemann are not assets,' said Dr. Raluca McCallum, a resident who spoke from a prepared statement in court on behalf of her colleagues. McCallum said the residents have continued to provide the highest level of patient care possible 'for Philadelphia’s sickest, poorest and most downtrodden population.'

Nonetheless, the judge seemed willing to use a market approach to decide the house staff's fate:

Gross gave the company permission to set up a potential auction for the residency program with an initial bid of $7.5 million from Tower Health, a health care company that owns hospitals in the region. They are an owner of hospitals and related medical facilities in the area.

Today, the Inquirer just reported that Tower did not win the bidding war for the residents and their program.

Hahnemann University Hospital’s residency slots fetched a $55 million winning bid from team of six local health systems at Thursday’s bankruptcy auction, topping bids by Tower Health and a California company that wants to reopen the Center City hospital.

Christiana Care Health System, Cooper University Health Care, and Main Line Health joined Einstein Healthcare Network, Jefferson Health, and Temple University Health System in the winning bid

This begs the question of how one could run a residency program currently populated by house staff based in Philadelphia that is split among six large hospital systems spread from Delaware to New Jersey.  Organizing something like that would be a huge, perhaps unprecedented undertaking.

Would former Hahnemann residents now shuttled around to destinations including multiple hospitals in six systems and three states feel even more like assets, or widgets?  As the man says, we shall see.


Was an Asset Sale the Plan All Along?

Given that Hahnemann had been placed under the tender protections of a for-profit hospital corporation along time ago, after it ended the abusive relationship with the failed AHERF (look here),  maybe it should not have been a big surprise that the finale would be asset sales.

An opinion piece in Bloomberg contained observations by Prof Alan Sager of the Boston University School of Public Health, including:

Hahnemann has posted operational losses every year from 2004 to 2018, a 'remarkable' record, said Sager, who reviewed public documents kept by Pennsylvania on hospital finances.

Yet despite sustaining such apparent "losses" for 14 years, Tenet seemed to not be interested in trying to turn the hospital around.  An article in the Inquirer from July 20, 2019, featured an interview with the president of Drexel University, whose medical school was tied to Hahnemann.  It stated,

When John Fry became president of Drexel University in 2010, he inherited a medical school that was hobbled by its relationship with Hahnemann Hospital, where aspiring doctors got hands-on training.

Serving mostly poor Philadelphians, the historic facility was struggling financially. Important maintenance kept on being put off, he said, and there was only 'passive interest' from the hospital’s for-profit owner, Tenet Healthcare Corp.

'We wanted a first-rate place to educate our students and treat our patients,' Fry said in an interview Thursday, "and we never had that.”

Why would Tenet continue to own and operate a hospital that lost money for 14 straight years without making any apparent effort to improve the situation?  In my humble opinion, there is only one explanation that makes sense.  The losses were an illusion, product of an accounting trick.  Tenet was extracting money from the hospital, possibly in the guise of administration/ management expenses charged to Hahnemann, as if the hospital was a stand-alone entity, not a subsidiary of Tenet.  Those charges led to a sham analysis that showed chronic deficits.  When Tenet got tired of stripping assets, or the assets available for stripping were drying up, it was time to sell.

After Paladin Healthcare, a private equity firm bought the hospital, asset sales were clearly in the cards.  A CBS News article featuring an interview with a disillusioned Hahnemann nurse recited what we already know about how private equity works, in health care as well as elsewhere. It included a discussion by an expert on private equity who explained why these firms are now so interested in health care:

The expectation that health care will provide a sure return in volatile economic times, said Eileen Appelbaum, co-director of the Center for Economic and Policy Research and an expert on private equity.

'Health care is a major area of investment for private equity,' Appelbaum said. 'They look at health care the way they used to look at supermarkets. They said, 'People have to eat, so this is safe investment.' Now they are saying that about health care.'

However, the private equity playbook may spell doom for the health care organizations such firms acquire:

Private equity funds acquire companies that are struggling or distressed yet still have value. PE executives then direct management to make operational changes in order to boost a business' performance. The goal is to turn around the businesses and eventually sell them for a profit.

But private equity firms also tend to raise money by issuing debt from their target company, which critics say can make it tougher for a struggling company to make a recovery. In the worst cases, critics say, fragile businesses can be pushed into insolvency by their new debt burdens.

The reason Tenet bought Hahnemann after the AHERF bankruptcy, and the reason Paladin was willing to buy the hospital from Tenet may have been all about the value of the real estate involved, not the health care or medical education the hospital provided.

But in Hahnemann's case, economist Appelbaum said, it appears the hospital was bought for the value of its real estate, not for its mission to provide care to low-income Philadelphians. The hospital is located near a burgeoning arts district in central Philadelphia, as well as Temple University, which makes the land valuable to developers.

'It's the first time I know for a hospital being bought by a private equity company in what appears to be a pure real estate play,' she said.

Again, the article highlighted the steps that neither Tenet nor Paladin took that might have kept the financially ailing hospital - if indeed it was - afloat.

To make Hahnemann a financially viable hospital, its management could have taken several steps, such as buying hospitals in wealthier, suburban neighborhoods, which would have diversified its revenue. It could have also opened smaller, urgent care clinics, which are increasingly popular with patients, she said. "They did none of those things," she said. 'Surprise, surprise, the hospital tumbled more and more into the red, then 18 months later they went to bankruptcy.'

In any case, in the private equity model, once the decision was made to declare bankruptcy, the residency program became just another, and relatively inconsequential asset to be sold.  The residents, and faculty, like the patients, were just subjects of collateral damage.Why shouldn't they all be outraged?

Graduate Medical Education Adrift in a Sea of Commercialized Health Care

In 2007, Dr Arnold Relman wrote(1) that physicians' core values are threatened:

Endangered are the ethical foundations of medicine, including the commitment of physicians to put the needs of patients ahead of personal gain, to deal with patients honestly, competently, and compassionately, and to avoid conflicts of interest that could undermine public trust in the altruism of medicine.

These threats arose from "the growing commercialization of the US health care system." This has been abetted by physicians who accept "the view that medical practice is also in essence a business." Thus, "the vast amount of money in the US medical care system and the manifold opportunities for physicians to earn high incomes have made it almost impossible for many to function as true fiduciaries for patients."

Since 2007, nothing has stopped the march to an ever more commercially focused US health care (non-)system.  Meanwhile, the mission of taking the best care of each patient, and thus necessarily providing adequate education to health care professionals, fades into the rear view mirror.

Although the original argument for the commercialization of health care came from neoliberalism, (or market fundamentalism) especially in its dogma that:

harshly reinstated the regulatory role of the market in all aspects of economic activity and led directly to the generalisation of the standards and practices of management from the private to the public sectors. The radical cost cutting and privatisation of social services that followed the adoption of neoliberal principles became a public policy strategy rigorously embraced by governments around the world(2)

 Yet, as Prof Sager pointed out in the Bloomberg article,

'This is a symptom of the underlying anarchy that pervades U.S. healthcare,' Alan Sager, a professor of health law, policy and management at the Boston University School of Public Health, said referring to the plan to shut Hahnemann. 'Nobody is accountable for identifying the hospitals that are needed for the public. There is no free market and there is no government accountability.'

Neoliberalism may seem like a lot of economic mumbo jumbo, but ask the patients and staff of the former Hahnemann University Medical Center, and the house staff and faculty of its former residency program about its impact.

If only we could go back to a time when hospitals were non-profit community and/or academic institutions, when for-profit hospitals and the commercial practice of medicine was banned, when anti-trust laws were enforced to prevent ever growing corporations from enforcing ever growing power.  If only...

Such drastic changes, however, would all greatly threaten those who have become wealthy off the current system.  Think of the former CEO of AHERF, the current CEO of Tenet, the owner of Paladin Healthcare, and indirectly, all those plutocrats and oligarchs out there.

However, unless the public is willing to discomfit these plutocrats and oligarchs, what happened to Hahnemann and its residency program will likely soon seem like a trivial problem compared to what will come next. 


References

1. Relman AS. Medical professionalism in a commercialized health care market. JAMA 2007; 298: 2668-2670. [link here]

2.  Komesaroff PA, Kerridge IH, Isaacs D, Brooks PM.  The scourge of managerialism and the Royal Australasian College of Physicians.  Med J Aust 2015; 202: 519- 521.  Link here.

Just Another Small Health Care Scam... the Trump Network and its Bogus Diagnostic Tests and Unproven Vitamin Treatments Resurfaces

Introduction

On Health Care Renewal, we frequently discuss deceptive marketing schemes designed to sell tests and treatments whose benefits for patients do not clearly outweigh their harms, and sometimes which are useless or dangerous.  In fact, we have to be selective about discussing such cases, because they are all too common.  Therefore, we tend to focus on cases involving the biggest and most powerful health care organizations, and/or the worst risks to patients.

We have generally not discussed the myriad promotions of dubious "nutritional" tests and therapies, because there are just so many of them, the players involved are generally small, and these products were effectively deregulated in the US by the 1994 Dietary Supplement Health and Education Act.

However,...

Just Another Multi-Level Marketing Scam?

In 2016, we posted about what appeared to be just another nutritional scam, but one that seemed at the time to have broader implications.  A colorful account of how it worked came from a 2011 New Yorker article, which focused on a marketer named Izzo:

He would order the vitamins from a company called Ideal Health. She would earn a commission on the sale and he, in turn, would become a part of her team and encourage other people to buy the vitamins. For those sales, Izzo would earn a commission, as would she (his 'upline'), and then the people he sold the vitamins to would become part of his sales team and would go on to create their own sales teams, who would go on to create their own sales teams, etc., ad infinitum, all of them funneling commissions from their sales up to Izzo and the woman on the phone. As he listened, 'something clicked,' Izzo says. 'I saw the beauty of the business model. And I said, ‘How can I do this, and do this big?’ '

Note that this was an interesting scam in that it involved a multi-level marketing (MLM) model, which sometimes are called pyramid schemes. What most interested the New Yorker back then, however. was that the scam got connected to a prominent, flashy New York businessman, one Donald J Trump, yes, that Donald J Trump:

'The name is hot!' Donald Trump booms over the speakerphone from his office at 725 Fifth Avenue, where, ever since The Apprentice breathed new life into his brand, he has presided over an ever-diversifying array of businesses. He is, of course, speaking of his own name. 'It’s on fire!'

In March 2009, Trump purchased Ideal Health, rebranding it the Trump Network. Though the packaging has now been imprinted with the Trump family crest, the product line is still much the same. There are the two multivitamins: Prime Essentials and the more expensive Custom Essentials, the ingredients of which are determined by the Trump Network–branded PrivaTest, a urine test that claims to determine which vitamins the user needs. There’s also a line of healthy snacks for kids called Snazzle Snaxxs, QuikStik energy drinks, and a Silhouette Solutions diet program. With the Trump investment, the company has added a skin-care line that goes by the seductively foreign name BioCé Cosmeceuticals.

How much of a scam was this?  The trick to this scheme was that it involved not only the sale of nutritional supplements, but the use of bogus urine testing to develop customized nutritional regimens.

 The Trump Network sold many health and wellness products, and its main one was a customized nutritional supplement whose composition was determined by a urine test, called the PrivaTest.

A former marketer provided STAT with a kit for Ideal Health’s PrivaTest. It contained a urine collection cup, five test tubes, a cold pack, a biohazard bag, a prepaid FedEx mailing label, and detailed instructions. Customers collected their urine and shipped it to a lab for analysis. That lab analyzed the urine with three tests and produced a report, which was sent to The Trump Network.

The Trump Network bundled the report with a package of pills and shipped it all back to the customer. The pills were marketed as 'Custom Essentials,' formulations based on the results of the test and manufactured by another lab. In all, there were 48 formulations.

According to an archived version of The Trump Network’s website that can still be found online, the PrivaTest, along with a month’s worth of the Custom Essentials, cost $139.95. Retesting was available for $99.95, plus shipping and handling. The company recommended retesting every nine to 12 months.

Other products purportedly tested for food allergies, stress, and digestive health. One claimed to measure 'the balance between your ‘good’ estrogen and your ‘bad’ estrogen.'

There was, however, no evidence that any of this testing meant anything, or that nutritional regimens constructed using it would do any good for patients.   First, there appeared to be no publicly available data on how the tests worked, what they actually tested, or how accurate they were.  Then there was no data about how the test results could rationally be used to suggest particular mixes of vitamin supplements.  Also, there was apparently no public data about what vitamins were in the potions sent to consumers, their purity, their strength, etc.

The New Yorker asked some experts about this:

 While the FDA may not have evaluated the tests or supplements, independent scientists have — and raised many questions.

Cohen, one of several scientists who reviewed materials from Ideal Health and The Trump Network, said that the tests were marketed too broadly and seemed to be 'pathologizing normal human life.'

The website, for example, recommended its “AllerTest” to anyone who had dark circles under their eyes, occasional digestive problems, fluctuating blood sugar, sinus and respiratory problems, or tiredness after eating.

'Does your blood sugar fluctuate?' Cohen said, laughing. 'If your blood sugar does not fluctuate, you are extremely ill. You will not be long on this planet.'

What’s more, the AllerTest did not measure food allergies, as the network’s website claimed it would, according to outside analysis of materials from the testing lab and Ideal Health publications.

The test measured information about an antibody known as immunoglobulin G, or IgG, according to company publications. The antibody is normally produced in the body and not indicative of a food allergy, said Dr. Robert Wood, director of pediatric allergy and immunology at Johns Hopkins School of Medicine.

'There’s no disease condition for which the IgG antibodies have any relevance at all,' Wood said.

Note that this did not discuss, but implied that administering bogus tests to people and patients could either make them think they have important medical problems when they do not, or make them think that they do not have problems which they actually have.  Thus systematically administering bogus tests to a population could harm that population.

 In any event, like many such scams, the whole thing eventually faded away, and Trump pulled out of the licensing deal in 2011.

There basically ended our post, noting that maybe it was significant that a then 2016 presidential candidate who was favored to win the Republican nomination once got involved in such an obvious, if relatively small-time health care scam (and one involving a possible pyramid scheme, and bogus diagnostic testing to boot).  And yet this story, like many involving unethical health care practices, seemed to fade away.  Of course, in this case, it was also rapidly drowned out by the increasing chaos being produced by Trump and his cronies.

But wait, there is more.

The Class Action Lawsuit Against Trump and Family for Allegedly Fraudulent Multi-Level Marketing Schemes

The Trump candidacy, of course, despite many predictions to the contrary, did not fade away.

And in 2018, a story appeared that again was nearly drowned out by the then ongoing Trump chaos.  As reported by the NY Times in October, a lawsuit surfaced:

The 160-page complaint alleges that Mr. Trump and his family received secret payments from three business entities in exchange for promoting them as legitimate opportunities, when in reality they were get-rich-quick schemes that harmed investors, many of whom were unsophisticated and struggling financially.

Those business entities were ACN, a telecommunications marketing company that paid Mr. Trump millions of dollars to endorse its products; the Trump Network, a vitamin marketing enterprise; and the Trump Institute, which the suit said offered 'extravagantly priced multiday training seminars' on Mr. Trump’s real estate 'secrets.'

Voila, the Trump Network scam reappears.

Of course, early in the NYT article was the caveat:

the lawsuit comes just days before the midterm elections, raising questions about whether its timing is politically motivated.

The Times always likes to report on both sides of the argument, regardless of the merits, but anyway...


Again, all was silent, while chaos raged about other matters, at least until early 2019, when Trump's legal filed their protest asking a judge to dismiss the lawsuit, as reported by Bloomberg,

In a filing Monday, the Trumps claimed they had nothing to do with any alleged fraud. Donald Trump provided celebrity endorsements to ACN from 2006 to 2015, but never owned or controlled the company. And the plaintiffs haven’t identified a single fraudulent statement made by any of the other defendants, the family said.

'No plaintiff is alleged to have paid or lost money to the defendants or to any Trump business, and no defendant is alleged to have solicited any plaintiff for anything,' the Trumps said in the court filing. 'It is undisputed that ACN -- and ACN alone -- through a network of ACN representatives, solicited and collected fees from plaintiffs, for the benefit of ACN'”

At least in the Bloomberg report, there was not a word about the small health care scam that was also alleged, and certainly not about the evidence from that New Yorker article from long ago about how involved Trump was in that, but never mind, and all was silent once again, until....

However, in July, 2019,this month, the judge ruled, again per Bloomberg,

President Donald Trump, his company and three of his children must face a class-action lawsuit in which people claim they were scammed into spending money on fraudulent, multilevel marketing ventures and a dubious live-seminar program.

U.S. District Judge Lorna Schofield in Manhattan ruled Wednesday that the case can go forward with claims of fraud, unfair competition, and deceptive trade practices. The decision likely opens the door for the plaintiffs to start gathering evidence from Trump and his company, including documents and testimony.

The implications are important.  The suit is not just against the Trump Organization, but against Donald J Trump personally, and three of his children.  Absent another challenge from the Trumps et al, there could soon be a discovery process, meaning lots of documents, emails, etc, the sorts of information Trump et al have struggled to keep secret in other contexts, might be disclosed.  Furthermore, additional coverage of this legal development underlined Trump's personal involvement with these schemes - as did, by the way, the old New Yorker coverage of the Trump Network nutritional testing scam, facts that long vanished from the public eye.

For example, Salon reported,

The complaint added, 'Central to Defendants' fraudulent scheme was a company called ACN, a multi-level marketing company ('MLM') that offers a business opportunity to individual participants. From 2005 to at least 2015, Defendants received millions of dollars in secret payments to promote and endorse ACN. In return, Donald J. Trump ('Trump') told prospective investors that '[y]ou have a great opportunity before you at ACN without any of the risks most entrepreneurs have to take,' and that ACN's flagship videophone was doing 'half-a-billion dollars' worth of sales a year.' Trump also told investors that he had 'experienced the opportunity' and 'done a lot of research,' and that his endorsement was 'not for any money.' Not a word of this was true.'"

It has since been revealed that Donald Trump earned $450,000 each for three speeches that he delivered for American Communications Network.

So it appears that Trump personally profited quite a bit from these little scams

Discussion

The nearly anechoic Trump Network story just adds to Trump's and cronies' long history of deception, unethical behavior, and to the questions about crime and corruption that have swirled around them for years, including times well before anyone ever could conceive of Trump as US President.  However, unlike many of the other cases (see this most recent summary here), this one involves health care, diagnostic testing, and patients, not just investors, as potential victims.

Thus this just adds to concerns that the Trump regime is enabling worsening of the ongoing problem of health care corruption in the US.  As we have said before, health care corruption has been nearly a taboo topic in the US, anechoic, presumably because its discussion would offend the people it makes rich and powerful. As suggested by the recent Transparency International report on corruption in the pharmaceutical industry,

However, strong control over key processes combined with huge resources and big profits to be made make the pharmaceutical industry particularly vulnerable to corruption. Pharmaceutical companies have the opportunity to use their influence and resources to exploit weak governance structures and divert policy and institutions away from public health objectives and towards their own profit maximising interests.

Presumably the leaders of other kinds of corrupt organizations can do the same. 

Yet,  Health Care Renewal has stressed "grand corruption," or the corruption of health care leaders.  We have noted the continuing impunity of top health care corporate managers.  Health care corporations have allegedly used kickbacks and fraud to enhance their revenue, but at best such corporations have been able to make legal settlements that result in fines that small relative to their  multi-billion revenues without admitting guilt.  Almost never are top corporate managers subject to any negative consequences.

In the last few years, as discussed here, voluminous reports have surfaced about the corruption of the Trump regime (although none of which, of course, mentioned the small case of Trump's sleazy health care scams).  They included numerous, ongoing cases of Trump's violations of the emoluments clauses of the US Constitution, which forbids a President from receiving payments from foreign countries, of US or state and local governments.  They included numerous appointments of gross instances of the revolving door, in which people with leadership positions in industries, including health care corporations, were given control over agencies which regulate and enforce laws pertaining to the corporations they previously served. They included numerous instances in which US government decisions were made seemingly to benefit Trump, his associates, and his conflicted appointees.  They included instances in which the federal government was used to promote Trump's ongoing business interests.

And now they should include one small health care scam that might have harmed patients.

So anyone concerned about health care corruption needs to realize that when the fish is rotting from the head, it makes little sense to try to clean up minor problems halfway towards the tail. Why would a corrupt regime led by a president who is actively benefiting from corruption act to reduce corruption? The only way we can now address health care corruption is to excise the corruption at the heart of our government.  

It was just a small health care scam...

"Like Watching a Slow Train Crash": AHERF to Hahnemann & Drexel, Part Deux

The Hahnemann Tragedy: Not All That Anechoic, But How Relevant Anyway?

There are so many health policy narratives right now entering new phases: CMS's head slamming the very idea of a public option; prescription drug costs; the opiate crisis now including both the Sacklers and J&D--all repeatedly subjects of this blog. So my dander's up over all these things more than something maybe unique to one town. Personally I'm finding it hard to stop and cone down on something that's for now mainly affected the U.S. Delaware River Valley. Philadelphia in particular.

Which is just the point that Dr. Poses, HCR's intrepid editor, recently made here around the closure of Hahnemann. (Its counterpart, Medical College of Pennsylvania Hospital, was closed by 2004.) Why has this major loss of a local health asset been so anechoic, a term I coined decades ago? Or has it actually been anechoic beyond the DelVal? Dr. Poses has urged me to blog on the Allegheny and Hahnemann debacles and their sequellae. It now occurs to me I can offer a useful extension, if not corrective, to his Part One on the events leading to the present demise of what's often been Philly's hospital and training venue of last resort, Hahnemann University Hospital.

Herewith, Part Deux. I lived through the whole sordid mess as a clinician and educator. I did so before, during, and after the late, unlamented, Allegheny University of the Health Sciences (a branch of Pittsburgh's AHERF) and its most important recent partner, Drexel University College of Medicine (DUCOM). Tellingly, we should call them frenemies, never true and trusted partners despite protestations to the contrary.

(To get ahead of the story only a bit: by the late 1990s, Drexel had inherited the bulk of academic and out-patient assets from Abdelhak's "AHERF East" expansion. Much less has been written or understood about Drexel's role in this narrative.)

So here's a perspective that will, I think, offer at least a little something new for everyone who trudges through it. It runs long.

Back, then, for a moment, to the "anechoic effect." Interestingly, the demise of Allegheny and now that of Hahnemann haven't lacked for echoes. Much has been written--indeed, the literature's so rich I'll only cite the most important milestones here--about it, and attention was fitfully paid nationally. The documentary trail is rich locally. But not only there. Look in peer reviewed widely read world wide including one exhaustive monograph out of a major university press. Or put ["tenet healthcare" hahnemann philadelphia] into a search engine, omitting the square brackets.

In what follows I yield to the impulse to pepper official accounts with my own and colleagues' observations, up to and including some insalubrious details. For some of these there is really nothing to cite. Thus, since I'm peppering, feel free to take my account with a grain of salt. Remind, me, however, to come back to the question: if the story was really not anechoic--let's say at worst hypoechoic--why do folks still not pay attention? Is there something unique about the Philadelphia setting, or are there lessons-learned that can be applied to other's settings?

After all, it wasn't exclusively (to coin a phrase) just The Philadelphia Story. From the outset, it was a statewide story, soon becoming a national story with the 1998 bankruptcy and consequent incursion of Tenet Healthcare, a for-profit out of Texas and California. Also it was always a money story, where "follow the money" goes back way beyond Bob Woodward and Carl Bernstein. Money stories are almost always generalizable. And yet ... I'm still not sure about this one.

All the basic facts of history below are easily checked, when provided for readability sans citation or link, via any good search engine.

Early Days.

Start at two ends of the same state of Pennsylvania, truly a "swing state" in so many ways, long before it joined Wisconsin in tipping the nation into chaos in 2016. By the early 1990s two things were clear. Pittsburgh had the state's most aggressive yet in another sense most defensive health care institution in what became the Allegheny Health, Education and Research Foundation, AHERF. It arose out of both the feared domination of Pitt and the ambition of a group of physicians and administrators led by a pre-AHERF hospital cafeteria director, post-AHERF jailed petroleum pirate, the late Sherif Abdelhak.

Abdelhak was not the only buccaneer involved in the story, though, either before, during, or after the 1998 bankruptcy. The crimes--or, rather, let's be careful, "departures from accepted norms"--of Abdelhak and his immediate Pittsburgh cronies were the worst. To keep his newly-cobbled-together statewide medical school afloat by the mid-90s, he'd already started quietly raiding any number of foundations, gifts, pensions and endowments that had supported worthy activities. (I participated in a class action suit around one of those.) Such activities continued uninterrupted for a while, with only faint rumbles heard early on at the institution Abdelhak had merged into the oddly-styled "MCP♦Hahnemann College of Medicine," and then its immediate progeny AUHS: Allegheny University of the Health Sciences.

AUHS's President Sherif Abdelhak gave the plenary lecture to the Association of American Medical Colleges (AAMC), the Cooper Lecture, in 1996, joining pre-bankruptcy luminaries such as Paul Beeson and Uwe Reinhardt beforehand and (post-bankruptcy) Clayton Christensen or Rita Charon in this prestigious venue. Everyone in 1996 was keen to hear, without cynicism, how he was pulling off his entrepreneurial hat trick. Cynicism came considerably later.

It was never clear to me whether it was AUHS or more broadly AHERF that suddenly and traumatically landed on the auction block in 1998. Long before their merger, both of the predecessor medical schools, Medical College of Pennsylvania and Hahnemann, each with its own wholly-owned non-profit teaching hospital, had been pressured financially and mismanaged. No one was all that surprised that they acceded to merger, even though no one was all that happy about the strange bedfellows that resulted. By the mid-1990s, Philadelphians already knew the city was over-medicalized both clinically and educationally.

The two most salient characteristics of this shotgun marriage were its "T" and "W" on a SWOT quad chart. Do the math: its main strength, such as it was and still the case in Philly real estate circles, was location. The medical schools and hospitals were rather dilapidated then and now. But at least Hahnemann offered a prime location just north of what was to become the Convention Center district. So the "S" was not so amazing despite a few additional clinical assets over the years (assessed at length here and here).

(Ironically, in the books just cited, institutional biographies were commissioned for joint sesquicentennials and both were published hard on the heels of bankruptcy. They reward reading. And yet, from such a reading you'll perhaps come away with the impression: "say what?!? you combined two med schools reeling from such radically different traditions and thought culture clash wouldn't impact the result?)

And there, along with failure to invest, lay a critical weakness. Culture matters. The medical cultures clashed with each other, with the new parent university, and with the business cultures of Tenet and its successor.

In retrospect and probably in prospect, the opportunities for the new medical school and the hospital--what remained Hahnemann University Hospital because subsequent hospital owners wanted to differentiate it from Drexel's academic receivership--were few and far between. That's because the threat, and this is crucial, was something that may in fact be unique to Philadelphia.

Because of its history--and this is a decidedly mixed blessing with certain blandishments that persist pleasantly to this day--Philadelphia was always an over-medicalized place since the onset of its gradual but inexorable post-19th century and -industrial decline. For generations, depending on how you count, it had either five or six medical schools, each with its own elaborate teaching hospital plant, not to mention myriad other smaller hospitals. Encroaching further were suburban hospitals in the 20th century and outpatient surgical centers in the 21st. Each poached lucrative business away not just from Hahnemann but from all the university hospitals. Something had to give, an event now playing out at the bottom of the health-care and -education food chain.

Hahnemann was situated in a location, journalists now observe, with one of the least favorable payer bases of any central Philadelphia hospitals. Only the now-defunct Philadelphia General Hospital over in West Philly, still there as recently as the 1970s along with the Civic Center where Strom Thurmond held forth in 1948, was poorer. (PGH and the Civic Center are now wiped from the face of Google Maps, supplanted by grand edifices built by ever-expanding Penn-affiliated organizations.)

When the bankruptcy hit AHERF, having stripped the former organizations' academic assets, was ill-equipped to attract investment or do much other than give up the ghost. It had essentially been a health care Ponzi Scheme. Below I connect the dots with larger national trends described in a key article published over the name of Penn's university president. But before I do that let me describe some of the highlights, or lowlights, of the early years after AHERF went into receivership.

Brokering a Deal

In 2019 Philadelphia will now "de-medicalize" some more, through the long-overdue shift of the medical school and clinical training facilities to a new east-central Pennsylvania location. But unlike the present circumstance, in the late 1990s it was deemed unacceptable for all those hospital employees and all those jobs and all those patients to lose their places in the Philly firmament.

The politicians swung into action, casting about for some cure for the institutional patient.

Those figures--let's simply name Ed Rendell and Arlen Specter for starters--saved the patient by dismembering it. They'd always go on to say there was no choice, and it's probably true. The inpatient facilities went to an out-of-state, for-profit organization as I already mentioned.  Clinical training and health undergraduate programs (medical and many others) went to Drexel. The serial name changes I described above continued. The jewel in the rather rusty crown, the med school, soon became Drexel University College of Medicine under Constantine Papadakis, the late Greek-born engineer and the university's then-President, .

What followed was a striking litany of unforced errors. Had both Tenet and Drexel not made so many mistakes, it's possible the endgame just might have gone a different way. We'll obviously never know with any certainty.

The Next Chapter: Greek Tragedy

What happened next is at least as important as anything AHERF miscreants did in sealing the fate of both institutions. It was not just Tenet against Drexel. It was also Drexel against Drexel.

It's hard to know which of these sets of conflicts was most consequential in weakening the edifice after the bankruptcy. In either case it's important to understand that there not two but three boards, three administrator-coteries, and three financial silos. Drexel quickly erected a "firewall" between its health schools and its traditional West Philadelphia campus, with disastrous results.

Start with Tenet against Drexel. It's fairly easy to dispose of this conflict, since as Poses points out, ruthless business thinking immediate took hold for Hahnemann University Hospital. Make concessions and collaborate with clinical research planning? Not a chance. Tenet rushed to hive off its information technology out of reach of Drexel, installing an incompatible EHR. Some Tenet lawyer may come after me and berate me for ignoring "how much we at Tenet did for Drexel," but I can assure you and her that on balance, most decisions were made to streamline, not to say strip bare, Hahnemann activities such that Drexel research languished at the Hahnemann campus. Ironically it was only hold-overs from certain AHERF-era grants such as the tobacco settlements and the Robert Wood Johnson Foundation that helped tide medical school departments over, at least for a while.

We come, then, to "Drexel versus Drexel." In some ways these conflicts were even more pernicious. The firewall between the two sides of the river promoted such a trend. After all, mimicking the sins of the Tenet fathers, the two Drexel "silos" themselves rushed to hive off their own IT groups one from the other. (This has since been reversed, a healthy dose of too-little-too-late.) Not without some justification, the Drexel "original" board was paranoid that Drexel Med would bring down its new foster-parent institution.

And foster child is what Drexel Med, and for a while its corollary health schools, became. Papadakis, the engineer-entrepreneur, had already made his main focus the dilapidated West Philly campus. So he emphasized physical development over everything else, neglecting even his own West Philadelphia faculty almost as much as that of the medical school. With one or two notable exceptions he hired poor administrators. One of them, an early medical school dean, mimicked Abdelhak by embarking on a relationship with a medical student. (Abdelhak's now-physician wife later divorced him. It seems uninteresting what happened to the medical dean and the weather girl-turned-med-student who went on to become his wife.) Ironically, the best administrators at Drexel Med were those already present when Drexel took over. But not many stayed on to help.

Hence, Drexel versus Drexel. Drexel Main Campus mimicked AHERF in many ways in looting the medical school, taxing it heavily. Perhaps the worst example of this, a truly damaging sort of virtual taxation, was Papadakis running roughshod over the internal processes of the struggling DUCOM. At one critical juncture, he required an estimable new dean, who'd followed the fine gentleman described above, to eliminate all searches for replacement department chairs, as their predecessors headed for the exits. He froze all the acting chairs in place, resulting in a further weakening of the administrative infrastructure. This should have been a quitting issue for many--but most had already booked because of Abdelhak and his earlier regime. And indeed soon thereafter that new dean, Richard Homan, who'd just had every single one of his chair searches shot out from under him, did leave for a much better deanship elsewhere.

The remaining departmental structures were, and even now remain, riddled with inadequacies and opportunities for outright fraud. Last time I checked, about six months to a year ago, heads were still rolling as a result. Over on the Main Campus there is a new president who, while an improvement over Papadakis, focuses on new buildings, which, of course, attract new money.

Echoes Are Heard

In 2004, at the end of a decade at the University of Pennsylvania during which she had her own battles with the health-school leaderships, its scientist-president Judith Rodin published an influential piece in AAMC's widely-read flagship publication, Academic Medicine. Giving credit where due, it was "contributed to" and likely co-authored or first-drafted by philosopher administrator Stephen Steinberg, to whom Rodin gave brief thanks in a footnote. Without once mentioning Allegheny it was a far-seeing autopsy of much that was going wrong in American medicine, typified--I know this from talking to Steinberg--by Allegheny, down to that moment when Rodin left Penn to head up the Rockefeller Foundation. It's worth re-reviewing now, fifteen years later.

Rodin and Steinberg noted how they'd seen the "terrifying perils of the vertically integrated academic health system, ... the University of Pennsylvania's newly created integrated health system [and] how dramatic shifts in federal policies and market forces threatened to take down our health system—and the rest of the university with it." She adverted to how, just

... as Penn led the way in the creation of the nation's first vertically integrated health system in 1993, so, too, were we among the first to feel the full effects of dramatically increased insurance claim denials and delays, and reduced Medicare payments, both overall and for medical education, that followed in the wake of the Balanced Budget Act of 1997. At the same time, we were providing $100-million per year in unreimbursed or underreimbursed indigent hospital care. As a result, the University of Pennsylvania Health System lost $350 million from 1997 to 2000, created $800 million in debt, and its bond rating was downgraded by Moody's Investors Services from Aa3 to A1, while the outlook for the university's higher AA rating was changed from “stable” to “negative.”

So the times were tough all up and down the food chain.

Rodin and Steinberg went on to prescribe Penn's "cure," not as novel as she implied but still emerging from an abyss hence now able to prescribe a "sow's-ear-to-silk-purse" transformation.

At that point, we faced the same fundamental choices as many of our peers: risk serious financial and educational damage to the rest of the university by continuing to absorb the Health System's deficits; eliminate the threat to the university's financial health by spinning off, selling, or otherwise separating the Health System from the university; or strategically plan and manage our way out of the financial crisis, and do so in a way that would make us less vulnerable to future potential perturbations.... [We] had to consider two separate—but ultimately related—questions. First, why were we in the business of integrated academic medicine, and why on earth would we want to stay in it, given the—by then obvious—risks? Second, if we were going to stay in it, how would we make it work, for our patients, for our faculty, and for our students, and—both academically and financially—for the university as an institution? Ironically, the answer to both questions was more and better integration—just the strategy that got us into so much trouble—but applied very differently this time. Applied more horizontally, and less vertically.

In other words, "we zig when they zag." But of course, Drexel, like other local schools (notably Jefferson, still today expanding with the absorption of Philadelphia University) was trying its damndest to do the same thing. At least Drexel was claiming to try to integrate, undertaking steps including adding schools of law and business and reintegrating information technology. So it boils down I think to "how rich were you when you started," and "how many unforced errors"? Winners get to write the history. Those at the bottom of the food chain, if they drop off, don't get to. No surprises here. Drexel (and others) were trying to integrate "horizontally." But with a lot less money, a lot less reputation, and no real cushion.

Next, in 2011, an eminent sociologist-historian, the late Judith Swazey, published a lengthy history of the Allegheny-Hahnemann disaster. In Merger Games, Swazey, per one reviewer

vividly document[ed] fundamental patterns inherent in practically all corporate reorganizations and mergers, and dissects why they succeed or fail. Because of these highly important and ever so timely lessons, the information in this book should ... reach the widest possible audience and to that end it should be made into a movie. It has all the ingredients of a terrific box office success. [Editorial note: not!!!] And at the same time it should be made into a Harvard Business School case study because these lessons ... need to be understood by tomorrow's organizational leaders.

In another way, of course, Swazey's reception, or lack thereof, may prove Poses's point. People don't pay much attention. Why?  Perhaps just simple hubris. They avert their eyes if there's the least rationale to do so, a plight now afflicting our entire country. It may have been just too easy, too glib to think of Philadelphia as overmedicalized, someone needing to drop off the rotten bottom of the food chain, bad managers making it worse--God knows they did!--and free-standing schools of health having little ballast during times of economic stress. In any case another reviewer, one who lived through it as I did, long before Hahnemann died went onto the Amazon website and described the experience in terms of "watching a slow train crash."

Impact on Patients

Well, not just the patients. Consider faculty members, many of whom have devoted decades to teaching subjects like anatomy or admitting to Hahnemann and accumulating significant coteries of devoted patients. Those patients aren't going to follow some fine physicians, or the ones who elect to migrate, out to Berks County, Pennsylvania.

Just yesterday I spoke to someone knowledgeable about the impact on the area's preeminent medical school, Penn, in terms of eye patients. This individual described to me a tripling of the numbers of patients appearing at the walk-in clinic, in almost overnight fashion. Imagine having to deal suddenly with three times the number of emergency walk-ins, triage them, get them to appropriate consultants. In time the impact will likely be diffused and absorbed, just as happened two generations ago with the  1977 closure of Philadelphia General Hospital. Nothing entirely new here. And yet, to say "move on, folks, nothing to see here," as some might be tempted to do, would be a shame.

Conclusion

In this account I've added some textural detail to the knock-on effects of the Allegheny bankruptcy. It's rich with irony. So many questions about what I have included actually remain unanswered. To what extent were Drexel administrators complicit with those from Tenet in insuring the slow steady decline of the involved institutions.

One thing is certain. Only in the past year and a half to two years, give or take, have some of the errors been addressed. For example, a clever strategy was only recently put into effect to undo the effects of Drexel's freeze on the hiring of department chairs based on real searches for quality. A number of chairs, some well meaning but most less than fully adequate, have finally been pushed out. Just in time for Drexel Med to move to another part of Pennsylvania, and for the heirs of its hospitals to give up the ghost entirely.

A Stealth Health Policy Advocate Goes Through the Revolving Door ... Now to Chair the White House Council of Economic Advisers

In 2017, we noted that President Trump had appointed a member of his Council of Economic Advisers who previously was a master corporate stealth health policy advocate.  Now he is getting a promotion.

Prof Tomas Philipson to be Named to Chair of the President's Council of Economic Advisers

On June 29, the Washington Post reported,

President Trump plans to name economist Tomas Philipson as the next head of the White House Council of Economic Advisers, according to senior administration officials.

Philipson has worked at the White House for nearly two years as a senior economist after serving briefly on the transition team. Best known for his research on health care, Philipson has been a key player in the Trump administration’s efforts to lower drug prices and push back against Democrats’ proposals for a Medicare-for-all system.

The Post noted that during his tenure on the Council it released a report warning of the financial dangers of proposals for a national single payer health insurance system ("Medicare for all"), which is labelled "socialism."

Also, it quoted him as saying

Deregulation is the cornerstone of the president’s pro-growth economic policies that has been implemented since he took office,

The article also briefly described his "long career and academia and public service."

An article on the NPR site included this testimonial:

'Tom is a very fresh thinker,' said Mark McClellan, a veteran of the George W. Bush administration who recruited Philipson to work for him, first at the FDA and later at the Centers for Medicare & Medicaid Services. 'Tom had a great background in health economics and wanted to do work that was very policy relevant. So it was a win-win.'

A health economist as the chief White House economic adviser sounds like a good idea on its face, but the reality is much more complex.  

Philipson's Career as a Master Stealth Health Policy Advocate

In February, 2017, months before Philipson ascended to the Council, a ProPublica article noted that Philipson was "the third co-founder of Precision Health Economics" (PHE).

As we said later in 2017, PHE was in the business of using its experts' academic credentials to help pharmaceutical and biotechnology companies influence public policy in their favor. From the ProPublica article

Over the last three years, pharmaceutical companies have mounted a public relations blitz to tout new cures for the hepatitis C virus and persuade insurers, including government programs such as Medicare and Medicaid, to cover the costs.

So,

To persuade payers and the public, the industry has deployed a potent new ally, a company whose marquee figures are leading economists and health care experts at the nation’s top universities. The company, Precision Health Economics, consults for three leading makers of new hepatitis C treatments: Gilead, Bristol-Myers Squibb, and AbbVie.

Furthermore,

This is just an extension of the way that the drug industry has been involved in every phase of medical education and medical research,' said Harvard Medical School professor Eric G. Campbell, who studies medical conflicts of interest. 'They are using this group of economists it appears to provide data in high-profile journals to have a positive impact on policy.'

PHE has worked with some of the biggest pharmaceutical and biotechnology companies and trade groups. In particular,

The roster includes Abbott Nutrition, AbbVie, Amgen, Biogen, Bristol-Myers Squibb, Celgene, Gilead, Intuitive Surgical, Janssen [a subsidiary of Johnson and Johnson], Merck, the National Pharmaceutical Council, Novartis, Otsuka, Pfizer, PhRMA, rEVO Biologics, Shire and Takeda.

ProPublica described some of the tactics PHE uses:

The firm participates in many aspects of a drug’s launch, both advising on 'pricing strategies' and then demonstrating the value of a drug once it comes on the market, according to its brochure. 'Led by professors at elite research universities,' the group boasts of a range of valuable services it has delivered to clients, including generating 'academic publications in the world’s leading research journals” and helping to lead “formal public debates in prestigious, closely watched forums.'

PHE has worked on campaigns to persuade the government and insurers to increase what they would pay for oncology drugs, and for Amgen's PCSK9 inhibitor (Repatha) for hypercholesterolemia.
 
Tomas Philipson was one of the principals of PHE:

Precision Health Economics may be well-positioned to influence the Trump administration. Tomas Philipson, an economist at the University of Chicago and the third co-founder of Precision Health Economics, reportedly served briefly as a senior health care adviser for the Trump transition team. He did not respond to requests for comment.

He has taken an active role in stealth health policy advocacy campaigns run by PHE.  For example, as part of the PHE campaign to advocate for generous government and commercial insurance payments for Repatha, Philipson disparaged an analysis by the Institute of Clinical and Economic Review which had suggested the drug was overpriced:

Philipson, the Precision Health Economics co-founder, and Jena wrote an op-ed in Forbes, citing the institute’s research and deriding its approach to value pricing as 'pseudo-science and voodoo economics.'

PHE and its principals, including Philipson, often failed to disclose relevant conflicts of interest.  For example, re the above Forbes article,

Only Philipson disclosed his ties to Precision Health Economics, and neither academic disclosed that Amgen was a client of the firm.

Failing to disclose the Amgen funding of their work in this context appeared deceptive.

Up to the time of his appointment to the Council of Economic Advisers, Philipson seemed to be enhancing his position at PHE.  In particular, in 2015, after PHE was bought out by a privately held biotechnology company, "Philipson ... [was] listed as chief economist and the chair of the strategy and innovation board."


However, Philipson's previous work on stealth advocacy campaigns for pharmaceutical and biotechnology companies did not prevent him from becoming a member of the Council of Economic Advisers.  Now that Philipson is likely to ascend to the chair of the Council, Philipson's previous record of stealth health policy advocacy has been anechoic.

Summary and Conclusions

The anechoic nature of this latest case shows how we are becoming numb to many common abuses in health care in the face of even worse abuses in the larger political economy, the ultimate defining down of deviancy.

Nonetheless, let me first emphasize that Philipson came through the revolving door from his role as a stealth health policy advocate to become a major Trump regime economic adviser.

We and others have said again and again that the revolving door is a species of conflict of interest. Worse, some experts have suggested that the revolving door is in fact corruption.  In particular, as we noted here, the experts from the distinguished European anti-corruption group U4 wrote,

The literature makes clear that the revolving door process is a source of valuable political connections for private firms. But it generates corruption risks and has strong distortionary effects on the economy, especially when this power is concentrated within a few firms.

In the Trump era, many people have come through the incoming revolving door, that is, people with significant leadership positions in health care corporations or related groups have attained leadership positions in government agencies whose regulations or policies could affect their former employers.  Many examples, starting with Philipson's initial appointment to the Council, appeared here.  The more people transit the revolving door from the world of big corporations to government, the more government appears rigged to do the bidding of big corporations and their  munificently paid leaders.


Furthermore,  have previously noted that promotion of health policies that allowed overheated selling of overpriced and over-hyped health care products and services included various deceptive public relations practices, including orchestrated stealth health policy advocacy campaigns.  Third party strategies used patient advocacy organizations and medical societies that had institutional conflicts of interest due to their funding from companies selling health care products and services, or to the influence of conflicted leaders and board members.  Some deceptive public relations campaigns were extreme enough to be characterized as propaganda or disinformation.

Philipson is not merely an adviser to pharmaceutical and biotechnology companies.  He was an active participant and innovator in stealth health policy advocacy (or maybe stealth lobbying.)   Putting an innovator in stealth health policy advocacy and lobbying in the top economic position in the White House will only amp up the power of propagandists and disinformation purveyors in government.

Meanwhile, top health care (and other) corporate management is increasingly merging with the current administration in one giant corporatist entity which is not in the interests of health care. To derig the system, we need wholesale, real health care reform that would make health care leaders accountable for what their organizations do, and would cut the ties between government and corporate leaders and their cronies that have lead to government of, for and by corporate executives rather than the people at large.


However, before thinking about true health care reform, we need top accomplish wholesale government reform. We need to excise the deception, crime and corruption at the heart of our government and restore government by the people, of the people, and for the people.