A Somewhat Harsh Farewell to David Blumenthal of ONC, From a Patient Injured by Health IT - My Mother

Well, from me actually, but she agrees with my assessment.

I believe one unfortunate "legacy" of Blumenthal's tenure is the near total absence of consideration of HIT risk.

Risk to patient life and limb.

As I wrote here, the PCAST report itself reflects the same systematic Pollyanna attitude.

My comments about the PCAST report are simple and twofold:

1. The term "risk" is absent from the PCAST report in the context of risk to patients from clinical IT. Instead, the context is largely about the risk to patients of NOT having health IT.

2. The term "safety" is similarly absent in the context of adverse effects of HIT, and only present in the context of how HIT will improve safety, except for one reference (indeed, the match to my search for the term "safety" was in the cited URL itself) ...

... I find this paucity of a certain context for these terms in a report to the President of the United States striking, and think the issue should have been a top ONC priority.

Instead, Blumenthal spoke only with certainty about the benefit of health IT (see my post "Science or Politics? The New England Journal and "The 'Meaningful Use' Regulation for Electronic Health Records") ...

The widespread use of electronic health records (EHRs) in the United States is inevitable. EHRs will improve caregivers’ decisions and patients’ outcomes. Once patients experience the benefits of this technology, they will demand nothing less from their providers. Hundreds of thousands of physicians have already seen these benefits in their clinical practice. (NEJM 10.1056/NEJMp1006114, July 13, 2010) ...

... and about the "anecdotalness" of reports of risk (see my May 2010 post "David Blumenthal on health IT safety: nothing to see here, move along"):

... [Blumenthal's] department is confident that its mission remains unchanged in trying to push all healthcare establishments to adopt EMRs as a standard practice. "The [ONC] committee [investigating FDA reports of HIT endangerment that FDA's head of CDRH said were likely the "tip of the iceberg" - ed.] said that nothing it had found would give them any pause that a policy of introducing EMR's could impede patient safety," he said.

It's a hard job, but he could have done better.

This is a harsh pronouncement, but my mother suffered a cerebral hemorrhage in May 2010 as a result of the technology's interference with her care - sadly and ironically, just days after my May 2010 posting cited above about ONC's Pollyanna attitude towards HIT risk.

This injury nearly cost her her life and she is still suffering from its aftermath. This was despite my explicit written warnings of EHR deficiencies that could result in patient harm to the hospital in question in April 2010, a month before the accident, and where I am well known.

The cavalier atmosphere set by ONC regarding HIT risk (i.e., "nothing to see here") certainly did not help the hospital heed the warnings of a medical informaticist who was also one of its former staff.

-- SS

Addendum:

This MAUDE report was submitted to FDA by me based on another EMR-related incident during my mother's time in extremis. This EMR problem almost caused her dire situation to become worse, and was prevented only because I was present at the time and a physician myself, with a physician's knowledge of drug nomenclature.

Along with other EMR mishaps during my mother's continuing, difficult course (such as I wrote about in my Jan. 2011 post "EHR Problems? No, They're Merely Anecodotal; the Truth Must Be That I Attract Bad Electrons and Stale Bits"), Blumenthal would probably call these matters "anecdotal."

One wonders if he would do so if the victim had been his mother, not mine.

-- SS

Conflating Heavy Coffee Drinkers With Glue Sniffers and PCP Abusers: Why Computer Personnel Should Not Play Doctor

I present a new, true case example of health IT-created problems, with some parallels to this prior health IT information science debacle where I had written:

... What manner of amateurs made and approved the decision to map semantically and often medically imprecise, and often deliberately overstated or misused billing codes to diagnoses, and then display the diagnostic terms to a user - ANY user, patient or "learned intermediary" - in an electronic health record?

Here are the de-identified details:

A clinician participated in a psychiatry team meeting.

The patient was in attendance and had dutifully been reviewing the treatment plan and records. The patient was upset that the Axis I diagnoses included “inhalant abuse.”

In fact, here’s what the patient's EMR-generated record indicated:

“305.90 CAFFEINE INTOXICATION, INHALANT ABUSE, OTHER (OR UNKNOWN) SUBSTANCE ABUSE, PHEN”

[PHEN = phencyclidine, a.k.a. PCP or "Angel Dust" - ed.]

The problem was that individual diagnoses are inexplicably conflated, leaving the user no choice but to select an overly broad, insufficiently "granular" diagnosis code. The EMR diagnosis dataset did not correctly reflect the Diagnostic and Statistical Manual of Mental Disorders (DSM), the "Bible" of psychiatric diagnosis published by the American Psychiatric Association.

(What about all of the people who have a history of “caffeine intoxication” but now also have a history of “inhalant abuse” because of the EMR's forcing diagnostic "blur" onto its users, the clinician wondered?)

The patient understandably interpreted the document as indicating that they had a history of “inhalant abuse,” and wanted it changed. (They probably would also have thought the document indicated they abused Angel Dust if they'd known what "PHEN" stood for.) The patient does have a history of substance abuse, but not inhalant abuse, and the clinician's progress notes reflected these facts.

The patient was upset in part because they didn't want something in the records that was inaccurate and/or could be misconstrued by someone in the future (e.g., law enforcement, the courts, an employer, a spouse, etc.)

The team and the clinician spoke with the patient, apologized for the inaccuracy about a history of “inhalant abuse,” acknowledged that there was no such history in the progress notes, indicated that the “other (or unknown) substance abuse” part was correct (with which the patient agreed), and offered to write a separate update note to reflect exactly what was meant in the diagnostic section. The clinician also indicated that they would follow up with leadership to see that the EMR was corrected so that this type of problem would not continue.

One wonders what other diagnoses were conflated.

The prevention of this type of problem is obvious to those who know even a smattering about medicine and medical information science (e.g., Medical Informatics). There should have been separate entries/options in the EMR such as follows, not one entry with all of them packed together, e.g.:

305.90 Caffeine Intoxication
305.90 Inhalant Abuse
305.90 Other (or unknown) Substance Abuse
305.90 Phencyclidine Abuse

Each diagnosis should be a separate user option, as reflected in the DSM. They should not be “bundled together” into one package as they are, forcing the user to enter incorrect diagnostic information that comes with the "bundle." Clinicians do not think in terms of "diagnostic bundles", nor does medicine work that way. Worst of all, the blurred information may at some time cause clinical or social harm to the victim.

This is a commercially sold EMR in wide use in some practices and even entire municipal health services departments. The conflation of diagnoses codes reflects a major design error for the convenience of the designers/programmers (I can think of no other valid reason).

This "feature" reflects a clear lack of comprehension of medicine and the social/societal implications by the EMR-merchant company of ill conceived blunders such as this.

-- SS

2/7/11

Addendum: a witness to these affairs indicates that, while the IT department is opaque and doesn’t readily ‘open the curtains’ for clinicians to ‘see’ what’s going on [typical - ed.], in this case faulty vendor design apparently led to implementation “workarounds” that led to the incorrect/bad outcomes. In other words, problems on top of problems led to more problems, in their words.

Brief Comments on the President’s Council of Advisors on Science and Technology (PCAST) Report on Health IT

A short post.

In Dec. 2010 the President’s Council of Advisors on Science and Technology issued a 108-page report entitled:

REPORT TO THE PRESIDENT: REALIZING THE FULL POTENTIAL OF HEALTH INFORMATION TECHNOLOGY TO IMPROVE HEALTHCARE FOR AMERICANS: THE PATH FORWARD

The PCAST health IT report is available from whitehouse.gov in PDF format here.

Rather than reproduce the executive summary of the report, a terse "PCAST Report Summary" can be seen about midway down the page of the HISTalk blog here.

My comments are simple and twofold:

1. The term "risk" is absent from the PCAST report in the context of risk to patients from clinical IT. Instead, the context is largely about the risk to patients of NOT having health IT.

2. The term "safety" is similarly absent in the context of adverse effects of HIT, and only present in the context of how HIT will improve safety, except for one reference (indeed, the match to my search for the term "safety" was in the cited URL itself):

... The Food and Drug Administration (FDA), while not currently regulating EHRs, currently does receive voluntary reports of death and injury associated with EHR malfunctions. FDA officials have suggested possible future regulatory strategies that could include mandatory adverse event reporting, or even classifying EHRs as medical devices, which would make them subject to pre-market regulation. [13]

[13] Healthcare IT News (February 26, 2010) at http://www.healthcareitnews.com/blog/should-fda-regulate-ehr-safety

I find this paucity of a certain context for these terms in a report to the President of the United States striking.

Finally, ONC solicited responses to the PCAST report. The American Medical Informatics Association (AMIA) issued a response that is very good. It outlines practical matters, the need for more Medical Informatics specialists and incorporation of their work into national efforts at a common "language" for medicine, interoperability, and other issues. For instance:

AMIA applauds the PCAST report for addressing important issues regarding interoperability and quality improvement. However, we note that the report highlights potential shortcomings and inadequacies in the current approaches and proposes a number of activities in addition to or instead of those currently underway. AMIA believes that the report would benefit from additional details and specificity to support the recommendations that are proposed. The report does not mention the significant prior work that has been conducted in these areas. Additional consideration of data and lessons learned from the scientific and peer-reviewed literature would help to further support and substantiate the ideas presented.

The AMIA response is available at this link (also PDF).

Also see summaries of other responses to the PCAST report at the Jan. 23, 2011 e-CareManagement blog post aptly entitled "Comments to ONC: PCAST HIT Report Becomes a Political Piñata."

-- SS

David Blumenthal to Resign as Director of the Office of the National Coordinator of HIT (ONC)

From NextGov.com - TECHNOLOGY AND THE BUSINESS OF GOVERNMENT

Blumenthal Calls It Quits

By John Pulley, March 3, 2011

Dr. David Blumenthal, who has pushed the country's health care providers to give up paper files in favor of electronic medical records, announced Thursday that he is stepping down as the country's de facto health IT czar after almost two years on the job. He will return to Harvard University, according to news reports.

Blumenthal served as National Coordinator for Health IT during a period of tremendous change. In 2009, Congress allocated billions of dollars to expand the Office of the National Coordinator's authority and to make available incentive funds intended to encourage mass adoption of electronic medical records. The first of those incentives payments were disbursed recently.

... Health and Human Services Secretary Kathleen Sebelius, writing in a memo obtained by Kaiser Health News, said that "David will leave his post having built a strong foundation, created real momentum for [health information technology] adoption, charted a course for the meaningful use of [electronic health records] and launched a new phase of cooperative and supportive work with the health care community, states and cities across the nation."

Despite that progress, however, there has been no shortage of impediments to large-scale adoption, including the dearth of qualified health IT specialists, a lack of certified health IT products [which by the way is an artificial, government and industry lobby-created impediment; "certification" does not equal safe or effective; it's merely a hastily-evaluated features check - ed.], disruptions in work flow caused by the switch to electronic health records [which in large part remain mission hostile to clinical work - ed.] and the challenge of meeting "meaningful use" standards that trigger incentive payments.

I wish Dr. Blumenthal well. ONC Chair is not an easy role, as I'm sure his predecessors would confirm.

My final comment is that the last paragraph might be rearranged as follows:

... Despite the impediments to large scale adoption, however, there has been no shortage of irrational exuberance in the technology, nor progress in taking seriously the risks to patients. Many of the "impediments" are probably not surmountable at our present dearth of understanding of this experimental technology and its sociotechnical complexities, with many in government, medicine and the IT industry dismissing a growing body of "inconvenient" literature (such as here), and these same people and IT merchants ignoring those who do understand those issues (or worse, such as here).

-- SS

More Legal Theater: Actavis Convicted, CareSource Settles

The march of legal settlements, and guilty pleas and verdicts continues.  The latest on parade, in alphabetical order, are:

Actavis

As reported by the (Austin, Texas) American-Statesman:

In what state officials describe as a record-setting verdict, a Travis County jury found Tuesday that a global drug manufacturer misrepresented prices to the state's Medicaid program and said the company should pay the state and federal government $170.3 million.

The verdict concluded a nearly three-week trial in state district court, where lawyers for the Texas attorney general's office argued that Actavis Mid-Atlantic LLC and co-defendant Actavis Elizabeth LLC artificially inflated the costs of medications to obtain more money. Medicaid reimbursed pharmacies at higher rates because of the falsely reported prices, officials said.

Actavis is apparently part of a multinational corporation based in Iceland that claims to have 10,000 employees. The company was taken private in 2007, and has not supplied financial reports since 2006 (see here), so the effect of the apparently large fine on its financial health is unclear, but I would guess not too severe.

Despite their conviction, Actavis leadership responded predictably, failing to admit any problem occurred:

Actavis officials said in a statement that they are disappointed by the verdict and 'are exploring our legal options.'

'Actavis remains, as always, committed to offering high-quality, lower-cost alternatives for health consumers, including the millions of Americans who participate in the Medicaid program,' said John LaRocca, the company's vice president and chief legal officer.

CareSource

As reported by the Columbus Dispatch,

A Dayton-based managed health care company agreed today to pay $26 million to settle allegations that it defrauded Ohio's Medicaid program.

CareSource, which provides managed care benefits to Medicaid recipients in Ohio and other states, was accused of failing to provide required screenings, assessments and case management for special-needs children and adults and submitting false data to make it appear as they had which allowed them to be reimbursed for services.

Once again, the amount of the fine was small in relation to the size of the company, which is actually a not-for-profit organization, and the magnitude of its revenues. According to a follow-up article in the Columbus dispatch:

The settlement is a fraction of the $2.3 billion the state paid the company last year.

The Attorney General said it was fraud:

'Medicaid program dollars need to be used to do what they are intended to do -- and that is to provide health care to some of our most vulnerable citizens,' Attorney General Mike DeWine said in a statement released by his office.

'The defendants in this case defrauded the state's Medicaid program by failing to provide critical health care services, which is both unconscionable and unacceptable.'

Again, company leaders denied there was a problem:

CareSource officials denied the allegations, saying they agreed to the settlement simply to end the matter.

'Because we are a mission-driven organization and because it is the right thing to do, we have always dealt with our relationship with the state of Ohio and the management of Medicaid funds with the highest integrity,' said Pamela Morris, chief executive officer of CareSource, in a statement.

State government officials also seemed unconcerned:

A spokesman for the Ohio Department of Job and Family Services, which oversees Medicaid, said CareSource will continue working for the state. 'The allegations are a cause for concern, but we are comfortable with the relationship and the terms of the settlement,' said Benjamin Johnson.

Summary

The continued march of legal settlements, and guilty pleas and convictions provide some measure of the current amorality of health care corporate leadership.  But I do not expect that these frequent legal proceedings will induce leaders to become more ethical.
These two cases, one involving a Icelandic, multinational generic pharmaceutical company, the other a US based managed care company, showed how corporate misdeeds lead to an elaborate, theatrical, but ultimately ineffective ritual. The prosecution denounces the vileness of the deeds and the severe consequences. The corporation pays a fine that seems big to those down on the farm, but in reality is a tiny fraction of revenues. Despite the prosecutorial assessment of the severity of the offense, no charges against any individuals are pursued. The corporation denies anything bad happened, but reaffirms its commitment to a somewhat vague mission. Since nothing bad happened, the corporation does not punish any employees who authorized, directed, or implemented the bad behavior. Finally, those in government who have to continue to work with the corporation plod on without fuss.

The impression is that no one in government is really serious about deterring corporate misdeeds.  Although there have been promises of a tougher approach that will actually hold corporate leaders  personally accountable for the misdeeds that occurred on their watch, the theater continues.

As long as the penalties to the corporation are relatively small, and can be diffused among stock-holders or owners, employees, and patients, clients or customers, as long as there is no compulsion to change how the corporation operates, and as long as no individual suffers any consequences, why should corporate leaders not continue to do what the government may call "unconscionable," but which results in net financial gains and no personal penalties?  (Note that we posted here about the large and increasing compensation given to CareSource's CEO, which had grown far faster than its revenues, and seemed to contrast with its stated mission to help the underserved.)

So I say again: 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.

Meanwhile, the continued unwillingness of government leaders to take on corporate leaders suggests how corporatist the US has become.  Government for the corporations, by the corporations, and of the corporations, bodes no good for the people whose rights are increasingly being displaced.   

Health Care Corporate Disinformation Campaigns: Wendell Potter's "Deadly Spin"

I wish I had gotten to this earlier....  In 2009, Wendell Potter, a mild-mannered former chief of public relations for for-profit health care insurance company Cigna, testified before Congress about how insurance companies manipulated public opinion to support corporate vested interests. 

insurance companies make promises that they have no intention of keeping, how they flout regulations designed to protect consumers . . . and how they ‘purge’ small businesses when their employees’ medical claims exceed what underwriters expected
[Kendall]

In November, 2010, he published a book entitled Deadly Spin on this topic.  Starting then, a series of op-ed pieces by Potter, reviews of his book, and interviews with him provided a chilling picture about how corporate health care uses disinformation to support its interests, regardless of the public's interests.  I am sure there is much more in the book, which I will endeavor to purchase and read forthwith.  Meanwhile, pieced together from these articles are examples of insurance industry disinformation campaigns, and some observations about how their disinformation machine works.

Stifling the Clinton Administration's Health Care Reform

He took part in the planning for the 'Harry and Louise advertising blitz that helped derail the Clinton health-care initiative and used to bandy about catchphrases that have resonated in more recent campaigns.
[Wilemon]

Discrediting Michael Moore's Movie Sicko

I described the meticulously planned and deception-based strategy the health insurance industry developed and carried out -- with help from one of Washington's biggest PR firms -- to discredit documentary maker Michael Moore and his 2007 movie, Sicko. Because the movie laid much of the blame for the seemingly intractable problems of the American health care system on insurers, the industry I used to work for spent a big chunk of policyholders' premiums on a behind-the-scenes campaign to demonize Moore and to misinform Americans about the health-care systems in Canada and Europe that -- as Moore explained in the movie -- provide coverage for all their citizens and provide high quality care for them at much lower costs than we do in the U.S.
[Potter, Huffington Post]

Quieting the Furor After a Denied Liver Transplant

In 2007, Cigna initially denied payment for a liver transplant for a 17-year old girl named Nataline Sarkisyan, creating a national uproar.

We learn that executives at Cigna worried that Nataline’s situation would only add fire to the growing public discontent with a health care system anchored by private insurance. As the case drew more national attention, the threat of a legislative overhaul that would ban for-profit insurers became real, and Mr. Potter found himself working on the biggest P.R. campaign of his career.[Chen]

As busy as they might have felt in the days leading up to Nataline’s death, he and his staff were inundated with calls from the news media immediately afterward. To bolster what was seen as a fight for its survival, Cigna hired a large international law firm and a P.R. firm already well known to them from previous work aimed at discrediting Michael Moore and his film 'Sicko.'
[Chen]

Twisting "Obamacare" to Benefit the Insurance Industry

Mr Potter himself wrote about how "Obamacare" was twisted into a win for the insurance industry in an op-ed entitled "Repeal and Replace?":

Despite all the attacks on 'Obamacare,' the new law props up the employer-based system that insurers and large corporations benefit from so greatly. It also guarantees that private insurers will get billions of dollars in new revenue. And the insurers won’t have to share a penny of that windfall with a government-run public option the president once said was necessary 'to keep insurers honest.'
[Potter, Newsweek]

On one hand, the goal of the insurance industry was the "individual mandate," the requirement that all Americans MUST purchase insurance, which for most means insurance provided by for-profit health insurance companies:

Although I was ashamed of many of the things I did during my career, I didn’t plan to speak out about the industry’s devious practices until I saw Karen Ignagni, president of America’s Health Insurance Plans, tell President Obama at the end of his March 2009 White House Forum on Health Reform, 'You have our commitment to play, to contribute, and to help pass health-care reform this year.' Then I knew the industry’s disingenuous charm offensive had begun. Soon after that I read that, Aetna chairman and CEO Ron Williams, the driving force behind the industry’s effort to get the individual mandate enacted, had met with the president half a dozen times. I knew Williams was trying to persuade the president to drop his insistence on the public option and to embrace the individual mandate. Sure enough, Williams got his wish.
[Potter, Newsweek]

In fact,

For months before I left my job, I worked closely with my counterparts at the other big insurers to develop the list of must-haves our well-connected army of lobbyists would take to Capitol Hill when lawmakers began drafting reform legislation. Despite their public statements to the contrary, insurance companies really liked much of what was in both House and Senate versions of the bill—big chunks of which they actually wrote behind the scenes—especially the requirement that all Americans buy insurance if they’re not eligible for an existing public program like Medic-aid or Medicare.
[Potter, Newsweek]

On the other hand, the industry wanted to make sure that the law did not regulate them too tightly, or otherwise inconvenience them or cost them too much money:

During the reform debate, the industry’s deception-based PR strategy had two active fronts. One was a highly visible charm offensive designed to create an image of the industry as an advocate for reform and a good-faith partner with the president and lawmakers in achieving it. The second was a secret fearmongering campaign using shadowy 'AstroTurf' groups and business and political allies as shills to disseminate misinformation and lies—like the one about the creation of 'death panels'—with the sole intent of killing any reform that might hurt the bottom line.
[Potter, Newsweek]

Tactic: Front Groups

This seems right out of the old KGB playbook, as described by Mr Potter in an interview about the campaign to discredit Michael Moore's Sicko:

one key component was to fund a front group, and that is something that I write about quite a bit in the book, about how special interests, and the insurance industry, in particular, will use premium dollars to funnel thousands and thousands, if not millions, of dollars to big PR firms to set up fake grassroots organizations—astroturf, as we call it—and front groups. And in this case, there was a front group that was set up called Health Care America, and the sole purpose for it to be set up was to attack Michael Moore and to attack the notion of a single-payer system in this country.
[Goodman]

Note that this particular tactic was never previously exposed:

I’ve done a search recently just to find out how they were covered, and they were never exposed.
[Goodman]

But it was quite influential:

They were quoted extensively. They sent out press releases. And they were given status as a legitimate organization, even by the New York Times.
[Goodman]

Tactic: Third Parties (Useful Idiots?)

An example from Potter's account of how insurers manipulated the Obama administration's health care reform:

He contends that the insurance industry used 'third parties,' such as sympathetic congressmen, 'to kill key elements of the president’s plan, if not all of it, by scaring and lying to the public.'
[Weiss]

Here is another version used in the campaign to quell the furor over the denial of the liver transplant:

the aggressive placement of articles with friendly 'third party' reporters, editors and producers who would 'disabuse the media, politicians and the public of the notion that Nataline would have gotten the transplant if she had lived in Canada or France or England or any other developed country.'
[Chen]

Tactic: Spies

This really is out of the espionage playbook:

A 'spy' was dispatched to Nataline’s funeral; and when the Sarkisyan family filed a lawsuit against the insurer, a team of lawyers was assigned to keep track of actions and comments by the family’s lawyer.
[Chen]

Tactic: Distractions to Make Important Issues Anechoic

We have often discussed how some of the issues we discuss on Health Care Renewal are anechoic, generating almost no discussion, polite or otherwise in the medical and health care research and policy literature, and sometimes even in the main-stream media. Part of the anechoic effect may be due to deliberate distraction, as Potter discussed in reference to the campaign to manipulate "Obamacare":

Potter shows then-Cigna chairman Edward Hanway's leading role in "a multi-milllion-dollar public relations and advertising campaign" in the run-up to the 2008 presidential election, designed to 'divert the public's and the media's attention' away from the central fact of millions of uninsured and underinsured sick people, toward other problems that were harder to blame on insurers: aging Americans, extravagant doctors, expensive technology, and consumers demanding costly operations they don't need.
[DiStefano]

Note that the usual dogma one sees in the medical and health care research/ policy literature about the causes of US health care's excess costs, declining access and poor quality are just as listed above: an aging population, high doctors' fees and excessive utilization, technology that appears to be ever costlier (unlike technology everywhere but health care), and patients' unreasonable demands.

Tactic: Message Discipline

As discussed by Potter in terms of the campaign to align "Obamacare" with the insurance industry's interests:

It's incredible message discipline, and it's based on an understanding of ideology. The health insurers know that they need to be allied with big, well-researched organizations like the Chamber of Commerce. They want to be associated with people who can convince us that the way to go for health care is market-based. You're going to be hearing in the weeks to come, as we revisit health care, from Republicans and big business and those in the industry that what we need are 'common-sense, market-based solutions.' Those are carefully crafted words, just as what we have now was a 'government takeover of the health care system.' They spend enormous amounts of money very carefully selecting words and putting them together in a way that will elicit an emotional response. The people who are saying this believe their own talking points because they don't have an understanding of how the system is working or not working. If they are conservative, they think, 'I'm supposed to believe this.' They're supposed to believe that the market should work well in health care. They just simply have their blinders on and won't take them down to see the reality.
[Whitaker]

Tactic: Entrapment (Double-Think?)

Finally, Potter discussed how public relations leaders keep their own people in line:

There's an entrapment that's part of the problem here. I was paid very well, but I wasn't independently wealthy, and I had to consider my own ability to make the house payments and the car payments and putting the kids through school. You also find that your ego and what you do for a living, you let it define you. How much money you make, what neighborhood you're able to live in, where you're able to send your kids to school, it all becomes part of your shell and your own self-identity. To do anything that will potentially destroy that is too frightening for people. It was certainly something I had to deal with, and I had to come to terms with the fact that I could lose all of that, whatever I had. I came to feel, well, I could lose it but what have I lost? A good friend of mine said, 'Well, you can at least push a broom, can't you?' I didn't think I was going to end up pushing a broom, but I didn't have to have all of that stuff. But people are afraid of losing all that stuff because they're afraid of losing part of their identity. So, financially and psychologically and from an ego point of view, it's hard to separate yourself from something you've been involved in.
[Whitaker]

Summary

In Mr Potter's own words, the for-profit health insurance industry's public relations machine, and by extension, the public relations machines of all the big health care corporate players

onslaught drastically weakened health-care reform and how it plays an insidious and often invisible role in our political process anywhere that corporate profits are at stake, from climate change to defense policy.
[Potter, Huffington Post]

So,

The onslaughts of spin will not stop, the distortions will not diminish, and the spin will not slow down. To the contrary, spin begets spin, as the successes of corporate PR functionaries increase the revenues of their employers, further funding their employers' efforts to create a more hospitable climate for their business interests. Americans are thus being faced with increasingly subtle but effective assaults on their beliefs and perceptions. Their best defense right now is to understand and to recognize the sophisticated tactics of the spinners trying to manipulate them.

Most important is a singular mandate: Be skeptical.
[Potter, Huffington Post]

I hope that summarizing some of Mr Potter's amazing points will help us all to be much more skeptical.

Note that Mr Potter has his own blog here, which will be added soon to our blog roll.

References


Chen P. When insurers put profits between doctor and patient. New York Times, January 6, 2011. Link here.
DiStefano JN. Potter vs Hanway: Cigna rebel tells all in book. Philadelphia Inquirer, January 20, 2011. Link here.
Goodman A. "Push Michael Moore off a cliff." Democracy Now, November 17, 2010. Link here.
Kendall J. An insider dissects the health insurance industry. Boston Globe, November 22, 2010. Link here.
Potter W. Repeal and replace? Newsweek, November 5, 2010.  Link here. 
Potter W. Why I will stay far away from cliffs from now on. Huffington Post, November 9, 2010. Link here.
Weiss G. Spin doctor reveals all. Portfolio.com, December 21, 2010. Link here.
Whitaker R. The insurance industry scam. Austin Chronicle, January 21, 2011. Link here.
Wilemon T. 3 events led 'Deadly Spin' author to turn on health insurance industry. Tennessean, January 13, 2011. Link here.

FDA to Scientific Protein Laboratories Managerement: "We Are Concerned About Your Fundamental Understanding"

Per Ed Silverman on the Pharmalot blog, we hear of new concerns about a company in the supply chain that ended up with adulterated heparin and dead patients.  Before summarizing what the blog reported, let me summarize the case again.

Case Summary

- We have posted several times, recently here, about the tragic case of suddenly allergenic heparin. Although heparin, an intravenous biologic anti-coagulant, has been in use for over 70 years, serious allergic reactions to it had heretofore been rare. Starting in 2008, hundreds of such reactions, and now over 80 deaths were reported in the US after intravenous heparin infusions.All the heparin related to these events in the US was sold by Baxter International.
- We then learned that although the heparin carried the Baxter label, it was not really made by Baxter. The company had outsourced production of the active ingredient to a long, and ultimately mysterious supply chain. Baxter got the active ingredient from a US company, Scientific Protein Laboratories LLC, which in turn obtained it from a factory in China operated by Changzhou SPL, which in turn was owned by Scientific Protein Laboratories and by Changzhou Techpool Pharmaceutical Co. Changzhou SPL, in turn, got it from several consolidators or wholesalers, who in turn got it from numerous small, unidentified "workshops," which seemed to produce the product in often primitive and unsanitary conditions. None of the stops in the Chinese supply chain had apparently been inspected by the US Food and Drug Administration nor its Chinese counterpart.
- The heparin proved to have been adulterated with over-sulfated chondroitin sulfate (OSCS), and many patients who received got seriously ill or died. While there have been investigations of how the adulteration adversely affected patients, to date, there have been no publicly reported investigations of how the OSCS got into the heparin, and who should have been responsible for overseeing the purity and safety of the product. Despite the facts that clearly patients died from receiving this adulterated drug, no individual has yet suffered any negative consequence for what amounted to poisoning of patients with a brand-name but adulterated pharmaceutical product.  (For a more detailed summary of the case, look here, and for all our posts on this topic, look here.)

The FDA Letter

Pharmalot reported that the US Food and Drug Administration (FDA) sent a warning letter dated January 20, 2011, to Scientific Protein Laboratories LLC, and provided a link to the letter. 

The letter identified continuing serious problems with Scientific Protein Laboratories' operations:

During our July 28, 2010 - September 3, 2010, inspection of your active pharmaceutical ingredient (API) manufacturing facility, Scientific Protein Laboratories LLC, located at 700 E. Main Street, Waunakee, WI, investigators from the Food and Drug Administration (FDA) identified significant deviations from Current Good Manufacturing Practice (CGMP) for the manufacture of drugs. These deviations cause your drugs to be adulterated within the meaning of section 501(a)(2)(B) of the Federal Food, Drug, and Cosmetic Act (the Act) [21 U.S.C. § 351(a)(2)(B)] in that the methods used in, or the facilities or controls used for, their manufacture, processing, packing, or holding do not conform to, or are not operated or administered in conformity with CGMP.

The firm failed to adequately respond to complaints about its products, including heparin:

Failure to investigate all quality related complaints whether received orally or in writing according to a written procedure.

For example, your firm failed to conduct a formal investigation concerning a complaint identifying potential contamination with Oversulfated Chondroitin Sulfate (OSCS) in a lot of Heparin Sodium USP (lot 1035-0778) on October 9, 2008. Your firm did not initiate a formal investigation until September 9, 2009. In addition, at that time, your firm failed to extend your investigations to other lots of Heparin Sodium USP manufactured using the same crude lot identified with OSCS contamination. Your investigation did not consider the other lot of Heparin Sodium USP that was associated with the same contaminated crude lot until May 26, 2010, eight months after initiating a formal investigation (i.e., lot 1035-0780, which tested negative for OSCS in June 2010). We acknowledge that you initiated a voluntary recall of Heparin Sodium USP that included lots 1035-0778 and 1035-0780 on October 13, 2010.

In your response, your firm notes that you have revised your procedure to state, “Any SPL employee will inform QA of a customer complaint.” However, this response does not address the fundamental issues that allowed the delays in communications and investigation to occur. Your handling of the heparin contamination complaint suggests the need to evaluate training across all departments about the types of information requiring prompt reporting to the quality unit. Further, your response does not address how you will ensure that complaint investigations are handled in a timely manner.

Also, the firm still had problems overseeing the work of companies that supplied it:

Your firm failed to properly evaluate a contract laboratory to ensure GMP compliance of operations occurring at the contract site

Furthermore, it did not use the proper equipment:

Failure to have equipment for the manufacture of APIs of appropriate design for its intended use.

The FDA seemed concerned that company management did not understand its responsibilities:

The manner in which you addressed this problem [the contamination of the heparin] is very worrisome with respect to the timeliness of the investigation, the identification of all potentially affected drugs, and implementing appropriate actions to resolve these issues. Be advised that your firm has the responsibility to ensure the quality, safety, and integrity of its drugs. FDA expects that your corporate management will immediately undertake a comprehensive evaluation of your quality system to ensure comprehensive compliance with CGMP.

In addition,

However, we are concerned about your firm’s fundamental understanding of what is required by your Quality Unit and the regulatory expectations for a firm that enters into agreements with contract testing laboratories. Although you have agreements with other firms that may delineate specific responsibilities to each party, you are ultimately responsible for the quality of your products and the reliability of test results. Regardless of who tests your products or the agreements in place, you are required to manufacture these products in accordance with section 501(a)(2)(B) of the Act to assure their identity, strength, quality, purity, and safety.

Summary

In previous discussions of the case of the adulterated heparin I speculated about reasons that the current leaders of health care corporations may have abandoned their most fundamental responsibilities, for example:

I submit that corporate cultures increasingly influenced by the arrogant, greedy, amoral leadership of the financial services industry that lead us to the brink of another depression are also leading us to the brink of a poisonous era in health care. Corporate leaders intent on cutting costs, and paying themselves as much of the resulting proceeds as possible, may see quality and safety as just another cost cutting target. Corporate leaders brought up in the culture of finance, but untrained and inexperienced in engineering, science, and medicine find it all too easy to ignore quality and safety and focus on the bottom line.

The FDA letter to Scientific Protein Laboratories seems to confirm my fear that leaders of health care corporations no longer seem to understand their most elementary responsibilities for providing safe products, in this case, pure, unadulterated drugs. It did not speak to why that may be the case, but certainly does not contradict my theory above.

The letter provides some reassurance that the FDA, at least, has not forgotten the case of the adulterated heparin. However, despite the number of deaths involved, this case has been relatively anechoic, and never fully investigated.

So here I go again: as long as the leaders of health care organizations are not held accountable for the results of their decisions on health care quality, cost, and access (even in such extreme quality violations as those resulting in multiple patient deaths), we can expect continuing decisions that sacrifice quality, increase costs, and worsen access, but that are in the self-interest of the people making them.


To really reform health care, we must hold health care organizations and their leaders accountable (and not blame all the problems on doctors, other health care professionals, patients, and society at large).

BLOGSCAN - Electronic Health Records: Should Congress “Defund” the Stampede to Convert to EHRs? No, But . . .

Maggie Mahar over at HealthBeat Blog has written a piece on Jan. 31, 2011 entitled "Electronic Health Records: Should Congress “Defund” the Stampede to Convert to EHRs? No, But . . ."

It cites my Jan. 28, 2011 HC Renewal post "US House of Representatives Proposes to Defund Largest Non-Consented Medical Experiment in U.S. History: HITECH."

She points out something quite interesting about the HIT market from an economic perspective (emphasis in the original):

... I am hardly an IT expert. But I have spent enough years observing markets—stock markets, real estate markets, and most recently, our health care market—to recognize a big, bright Bubble when I see one. Eager to take advantage of fat federal subsidies, too many buyers, with too little information, are scrambling to purchase health IT. And, as is always the case, too many sellers are all too eager to satisfy the buyer’s desire to part with his money....

... The more I think about it, the more I am reminded me of the bull market of the 1990s. Then, as now, neither buyers nor the analysts, brokers and financial planners who sold them stocks possessed the knowledge that they needed. “Momentum” was all as the pace of investing quickened. As for the “collateral damage”—our economy is still recovering from the 1990s.

I hope the medical world will not find itself recovering from the "collateral damage" that too-soon, frantic adoption of not-ready-for-prime-time health IT can cause.

The health IT bubble

-- SS

An Updated Reading List on Health IT

“It is only the ignorant who despise education.” - Publilius Syrus, Latin Poet, 43-85 AD

In a March 2009 post "A Primer On Why We Have Busywork Generators Masquerading as EMR's: Health IT Reality vs. the Bernard Madoff Version", I posted a "reading list" of articles about health IT that I consider essential in understanding the issues surrounding the experimental nature of this technology.

I wrote:

Anyone contemplating policy work in health IT should be intimately familiar with these works, as they illustrate the true HIT environment in 2009, not the Bernard Madoff "unlimited returns no matter what" version.

What these articles do not illustrate is the common atmosphere of irrational exuberance and complacency now prevalent about HIT, with healthcare organizations and physicians now being pushed forcefully to adopt these technologies or suffer payment penalties they can ill afford:

I've updated the list.

Updated reading list (not meant to be at all comprehensive; this is just a set I've collected over recent years writing on health IT):

[1] Electronic Health Records and Clinical Decision Support Systems: Impact on National Ambulatory Care Quality. Max J. Romano, BA; Randall S. Stafford, MD, PhD, Arch Intern Med. Published online Jan. 24, 2011. doi:10.1001/archinternmed.2010.527

[2] Electronic Health Record Use and the Quality of Ambulatory Care in the United States. Linder, Ma, Bates et al. Arch Intern Med. 2007;167:1400-1405

[3] The Impact of eHealth on the Quality and Safety of Health Care: A Systematic Overview. Black AD, Car J, Pagliari C, Anandan C, Cresswell K, et al. PLoS Medicine 8(1): e1000387 (Jan. 18, 2011). doi:10.1371/journal.pmed.1000387.

[4] Electronic Health Records’ Limited Successes Suggest More Targeted Uses. DesRoches, Jha et al., Health Affairs, April 2010 vol. 29 no. 4 639-646, doi:10.1377/hlthaff.2009.1086

[5] Health information technology: fallacies and sober realities. Karsh et al. (Oct. 2010). JAMIA 2010 17: 617-623.

[6] Challenges in ethics, safety, best practices, and oversight regarding HIT vendors, their customers, and patients: a report of an AMIA special task force. Goodman et al. JAMIA doi:10.1136/jamia.2010.008946. Nov. 2010.

[7] The Top Ten Health Technology Threats to Patient Safety for 2011. ECRI Institute, Plymouth Meeting, PA, Dec. 7, 2010.

[8] Current Approaches to U.S. Healthcare Information Technology are Insufficient. Computational Technology for Effective Health Care: Immediate Steps and Strategic Directions. National Research Council of the U.S. National Academies, Jan. 2009.

[9] Evaluating the Impact of the Electronic Health Record on Patient Flow in a Pediatric Emergency Department. Mathison, Chamberlain, Children's National Medical Center – Division of Emergency Medicine, Washington, DC. Applied Clinical Informatics, Vol. 2, Issue 1, 2011, 10.4338/ACI-2010-08-RA-0046

[10] A Critical Essay on the Deployment of an ED Clinical Information System ‐ Systemic Failure or Bad Luck?, Professor Jon Patrick, Health Information Technology Research Laboratory, School of Information Technologies, University of Sydney, Australia, Jan. 2010.

[11] E-Health Hazards: Provider Liability and Electronic Health Record Systems. Sharona Hoffman and Andy Podgurski. Berkeley Technology Law Journal (2010). Followup paper on EHR medical and legal risks. This article is a first of its kind, a comprehensive analysis of the liability risks associated with use of clinical IT. The authors point out that the potential benefits of computerization could be substantial, but EHR systems also give rise to new liability risks for health care providers that have received little attention in the legal literature.

[12] Meaningful Use and Certification of Health Information Technology: What About Safety? Sharona Hoffman and Andy Podgurski. Case Research Paper Series in Legal Studies Working Paper 2010-34, October 2010.

[13] Finding a Cure: The Case for Regulation And Oversight of Electronic Health Records Systems, Sharona Hoffman and Andy Podgurski. Harvard Journal of Law & Technology 2008 vol. 22, No. 1

[14] Emerging Trends in Electronic Health Record Liability. Chad P. Brouillard. For the Defense, July 2010 (Defense Research Institute).

[15] Electronic Health Records: Recognizing and Managing the Risks. ClaimsRx: Clinical and Risk Management Perspectives. NORCAL Mutual Insurance Company, Oct. 2009.

[16] Litigation in the Decade of Electronic Health Records. Joel B. Korin and Madelyn S. Quattrone. New Jersey Law Journal, June 11, 2007.

[17] Role of Computerized Physician Order Entry Systems in Facilitating Medication Errors. Ross Koppel, PhD, et al, Journal of the American Medical Association, 2005;293:1197-1203

[18] Workarounds to Barcode Medication Administration Systems: Their Occurrences, Causes and Threats to Patient Safety, Koppel, Wetterneck, Telles & Karsh, JAMIA 2008;15:408-423

[19] Hiding in Plain SIght: What Koppel et al. tell us about healthcare IT. Christopher Nemeth, Richard Cook. Journal of Biomedical Informatics. 38 (4): 262-3.

[20] Health Care Information Technology Vendors' "Hold Harmless" Clause - Implications for Patients and Clinicians, Ross Koppel and David Kreda, Journal of the American Medical Association, 2009; 301(12):1276-1278

[21] Hospital Computing and the Costs and Quality of Care: A National Study. Himmelstein. Wright, Woolhandler. The American Journal of Medicine, Volume 123, Issue 1 , Pages 40-46, January 2010.

[22] Unintended errors with EHR-based result management: a case series. Yackel and Embi; JAMIA 2010 17: 104-107; doi: 10.1197/jamia.M3294, Oct. 2009.

[23] Information Technology: Not a Cure for the High Cost of Health Care: Knowledge@Wharton, Wharton School of Business, University of Pennsylvania, June 10, 2009. (PDF version available at this link).

[24] Contemporary Issues in Medical Informatics: Common Examples of Healthcare Information Technology Difficulties. Teaching website, Scot Silverstein, MD, Drexel University, College of Information Science and Technology, Philadelphia, PA. Site initiated in 1999.

[25] Healthcare Renewal blog. I write on healthcare IT issues at this multi-author website sponsored by the Foundation for Integrity and Responsibility in Medicine (FIRM), a 501(c)(3) advocacy group. FIRM researches problems with leadership and governance in healthcare that threaten healthcare's core values.

[26] Health IT Project Success and Failure: Recommendations from Literature and an AMIA Workshop. Journal of the American Medical Informatics Association. Bonnie Kaplan and Kimberly D. Harris-Salamone.

[27] Joint Commission: Sentinel Events Alert on HIT, Dec. 2008.

[28] Internal FDA memorandum on HIT risks to Jeffrey Shuren MD JD (Director, Center for Devices and Radiological Health). "Not Intended for Public Use." Feb. 23, 2010. (Description/summary of memorandum is at this link).

[29] FDA's Manufacturer and User Facility Device Experience database (MAUDE) and HIT risks. Healthcare Renewal Blog, Scot M. Silverstein MD, Drexel University, Philadelphia, PA, Jan. 2011

[30] Health IT's Mission Hostile User Experience (eight-part essay), Healthcare Renewal Blog, Scot M. Silverstein MD, Drexel University, Philadelphia, PA, Feb. - Mar. 2009.

[31] The National Programme for IT in the NHS: Progress since 2006. Summary points, conclusions & recommendations. UK Parliament House of Commons, Public Accounts Committee, January 2009. (Full report at this link.)

[32] The future of the NPfIT. Program slated for major downsizing and decentralization after poor progress and expenditures exceeding £13 billion. UK Dept. of Health, Sept. 2010.

[33] "Don't Repeat the UK's Electronic Health Records Failure". Stephen B. Soumerai, Professor of Population Medicine at Harvard Medical School, Anthony Avery, Professor of Primary Care at the University of Nottingham Medical School, UK. Huffington Post, Dec. 5, 2010.

[34] Health informatics — Guidance on the management of clinical risk relating to the deployment and use of health software. UK National Health Service, DSCN18 (2009), formerly ISO/TR 29322:2008(E).

[35] Health Informatics — Application of clinical risk management to the manufacture of health software. UK National Health Service, DSCN14 (2009), formerly ISO/TS 29321:2008(E).

[36] The Impact of eHealth on the Quality & Safety of Healthcare, A Report for the NHS Connecting for Health Evaluation Programme. (Note: 7 MB in length). Car et al., Imperial College, London, March 2008.

[37] Medical Project Agency's Working Group on Medical Information Systems: Project summary. Proposal for guidelines regarding classification of software based information systems used in health care. Läkemedelsverket - Swedish Medical Products Agency (MPA), June 2009, revised Jan. 2010.

[38] Tensions and Paradoxes in Electronic Patient Record Research: A Systematic Literature Review Using the Meta-narrative Method. Greenhalgh, Potts, Wong, Bark and Swinglehurst, University College London. Milbank Quarterly, Dec. 2009.

[39] Failure to Provide Clinicians Useful IT Systems: Opportunities to Leapfrog Current Technologies, Ball et al., Methods Inf Med 2008; 47: 4–7,

[40] IT Vulnerabilities Highlighted by Errors, Malfunctions at Veterans’ Medical Centers, JAMA Mar. 4, 2009, p. 919-920.

[41] Software hiccups cause drug, treatment errors at VA”, Associated Press, January 14, 2009

[42] Electronic Records System Unreliable, Difficult to Use, Service Officials Tell Congress, Sandra Basu, U.S. Medicine - the Voice of Federal Medicine, May 2009

[43] Unexpected Increased Mortality After Implementation of a Commercially Sold Computerized Physician Order Entry System, Han et al., PEDIATRICS Vol. 116 No. 6 December 2005, pp. 1506-1512 (doi:10.1542/peds.2005-1287).

[44] The Computer Will See You Now, New York Times, Armstrong-Coben, March 5, 2009.

[45] Physician testimony to HHS Standards Committee Implementation Workgroup of the ONC, Jan. 11, 2011. Reproduced with permission at Healthcare Renewal blog.

[46] Bad Health Informatics Can Kill. Working Group for Assessment of Health Information Systems of the European Federation for Medical Informatics (EFMI).

[47] "Dutch nationwide EHR postponed: Are they in good company?", ICMCC.org, Jan. 24, 2009

[48] "The failure rates of EMR implementations are also consistently high at close to 50%", from Proceedings of the 11th International Symposium on Health Information Management Research – iSHIMR 2006

[49] Adverse Effects of Information Technology in Healthcare. This knowledge center presents a collection of information on the adverse effects of information technology in its application to healthcare. It also references sources of information on information security, and related media reports.

[50] The Machinery Behind Health-Care Reform: How an Industry Lobby Scored a Swift, Unexpected Victory by Channeling Billions to Electronic Records - Robert O'Harrow Jr., Washington Post, May 16, 2009

[51] Pessimism, Computer Failure, and Information Systems Development in the Public Sector. Shaun Goldfinch, University of Otago, New Zealand, Public Administration Review 67;5:917-929, Sept/Oct. 2007

The following are dead-serious personal accounts of health IT misadventure:

[52] EHR Problems? No, They're Merely Anecodotal; the Truth Must Be That I Attract Bad Electrons and Stale Bits (personal account, Scot M. Silverstein, MD, Jan. 2011)

[53] This post on leadership changes at ONC might also be worth a read.

I await invective that these sources are "cherry picked" and "anecdotal."

-- SS

Data breach, a serious threat on our right to privacy

Data breach is a very serious problem. Large corporations know that its plain good business to secure information. But what about average guys like us? We still need to secure our files. We should all enjoy our right to privacy! And with all the identity theft going on out there, there really is a need to secure our data. 


Some laptops have security measures like fingerprint analysis or facial recognition, but the problem is that once you share your computer or have it repaired, you would still have to give full access to the other user. What you need is something that can secure your sensitive files but still give access to your other data. 


Finally! An amazingly simple and very effective solution to your data security is here in the Philippines. Easysafe is the only computer data encryption hardware in the market today. It is surprisingly simple to use; works just like a key! Just insert Easysafe key in the USB port then type in your password, and a secret drive will appear where you can store all your sensitive files. Remove Easysafe key, and the secret drive disappears, your files are safe from prying eyes. Brilliant! What's great about this is that it uses military-standard encryption algorithm, so rest assure that your files are well-guarded. 


Easysafe can be used to secure files in your laptop, external hard drives, thumb drives, and other data storage devices. One Easysafe key can be used in different computers, and different Easysafe keys can be used in one computer. Easysafe comes with two  water-resistant keys with the same encryption code. Just like other keys, you always get a spare! Easysafe truly is a product for everyone. It would also make for a perfect corporate gift! Easysafe is available in National Bookstore branches around the Metro. 

More on Hospital Executives' Disproportionate Pay

Local US news media brought some more striking examples of disproportionate pay given to health care organizational leaders. 

Carolinas HealthCare System: Corporate-Style Compensation for a Public Hospital CEO

Carolinas HealthCare System declares it is "the largest health care system in the Carolinas and the third largest public system in the nation" in its membership blurb for the National Association of Public Hospitals and Health Systems.  That association describes its members thus,

Since the establishment of the first public hospital in the United States in the early 1700s, safety net hospitals and health systems have been an essential part of our nation’s health care delivery system.

In the 21st century, safety net hospitals continue their long tradition of quality and service to the community. By delivering care to America’s growing number of working uninsured families, providing world-class trauma and emergency care, preparing for and responding to the threat of terrorism, epidemics, and natural disasters, and training the next generation of doctors, nurses, and dentists—safety net health systems ensure our nation’s communities are health and strong.

The Charlotte Observer just noted how much this "safety net hospital," which declared solidarity with "working uninsured families," pays its CEO:

Carolinas HealthCare System paid its CEO $3.7 million in 2010, $287,000 more than the year before as the system lifted a pay freeze and paid bonuses for reaching annual and long-term goals.

Chief Executive Officer Michael Tarwater, 57, who has led the $6.3 billion public hospital system for nine years, received a base salary of $986,172, two bonuses totaling $2 million, and other compensation, including retirement and health benefits, of $630,346.

In 2009 his compensation package totaled $3.4 million.

So the leader of an organization that serves the poor and uninsured gets enough compensation to make him  quite rich.    

Mary Washington Healthcare: Net Income Increases, but 20% Goes to Bonuses of Top 20 Executives

According to the Fredricksburg (Virginia) Free Lance-Star, from 2008 to 2009, Mary Washington Healthcare saw its total revenues increase, but its net surplus decrease,

The company's net income was $25 million in 2008, up from $20 million in 2007.

Then

The company opened its second hospital that year [2009] and recorded revenues of more than $666 million, up from $551 million in 2008. However, net income dropped to $8 million, in part because of the opening of Stafford Hospital.

So what happened to its executive compensation?

The top employees at Mary Washington Healthcare earned more than $1.1 million in bonuses in 2009, their reward for a successful 2008.

More than two dozen key executives and employee physicians earned annual bonuses ranging from $2,000 to $246,278. The median bonus for the company was more than $28,000.

Fred Rankin, president and chief executive officer, received the largest bonus among managers: $151,430. Rankin continues to be the firm's highest-paid employee, with a 2009 salary package of $955,282.

The hospital's net income increased $5 million (25%) from 2007 to 2008.  It then dropped $17 million (66%) from 2008 to 2009.  Reflecting 2008 results, its top 20 executives received 2009 bonuses of over $1 million, an amount that exceeded 20% of the hospital's 2008 net revenue increase on which the bonuses were based.  The total compensation of these 20 people in 2009 was approximately $6.5 million (see here), which exceeded the hospital's entire increase in net revenue from 2007 to 2008.  The hospital CEO's compensation in 2009 would have consumed one-eighth of the net revenue that year.  This all suggests that the top executives of this hospital consume an inordinate part of the organization's total revenue stream.    

Hutcheson Medical Center: CEO Compensation and Deficits Rise

Here is how the Rome News-Tribune described the financial status of Hutcheson Medical Center, located in Fort Oglethorpe, Georgia:

HMC reported a profit of $766,766 in 2007 and a $7.3 million loss in 2009.

In addition,

In 2008 more than 80 Hutcheson employees lost their jobs when the hospital eliminated its emergency medical services.

And after the profitable year of 2007, the Hutcheson administration approved major renovations for the hospital’s front lobby and entered into a $35.5 million dollar bond issue to fund further renovations and pay off debt.

That bond issue is currently in default, which prohibits the next $10 million payment from being released to HMC.

Things look worse in the future:

At a meeting Thursday, Jan. 28, of the Hospital Authority Board, HMC chief financial officer Gerald Faircloth revealed that the hospital had losses of $3.3 million in the first quarter of budget year 2011 and projected total 2011 losses at around $9 million.

Faircloth, whose compensation went down by $15,000 from 2008 to 2009, also reported that HMC has an estimated 15 days of operating cash on hand.

'So the wolf is at the door,' said Bill Cohen, a trustee who represents Catoosa County on the Hospital Authority Board.

Faircloth agreed.

Wolves notwithstanding, however, the Hutcheson CEO has done very well:

In the face of Hutcheson Medical Center’s financial losses over the past several years, financial documents reveal that president and CEO Charles Stewart’s compensation package has increased more than 26 percent from 2007 to 2009.

According to Internal Revenue Service documents for the 2007 and 2009 budget years, Stewart received $337,081 and $425,745, respectively, in total compensation. The Fort Oglethorpe hospital’s budget year runs from October through September.

Stewart’s 2009 income includes a “bonus and incentive compensation” of $69,750.

So despite a major financial loss, lay-offs and service discontinuations, and a bond default, the CEO got "bonus and incentive compensation" in 2009.   At least that drew some attention:

'I’m really surprised that the board (Stewart) works for would give him such an increase,' said Walker County commissioner Bebe Heiskell, referring to the HMC board of directors that oversees the day-to-day operations of the hospital. 'For a failing hospital that’s exorbitant.'

So while the hospital's financial performance continued to decline, the total compensation provided its CEO continued to increase.

Summary

Here were three instances in which the compensation of top non-profit hospital leaders seemed out of all proportion to the hospitals' financial results, let alone their accomplishment of their missions. In the first case, the CEO of a public hospital system meant to serve poor and uninsured patients was paid enough in one year to make him an instant multi-millionaire. In the second, the bonuses alone handed out to a handful of top executives ostensibly based on a net revenue increase would have consumed one-fifth of that increase, and when net revenue declined the next year, those executives' compensation would have almost consumed that entire year's net revenue. In the third, a CEO got increasing compensation while his hospital suffered increasing losses.

As we have said before, far too often the leaders of not-for-profit health care institutions seem more interested in padding their own bottom lines than upholding the institutions' missions. They often seem entirely unaware of their duty to put those missions ahead of their own self-interest. Like the financial services sector in the era of "greed is good," health care too often seems run by "insiders hijacking established institutions for their personal benefit." True health care reform would encourage leadership of health care who understand health care and care about its mission, rather than those who see a quick way to make a small fortune.