Wellcare Settles Again, but Wait, There is More...

We posted several times, most recently in 2009 (here and here), about misbehavior by the health insurance company/ managed care organization Wellcare.  That year, the company settled criminal charges that it defrauded the Florida state Medicaid program by paying a fine and accepting a deferred prosecution agreement.  Previously, the state of Connecticut had canceled its arrangement with Wellcare to run a Medicaid program in that state after the company refused to provide the state with requested data.  Then the company signed a consent order with the Florida Elections Commission in which it admitted making "questionable" political contributions.

Then this year, it was announced that the company would settle additional civil charges, as per the St. Petersburg (FL) Times,

Tampa-based WellCare Health Plans Inc. has agreed to pay $137.5 million to the U.S. Department of Justice and other federal agencies to settle civil lawsuits accusing the company of overcharging for its Medicaid and Medicare programs.

Also,

Under the tentative deal, which must be approved in court, WellCare would have three years to make payments to the Justice Department's civil division, the U.S. Attorney's Office for the Middle District of Florida and the U.S. Attorney's Office for Connecticut.

WellCare said the payments will include the approximately $23 million owed to the Florida Agency for Health Care Administration for overpayments received by the company in 2005.

The civil settlement is separate from a deal struck last year on the criminal front. In that case, WellCare agreed to pay $80 million to settle a charge of conspiracy to defraud the Florida Medicaid program and the Florida Healthy Kids Corp.

It also previously agreed to a $10 million civil penalty settling an informal inquiry by the Securities and Exchange Commission that regulatory filings reflected more than $40 million in profits that WellCare failed to return to the Florida agencies from 2003 to 2007.

WellCare, which is Florida's largest Medicaid plan operator, has acknowledged that it overcharged Florida and Illinois health programs by about $46.5 million.

But wait, there is more. No sooner than this settlement been announced than it was challenged. While considering the settlement, the judge involved unsealed a set of complaints by whistle-blowers about Wellcare. First, as reported by the Miami Herald,

The complaint, filed by former WellCare financial analyst Sean J. Hellein, portrays a company so ethically challenged that it rewarded employees who dumped hundreds of sick newborns and terminally ill patients from the membership rolls, thereby pumping up profits by millions of dollars.

It describes a company that embraced fraudulent accounting as a business model, eventually stealing between $400 million and $600 million from Medicare and Medicaid programs in several states, perhaps most of it from Florida.

See these specifics:

Hellein, who wore a wire for more than a year to gather evidence for federal agents, says in the complaint that:

- WellCare moved money between accounts to make it appear that patients' treatment cost much more than it actually did. In some cases, the company made payments years in advance to jack up the apparent cost of care to fool states into increasing Medicaid premiums. It worked, he said.

- When states made overpayment errors, WellCare didn't pay the money back, as its contract requires. Florida Medicaid made a series of overpayment blunders that fattened WellCare's bottom line by many millions; those who made the errors included both state officials and contractors.

- Sometimes hospitals and physician groups helped WellCare hide its true spending from Medicaid programs by accepting payments through one account for expenses incurred by another. Sometimes they allowed WellCare to pay for future years' expenses to make it appear spending for the current year was higher than it actually was.

Hellein named two hospital systems - one in Illinois and one in Florida - that he said participated in the sham arrangement, but he said it was common.

WellCare pushed expenses into certain programs - behavioral health programs in Florida and Illinois and the Healthy Kids program in Florida, a program for uninsured children of families with modest incomes - because they required repayment if the cost of treatment fell below a certain threshold.

Florida public officials were repeatedly duped by WellCare. The director of the Florida Medicaid program from 2004 to 2007, while much of the alleged fraud was going on, was Tom Arnold. He currently is Secretary of the Agency for Health Care Administration.

Another agency that fell for WellCare's line was the Office of Insurance Regulation, where an actuary found nothing wrong with a WellCare subsidiary in the Cayman Islands acting as the company's reinsurer.

The reinsurance arrangement enabled WellCare to bank $5 for each insured while making it appear that the cost was just 11 cents, the complaint says.

After Wall Street analysts raised questions about the legality of the reinsurance arrangement in 2007, some thought it might be reviewed by Chief Financial Officer Alex Sink. But nothing ever came of it.

WellCare conducted a study to figure out which Medicaid recipients were profitable and which were not so that it could engage in "cherry-picking," a term for enrolling only the profitable members. The study found that disenrolling a baby born with health problems saved the company an average of $20,000; each terminally ill patient saved $11,500.

Those who were persuaded to resign from WellCare went into the general Medicaid or Medicare fee-for-service programs.

WellCare also restructured its benefit package to discourage the least-profitable Medicaid recipients from enrolling and encouraging those who were more profitable to sign up.

Low-income mothers and children yielded a net of only about 10 percent, while the physically and mentally disabled paid for by Medicare yielded a net of 30 percent, the complaint says.

The complaint names about 20 employees of WellCare who knew about the fraudulent activities. Only one, Gregory West, has been charged. He pleaded guilty in December 2007 but sentencing has been postponed several times.

No charges have been brought against three former executives of the company named in the complaint as orchestrating the fraud: President, CEO and Chairman Todd Farha, CFO Paul Behrens and General Counsel Thaddeus Bereday.

They all resigned in January of 2008, three months after the FBI and other law-enforcement agents raided the Tampa campus of WellCare and carted off computers and files.

The the St. Petersburg Times reported about two more complaints that were unsealed:

Clark J. Bolton, a former supervisor of special investigations at WellCare, said the insurer encouraged overbilling and refused to audit claims for fraud in order to curry favor with doctors and hospitals and build market share. The result was millions in excessive and illegal expenses passed through to federal Medicare and state Medicaid programs, Bolton said.

Eugene Gonzalez, a referral coordinator for seven years, claimed WellCare met government customer service standards only because it had employees create backdated documents and make bogus calls to the company's phone lines. Failure to meet these standards would have resulted in the loss of billions of dollars worth of Medicare and Medicaid contracts.

As we have before, we see a striking contrast between the scope of the allegations and the response by the government agencies that are supposed to regulate insurers, insure that public money is spent wisely, and investigate and seek punishment for illegal activities. As the latter St. Petersburg Times article noted,

U.S. Rep. Kathy Castor criticized the proposed settlement as wholly inadequate in a letter this week to Attorney General Eric Holder. 'Where is the penalty and punishment for such egregious actions?' she wrote. 'It appears that companies such as these simply build such payments into the 'cost of doing business.' We cannot allow this to continue.'

This notion should be familiar to readers of Health Care Renewal. The Wellcare case fits right into the parade of legal settlements we have discussed. As we have said again and again, the usual sorts of legal settlements we have described do not seem to be an effective way to deter future unethical behavior by health care organizations. Even large fines can be regarded just as a cost of doing business. Furthermore, the fine's impact may be diffused over the whole company, and ultimately comes out of the pockets of stockholders, employees, and customers alike. It provides no negative incentives for those who authorized, directed, or implemented the behavior in question. My refrain has been: we will not deter unethical behavior by health care organizations until the people who authorize, direct or implement bad behavior fear some meaningfully negative consequences. Real health care reform needs to make health care leaders accountable, and especially accountable for the bad behavior that helped make them rich.

Also note that the case of Wellcare remains relatively anechoic. Despite the severity of allegations, and the national scope of the company, the case has only been mentioned in news stories, mainly in Florida where the company has its headquarters, and in a few health care trade publications. It, like many of the cases we discuss on Health Care Renewal, has not been mentioned in the medical/ health care research/ health care policy literature.

If we cannot even speak about the sort of very bad management that afflicted Wellcare as a cause of many of the ills of our health care system, how do we really expect to constructively reform that system?

Quackwatch being sued by "Doctor's Data", a laboratory that caters to chelation therapists

Quackwatch is being sued by "Doctor's Data", a laboratory that caters to chelation therapists. See the post "Why Doctor's Data Is Trying to Shut Me Up" by Stephen Barrett, MD at this link.

(I have no connections to either Quackwatch or "Doctor's Data", and do not know Dr. Barrett. However, this case caught my eye.)

From a law firm, Augustine, Kern and Levens, Ltd. of Chicago:

Dear Dr. Barrett:

It has recently come to the attention of our client, Doctor's Data, Inc., an Illinois corporation, that you have, on a continuing basis, harmed Doctor's Data by transmitting false, fraudulent and defamatory information about this company in a variety of ways, including on the internet and in other publications. Doctor's Data is shocked that you would intentionally try to harm its business and its relationship not only with doctors but also with the public. Doctor's Data has also learned that you have apparently conspired with and encouraged individuals to seek litigation against it, and have filed false complaints at various government and regulatory agencies against Doctor's Data.

"It is never libelous," you have said, "to criticize an idea." However, you have gone way beyond the idea stage, and our client will not tolerate it. You apparently have carried on this conduct in an intentional manner and with the assistance of others. It is clear that you have a specific intent to harm Doctor's Data, and this conduct must stop immediately.

We demand that you cease and desist any and all comments regarding Doctor's Data, which have been and are false, fraudulent, defamatory or otherwise not truthful, and make a complete and full retraction of all statements you have made in the past, including those which have led in some instances to litigation. Such comments include, but are not limited to, those made in your article entitled, "How the 'Urine Toxic Metals' Test Is Used to Defraud Patients," which you authored and posted on Quackwatch.com. "The best evidence for reckless disregard," you have written, "is failure to modify where notified." Consider this notice to you that if you do not make these full and complete retractions within 10 days of the date of this letter, in each and every place in which you have made false and fraudulent, untruthful or otherwise defamatory statements, Doctor's Data will proceed with litigation against you and any organizations, entities and individuals acting in common cause or concert with you, to the full extent of the law, and will seek injunctive relief and monetary damages, both compensatory and punitive.

Doctor's Data is a CLlA-certified company in full compliance with all state and federal regulatory and CLlA standards, and your false, fraudulent, defamatory and otherwise untruthful comments have been made to intentionally damage Doctor's Data, Inc. This conduct will no longer be tolerated and if the retractions are not made as written above, the lawsuit shall be filed imminently.

Very truly yours,

Algis Augustine

Dr. Barrett of Quackwatch replied:

Dear Mr. Augustine:

Thank you for your letter of June 4th in which you accuse me of "transmitting false, fraudulent and defamatory information" about Doctor's Data. Your letter asks me to:

Cease and desist any and all comments regarding Doctor's Data, which have been and are false, fraudulent, defamatory or otherwise not truthful. and make a complete and full retraction of all statements you have made in the past.

Make . . . full and complete retractions within 10 days of the date of this letter, in each and every place in which you have made false and fraudulent, untruthful or otherwise defamatory statements.

I take great pride in being accurate and carefully consider complaints about what I write. However, your letter does not identify a single statement by me that you believe is inaccurate or "fraudulent." The only thing you mention is my article about how the urine toxic metals test is used to defraud patients: (http://www.quackwatch.org/t). The article's title reflects my opinion, the basis of which the article explains in detail.

If you want me to consider modifying the article, please identify every sentence to which you object and explain why you believe it is not correct.

If you want me to consider statements other than those in the article, please send me a complete list of such statements and the people to whom you believe they were made.

Thank you,

Stephen Barrett, MD

To which the response was predictable, resulting in this:

On June 18th, Doctor's Data filed suit against me [Barrett], the National Council Against Health Fraud, Inc., Quackwatch, Inc., and Consumer Health Digest, accusing us of restraint of trade; trademark dilution; business libel; tortious interference with existing and potential business relationships; fraud or intentional misrepresetation; and violating federal and state laws against deceptive trade practices. (On June 29th, Consumer Health Digest was dropped as a defendant.) The complaint asks for more than $10 million in compensatory and punitive damages. The suit objects to seven articles on my Web sites:

• How the Urine Toxic Metals Test Is Used to Defraud Patients
• CARE Clinics, Doctor's Data, Sued for Fraud
• Be Wary of CARE Clinics and the Center for Autistic Spectrum Disorders (CASD)
• Three brief articles in Consumer Health Digest:
  • Slate article blasts the urine toxic metals test
  • Shady clinic and lab under legal assault
  • "Autism specialists" sued
• Laboratories Doing Nonstandard Laboratory Tests

My personal opinion of "offbeat practitioners"

Barrett also writes:

Very few people provide the type of information I do. One reason for this is the fear of being sued. Knowledgeable observers believe that Doctor's Data is trying to intimidate me and perhaps to discourage others from making similar criticisms. However, I have a right to express well-reasoned opinions and will continue to do so. If you would like to help with the cost of my defense, please follow the instructions on our donations page.

This seems like a case of legal intimidation and may be a case for Senator Grassley's whistleblower hotline (whistleblower@finance-rep.senate.gov).

Finally, as a Medical Informatics specialist once called "Doctor Data", I find the company name "Doctor's Data" for a company in this business ironic indeed.

-- SS

$4 Billion Military EMR "AHLTA" to be Put Out of Its Misery? Also, Does the VA Have $150 Million to Burn on IT That Was Never Used?

I have heard from numerous reliable sources that the military's $4 billion+ EMR known as "Armed Forces Health Longitudinal Technology Application" (AHLTA) is to be declared a failure, and replaced.

I'd written about AHLTA's considerable problems at the post "If The Military Can't Get Electronic Health Records Right, Why Would We Think Conflicted EHR Companies And IT-Backwater Hospitals Can?" at http://hcrenewal.blogspot.com/2009/06/if-military-cant-get-electronic-health.html .

From that post:

[AHLTA has been described as] difficult for physicians to use. Intolerable. Slow. Unreliable. Frequently crashes. Near mutiny. Morale. Affecting patient care, decreasing patient load. Can it get worse?

Yes ... When the Army's Surgeon General observes that clinicians "spend as much or more time working around the system as they do with the system", and that the superusers are not enthusiastic about the system, and a Congressional hearing is held entitled "where do we go from here?" (it's clear to this author that they have no clue), one should start to very critically question basic assumptions about health IT.

One wonders if anyone responsible for AHLTA ever read my now decade-old site on health IT dysfunction, now at this link at Drexel University, or its many hyperlinks to additional resources.

Meanwhile, the VA is having its own problems as noted on the HISTalk blog:

[HISTalk News 6/30/10] Back in March, I dug out a juicy nugget from an internal VA report: it was scrapping a $150 million patient scheduling system without ever bringing it live. The GAO weighs in with its official report (warning: PDF), pegging the cost at $127 million and saying “VA has not implemented any of the planned system’s capabilities and is essentially starting over.” The contractor that developed the system with “a large number of defects” walks away with $65 million. GAO finds much to criticize about the VA’s involvement: lack of competitive bidding, sloppy specs, unreliable status reports, and lack of action by project oversight groups when the project started tanking.

The linked PDF report from the U.S. Government Accountability Office (GAO), entitled "INFORMATION TECHNOLOGY - Management Improvements Are Essential to VA’s Second Effort to Replace Its Outpatient Scheduling System", reveals errors that cause me to question whether the project leadership ever passed their introductory undergraduate IT courses (assuming they had any).

From that report:

VA’s efforts to successfully complete the Scheduling Replacement Project were hindered by weaknesses in several key project management disciplines and a lack of effective oversight that, if not addressed, could undermine the department’s second effort to replace its scheduling system:

• VA did not adequately plan its acquisition of the scheduling application and did not obtain the benefits of competition.
• VA did not ensure requirements were complete and sufficiently detailed to guide development of the scheduling system.
• VA performed system tests concurrently, increasing the risk that the system would not perform as intended, and did not always follow its own guidance, leading to software passing through the testing process with unaddressed critical defects.
• VA’s project progress and status reports were not reliable, and included data that provided inconsistent views of project performance.
• VA did not effectively identify, mitigate, and communicate project risks due to, among other things, staff members’ reluctance to raise issues to the department’s leadership.
• VA’s various oversight boards had responsibility for overseeing the Scheduling Replacement Project; however, they did not take corrective actions despite the department becoming aware of significant issues.
  

The impact of the scheduling project on the HealtheVet initiative cannot yet be determined because VA has not developed a comprehensive plan for HealtheVet that, among other things, documents the dependencies among the projects that comprise the initiative.

My question is:

By what miracle of God will the military's AHLTA's and the VA's scheduling system "replacements" be any better than what now exists? Through reliance on commercial EMR vendors and management consultant "experts", perhaps?

If so, I wish the military and VA the best of luck. They will need it.

The problems with computing in complex settings such as medicine are pervasive, far beyond the military. It is increasingly clear that the leadership of the healthcare IT ecosystem (and probably even the broader IT ecosystem) consists of recycled incompetents, never held accountable for project failures, even massive ones, instead moving on to wreak mayhem elsewhere. This has certainly been my own experience in both the hospital and pharma sectors.

Competent experts who actually try to do meaningful work (a.k.a. "rock the boat" or "non-team players" in the parlance of the incompetent and/or the power seekers) have become hopelessly marginalized - or unemployed. See the post "Edwin Lee on the Tiger We Are Now Riding" by Roy Poses. Our economy and even society is falling apart as a result of these leadership problems; Lee's post "Lightweight oil executives produce worthless disaster plans" as linked above is pathognomonic of these failures. Writes Lee:

... This week the executives of the other major oil companies (besides BP) presented their oil spill contingency plans to Congress. Several things were immediately evident: the plans were all grossly inadequate and carelessly done, they were all developed by the same outside consulting firm and they were essentially carbon copies of BP’s nearly useless plans. In other words, they were empty “cover your ass” documents rather than serious contingency plans. Some people may find this surprising. From my experience, it’s what we can and should expect from the vast majority of large, public institutions because of a universal and deeply flawed process for selecting their leaders.

... Those who are chosen to lead fit a mold: mediocre, short term thinkers with similar work experiences, outlooks, temperaments and personal incentives. Disaster response, creative thinking and fundamental changes are outside their limited range of interests or competencies.

Here is the major problem in a nutshell: no real accountability where it matters.

What follows from this is a first principle:

Recycled incompetents will never produce good information systems.

Major health IT commercial vendor CEO's have been reported as making statements that health IT usability -- one of AHLTA's major deficiencies - "will be part of certification over her dead body" (as described in my post at http://hcrenewal.blogspot.com/2010/05/did-epic-ceo-judy-faulkner-of-epic.html).

Why don't we recycle physicians with track records of killing patients? Better yet, make them Chairs of clinical departments?

The answer is obvious, but the IT culture seems immune to such considerations.

The UK's National Programme for IT in the NHS (NPfIT) is AHLTA on a national scale:

The UK Public Accounts Committee report on disastrous problems in their £12.7 billion national EMR program is here.

Gateway reviews of the UK National Programme for IT from the Office of Government Commerce (OGC) are here (released under the UK’s Freedom of Information Act), and a summary of 16 key points is here.

My prediction is this:

I do not believe health IT has advanced enough beyond the experimental stage for clinically efficacious, safe, cost effective mass dissemination.

Further, I do not believe that the human capital necessary to make such dissemination happen in a clinically efficacious, safe, cost effective manner exists in the IT industry.

Talent management in that industry -- based on cheap, just-in-time, "programming language/platform du jour", "smart people cannot or should not learn but should be declared obsolete", and Bart Simpson-style attitudes about ability and expertise -- does not allow the needed human capital to exist. A remarkable and revealing example comes from an article about health IT leadership a number of years ago in the journal “Healthcare Informatics”:

I don't think a degree gets you anything," says healthcare recruiter Lion Goodman, president of the Goodman Group in San Rafael, California about CIO's and other healthcare MIS staffers. Healthcare MIS recruiter Betsy Hersher of Hersher Associates, Northbrook, Illinois, agreed, stating "There's nothing like the school of hard knocks." In seeking out CIO talent, recruiter Lion Goodman "doesn't think clinical experience yields [hospital] IT people who have broad enough perspective. Physicians in particular make poor choices for CIOs. They don't think of the business issues at hand because they're consumed with patient care issues," according to Goodman.

The "management improvements" sought by the VA may simply not be possible, until the IT field undergoes something comparable to the "Flexner report" that the medical professions and their educational programs underwent a century ago.

And perhaps until health IT leadership personnel begin to lose their homes and fortunes in court to harmed patient plaintiffs, to the point where the leadership start begging competent, marginalized professionals who actually know what they're doing to save their sorry asses.

-- SS

7/6 addendum:

For more on the topic of dinosaur-era attitudes about Medical Informatics that lead to such debacles, see my July 5, 2010 post "Jurassic Attitudes about Medical Informatics: in the U.S. Navy?"

A Source of the Anechoic Effect Discovered: the Public Relations Person in the Room

A series of posts in journalism blogs last month revealed a mechanism used by health care organizational leaders to shape discussion of the issues that affect their interests, but one that is probably unfamiliar to most health care professionals and the public at large.  Let me provide the key quotes in chronological order.

First, from the Covering Health blog of the Association for Health Care Journalism (10 June, 2010):

Have you recently tried to get information from the federal government or arrange an interview with a federal official?

AHCJ’s Right-to-Know Committee is calling on journalists to report their experiences, as part of a continuing effort to pry open the doors of the federal government. We’re looking for recent anecdotes about journalists’ experiences with public information officers, especially at the Department of Health and Human Services and any of the agencies that are part of it (e.g., CDC, FDA, CMS etc.).

Please write to Felice J. Freyer, Right-to-Know Committee chair, at felice.freyer@cox.net, about problems you have encountered, including mandates to clear interviews with the press office, slow responses, refused interviews, burdensome requirements (such as written questions and answers only), extreme time limitations on interviews, PIOs listening in on your conversations, or anything else that made it hard for you to get the information and quotes that you needed in time.

The implication here, of course, is that the committee was concerned that journalists attempting to interview employees and officials of US government health agencies may encounter a variety of problems, including public information officers "listening in on your conversation."

Of course, just because the committee was concerned about a possible problem does not mean the problem exists, or is if it exists, is important.

However, a week later this post appeared in the Covering Health blog (17 June, 2010):

MedPage Today, an online breaking-news service for physicians, today instituted a rule requiring reporters to inform readers whenever a press officer has listened in on an interview.

'If a source’s comments are monitored by a press officer, then the person may not have been speaking freely,' said Peggy Peck, vice president and executive editor. 'That’s information readers should have.'

Peck instructed her staff to use phrases like 'said in a telephone interview that was monitored by a public information officer' whenever using quotes from such an interview.

Peck emphasized that a reporter’s goal should be to avoid having a press officer listening to calls or attending face-to-face interviews. 'But if that is the only way a researcher will talk, we need to let our readers know that,' said Peck’s memo to eight reporters.

Peck is a member of AHCJ’s Right-to-Know Committee, and the rule sprang from the committee’s work to end interference by public information officers in newsgathering, especially in the federal government.

'I applaud MedPage Today for taking this step and encourage reporters and editors everywhere to follow suit,' said Felice J. Freyer, chair of the Right-to-Know Committee and a member of AHCJ’s Board of Directors.

'Reporters have come to accept the presence of public relations people at interviews, but it’s really not acceptable. We all know that such eavesdropping hinders the free flow of information – and we need to let our readers know that this is happening.'

Now this is much more clear. Apparently some, maybe most of the information obtained by journalists from interviews of officials and employees of government health care agencies was monitored by public relations people, presumably to keep the interviewees "on message," and remind them not to say anything that did not fit the party line.  Furthermore, such monitoring was not often disclosed by the reports when they wrote about the interview. 

In addition, Paul Raeburn posted this on the Knight Science Journalism Tracker blog:

I’ve long been troubled by the insistence of some 'public' information officers (they are paid to work for their institutions, not the public, although the interests of the two can sometimes coincide) to listen in or sit in on interviews. Even if they don’t say a word, their presence inevitably changes the interview.

Imagine telling colleagues about the last story you wrote, and what you had to do to get it. Now imagine the same conversation with your colleagues while your editor–on whom your livelihood depends–listens in. I don’t imagine myself dissembling in either set of circumstances, but I can certainly imagine myself telling the story a little differently in each case.

The point is not that information officers are always trying to limit or shape the interview, although that clearly happens. The point is not to challenge the integrity of information officers, although, like reporters, some are better at what they do than are others. The point is that the presence of an institutional representative changes the interview. And we owe it to out readers to conduct interviews without that presence whenever possible.

Mr Raeburn seemed to make an effort to be exquisitely polite, but still managed to affirm that the public relations person in the room is a real and important phenomenon in reporting about health care.
This reinforces the notion that monitoring of interviews with journalists by public relations people is common practice, but one heretofore not discussed publicly.  It seems obvious that the point of this practice was to keep the interviewee on message, and to restrain any discussion that might not fit with the public relations persons' bosses interests.

If we did not know about the practice of keeping a public relations person in the room for interviews with people working for the government, it seems likely that we also did not know about similar practices affecting interviews with people in other kinds of health care organizations, e.g., for-profit corporations, and not-for-profit organizations.

We have frequently discussed the "anechoic effect," how important cases, stories, and data about the negative effects of concentration and abuse of power in health care, and about ill-informed, incompetent, self-interested, conflicted, or even corrupt leadership of health care organizations, and the unaccountable, unrepresentative, opaque, and often unethical governance that enables it are often just not discussed, and when discussed, produce few echoes.  Now we see another mechanism that maintains this effect.  Large health care organizations deploy substantial money and personnel to market their products and massage their messages.  These people apparently use a variety of tactics to control the flow of information to journalists.  While journalists seem to be provide much more information about the problems in health care we discuss on Health Care Renewal than professional and academic publications and meetings, we now see one more mechanism that has impeded them from doing so openly and fully.

In my humble opinion, disclosing that interviews were monitored by public relations personnel is one small, but important step in beginning free enquiry into what has gone wrong with health care.  Bravo to the people who have stood up for it. 

How Can a $101 Million a Year CEO Help "People Get the Care They Need at an Affordable Price?"

In 2005, we entitled a post, "How Can a $124.8 Million a Year CEO Make Health Care More Affordable?"  At that time, we contrasted the enormous compensation given to the then CEO of UnitedHealth, Dr William McGuire, with the stated mission of his corporation.  Since then, we have traced the travails of UnitedHealth and its leadership.  Dr McGuire was eventually accused of receiving backdated stock options (which at one time raised his personal fortune to over $1 billion), and was pushed into retirement.  UnitedHealth was accused of a variety of management and ethical lapses.  The rather sorry story as of April, 2010 was summarized here.

The more things change, the more they stay the same.  The Minneapolis Star-Tribune just reported:

Stephen Hemsley, a serious and studious man, is known for his marathon-like work schedule, which regularly includes Saturdays and Sundays, in his role as chief executive of Minnetonka-based UnitedHealth Group.

Now, he also is known as the highest-paid CEO in Minnesota with a 2009 pay package totaling $101.96 million, six times the amount paid to the next CEO in the Star Tribune's annual survey of the state's 100 highest-paid chief executives at publicly traded companies.

But Hemsley's big pay package is also a vestige of the company's former practice of loading executive compensation heavily with stock options, a practice that changed in the wake of a crippling backdating scandal four years ago.

Those options, granted under a different regime of board directors, accounted for $98.6 million of Hemsley's income in 2009.

The attempts company officials made to minimize Hemsley's outsized compensation were almost funny:

UnitedHealth officials assert that Hemsley's 2009 pay package minus the 10-year-old options was $8.9 million, far less than the compensation paid to CEOs in other health insurance organizations.

But Hemsley did exercise the options, so he did receive the additional $98.6 million.

Hemsley also seems on target to get gargantuan compensation this year too:

Nonetheless, Hemsley has already put up good compensation numbers for 2010 with the exercising of additional options granted after 1999 worth $21 million. He also controls 6 million exercisable and unexercisable options, half of which are underwater or below the stock's current value.

The cringe-inducing contrast is with UnitedHealth's high-minded mission statement:

Our mission is to help people live healthier lives.

* We seek to enhance the performance of the health system and improve the overall health and well-being of the people we serve and their communities.
* We work with health care professionals and other key partners to expand access to quality health care so people get the care they need at an affordable price.
* We support the physician/patient relationship and empower people with the information, guidance and tools they need to make personal health choices and decisions.

Hemsley's compensation could have provided "care they need" to quite a few people at an affordable price.

More to the point, it is hard to imagine that a company that feels the need to pay so much to its CEO, and a CEO that can accept such riches, have the slightest understanding or interest in providing people "the care they need at an affordable price."

In this cynical age, I doubt many people credit the UnitedHealth mission statement with being more than advertising fluff. Nonetheless, I suspect most people believe that our society should try to provide as many people as possible with "the care they need at an affordable price," but realize that we are far from doing so. Health care insurance companies/ managed care organizations that see fit to make their hired leaders extremely rich seem to be part of the problem, not the solution.

"Smoke Detector" - Medical Center Leader (and Former Biotech CEO) Outed as Tobacco Investor

Last year we posted about the seemingly incongruous choice of a wealthy biotechnology executive with little academic or practice experience to run the prestigious University of California - San Francisco, a health oriented university housing a respected medical school.  We wondered whether her corporate background would make it difficult to uphold the university's academic and patient care missions.

In line with our concerns, Duff Wilson, writing in the New York Times, reported:

When Dr. Susan Desmond-Hellmann was named chancellor of the University of California, San Francisco, last summer, she took over a medical institution focused on world health generally and tobacco control in particular.

But she forgot one thing in adjusting to her new role: personal stock holdings listed last year in the range of $100,000 to $1 million in Altria, owner of Philip Morris USA, the maker of Marlboro cigarettes. Altria has been blamed for thousands of deaths and repeatedly criticized by the Center for Tobacco Control Research and Education at the university.

Last week, a day after The New York Times inquired about the Altria stock, Dr. Desmond-Hellmann and her husband, also a doctor, ordered it to be immediately sold and imposed 'values screening' on their personal investments.

Experts on tobacco control were aghast:

Dr. Stanton A. Glantz, director of the university’s tobacco control center, said he was unaware of Dr. Desmond-Hellmann’s Altria stock, which was contained in a university filing but not made public until now, after a public records request by a former student who passed it on to The Times.

“I do find that kind of shocking, but at least she got rid of it,” Dr. Glantz said on Monday, adding that Dr. Desmond-Hellmann had been very supportive of the center.

Dr. Kenneth E. Warner, dean of the school of public health at the University of Michigan and a national antitobacco leader, said, “I find it frankly a bit appalling that the chancellor of a major medical center would have held such stock. It strikes me as unthinking, frankly.”

We should give Dr Desmond-Hellmann credit for selling her Altria stock as soon as its connotations were made plain to her. (And at least she was not on the board of a tobacco company, to our knowledge, as was one former president of a university and large health sciences center.)

However, this little incident underlines the clash between the culture that dominates large health care corporations and the mission of medical schools and academic medical centers. In the last 30 years, academic medicine has rushed to embrace the reigning corporate culture, not to mention corporate money. I submit that this embrace has been at the peril of the fundamental academic and patient care missions.

Academic medical leaders need to promote better patient care, and honest, responsible teaching and research. To do so, they may have to give up some of the glitz, glamor, and cash proffered by industry. If they do not make this sacrifice, they risk losing the trust of an increasingly skeptical, if not cynical public.

Insel Admits His Statements "May be Viewed as Misleading"

Dr Bernard Carroll has posted several times, most recently here, about shenanigans by "key opinion leaders" in psychiatry whose apparently academic writing and speeches have conveyed messages in line with the marketing agendas of drug and device companies, while they downplayed or concealed their financial ties to these companies.  Lately, Dr Carroll noted how the current director of the US National Institute for Mental Health (NIMH), Dr Thomas Insel, has defended Dr Charles Nemeroff, whose recent move to the University of Miami let him shed sanctions imposed by Emory University for his failure to disclose conflicts of interest while he was there. Dr Carroll wrote, "For the past three months, Insel has been trying to put some distance between himself and Nemeroff, but the public isn’t buying it. I have called his statements disingenuous...."

Dr Carroll is on vacation, so in his absence, I note the following from a brief article in the Chronicle of Higher Education:

The director of the National Institute of Mental Health, Thomas R. Insel, has softened his denial of a mutually helpful relationship with Charles B. Nemeroff, a university researcher found to have repeatedly collected undisclosed corporate payments. In an update to his official blog posting, Dr. Insel said his initial denial of job assistance from Dr. Nemeroff 'may be viewed as misleading,' and acknowledged that Dr. Nemeroff served in key positions related to Dr. Insel's hiring by Emory University.

This seems to corroborate Dr Carroll's skepticism. I wonder what other statements by Dr Insel, or Dr Nemeroff for that matter, ought to be "viewed as misleading?"

We have said repeatedly that commercially sponsored "key opinion leaders" are really part-time drug marketers disguising themselves as academics or distinguished practitioners. The deceptions inherent in these roles seem to lead to a certain habitually elastic approach to the truth.

Medical academics and practitioners will need a renewed commitment to honesty and transparency if they want to regain the respect of an increasingly skeptical, if not cynical public.

BLOGSCAN - Deceptive Pharmaceutical Marketing

Perhaps in honor of the recently concluded meeting organized by Dr Adriene Fugh-Berman and her colleagues at PharmedOut.org on the pharmaceutical industry and its influence on continuing medical education, three significant posts appeared this week about deceptive pharmaceutical marketing practices. 
On the Health Business Blog, David Williams analyzed how a former pharmaceutical and biotechnology executive spun the Vioxx case, blaming it all on the public's risk aversion. 
On the Hooked: Ethics, Medicine and Pharma Blog, Dr Howard Brody summarized two significant articles by Kalman Applbaum on complex psychological campaigns, really versions of disinformation campaigns, used to to market pharmaceuticals. 
On the Carlat Psychiatry Blog, Dr Daniel Carlat published a letter about life at a medical school department lead by Dr Charles Nemeroff, one of the "key opinion leaders" most lavishly paid by pharmaceutical companies to help them market questionable drugs for questionable reasons, and giving observations on Dr Nemeroff's new career.

WellPoint: Don't Know Much About Computer Programming; Aetna: Don't Know Much About Mathematics

Big US based health care insurance companies have not been covering themselves in glory in the last week.

Aetna's Math Errors

First, there was the case of Aetna's mathematical prowess, e.g., as reported by the Los Angeles Times:

A second insurance company in California has killed plans for double-digit rate hikes for individual policyholders because of errors in its filing that would have inflated premiums, state regulators said Thursday.

Connecticut-based Aetna Inc. had sought an average 19% increase in rates for its 65,000 individual customers, but pulled back after multiple math errors in its paperwork were found by its own staff and by an independent consultant working for the state.

Aetna's decision follows a similar move by Anthem Blue Cross, which canceled a rate increase of as much as 39% for many of its 800,000 California policyholders in April after the state consultant found calculation errors in its filing with the California Insurance Department.

Of course, Aetna tried to minimize the story:

An Aetna spokeswoman said the company found 'a miscalculation not previously detected' when it conducted a third round of internal reviews.

'This was a simple human error,' said spokeswoman Anjanette Coplin, who did not elaborate.

However,

'There were multiple errors … in the way [Aetna] annualized premiums and in the compounding of the rate increase,' said state Insurance Department spokesman Darrel Ng.

Of course, somehow the errors all were in Aetna's favor:

Even with the new disclosure requirements, regulators have limited authority to block rate increases. They can do so only if insurers fail to spend at least 70% of their premiums on medical claims.

In Aetna's recent rate filing, the insurer said its plan met the 70% minimum. But once the errors were identified, medical-claim spending fell below the 70% requirement. The proposed rates were higher than they should have been, officials said.

WellPoint's Computer Errors

A few minutes ago, the Associated Press reported:

WellPoint Inc. has notified 470,000 individual insurance customers that medical records, credit card numbers and other sensitive information may have been exposed in the latest security breach of the health insurer's records.

The Indianapolis company said the problem stemmed from an online program customers can use to track the progress of their application for coverage. It was fixed in March.

Spokeswoman Cynthia Sanders said an outside vendor had upgraded the insurer's application tracker last October and told the insurer all security measures were back in place.

But a California customer discovered that she could call up confidential information of other customers by manipulating Web addresses used in the program. Customers use a Web site and password to track their applications.

Note that this security breach was potentially serious:

WellPoint's security breach doesn't crack the top 10 in terms of number of people who may have had information exposed, said Paul Stephens, the [Privacy Rights Clearinghouse]organization's director of policy and advocacy. Even so, he labeled the breach 'very serious' because it possibly involved both financial and medical information.

This is not the first time WellPoint's computers and software have violated the privacy of its applicants or customers:

Two years ago, WellPoint offered free credit monitoring after it said personal information for about 128,000 customers in several states had been exposed online. In 2006, backup computer tapes containing the personal information of 200,000 of its members were stolen from a Massachusetts vendor's office.

Summary

Of course, everyone makes mistakes.  However, one would expect that at least health insurance companies/ managed care organizations ought to be able to do the math necessary to support their rate proposals correctly, and keep their policy-holders' and applicants' personal information confidential.  These would seem to be fundamental competencies that such organizations ought to display.  Of course, one can find other examples of lack the lack of competency (and worse) displayed by both Aetna and WellPoint. 

Furthermore, anyone can make mistakes, but in the real world, those who preside over such mistake-prone enterprises often do not do too well.  However, in the bizarre world of large health care organizations, the executives who preside over the ongoing bumbling just make more and more money, under the pretense that their continuing brilliant leadership just leads to one triumph after another. 

As we noted here, WellPoint CEO Angela Braly's total compensation increased in 2009 to an outsized $13.1 million, with the executives just underneath her paid proportionately well.  Per its 2010 proxy statement, WellPoint's

Total Rewards compensation program is designed to attract, engage, motivate and retain a talented team of executive officers and to appropriately reward those executive officers for their contributions to our business and our members. We seek to accomplish this goal in a way that is closely aligned with the long-term interests of our shareholders and the expectations of our members and health care providers.

I suspect that WellPoint's members' expectations did not include the three computer security breaches noted above.

Similarly, according to its 2010 proxy statement, Aetna CEO Ronald A Williams' total compensation in 2009 was a mere $18,058,162. Other top executives made proportionate amounts, from more than $1 million to more than $12 million. The rationale underlying executive compensation includes:

We seek to implement a pay-for-performance philosophy by tying a significant portion of our executives’ compensation to their achievement of financial and other goals that are linked to the Company’s business strategy and each executive’s contributions towards the achievement of those goals.

To me, avoiding mathematical errors in calculating policy premiums ought to be part of the company's goals linked to its business strategy.

An old rock song that starts with "don't know much about history," may have a certain charm.  Health insurance companies that cannot accurately calculate premiums or protect the confidentiality of policy-holders' computerized data has none. 

As long as "imperial CEOs" can continue to get extremely rich while presiding over incompetence and stupidity, if not worse (see here), we can expect the foolishness to continue.  Meanwhile, the foolishness drives up costs and drives down quality of health care for the poor suffering patients, let alone the physicians and other health care professionals who must deal with it.

To really reform health care, we need to provide incentives for competent, honest leadership, and make that leadership accountable for its shortcomings.