Henry Kissinger, Iceland's Promoter, Khadafy's Apologists, and the Rise of the Academic Mercenary

In which we discuss how medical academic mercenaries (like the key opinion leaders paid to promote drugs and devices cloaked in their academic and professional credentials) now appear to be just part of a larger problem.
Henry Kissinger

Almost 17 years ago, an article by David Halberstam in Vanity Fair(1) should have warned us of the rise of the academic and intellectual mercenary.  However, back in those go-go years of the new gilded age, most of us were not listening. 

Halberstam focused on Henry Kissinger, once a protege of New York Governor and then US Vice President Nelson Rockefeller, who became the infamous President Nixon's National Security Advisor, then Secretary of State:

Kissinger’s capacity to be all things to all campaigns—an overt Rockefeller man, a semi-overt Humphrey man, and a covert Nixon man—reflects the emergence of the rootless operator in the modern superstate. Kissinger was the first—though there were others to follow—of the wildly ambitious agents of opportunity set loose in the wilds of Washington and other capitals. They are interchangeable men, singular in their ambitions, unhampered by traditional loyalties or affiliations. They are men so cool and detached in their geopolitical views that they sometimes seem to be part of a new international elite, readily transferable to the governments of allies and adversaries alike.

Two recent dramatic stories show how prevalent academic mercenaries, another breed of "rootless operators," or "wildly ambitious agents of opportunity," have become.

Promoting Iceland: Columbia Professors' "Inside Job"

The Academy Award winning documentary film, "Inside Job," suggested that one cause of the Great Recession was the wrong-headed deregulation of the financial industry deceptively promoted by academics who failed to disclose they were being paid by those who stood to benefit from deregulation.  (See our post here.)

Reconsideration of the roles of two of the academics cited in the film who are faculty at Columbia University shed more light on how public policy was influenced by academics hired to do public relations. The Columbia Spectator just published a three- part series on the local controversy with global implications.

At least a few Columbia faculty realized that it did not look good for their colleagues to do public relations while pretending they were delivering disinterested academic opinions:

[Columbia Economics Department Chair Michael] Riordan added that it is important that Columbia protect its reputation and the public’s trust in its professors’ expert opinions.

'What does the university stand for but if not for the quality of the ideas that come out of that university?' he asked. (2)

Also,

Teachers College professor Kathleen O’Connell ... called the film 'appalling' and said that 'the Columbia professors were even more appalling.' She said she was especially surprised considering Hubbard and Mishkin have both had high-ranking government jobs—Hubbard was at one time a top economic adviser to former President George W. Bush, and Mishkin was a governor of the Federal Reserve.

'I was shocked at the lack of ethics that they displayed. They are in really powerful positions—they have been in powerful positions in the Federal Reserve and the President’s economic advisors,' O’Connell said.(3)

However, there was much resistance to change. Just as we have seen in arguments about conflicts of interest affecting medical faculty, there were those who denied that being paid to consult could affect any faculty member's thinking about the source of the payment:

But some, including Business School professor and University Senator Frank Lichtenberg, oppose the disclosure of consulting to the University. Lichtenberg said that many factors besides money can influence professors’ academic opinions.

'There are lots of other sources of bias and non-neutrality in academia anyway,' Lichtenberg said. 'People often have predispositions for or against different hypotheses, and unfortunately, those sometimes prevail.'

Some professors question whether paid consulting positions influence researchers at all. Business School professor Bruce Greenwald said that the economists featured in 'Inside Job' have 'long espoused and long promoted' pro-market ideas and would have made the same arguments regardless of financial ties.(4)

So we have economists denying the effect of economic incentives?

Beyond that, there were arguments that public disclosure of conflicts of interest would violate faculty members' privacy.

But full public disclosure is not likely to gain much traction in the debate over a University-wide policy. Steele said that it is not necessary to publicly release disclosures made privately to University officials.

'I don’t think that the public needs to have access to forms that people fill out and all the materials that go into that,' [Provost Paul] Steele said. 'That would be onerous at least, and there might be other objections … that you are invading people’s sense of privacy and freedom.'(2)

I suppose that would have made some sense if the faculty member had not made any public pronouncements that could have been influenced by the undisclosed conflicts. However, the contention in "Inside Job" was that conflicted academic economists publicly advocated on behalf of their undisclosed clients. For example,

In 2006, the Iceland Chamber of Commerce paid Columbia Business School professor Frederic Mishkin $134,858 to co-author a report on Iceland’s economy and banking systems. In the report, titled 'Financial Stability in Iceland,' Mishkin painted a bright picture of the country’s economic future, but he did not disclose who was paying him to write it.

'Although Iceland’s economy does have imbalances that will eventually be reversed, financial fragility is not high and the likelihood of a financial meltdown is very low,' Mishkin wrote.

Two years later, Iceland’s economy collapsed. Its major banks failed, its currency lost much of its value, and thousands of its citizens lost their jobs. The New York Times wrote at the time that, to Icelanders, 'the collapse came so fast it seemed unreal, impossible.'(2)

Harvard Professors' Paid Apologia for Moammar Khadafy

Praising Iceland's economy was one thing. Praising brutal Libyan leader Moammar Khadafy as democratic was another.

In March, 2011, Mother Jones disclosed(5) how a consulting group run by Harvard professors was hired in part to burnish the image of Moammar Khadafy, who since has ordered brutal attacks on protesters within his country.

In February 2007 Harvard professor Joseph Nye Jr., who developed the concept of "soft power,' visited Libya and sipped tea for three hours with Muammar Qad'afi. Months later, he penned an elegant description of the chat for The New Republic, reporting that Qaddafi had been interested in discussing 'direct democracy.' Nye noted that 'there is no doubt that' the Libyan autocrat 'acts differently on the world stage today than he did in decades past. And the fact that he took so much time to discuss ideas—including soft power—with a visiting professor suggests that he is actively seeking a new strategy.' The article struck a hopeful tone: that there was a new Qaddafi. It also noted that Nye had gone to Libya 'at the invitation of the Monitor Group, a consulting company that is helping Libya open itself to the global economy.'

Nye did not disclose all. He had actually traveled to Tripoli as a paid consultant of the Monitor Group (a relationship he disclosed in an email to Mother Jones), and the firm was working under a $3 million-per-year contract with Libya. Monitor, a Boston-based consulting firm with ties to the Harvard Business School, had been retained, according to internal documents obtained by a Libyan dissident group, not to promote economic development, but 'to enhance the profile of Libya and Muammar Qadhafi.' So The New Republic published an article sympathetic to Qaddafi that had been written by a prominent American intellectual paid by a firm that was being compensated by Libya to burnish the dictator's image.

Monitor also sponsored trips to Libya for scholars from other universities who also later wrote positively about Khadafy's and his reign over Libya, presumably after they had received their large consulting fees.

The Boston Globe reported(6) in more detail about a proposal by Monitor to write a laudatory book about Khadafy:

It reads like Libyan government propaganda, extolling the importance of Moammar Khadafy, his theories on democracy, and his 'core ideas on individual freedom.'


But the 22-page proposal for a book on Khadafy was written by Monitor Group, a Cambridge-based consultant firm founded by Harvard professors. The management consulting firm received $250,000 a month from the Libyan government from 2006 to 2008 for a wide range of services, including writing the book proposal, bringing prominent academics to Libya to meet Khadafy 'to enhance international appreciation of Libya' and trying to generate positive news coverage of the country.

As further documented in the Globe article, it was very clear that Monitor was paid not just to provide consultation, but to do public relations work on behalf of the Khadafy regime.

Yet an article in the Nation(7) made it clear that the prominent academics it hired did not disclose who paid them, or the purposes of those payments:

Joseph Nye of Harvard’s Kennedy School wrote in The New Republic in 2007 that Muammar Qaddafi was interested in discussing 'direct democracy.'

Anthony Giddens of the London School of Economics wrote in the Guardian the same year that Libya under Qaddafi could become 'the Norway of North Africa.'

Benjamin Barber of Rutgers University wrote in the Washington Post, also in 2007, that Libya under Qaddafi could become 'the first Arab state to transition peacefully and without overt Western intervention to a stable, non-autocratic government.

Great minds think alike? Actually, no: all were being paid by Libyan money, under a $3 million per year contract with a consulting group which promised to 'enhance the profile of Libya and Muammar Quadhafi' in Britain and the US.

One more thing: none of them said in The New Republic, the Guardian, or the Washington Post that they were being paid by Libyan money.

So here again we have the elements of what Wendell Potter (see this post) called the "third party strategy." A public relations company hires outside "experts" with veneers of academic or professional credibility to promote the interests of its clients, without disclosing that the "experts" have become paid flacks. Again, this is bad enough when it is done on behalf of health policies favorable to commercial insurance companies. It is worse when it is done on behalf of brutal dictators.

More recently, the Globe discovered(8) that the Monitor Group negotiated with the head of the Libyan intelligence service who had been implicated in various violent acts,

He is Moammar Khadafy’s brother-in-law and his most trusted aide, convicted in absentia for the 1989 bombing of a French airliner and implicated in the 1996 massacre of 1,200 Libyan political prisoners.

But in 2006, Abdullah Al Sanusi was also the man who arranged the services of a noted Cambridge consulting firm in a very different project: revamping Libya’s reputation on the world stage.

Sanusi, a longtime head of Libya’s intelligence services, oversaw initial negotiations with the Monitor Group, which was vying for a contract with Libya to bring prominent Americans to speak to Khadafy as part of an effort to improve ties and nudge the pariah country toward reforms.

'We believe that your commitment to creating a program of mutual education and relationship building with the Unit ed States remains of critical importance at this turning point in Libyan history. We remain privileged to be trusted with this work,' Monitor’s chief executive, Mark Fuller, and project director, Rajeev Singh-Molares, wrote to Sanusi in 2006.

However, so far, Harvard leadership has if anything been more defensive about its faculty members' stealth public relations work for a brutal dictator than was Columbia's leadership about its faculty member's stealth public relations work for Iceland. As reported(9) again by the Boston Globe,

A prominent Harvard professor and former university administrator urged Harvard President Drew Faust during a faculty meeting yesterday to express 'shame'’ on behalf of the university at the disclosure of financial ties between a senior academic and Libyan dictator Moammar Khadafy.

Saying nothing would send the wrong message to students, giving them the impression that personal financial gain could come at the expense of ethical conduct, said Harry Lewis, a computer science professor who formerly served as undergraduate dean.

'Shouldn’t Harvard acknowledge its embarrassment, and might you remind us that when we parlay our status as Harvard professors for personal profit, we can hurt both the university and all of its members?' Lewis asked Faust at the monthly gathering of the arts and sciences faculty.

Faculty meetings are closed to outside media, but Lewis provided the Globe a written transcript of his statement, which he sent to Faust several days ago.

Faust — who, according to Lewis, told him she did not want to be 'scold in chief' — said she supports the wide discretion of faculty members to pursue the directions of academic inquiry and outside engagements they choose.

How low once proud institutions have fallen was demonstrated by a Harvard President who could not bring herself to "scold" faculty who were paid to provide public relations for a brutal dictator while hiding behind their Harvard titles.  Her action was not just "a weak standard for an institution of global leadership,"(10) but failed to erase "a distinctive odor, one that emanates from the corruption of academic reputation."(11)

Summary

Since before we first started this blog, we wondered somewhat despairingly how medicine, and particularly academic medicine, had become so badly lead.  Since the global economic collapse/ Great Recession it belatedly became clear that health care has just been swept along by the waves that drove larger social, economic and political institutions.  In particular, when we wondered how conflicts of interest had become so pervasive in medicine, we did not realize how pervasive conflicts of interest and corruption had become throughout the world.  The fact that leaders of previously revered educational institutions like Columbia and Harvard still cannot bring themselves even to admit the need to disclose conflicts, much less "scold" people for selling out to brutal tyrants indicates how deep the rot has gone.

Fixing the great problems of health care will require fixing the greater problems of society at large.  We must learn to discredit, not honor the "wildly ambitious agents of opportunity" that have been sent out to dominate the new gilded age.   


References


1.  Halberstam D. The new establishment: the decline and fall of the Eastern Empire. Vanity Fair, October, 1994. Link here.
2. Poliak S. 'Inside Job' prompts new look at conflict of interest policy. Columbia Spectator, April 13, 2011. Link here.
3. Poliak S. After documentary, B-school rethinking ethics. Columbia Spectator, April 15, 2011. Link here.
4. Poliak S, Roth S. 'Inside Job' sparks three separate reviews of disclosure policy. Columbia Spectator, April 14, 2011. Link here.
5. Corn D, Mahanta S. From Libya with love. Mother Jones, March 3, 2011. Link here.
6. Stockman F. Local consultants aided Khadafy. Boston Globe, March 4, 2011. Link here.
7. Wiener J. Professors paid by Qaddafi: providing 'positive public relations.' The Nation, March 5, 2011. Link here.
8. Stockman F. Top Khadafy aide helped craft deal with local firm. Boston Globe, March 30, 2011. Link here.
9. Jan T. Harvard leader confronted on professor's ties to Libya. Boston Globe, April 6, 2011. Link here.
10. Anonymous. Yes, Harvard chief should scold profs who worked for Khadafys.  Boston Globe, April 11, 2011.  Link here.
11.  Barrett PM. The professors and Qaddafi's extreme makeover.  Bloomberg BusinessWeek, April 6, 2011.  Link here.

Post Title → Henry Kissinger, Iceland's Promoter, Khadafy's Apologists, and the Rise of the Academic Mercenary

"Government-Run Health Insurance" Run by Corporations? - Two Medicaid Examples

In the US, there seems to have been a constant argument between right- and left-wingers over "government-run" health insurance.  The right tends to disparage all aspects of "government-run" health care, and in the case of insurance, uses the alleged faults of the two big US government health insurance programs as examples.  (Medicare is a federal government health insurance program for the elderly and disabled. Medicaid is federal-state program for the poor.) 

For example, per the Associated Press via BusinessWeek, from a currently prominent Republican hopeful for President, former Minnesota Governor Tim Pawlenty,

The former Minnesota governor was the latest politician to participate in the Health Policy Grand Rounds program that Dartmouth-Hitchcock Medical Center has organized for its staff during the past two presidential campaign cycles. Using Medicare and Medicaid as examples, he criticized the notion that government-run health care will produce efficiency and said the answer lies in empowering consumers.

Republican Congressman Darrell Issa (California) wrote in 2010:

an expansion of the federal bureaucracy at that rate will greatly increase the incidence of waste, fraud and abuse in health care. Already Medicare, which accounts for 14% of all federal spending, is rife with waste, fraud and abuse. Even Attorney General Eric Holder has said, 'By all accounts, every year we lose tens of billions of dollars in Medicare and Medicaid funds to fraud.'

A recent analysis by the Government Accountability Office (GAO) estimated that federal subsidy programs cost taxpayers about $100 billion every year in improper payments, with Medicare and Medicaid accounting for more than half of that.

The left may advocate for government-run, "single-payer" insurance programs, perhaps using the alleged benefits of Medicare and Medicaid as examples.

Scholarly articles about health care policy may refer to Medicaid as a government "single-payer" system.  (For example, see: Robinson JC. The commercial health insurance industry in an era of eroding employer coverage. Health Aff 2006; 25:1475-1486. Link here.)

In any case, I suspect most of us think of Medicaid as an example of "government-run" health care insurance, regardless of whether we believe that is a good or a bad thing.

Yet the reality may be more complex. Two recent stories, one a follow-up on an old Health Care Renewal post, provide some dots to connect.

Connecticut HUSKY Medicaid Program

In 2007, we posted about how the state of Connecticut was going to end participation in the HUSKY state Medicaid program for poor children by four insurance companies/ managed care organizations.  They apparently refused to provide information about payments to physicians and denial of payments for prescription drugs to the state.  The two largest organizations involved were Anthem Health Plans (a subsidiary of WellPoint), and Health Net.  At the time, we noted that this case provided an example of the lack of transparency exhibited by major health organizations.

Late last year, the Connecticut Mirror documented more criticism of the HUSKY program based on a report that showed that participating companies were making big profits from it (but perhaps not from other state Medicaid programs): 

The three managed care companies in the state's HUSKY insurance program for low-income children and families recorded profits of $18.8 million last year, according to figures released by the state Department of Social Services.

In one part of HUSKY, the insurers made margins of at least 20 percent and spent less than 72 percent of their revenues on medical care.

The figures released this month drew criticism from members of the Medicaid Care Management Oversight Council, who are in the midst of considering moving HUSKY out of managed care.

In more detail, the relevant numbers were:

AmeriChoice, part of UnitedHealthcare, spent 62 percent of its revenue on medical care and posted a 22.9 percent profit margin in the HUSKY B program.

By contrast, the federal health reform law sets minimum medical care ratios for insurers of 80 percent or 85 percent, depending on the type of plan. The provision does not apply to Medicaid plans, but was cited as a benchmark in the council's discussion.

None of the insurers met those benchmarks in HUSKY B, which covers children whose family income does not qualify for Medicaid. Last year, it covered between 13,000 and 16,000 children, many whose families earned below 300 percent of the federal poverty level.

Aetna spent 70.5 percent on medical care and made a 20 percent margin, while Community Health Network of Connecticut, a non-profit with far more enrollees than the other insurers, spent 71.8 percent of its revenues on medical care and made a 20.6 percent margin.

Margins were lower, and medical care ratios higher, in HUSKY A, a Medicaid program that enrolled as many as 358,088 children and adults in 2009.

Community Health Network reported a 95.1 percent medical care ratio and a -0.3 percent margin. AmeriChoice spent 86.3 percent of its revenue on medical care and achieved a 3.5 percent margin, while Aetna had an 83.9 percent medical care ratio and 6.5 percent margin.

Overall, the medical care ratio was 90.7 percent for both HUSKY programs and all three insurers. The overall margin was 2.3 percent.

The insurers involved defended themselves by noting to participate in HUSKY they also had to participate in another program, Charter Oak Health Plan, "on which they lose money."

Last month, it looked to be the end of managed care in these Medicaid programs, again as reported by the Connecticut Mirror:

The Malloy administration announced plans Tuesday to move the HUSKY and Charter Oak health programs out of managed care and increase care coordination in the state's other Medicaid programs, an effort officials said would save money while giving the state more control over health programs that serve more than 500,000 people.

This article also noted:

In the current system, the state pays three managed care companies set fees for each HUSKY and Charter Oak member every month, and the companies use the money to pay medical claims. Critics say it gives the managed care companies an incentive to deny care since they get to keep the money not spent on medical costs.

So let us deal directly with the cognitive dissonance generated by these articles. In the ongoing US health reform debate, Medicaid is usually discussed as a "government-run" health care (insurance) program. Yet these news articles from Connecticut suggest at least in that state, part of Medicaid was out-sourced to mostly large, national, for-profit health insurance companies/ managed care organizations. Furthermore, as noted just above, these corporations seemed to be mainly calling the shots in how their part of Medicaid was run. So is this "government-run" health care (insurance)?

But wait, there is more....

Minnesota Medicaid Controversy

Last month, the Politics in Minnesota web-site ran a report on an unlikely reformer:

Dave Feinwachs is no stranger to the Capitol.

For three decades he was the general counsel to the Minnesota Hospital Association. In that capacity, he negotiated with state agencies and testified regularly before legislative committees on health care issues.

But early last year, Feinwachs said, he was ordered by his superiors at the hospital association not to provide any further testimony at the Capitol. The reason for the muzzle: his vocal insistence that health maintenance organizations (HMOs) should contribute money to help salvage the state’s General Assistance Medical Care program for indigent adults.

Feinwachs says he abided by the prohibition on testimony before legislative committees, but apparently it was not enough to keep him in the good graces of his employer. In November he was fired as the group’s principal attorney. Feinwachs will not discuss the reason for his termination, citing potential litigation. But it almost certainly had something to do with his ongoing zealous campaign to force greater transparency and accountability on the state’s HMOs - primarily Blue Cross & Blue Shield, HealthPartners, Medica and UCare - which receive roughly $3 billion annually to run health plans for many of the state’s poorest residents.

So here we go again. This article suggested that Minnesota had out-sourced a very large part of its Medicaid program.

Furthermore, it also appears that the state government knows little about what happens to the money it hands over:

In the next two years, Minnesota is slated to funnel about $6 billion to the state’s HMOs to provide health care for 550,000 of the state’s poorest residents. To put that figure in perspective, it is nearly 20 percent of the state’s expected 2012-13 general fund revenues - and nearly identical to the state’s projected $6.2 billion deficit. In coming up with a solution to Minnesota’s financial crisis, Feinwachs and others believe, legislators must at least have a clear accounting of this massive pot of health care dollars.

HMOs, meanwhile, are not exactly yearning for scrutiny, especially as they launch a pitch to administer even more of the state’s health care spending.

In addition, there is reason to believe that Minnesota may be paying a significant amount for administration:

Feinwachs believes that the administrative overhead collected by HMOs could be in the neighborhood of 16 percent. He concedes, however, that this is no more than a 'guesstimate' pieced together from the limited information that is publicly available.

Then, there is reason to suspect that the private (and nominally not-for-profit) HMOs that Minnesota pays to run Medicaid have resisted accounting for how the money they got was spent:

Past attempts to bolster accountability and transparency for HMOs have largely run into a brick wall. For instance, when legislators considered requiring the health plans to chip in on a plan to restore the General Assistance Medical Care program last year, they were told by officials from the Department of Human Services that such a move would be illegal. Efforts to provide more financial disclosure have been rebuffed by the argument that such information is proprietary and not subject to the state’s data practices rules. The complexity of Minnesota’s patchwork of publicly funded health care plans, which very few individuals clearly understand, has also helped forestall changes.

'We can’t let the complexity of data and information beat us down, and I think that’s what happened in the years past,' Hosch said. 'The systems almost seem like they’re deliberately complex in order to confuse us.'

Apparently in these parlous financial times, Mr Feinwachs got some attention. Last week, the state Governor announced his willingness to dig into the results of the state's out-sourcing of Medicaid, per the Minneapolis Star-Tribune:

It's high time that Minnesota started treating its nonprofit health plans for what they are -- some of state government's largest vendors.

Reforms announced this week by Gov. Mark Dayton's office are a promising first step toward scrutinizing health plan contracts for savings and finding new ways to rein in Minnesota's soaring medical costs.

Managing care for more than 500,000 low-income, disabled and elderly Minnesotans enrolled in state public health programs is a $3.1 billion-a-year business for health plans in Minnesota, with the state and federal government jointly footing the bill.

Over the past decade, the state's portion of this outsourced care has increased from 5 percent to 11 percent of the state budget, according to Dayton's office.

The state also has more than 249,000 people -- typically the sickest of the sick -- in a fee-for-service public program. That spending is also ripe for a cost-savings review.

On Wednesday, Dayton announced plans to do what good business leaders do in difficult financial circumstances. His administration is going to start driving harder bargains with health plans.

Key parts of the plan include making the contracting system more competitive, making financial information more transparent, and doing deeper auditing of plans' books to analyze administrative and medical expenses.

So again in Minnesota, it appeared that the state had out-sourced a large proportion of its Medicaid program, covering apparently two-thirds of the state's Medicaid patients. It appears that knowledge of the out-sourcing of most of Medicaid was relatively anechoic, and that even the state's former Governor Pawlenty was unaware of it (see his comments in introduction to this post). Despite the amounts of money and the numbers of people involved, up to now the state government had apparently very little information about how billions of dollars were being spent by private, albeit nominally non-profit health insurance companies/ managed care organizations.

Summary

Two cases from two states suggest that some proportion of Medicaid, perhaps a very large proportion, has been out-sourced to private corporations, both nominally non-profit and for-profit.

In fact, a Washington Post article last year suggested that 70% of Medicaid patients are in managed care plans, most of which are likely out-sourced, not run by state Medicaid agencies.

Our two cases above further suggest that government officials may know little about how the money given to these corporations was spent, and how the corporations managed the supposedly "government-run" health insurance.

So much for the notion that the US Medicaid program is "government-run" health insurance.  Whether one believes that government bureaucrats are good or bad at running health care, it seems that most Medicaid patients' care is managed by corporate, not government bureaucrats.

The likelihood that a substantial proportion of Medicaid patients actually get their health care coverage from corporations, be that non-profit or for-profit, raises some important questions.
- What proportion of the government funds provided these corporations goes to health care versus administration, overhead, etc?
-  What then is the proportion of all Medicaid money spent on health care versus administration, overhead, etc at the federal, state, and corporate levels?
-  What proportion of the revenue of major health insurers/ managed care organizations actually comes from tax-payers via Medicaid?
-  To what extent do health insurers/ managed care organizations influence clinical care through their role implementing Medicaid?
-  How transparent are their finances and their implementation of Medicaid?
-  How well are they supervised and regulated by national and state government?

Meanwhile, it appears that there is far more overlap between government and corporate health insurance and managed care than most of us realized.  That suggests the usual debate between the foes and proponents of "government-run" health care (insurance) was vastly too simplistic.  Maybe some of those involved in the debate should have known that.   

Meanwhile, the concerns I discussed in 2002 that "health care has become dominated by large, bureaucratic organizations" appear increasingly well-founded.  This domination seems to be increasingly facilitated by collaboration - or should that be collusion? - among government and private bureaucracies.  The danger, as we have repeatedly discussed, is that the leaders of these bureaucracies may feel increasing loyalty to the managers' and executives' guild, and decreasing pressure not to fulfill their own and their cronies' self-interest.  We need at least to have some frank discussions about the increasing corporatism of health care and all of society, and what to do about it. 

Post Title → "Government-Run Health Insurance" Run by Corporations? - Two Medicaid Examples

A Jury Finds Johnson and Johnson's Risperdal Marketing "Willfully Deceptive," but What Will It Take to Change Company Leadership?

For Johnson and Johnson, it's deja vu all over again, as reported by the Spartansburg (SC) Herald Journal:

A Spartanburg jury decided that Johnson & Johnson and a subsidiary violated South Carolina's Unfair Trade Practices Act, but the company will wait until damages are determined next month before it decides whether to appeal the jury's decision.

Also,

The jury decided Tuesday the company willfully violated the act by sending a 2003 letter to doctors that attorneys for the state said sought to minimize the risk of hyperglycemia — or high blood sugar — and diabetes reported by patients using Risperdal.

The letter was sent to about 700,000 doctors nationwide — 7,200 of those in South Carolina.

The jury decided that warning labeling included with the drug was also willfully deceptive.

This is not the first such lawsuit involving Risperdal,

South Carolina's lawsuit was the fourth state lawsuit to go to trial.

In West Virginia, claims involving Risperdal were dismissed with prejudice last December following the company's appeal.

In October, a jury in Louisiana awarded almost $258 million in civil penalties to the state. Janssen will appeal that decision.

In a jury trial in Pennsylvania in June, a judge dismissed the state's case against Janssen.

Note that we posted about the Louisiana verdict here.

The hits, they just keep on coming for Johnson and Johnson, which has been recalling a dizzying array of products due to manufacturing problems.  A new recall was just announced today, and there have been 20 separate recalls since mid-2009.

Just eight days ago we contrasted the opulent compensation given the Johnson and Johnson CEO in 2010 (about $29 million) with the company's poor financial performance, seeming inability to make pure, unadulterated, safe products as manifested by multiple recalls, and ethical problems as indicated by legal settlements and guilty pleas. Today we have added another recall, and a jury verdict against the company finding its marketing was deceptive.  So the cognitive dissonance evoked by comparison of executive pay and corporate dysfunction continues. 

Is there any degree of organizational dysfunction that could possibly induce a health care corporate CEO to feel shame for continuing to extract millions from the flailing beast?  Is there any degree of disconnection between executive compensation and corporate performance that could possibly induce complacent corporate boards to feel shame for enriching the hired executives who presided over the mess?

Probably not.  The events surrounding the global financial collapse suggested that somehow expecting corporations to regulate themselves was at best foolishly naive (e.g., see here).  Presumably former US Federal Reserve Chair Allan Greenspan really thought that markets could regulate themselves, and that fraud could not exist because markets in his idealized view would punish it themselves,

he didn't believe that fraud was something that needed to be enforced or was something that regulators should worry about....

But then he later admitted: 

Those of us who have looked to the self-interest of lending institutions to protect shareholder's equity – myself especially – are in a state of shocked disbelief

We do not yet seem to be at the point that will we generate enough "shocked disbelief" about the misbehavior of current health care organizations to realize that they will not police themselves, and a true health care reform movement will have to figure out how to reasonably regulate them.  (I submit that perusing the archives of Health Care Renewal will suggest that we should have been at that point years ago.)

If we do not fix the severe problems affecting the leadership and governance of health care, and do not increase accountability, integrity and transparency of health care leadership and governance, we will be as much to blame as the leaders when the system collapses.

Post Title → A Jury Finds Johnson and Johnson's Risperdal Marketing "Willfully Deceptive," but What Will It Take to Change Company Leadership?

Some Dare Call It "Corruption" - the Massachusetts Blue Cross Blue Shield Golden Parachute Scandal Continues

We have discussed many cases of health care organizations' leaders reaping rewards disproportionate to any concept of their performance, and especially to any concept of the effect of their conduct on patients' or the public's health.  Most of these cases have been pretty anechoic, but for some reason, the case of the huge golden parachute given to the outgoing CEO of Massachusetts Blue Cross Blue Shield despite a tenure  marked by financial losses and no particularly brilliant advances in patients' care or outcomes, (see this post) continues to generate responses. 

One editorial suggested that should the non-profit health insurance company continue to pay so lavishly, it should lose its tax exemption.  Another noted that the company should start putting its stakeholders, defined as its policy-holders "first and its funding of overly generous compensation packages to board members and outgoing CEOs somewhere far below."  Finally, an editorial in the local Providence Journal used the "c" word, "corruption," to define the company's and its CEO's behavior.

So it should not be surprising that defenders of the company have appeared.  The Boston Globe published an article which featured attempts to minimize the importance of the CEO's golden parachute. Further analysis of the points are in order.

Executive Salaries are a Minimal Component of Cost

The article quoted an expert who asserted executive salaries are not themselves a big component of cost:

The outcry grew big enough to force Blue Cross board members to vote to suspend their own payments and to lead the insurer to make promises to curb excessive payouts to executives. There’s just one problem: Those steps will do little to fix soaring health care costs.

'I have the same outrage,' Stuart H. Altman, a national health policy professor at Brandeis University, said about Blue Cross’s payments. But, 'We need to put executive pay and board salaries in perspective. It is not the major force, or even close to the major force, in driving up health care costs.'

My comment is that just because administrative costs are not the largest component of health care costs does not mean they do not drive health care costs.

As I have argued before, the biggest problem created by excess compensation for health care organizations' leaders is not the amount of money they get, per se.  The problem is the effect of the perverse incentives created by the money.  One concern is that people paid that much may make decisions that support their pay in the short-term, but damage the organizations' mission in the long-term.  Another is that the sorts of people attracted by the possibility of big pay packages are those least likely to uphold the mission in the first place.  Another is that the huge disparity between the pay of the top leaders and of everybody else is demoralizing for the relatively poorly paid staff who actually must do the work.

Finally, it may be worth quoting the former President of Princeton University, just interviewed about what academic leadership was like in the days before giant pay packages:

I’m not a fan of huge salaries for presidents of academic institutions. These are hard jobs. But people don’t really do them for the money. What kind of message do you really want to convey concerning the nature of the institution and its leadership? I always thought that it was important to convey a message of we’re all in this together. If you as president earn so much more than everyone else, it’s hard to argue that we’re all in this together.

Focusing on Executive Compensation Distracts from the Real Issues

The final argument in the Boston Globe piece was that huge executive compensation just is a distraction from the real issues:

Yet [current Massachusetts Blue Cross Blue Shield CEO Andrew] Dreyfus said he is concerned that the focus on executive and director pay will distract insurers, providers, and policy makers from addressing factors driving health care costs higher. Those factors range from an aging population to increases in obesity to expensive tests, drugs, and treatments that cure diseases and prolong lives.

'If you had a dozen health economists sitting in this room and you asked them what’s driving health care [costs], you know executive and board compensation wouldn’t be at the top of the list,' he said. 'It would be chronic illness and prices of hospitals and doctors and medical advances and discoveries and technology.'

That list of the "real" drivers of health care costs sounds very familiar.

Wendell Potter's Deadly Spin, is an expose of how how insurance and managed care corporations' public relations departments used deception, propaganda, and outright disinformation campaigns to make sure health policy supported the companies' interests.

Potter wrote (p.110) about how PR campaigns were designed to distract the public and policy makers from the industry's responsibility for health care dysfunction:

Rather than admit responsibility for the failures, insurance executives pointed the finger of blame at their customers, the 'consumers' of health care, and, of course, the providers of care. In introducing the concept of their new silver bullet - consumer driven health care - insurance executives claimed that the 'real drivers of health care costs' (one of my CEO's favorite expressions) were the people who sought care when they really didn't need it and the doctors and hospitals who were all too willing to provide this unnecessary care. Sure, the aging population and expensive new technology were also factors, but the main culprits were people who just didn't realize how expensive health care had become.

I color coded the factors listed by the current Blue Cross CEO as the real "drivers" of health care using the same colors with which I coded Mr Potter's list the specific distractors created by insurance company executives to deflect attention from the companies' inability (and probable) disinclination to control costs.
So it appears that Andrew Dreyfus is working from the same playbook that Wendell Potter described, down to the "drivers of health care costs" terminology. 

Summary

The Massachusetts Blue Cross Blue Shield kerfuffle seems to be enlarging into a good case to teach about what health care dysfunction is really all about.  It shows how the leaders of large health care organizations seem to be putting their self-interest ahead of the missions they are supposed to uphold.  Without governance structures that hold them accountable for upholding these missions, they have set up perverse incentives to pay themselves very well regardless of the effects of their actions on patients' or the public's health. 

So it appears, as the Providence Journal editorial asserted, that the leadership of health care organizations is increasingly corrupt, at least using the Transparency International definition of corruption, abuse of entrusted power for private gain. 

True health care reform would make leaders of health care organizations accountable for upholding their missions, and for patients' and the public's health.  Leaders of health care organizations ought to get reasonable incentives for improving health, but not incentives so large as to demoralize the people who actually do the work and take care of the patients. 

Post Script: More Undisclosed Conflicts of Interest

It is obvious why Andrew Dreyfus, the new CEO of Massachusetts Blue Cross Blue Shield might quote the health insurance industry public relations party line about drivers of health care costs that conveniently do not include insurance company practices and executive compensation. 

It was not obvious when reading the Boston Globe article why Professor Altman might be susceptible to that party line.  Perhaps his conclusions were only based on his scholarship.

However, the Boston Globe article failed to disclose Prof Altman's part-time jobs.  As per this 2010 proxy statement, he is a member of the board of directors of Lincare, a company that provides respiratory care services, including disease management, and of Aveta Inc, a privately held health insurance company.  Prof Altman's total compensation from Lincare in 2009 (per the latest proxy statement available, i.e., that issued in 2010), was over $1.7 million.   Note that corporate directors, as we have discussed previously, have a fiduciary duty to exhibit "unyielding loyalty" to the stockholders of the company and their interests  [Per Monks RAG, Minow N. Corporate Governance, 3rd edition. Malden, MA: Blackwell Publishing, 2004. P.200.].  Given Prof Altman's membership in the board of directors of a health insurance company, and his towering compensation as a director of a health care company that may need to maintain good relationships with health care insurers, it would seem that he has multiple financial relationships that could lead to sympathy with the health insurance industry's public relations party line.

So it seems that regardless of the intent of the reporter who wrote it, the latest Boston Globe article about the Massachustts Blue Cross Blue Shield CEO golden parachute scandal ended up being an apologia for excess compensation of health care insurance executives that followed the script written years ago by health care insurance corporate public relations.

So I need to add another conclusion.  The discussion of health care policy needs to be informed by disclosure of the financial interests of those participating, particularly those participating as experts in the media.   True health care reform would lead to such disclosure.  However, in our currently dysfunctional health care environment, be very skeptical about the interests of "health policy experts" who seem eager to support the powers that be.

Post Title → Some Dare Call It "Corruption" - the Massachusetts Blue Cross Blue Shield Golden Parachute Scandal Continues

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.

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

"I'm Not Here to Sell Drugs" - Then Why Use Company Provided "Correct" Slides?

In October, 2010, we discussed a series of reports by Pro Publica and multiple other respected news organizations about payments by seven pharmaceutical companies to thousands of doctors.  Industry often claims that they only pay the best and the brightest physicians and academics to provide education relevant to their products.  However, the ProPublica et al report suggested that they mainly recruited physicians who already showed their favor to their products by prescribing them often, but soothed their consciences by dubbing them "thought leaders" or "key opinion leaders."  While some of the physicians were well-known academics, others had notably blemished records. 

Since then, news media around the US have looked into interactions among local physicians and academic medical institutions and the seven pharmaceutical companies.  In November, 2010, here we discussed cases that suggested that pharmaceutical companies like physician speakers because they are more "believable" than pharmaceutical representatives, and choose physicians who already are prolific prescribers of the drug to be promoted, and that suggested that some physicians realized that speaking for pharmaceutical companies influenced their own prescribing.

Since then, more investigations of local physicians' interactions with pharmaceutical companies have appeared that reinforced contrasts between rationalizations that physicians and drug companies use to support continued payments for "drug talks," and what these talks are really about.

"Leaders in Their Field" vs Sanctions and Crimes

 Many pharmaceutical (and other health care corporations) have repeated the mantra that the physicians they hire to give talks are the best and the brightest.  The physicians who give the talks sometimes get to believe this.  For example, a ProPublica follow-up report[1] on discrepancies between data the pharmaceutical companies put on the web and gave to state regulators noted:

Pfizer, for example, told the state it paid Dr. Randy Schapiro $1,770 last year. But on the firm’s website, it reported spending $43,827 on him in the second half of 2009 alone.

It then quoted Dr Schapiro:

Schapiro said the doctors paid by pharmaceutical companies are 'leaders in their fields,' and patients should want to see their physician among them. 'If their doctor is not on the list,' he said, 'maybe they should look for a different doctor.'

On the other hand, several of the local news articles focused on physicians who were paid drug company speakers despite having chequered backgrounds, shall we say. In the Elmira Star Gazette[2]:

Tulio Ortega, a Rochester psychiatrist who made $144,548 from Eli Lilly and AstraZeneca for speaking to groups of peers during the last two years - was put of [sic] probation for two years in 2008 and ordered to pay a $7,500 fine after being sanctioned for negligence and incompetence.

Also,

Lilly also paid Yonkers physician Ali Sherzoy $4,334 in the first two quarter of this year, even though he had his license suspended in New York and New Jersey earlier this year after pleading guilty to a count of criminal sexual contact in 2008.

Sherzoy told ProPublica the incident involted his family's nanny and had nothing to do with his ability to practice medicine.

Other New York doctors were sanctioned for incidents ranging from deficiencies in handling controlled substances to being convicted of tax evasion.

Another article by the same author[3] noted two more cases:

In 1991, Johnson City doctor Louis Mateya was charged with professional misconduct after a 22-year-old woman accused him of unzipping his pants and fondling himself during an examination.

Mateya admitted guilt to the charge. The State Board for Professional Medical Conduct suspended his license for two months, followed by a 58-month probationary period, during which he was monitored by a psychiatrist and a health professional selected by the board.

During the last nine months of 2009, GlaxoSmithKline paid Mateya, an internist at United Health Services, $1,750 to speak on behalf of Lovaza, Glaxo's prescription omega 3 fish oil, according to an e-mail from a United Health Services spokeswoman.

Also,

A second Southern Tier physician, Robert Douenias, of Corning, was also paid by Glaxo: $20,000 during the same time frame to deliver speeches, even though he received sanctions in 1992.

According to the Office for Professional Medical Conduct (OPMC) records, Douenias lied about a previous criminal conviction on his application for a New York medical license. He received a censure and reprimand from the OPMC, was ordered to perform 200 hours of public service and was placed on probation for two years. Douenias said on his application he had never been convicted of a crime in any state or country, even though he had a previous conviction, according to OPMC records.

Note that the original ProPublica reporting from their database emphasized cases of physicians paid to speak by pharmaceutical companies who also had been sanctioned by medical boards or the criminal justice system (see post here).

Although drug marketers like to tell physicians they are selected as "thought leaders" because of their brilliance, it appears that the selection of such "key opinion leaders" is not necessarily based on sterling character.

"I'm Not There to Sell a Drug," But Then Why Use the Company's Slides?

A number of the reports featured physicians who asserted their independence, at least from marketing goals. 

For example, as reported by the Duluth (MN) News Tribune[4],

A Duluth psychiatrist has received more than $525,000 since 2002 in payments from pharmaceutical companies, far more than any other Northland doctor, an analysis by the News Tribune shows.

Dr. Tracy Tomac of St. Luke’s hospital was paid by the companies to give presentations on health and drug issues.

Furthermore,

'I’m there as an educator and resource,' she said. 'I’m not in business to do a sales pitch. I’m not a salesperson.'

Also,

In 2007, [Dr] Tomac said her presentations included content that was screened and approved by the FDA,....

However, other reporting suggested that content "screened and approved by the FDA" was content provided by the pharmaceutical companies.

For example, The Tennessean noted[5]:

Dr. Jan Brandes heads the Nashville Neuroscience Group, a clinic that's now part of Nashville-based Saint Thomas Health Services. She made $111,150 in outside income over the past two years, largely in speaker fees paid by drug company GlaxoSmithKline, which markets a wide array of brand-name drugs, literally from A to Z.

Dr Brandes also asserted,

'The real point is I'm not there to sell a drug,' Brandes said. 'I'm there to interpret trial results, talk about disease states and help physicians understand where this research might fit in the context of their practice.'

However,

Most drug companies now require physicians to use the company's slides and presentations if they pay them to speak at an event. The industry says that is to ensure that all U.S. Food and Drug Administration rules are met and that physicians don't wander off into discussing uses for a particular product that haven't been approved by regulators.

Also, an article in the Alexandria (VA) Gazette Packet[6] noted:

Whistleblower lawsuits filed in recent years have accused firms of using doctors to push pills for unapproved uses during dinnertime talks, prompting at least 10 firms to settle cases for nearly $7 billion in the last three years. Since that time, pharmaceutical companies have tightened control over what happens during presentations given on their dime. Last year, for example, GlaxoSmithKline instituted a new policy prohibiting doctors from using their own slides during presentations. Starting in 2010, all doctors giving speeches sponsored by GlaxoSmithKline must use slides presented by the pharmaceutical company in the order specified.

'We want to make sure that everything is correct,' said Mary Anne Rhyne, a spokeswoman for GlaxoSmithKline. 'The best way to do that is to have our team prepare the slide.'

Note that Dr Brandes above was paid mainly by GlaxoSmithKline, who presumably also provided all her slides and made sure that everything she said was "correct," at least in terms of what GlaxoSmithKline thought was correct.

And one more example per MyFoxAtlanta[7]:

Some of Georgia's highest paid physicians? .... and Roswell psychiatrist Dr. Michael Banov: over $68,000, also from Lilly.

Dr Banov asserted:

We don't sell medications. We simply educate physicians about data, and they make their own mind up.

However,

Banov says, the drug company - not him - creates the materials used in his speeches, and he says there's a reason for that.

'We are only able to present the data. We're not able to present our personal opinions. Our personal preferences, how we use the medication off label. any of that. So we're held to a very tight standard by the FDA,' said Banov.

Drug companies may say they make their paid physician speakers use slides provided by the company to prevent them from talking about "off-label" uses.  However, there is no reason for a physician-educator not to talk about "off-label" uses, and physicians can prescribe any legal drug for whatever purpose they see fit, whether or not the drug is on or "off label." 

But drug companies are prohibited by law from promoting off-label uses.  Requiring physicians to use drug companies' slides and preventing them from talking about "off-label" uses demonstrates that the physicians are functioning as marketers, not educators. 

Summary

As local reporters look into more cases, it becomes increasingly clear that up to now, pharmaceutical companies have been none too fussy about which physicians they pay to speak about their products. It is self-serving, but inaccurate for both sets of parties to assert that the companies choose only the "best and the brightest." 

Furthermore, it has now become glaringly obvious that the purpose of "drug talks" is, well, to sell drugs.  Some physicians paid by drug companies to speak may bluster about their independence, but if they are using company provided slides, who can deny they are influenced  by the company.  Furthermore, when companies insist not merely on providing slides, but on ensuring that "everything is correct," then it is clear that it is the companies' talks that the physicians are giving.  Physicians giving company talks cannot be speaking independently, and hence must be regarded as company sales personnel, whose disguises as independent doctors or medical academics are now in tatters.

Doctors who still choose to go to "drug talks" should have no illusions that they are being exposed to anything other than marketing.  Thus, I urge my colleagues to forgo the nice meals and the company prepared "correct" slides, and spend the time trying to more critically assess the clinical evidence. 

References


1.  Ornstein C, Weber T. In Minnesota, drug company reports of payments to doctors arrive riddled with mistakes.  ProPublica, Dec 10, 2010.  Link here.
2. Hunter J. Rochester psychiatrist, sanctioned for incompetence, made $144K from drug companies. Elmira Star-Gazette, Dec 4, 2010.
3. Hunter J. Despite sanctions, physicians hired as drug company pitchmen. PressConnects.com, Dec 4, 2010. Link here.
4. Stahl B. Duluth doctor denies payments from drug companies sway decisions.  Duluth News Tribune, Dec 20, 2010.  Link here.
5. Ward G. They say they prescribe based on patients, not Big Pharma. Tennessean, Dec 19, 2010. Link here.
6. Pope ML. Conflict of interest? - Alexandria doctors receive thousands of dollars from Big Pharma.  Alexandia Gazette Packet, Jan 13, 2010.  Link here.
7. Galvin B. Health watch: doctors and drug companies. MyFoxAtlanta, Dec 29, 2010. Link here.

Post Title → "I'm Not Here to Sell Drugs" - Then Why Use Company Provided "Correct" Slides?

Guidant (Boston Scientific) Gets Probation

The latest in the parade of legal settlements by health care corporations involves a new wrinkle. 

We have been writing about the case of Guidant Corporation's faulty implantable cardiac defibrillators (ICDs) in 2005, almost since the start of the Health Care Renewal blog.  A quick summary, via the Minneapolis Star-Tribune, is:

In 2005 Minneapolis Heart Institute doctors Barry Maron and Robert Hauser went public with concerns about a Guidant defibrillator called the Ventak Prizm 2 after a 21-year-old patient died when his defibrillator short-circuited and failed to revive him after he went into sudden cardiac arrest.

Guidant had known about the short-circuiting issue since 2002 and had made two attempts to fix the device, according to court documents. The company did not alert the FDA -- even though federal law requires manufacturers to report changes that may pose a health risk to patients.

In early 2004, Guidant discovered a similar short-circuiting problem in different defibrillator models called Contak Renewal 1 and 2. The company ordered its factory to stop making and shipping the models, but potentially faulty products on hospital shelves continued to be implanted in thousands of patients.

Although engineers at Guidant had recommended recalling the Contak Renewal devices, upper management rejected the proposal, court documents state. Instead, Guidant issued the 'least aggressive' form of communication, called a product update, in which sales representatives were told to tell doctors that 'nothing was broken' with the device.

Maron and Hauser met with top Guidant officials in May 2005 and urged the company to communicate the problem to doctors, but Guidant refused. The doctors then went to the New York Times, which published an article indicating that the company had known for three years that the Ventak Prizm model could short-circuit, but did not communicate that to doctors.

In June 2005, Guidant issued a public missive detailing safety issues with the defibrillators, which were later recalled by the FDA.

A longer version from a series of Health Care Renewal posts can be found here.

In 2010, Guidant, now a subsidiary of Boston Scientific, agreed to a settlement which would involve guilty pleas to misdemeanors and payment of a large ($296 million) fine, but the settlement was rejected by a federal judge who found it to be too lenient (see post here). Now the judge has approved a new version, again per the Star-Tribune,

In what is believed to be the largest criminal penalty ever imposed in a medical device case, a federal judge on Wednesday approved an agreement calling for Guidant Corp. to pay $296 million for concealing safety information about several of its heart devices.

The denouement in U.S. District Court in St. Paul ended a difficult chapter for one of the biggest players in Minnesota's signature medical technology industry. Thirteen patient deaths have been associated with faulty devices made by Arden Hills-based Guidant, which is now part of Boston Scientific Corp. The controversy lingered for almost six years and raised questions about how safety issues involving medical devices are communicated to the Food and Drug Administration, doctors and patients.

Last April, U.S. District Judge Donovan Frank rejected a previous $296 million settlement between the Department of Justice and the company. This time that fine remained intact, but Frank also called for Boston Scientific to serve three years' probation.


Boston Scientific will be required to make quarterly reports to the U.S. Probation Office regarding safety and compliance issues, as well as submit to regular, unannounced inspections of its records. Frank also called upon Boston Scientific to continue charitable programs intended to raise awareness about heart disease.

'I believe this serves not only the interests of the community and the interests of justice, but respect for the law and corporate responsibility,' Frank said.

The new wrinkle is, of course, probation. I have not previously heard of a US health care corporation put on probation in a criminal settlement. Presumably, the idea is that probation will involve court supervision of the company that might be less lenient than US Department of Justice oversight via a corporate integrity agreement.

So this is a small step forward, but once again, the extent that this settlement will deter future bad behavior seems small. Once again, although the fine imposed seems large, it is small compared to the money to be made by selling these very expensive devices. Moreover, the cost of the fine can be diffused over the entire company, and ultimately over all its employees, its stockholders, and its customers.

Since no individual will pay a penalty, and since it is likely some individuals made themselves rich or richer from the company's actions, it is likely that other individuals in the future will authorize, direct, and implement similar bad behavior to fatten their bonuses and total compensation.

Last June, we noted that some government officials were starting to talk tough about imposing penalties on individuals for misbehavior by health care corporations. In fact, in 1943, the US Supreme Court found that corporate leaders could be held responsible for corporate bad behavior, the so-called Responsible Corporate Officers doctrine. However, the laissez faire malaise that apparently infected most government officials starting in the 1980s seemed to prevent anyone from invoking this doctrine during the last 30 years of health care dysfunction. That malaise still seems to be rendering US federal law enforcement effete, at least when applied to wrong-doing by big, powerful, rich health care corporations.

So like Cassandra, fated to have her predictions always ignored, I repeat: When it comes to health care's leadership, society seems to have acceded to defining deviancy down. Until we start holding health care leaders to high standards, expect their organizations not to uphold high standards.  Further, expect organizations that did not uphold high standards in one instance to fail to uphold them in other instances.  If we really want high quality accessible, reasonably priced health care, we need true health care reform that reduces concentration of power in large organizations, and makes health care organizations' leadership accountable, ethical, and transparent. That will not be easy.

Post Title → Guidant (Boston Scientific) Gets Probation

High Heels, Short Skirts, and Recruiting Bone Marrow Donors

Once again, you just can't make this stuff up.  Here is the New York Times description of new state of the art in recruiting donors for bone marrow transplant.

On its face, it seemed reasonable enough: a bone marrow registry sending recruiters to malls, ballparks and other busy sites to enlist potential donors.

But the recruiters were actually flirtatious models in heels, short skirts and lab coats, law enforcement officials say, asking passers-by for DNA swabs without mentioning the price of the seemingly simple procedure. And the registry, Caitlin Raymond International, was paying up to $60,000 a week for the models while billing insurance companies up to $4,300 per test.

In New Hampshire, where prosecutors say thousands of people appeared to have provided swabs, the attorney general is investigating the registry’s marketing and billing practices. The registry is a nonprofit subsidiary of UMass Memorial Medical Center in Worcester, which said Thursday that it had stopped seeking donors in New Hampshire and using models altogether.

James T. Boffetti, the state’s senior assistant attorney general, said the registry had hired models based on their photographs and had given them 'explicit instructions' to wear heels and short skirts.

The recruitment seemed to be based more on in-your-face sex appeal than an appeal to altruism:

'The models worked the crowds, if you will,' he said. 'We were told basically they would engage a lot of younger men with some sort of flirtatious thing: ‘Hey, don’t you want to be a hero? Come on, do this!’ '

What the models did not tell their, um, prospects was that apparent acts of charity would result in a hefty bill to the volunteers' health insurance:

They got people to do this without telling them it could be a charge of $4,300 against their insurance

To put that charge in perspective, as reported by Liz Kowalczyk in the Boston Globe:

In the last decade, Massachusetts, New Hampshire, and Rhode Island became the only states where legislators mandated insurers pay for bone marrow testing.

Nationally, most hospitals and other donor-recruitment organizations do not charge for the testing, said Michael Boo, chief strategy officer for the National Marrow Donor Program. The test typically involves a DNA analysis to determine whether the donor is a match for anyone on the bone marrow transplant waiting list.

Boo estimates it costs the organization about $100 to test and recruit each potential donor, although he said that, as the largest bone marrow donor registry in the United States, the program gets a volume discount from labs for the DNA analysis. The organization has about 8 million registered donors. (The Caitlin Raymond registry has 185,000 potential donors.)

But in New Hampshire, UMass Memorial charges self-insured employers, like the city of Manchester, that do not have a negotiated rate upwards of $4,000 per person for testing. It generally has charged insurers like Blue Cross and Harvard Pilgrim $700 to $1,500 person for testing, said James Boffetti, senior assistant attorney general in New Hampshire and chief of the consumer protection bureau.

'We haven’t been able to get a clear explanation from UMass about the reasons for the costs,' he said. As for the unusual recruiting, he said, 'they’re doing it because they are making money on this test.'

Finally, although the medical center sent initial bills for the tests to volunteers' insurers, sometimes the volunteers got stuck with part of the bill. As reported by National Public Radio:

Marc Ferland, a 45-year-old father of two in Bow, N.H., stopped at a registry booth after giving blood at a Red Cross drive. A month later, he received a bill that said he owed more than $2,000 to cover the costs of the test. When he complained, the amount was cut to $760, which he paid out of a health care account offered by his employer.

'When you take money out of my spending account, that's a cost to me,' Ferland said.

So here is an almost unbelievable example of how the a culture of marketing gone amok has taken over an academic health care institution. It seems darkly humorous now that the UMass Memorial Medical Center includes in its stated values:

Staff members of UMass Memorial Medical Center are committed to:

* Excelling at patient-centered care
Achieving patient-focused excellence through the highest standards of quality care, patient safety and patient satisfaction
* Acting with integrity
Dealing honestly, fairly and responsibly with each other
* Respecting one another
Valuing the contributions, ideas and opinions of our coworkers, colleagues, patients and partners
* Contributing to the community
Partnering with the community at large and with other health care and social agencies in meeting the health needs of the community
* Improving through teamwork and systems thinking
Working to continuously improve ourselves, our processes and our patient services through cooperation and thinking as an integrated health care system
* Embracing accountability
Holding ourselves, our coworkers and our leaders to the highest standards of performance

Integrity? Partnering with the community? - maybe that is what some of the recruits were hoping for, in a sense.   Embracing accountability?  Maybe the new vision statement should be "a sucker is born every minute."

Again, it would be funny if it were not so tragic.  Here we see a major academic medical institution debased into something that a Las Vegas casino might frown upon.

As we have noted ad infinitum, however, previous attempts at health care reform have not dealt with how the "greed is good" culture of Wall Street, run by amoral financiers and fueled by cynical marketers, has taken over health care.  Until we get health care leaders who really do care about patients, and about the integrity of teaching and research, the show will go on.  Meanwhile, the suckers better watch out.

Post Title → High Heels, Short Skirts, and Recruiting Bone Marrow Donors