University of California CEO - You Can Reduce My Pay if "You Throw In Air Force One"

The San Francisco Chronicle recently reported how students at the University of California have been providing a satirical approach to the problems of the university's leadership:

It's been a seriously dramatic year at the University of California, where hundreds of students seized buildings, demonstrated and shut down regents meetings last fall to protest rising tuition and the perceived privatization of the public school.

It's also been a satirically dramatic year, thanks to the UC Movement for Efficient Privatization, a fledgling group of mostly grad students in business attire that uses humor tinged with sarcasm to lampoon UC officials.

Their own name is an example. Many UC students believe leaps in tuition and reduced state funding are turning the public university into a private institution.

In particular, they drew attention to the university president's sense of entitlement:

UCMeP has made itself known on the Berkeley campus since September. That's when UC President Mark Yudof, who earns about $600,000, drew students' ire for telling the New York Times he'd take a $200,000 pay cut for salary parity with President Obama - if Air Force One were part of the package.

Seeing this as a philanthropic opportunity, UCMeP issued fundraising flyers: 'Help Buy Mark Yudof a Plane!'

The relevant parts of the New York Times interview, which I regret to say I missed at the time it was published, are:

Some people feel you could close the U.C. budget gap by cutting administrative salaries, including your own.
The stories of my compensation are greatly exaggerated.

When you began your job last year, your annual compensation was reportedly $828,000.
It actually was $600,000 until I cut my pay by $60,000. So my salary is $540,000, but it gets amplified because people say, 'You have a pension plan.'

What about your housing allowance? How much is the rent on your home in Oakland?
It’s about $10,000 a month.

Does U.C. pay for that on top of your salary?
Yes, and the reason they do that is because they have a president’s house, it needed $8 million of repairs and I decided that was not the way to go. Why the heck would I ever authorize $8 million for a house I didn’t want to live in anyhow?

Why can’t you have architecture students repair the house for course credit?
Let me ponder that.

What do you think of the idea that no administrator at a state university needs to earn more than the president of the United States, $400,000?

Will you throw in Air Force One and the White House?

While Yudof's response is clearly sarcastic, he obviously never substantively addressed why he is entitled to be paid comparably to the President of the richest country in the world.

We have written a few times about the travails of the University of California, some of its multiple campuses, and in particular its medical schools and teaching hospitals.  Most recently we have written about how leaders of its teaching hospitals also seemed to feel entitled to substantial compensation, including bonuses for "performance" even when their institutions were receiving bad publicity for quality problems (posts here and here).

Again and again we see examples of leaders of academic medical institutions, and health care organizations in general who seem to feel entitled to be judged differently, and rewarded differently than the common folk.  These entitlements exist even when the economy, or the financial performance of the specific organization prevents other people from making any economic progress. This entitlement exists even if those other poeple actually do the work, and ultimately provide the money that sustains the organization.


Although the executives of not-for-profit health care organizations generally make far less than executives of for-profit health care corporations, collectively, hired managers of even not-for-profit health care organizations have become richer and richer at a time when most Americans, including many health professionals, and most primary care physicians, have seen their incomes stagnate or fall. They are less and less restrainted by passive, if not crony boards, and more and more unaccountable. In a kind of multi-centric coup d'etat of the hired managers, they have become our new de facto aristocracy.

Or as we wrote in our previous post, executive compensation in health care seems best described as Prof Mintzberg described compensation for finance CEOs, "All this compensation madness is not about markets or talents or incentives, but rather about insiders hijacking established institutions for their personal benefit." As it did in finance, compensation madness is likely to keep the health care bubble inflating until it bursts, with the expected adverse consequences. Meanwhile, I say again, if health care reformers really care about improving access and controlling costs, they will have to have the courage to confront the powerful and self-interested leaders who benefit so well from their previously mission-driven organizations. It is time to reverse the coup d'etat of the hired managers.

Post Title → University of California CEO - You Can Reduce My Pay if "You Throw In Air Force One"

More California Medical Centers Plagued by Quality Problems While Their Executives Get Bonuses for "Improved Patient Care"

Earlier this week, we noted that while executives at one University of California medical center were getting large bonuses supposedly for "improved patient health," the hospital was being cited for serious health care quality deficiencies.  Now, more stories have appeared that raise questions about the rationale for the generous bonuses handed out to multiple top hospital executives at University of California hospitals. 

University of California - San Diego

First, in alphabetical order by city, the San Diego Union-Tribune reported on penalties for poor quality care announced by the California Department of Public Health:

UCSD Medical Center in San Diego was fined $50,000.... The state said the hospital staff failed to follow its surgical policies and procedures, which resulted in a patient having to have a second surgery to remove a foreign object — a guide wire that was left in the patient when a central venous catheter was inserted into the patient’s right femoral vein in the groin area in January 2009. The wire migrated into a chamber of the patient’s heart.

The procedure was done by a first-year intern and supervised by a third-year resident.

This marks the third time the state has penalized UCSD, with the first penalty issued in May 2008 and the second in May 2009.

However, a few days earlier, the Union-Tribune had reported:

Despite criticism from union leaders and rank-and-file employees, University of California regents yesterday overwhelmingly approved $3.1 million in incentive payouts to 38 medical center executives.

The payouts mean, for instance, that former UC San Diego Medical Center CEO Richard Liekweg will receive $136,174 in performance pay for the last fiscal year, added to his base of $660,500.

Regents justified the payments by noting that incentive programs are common in the health care industry, and necessary to compete for top talent.

'It’s the way this industry works,' said Regent William De La Pena, an ophthalmologist and medical director of eye clinics throughout Southern California.

At UCSD Medical Center, 10 senior managers will receive a combined $754,650 for surpassing goals set in areas ranging from improved patient safety to increased revenue. The bonuses amount to 14 to 23 percent added to executives’ salaries.

University of California - San Francisco
Meanwhile, the San Francisco Chronicle reported that a major University of California - San Francisco teaching hospital was also cited by the state Department of Public Health for quality problems:

San Francisco General was fined $25,000 for leaving a piece of surgical gauze in a patient who underwent an eight-hour operation for two types of cancer in September 2008. The foreign object was discovered about three months later and was removed without surgery during an office visit.

The Chronicle also reported a possibly major breach in the confidentiality of patient records at the UCSF Medical Center:

Medical records for about 4,400 UCSF patients are at risk after thieves stole a laptop from a medical school employee in November, UCSF officials said Wednesday.

The laptop, which was stolen on or about Nov. 30 from a plane as the employee was traveling, was found in Southern California on Jan. 8.

There is no indication that unauthorized access to the files or the laptop actually took place, UCSF officials said, but patients' names, medical record numbers, ages and clinical information were potentially exposed.

The security breach is UCSF's second in recent months. Last month, UCSF officials revealed that a faculty physician responding to an Internet 'phishing' scam potentially exposed the personal information of about 600 patients.

However, despite these obvious quality problems, the San Francisco Business Times reported

University of California regents approved $500,000 in bonuses to six top officials at the UC San Francisco Medical Center, part of a package of $3.1 million in payments to 38 hospital executives across the UC system.

In an interview last week with UCSF Chancellor Susan Desmond-Hellman, she said that the executive bonuses were tied to meeting specific performance goals, such as reducing clinical infections and increasing satisfaction ratings by patients. She also pointed out that additional payments of $14.3 million to the UCSF Medical Center’s 6,600-strong workforce were approved earlier.

The UCSF officials awarded bonuses were:

* Mark Laret, chief executive officer, $181,227;
* Ken Jones, chief financial officer, interim chief operating officer, $89,162;
* Larry Lotenero, chief information officer, $66,045;
* John Harris, chief strategy and business development officer, $63,196;
* Susan Moore, finance director and interim chief financial officer, $53,261; and
* Sheila Antrum, chief nursing/patient care services officer, $49,280.

Summary

So, in summary, multiple executives at three major University of California medical centers received generous bonuses.  The rationale for these bonuses, given out at a time when the university system was under major financial constraints, was that they were incentives for exemplary performance and patient care. 

Yet almost simultaneous with announcement of the bonuses were news reports indicating serious patient care problems at the same medical centers.  The point I am NOT trying to make is that the care at any of these medical centers is bad.  The examples of quality problems were limited.  I am sure that many other major medical centers hae had such quality problems as well.  However, the cases cited above were sufficient to argue that the care at these medical centers was not outstanding, not exemplary.  Yet, the bonuses were awarded not for acceptable performance or average quality.  Their rationale was exceptional performance and quality.  Thus, the rationale for the performance bonuses seems at best naive, if not foolish. 

I would suggest, instead, that the sorts of bonuses given out at the University of California are a product of the current management culture that has been infused into nearly every health care organization in the US.  That culture holds that managers are different from you and me.  They are entitled to a special share of other people's money.  Because of their innate and self-evident brilliance, they are entitled to become rich.  This entitlement exists even when the economy, or the financial performance of the specific organization prevents other people from making any economic progress.  This entitlement exists even if those other poeple actually do the work, and ultimately provide the money that sustains the organization. 

Although the executives of not-for-profit health care organizations generally make far less than executives of for-profit health care corporations, collectively, hired managers of even not-for-profit health care organizations have become richer and richer at a time when most Americans, including many health professionals, and most primary care physicians, have seen their incomes stagnate or fall.  They are less and less restrainted by passive, if not crony boards, and more and more unaccountable.  In a kind of multi-centric coup d'etat of the hired managers, they have become our new de facto aristocracy. 

Or as we wrote in our previous post, executive compensation in health care seems best described as Prof Mintzberg described compensation for finance CEOs, "All this compensation madness is not about markets or talents or incentives, but rather about insiders hijacking established institutions for their personal benefit." As it did in finance, compensation madness is likely to keep the health care bubble inflating until it bursts, with the expected adverse consequences. Meanwhile, I say again, if health care reformers really care about improving access and controlling costs, they will have to have the courage to confront the powerful and self-interested leaders who benefit so well from their previously mission-driven organizations.  It is time to reverse the coup d'etat of the hired managers.

Post Title → More California Medical Centers Plagued by Quality Problems While Their Executives Get Bonuses for "Improved Patient Care"

"Thinly Veiled Political Desire to Deprofessionalise Medicine"

Last month we posted on an ostensible reform of the British system for matching graduating medical students with hospital training positions. The new system would eliminate face-to-face interviewing, and substitute for them a web-based data collection system. In a letter to the Times (UK), senior academics suggested that this system could be easily gamed, and would thus be unfair.

Unlike many stories posted on Health Care Renewal, this one quickly rated a lead editorial in a major medical journal, the Lancet. [Anonymous. UK medical schools: undervalued and undermined. Lancet 2006; 367: 1029.]

After reviewing the facts in the case, the editorial noted, "respected academic clinicians who have dedicated themselves to teaching medical students and preparing them for practice quite reasonably ask why politicians are now involving themselves in the procedures for selecting and training doctors." Thus, "by shifting responsibility for newly qualified doctors this way, the government is creating a cohort of disenfranchised and demoralised young clinicians who feel hampered in pursuing career paths that best suit their talents and patient needs." The editorial concluded, "the Department of Health's unprecedented and mistaken incursion into medical education, together with its covert attack on medical schools, are yet further examples of thinly veiled political desire to deprofessionalise medicine."

Boldly treading into the arena of international comparisons, let me submit that in the UK, health care is dominated by a single large organization, the National Health Service. In the US, health care is dominated by multiple slightly less large organizations, some governmental, some for-profit corporations, and some not-for-profit corporations. Yet the effects of veiled politically, ideologically, or economically motivated desires to deprofessionalise medicine in both countries were often similar. Both seemingly heeded Einthoven's call to break the physician's "guild," by putting managers and bureaucrats over patients and physicians (see related post here). Doing so did not control costs, access or quality, but did give managers and bureaucrats more power and more money.

Instead, maybe both countries need a third way - perhaps I should use another term - a different pathway. Instead of empowering managers and bureaucrats, we need a system that empowers patients and reinforces physicians' (and other health professionals') professionalism. Failing to do so just lets health care's downward spiral continue.

Post Title → "Thinly Veiled Political Desire to Deprofessionalise Medicine"

Do Health Care Managers Think "L'Organisation de la Sante C'est Moi?"

The thinking behind a comment that recently appeared on this blog bears examination beyond the reply I added in our "comments" section.

An anonymous commentator, responding to a post that addressed questions raised in the media about managers who left the troubled University of Medicine and Dentistry of New Jersey (UMDNJ) to work for Drexel University Medical School, wrote,

Through Drexel leadership, the medical school just finished an outstanding LCME review, a very good match, outstanding board scores and fiscal solvency.

"Through Drexel leadership?" Based on my experience in medical education, I would argue, instead, that the people most responsible for good results in an accreditation review, in placing students into residencies, and in board examinations are the students themselves (especially related to the latter two), and the faculty who taught them. Medical school managers, of course, help provide the infrastructure and manage the financing that enables medical education to succeed. But giving the management first credit for educational results is somewhat grandiose. Managers may deserve more credit for fiscal solvency. But so do the students who pay the tuition, and the hard-working health care professionals and support personnel who actually do most of the work.

We have posted previously about how health care managers and bureaucrats seem to believe that what they do is central and more important than anyone else's work to their organizations.

For example, see this post which quotes the Chief Financial Officer (CFO) of Pheobe Putney Health System, "we'll manage it the way we damn well want."

Also, see this post about how the merger with UnitedHealth Group resulted in rich rewards for Pacificare executives. Wall Street analysts thought that the executives were deserving of huge financial rewards for the "risk" they took in trying to turn around a troubled health care company. However, it was their stock-holders who were at financial risk. The executives were paid employees, whose salaries were no more, and possibly less at risk than any other employees if the corporation were to fail.

The attitudes in these three cases seem analogous to that attributed to the French King Louis XIV, "l'etat c'est moi." Managers' apparent beliefs that they are of the most central importance to the medical school, the hospital system, or the managed care company negate the contributions of all the other dedicated people who make these organizations work. The managers perhaps believe that they in effect are owners of these organizations, which, of course, they do not actually own.

This notion that "l'organisation de la sante c'est moi" may represent some of the garbled thinking underlying our presently mismanged health care system.

(I apologize to all and sundry if I have made any errors using the French language. My language education was unfortunately stunted.)

Post Title → Do Health Care Managers Think "L'Organisation de la Sante C'est Moi?"

To Whom Do "Udidoos" Owe a Duty?

We recently posted at length about the negative consequences of the growing control of managers and bureaucrats over health care. This may have been inspired by the call of one of the key advocates of managed care, Alain Einthoven, to break up the supposed physicians' "guild."

This theme seems to be on many minds. Philip Alper writes an interesting, pithy column on medicine and health care for the Internal Medicine World Report, (unfortunately not available on the web). In his February column, he took up the issue of the intrusion of managers and bureaucrats into practice.

He coined the term "udoos" for those who say "you do this and you do that," "udids," for those who "chillingly remind us that 'you did this and you did that." He noted, "both types are familiar to physicians because authority figures and critics with whom we interact characteristically speak this language."

Further, the managers who must "redress our [physicians'] failures," he termed "udidoos, who offer 'because'-based prescriptions for doing better in the future. Udidoos simultaneously creat guilt and the promise of expiation. Consequent anxiety pushes us to accept the controls of managed care, for example, no matter what doubts we may privately harbor about their utility or effectiveness."

Alper went on to critique The Future of Primary Care, edited by Showstack et al. He took particular exception to a chapter by Mary O'Neill Mundinger, RN, DrPH, Dean of the Columbia University School of Nursing, whom he would apparently would consider a "udidoo." The chapter was entitled "Advanced Practice Nurses: The Preferred Primary Care Providers for the 21st Century."

Mundinger's prescription as a "udidoo" was for advanced practice nurses (APNs) to take over from primary care physicians. As Alper wrote, "the underlying notion is that nurses are better suited than physicians to be primary care providers. There is no attempt at collegiality here. Dr Mundinger has previously written about why nurses should be paid the same as doctors (they get equal results). Now she wants not only to replace the primary physician but also commandeer their title." Alper finally decided,

Maybe the best thing to do is to just laugh. Even gallows humor certainly beats crying - or going crazy.

Although I do not have a copy of the book, Mundinger has made similar assertions elsewhere. For example, in Pediatrics,(1) she wrote that physicians should be subservient to nurses (and others) in health care teams, "the disease specialist - the pediatrician - merits leadership of the team only when disease is the major concern. At other times, it may be the nurse practitioner... who directs the team." And she asserted that pediatric nurse practitioners are more competent than some physicians in caring for children: "it is questionable that non-pediatric physicians are more qualified to care for children than pediatric nurse practitioners. Education for non-pediatric physicians is often limited to 1-month clerkships in pediatric medicine during the third year of medical school." Furthermore, she claimed these nurse practitioners spend five times as much time in pediatric training than do family physicians.

In a review article in Academic Medicine,(2) Mundinger claimed "APNs - whose advanced primary care is delivered with full accountability and is indistinguishable from such care delivered by physicians - offer a different style of practice, which involves caring, nurturing, support, engagement with patients, attention to illness prevention and health promotion, and patient education."

Mundinger was the lead author of the study that claimed outcomes of patients seen by nurse practitioners in ambulatory settings were comparable to those seen by primary care physicians.(3) The study received wide attention, although its external validity was questioned.(4)

Mundinger's advocacy of nurse practitioners as substitutes for and superiors to physicians is helpful for the managed care organizations Alper criticized. Nurse practitioner care currently costs less than physician care. Although physicians have not always loudly expressed their doubts about managed care, as Alper noted above, nurses are not likely to be more vocal.

But while I read Alper's commentary, and then Mundinger's writing, a small voice in my head reminded me that I had just seen her name before. But where?

Ah yes, it was here. A while back, we commented on the irony that Donna Shalalaw, living the good life as president of the University of Miami, was as on the board of directors of UnitedHealth Group, a large commercial managed care organization whose public mission includes making health care more "affordable," while the University of Miami's outsourced maintenance workers, including those who worked at its medical center, had no medical insurance.

On the roster of UnitedHealth Group's board of directors also was the name of Mary O'Neill Mundinger DrPH. She has been on the board since 1997. If one goes to the Columbia University School of Nursing web-site, Dr Mundinger's biographical page does include her directorships (of Welch Allyn, Gentiva Health Systems, Cell Therapeutics as well as UnitedHealth Group). However, none of the articles cited below(1-3) mention her seemingly important conflict of interest. And Dr Alper informed me he saw nothing about it in the book chapter she wrote that he critiqued.

Thus, she has had a fiduciary duty to UnitedHealth Group and its stock-holders since 1997. And it would clearly seem to be in the interest of UnitedHealth Group to reduce its costs by paying for more care by nurse practitioners, and less by physicians. So how much of Mundinger's advocacy of advanced practice nurses to replace physicians is based on her academic work, and how much is based on her duties to UnitedHealth? I cannot tell.

But readers of her work up to now would never have thought of this question, unless they fortuitously had learned about her responsibilities to UnitedHealth from some other source.

In summary, it seems that the more one looks, the more examples one finds of leaders of academic health care organizations who also are directors of health care companies. Yet these often influential figures have not always revealed their conflicts when writing about health care, even when their works relate to the interests of the companies whose interests they are legally bound to protect. So how much of their influential work reflects their professional and academic research and beliefs, and how much reflects their fiduciary responsibilities to commercial organizations? Inquiring minds really want to know.

References
1. Mundinger MO. Toward a quality workforce. Pediatrics 2003; 112: 416-418.
2. Mundinger MO. Twenty-first century primary care: new partnerships between doctors and nurses. Acad Med 2002; 77: 776-780.
3. Mundinger MO et al. Primary care outcomes in patients treated by nurse practitioners or physicians: a randomized controlled trial. JAMA 2000; 283:59-68.
4. Sox HC. Independent primary care practice by nurse practitioners. JAMA 2000;283:106-108.

Post Title → To Whom Do "Udidoos" Owe a Duty?

The Cloud Spreads from UMDNJ

The cloud from ongoing problems at the University of Medicine and Dentistry of New Jersey (UMDNJ) is starting to spread over other institutions.

We have posted extensively at the troubles at UMDNJ, which now is operating under a federal deferred prosecution agreement with the supervision of a federal monitor (see most recent post here.) We had previously discussed allegations that UMDNJ had offered no-bid contracts, at times requiring no work, to the politically connected; had paid for lobbyists and made political contributions, even though UMDNJ is a state institution; and seemed to be run by political bosses rather than health care professionals. (See post here, with links to previous posts.)

The Philadelphia Inquirer just reported that New Jersey Governor Corzine is proposing substantial ($169 million) cuts in state higher education funding affecting all state colleges and universities, not just UMDNJ, because he believes that the problems at UMDNJ reflect systemic problems with the management of all New Jersey higher education. He said, "frankly, the UMDNJ issue tells me there may be management weaknesses. UMDNJ tells me the institutions are not as disciplined as we would like...." Furthermore, if the colleges and universities try to make up the cuts with tuition increases, not management cuts, Corzine is threatening to re-organize the entire state higher education effort.

Meanwhile, the Inquirer also reported that questions are being raised about former UMDNJ managers who wound up at Drexel University College of Medicine in Philadelphia. We had previously posted about two fomer managers who wound up at Drexel after receiving golden parachutes from UMDNJ. James Archibald, former senior vice president for administration and finance at UMDNJ, is now Senior Vice President for Health Sciences at Drexel. John Ekanius, former vice president for government and public affairs at UMDNJ, is now Associate Dean for External Relationships and Strategic Development. The Inquirer reported that Archibald had arranged one of the famous "no-bid contracts" at UMDNJ, with the late, politically connected Ronald A. White, former fund raiser for New Jersey's former Governor Jim McGeevey. Drexel also hired David L Printy as chief operating and business development officer at the medical school. He left a year later after a "problem" he had with the US Securities and Exchange Commission (SEC) in 1996 was revealed, which had lead to a 10 year ban from working in the securities field.

Drexel was the successor institution to the former Allegheny University of Health Sciences (AUHS), part of the Allegheny Health Education and Research Foundation (AHERF). As the Inquirer pointed out, "Allegheny leaders spent tens of millions of dollars in restricted medical endowments to keep the money-losing system afloat. That resulted in a 2002 plea and a 11 1/2 - month sentence for Allegheny's head, Sherif Abdelhak. (For a somewhat more detailed history of the AHERF debacle, see the article I wrote for the RI chapter newsletter for the Amercian College of Physicians.) The Inquirer quoted a former assistant US attorney re Drexel's relationship to AHERF, "when you are the successor to a company that has gone through the tumultuous times with law enforcement like Allegheny, there should be lessons learned and a desire to reestablish credibility, not only with regulators, but with the public at large."

Yet, in addition to Printy's "issue," there were other issues raised about Archibald after he became the leader to which Drexel's medical school reported. Archibald's only experience with health care had come during his management career at UMDNJ. Before then he was the Chief Financial Officer (CFO) for SEPTA, the Philadelphia municipal transit system. The Inquirer stated, "Archibald's style and lack of medical credentials angered many on the Drexel faculty." "In March, 2004, nearly all of the 23 [Drexel] department chairs signed a letter to [Drexel President] Papadakis, seeking Archibald's demotion.... 'The dean must be empowered to be the unquestioned leader' they wrote.... The letter stated that the atmosphere of the school had 'become one of both dysfunction and distrust.'" 18 months later, the new dean of the medical no longer had to report directly to Archibald. The Inquirer article was silent about whether the Drexel medical school faculty still feel the institution's atmosphere is characterized as dysfunction and distrust.

The new Governor of New Jersey has realized the existence of widespread mismanagement in our formerly trusted and revered health care and educational institutions, and the consequences such mismanagement may have. I hope the President of Drexel, which only acquired a medical school due as a consequence of mismanagement, and worse, at Allegheny, now realizes that not everyone who fell into health care management in the last 20 boom years necessarily should continue in these roles.

Addendum: Some quick Google searching revealed that Ms. Susan Mettlen, formerly vice president for information services and technology at UMDNJ, who became Chief Information and Technology Officer for Drexel medical school, was forced to resign her position of vice chancellor for information infrastructure at the University of Tennessee in 1998 after questions were raised about her relationship with a company that sold software to the school. Maybe the people who oversee the managers of health care organizations should learn how to use Google.

Addendum (4/7/2006): The Philadelphia Inquirer published a letter from Joseph Jacovini, chair of the Drexel University Board of Trustees, in response to the article cited above:

The reputation of a university is its most important asset. Your Page One headline ("N.J. probe may touch Drexel's reputation," March 24) unfairly imputes a Drexel association with this matter. Simply stated, the facts of the article do not support the headline and your newspaper has improperly impugned Drexel's reputation.

The situation at the University of Medicine and Dentistry of New Jersey is not a Drexel story. It is not related to any actions at Drexel by James Archibald, senior vice president for health sciences, or any of the former UMDNJ employees hired. I should not have to make this clear, except that your article was misleading. The financial management of Drexel University is beyond reproach.

Drexel began operating the College of Medicine in 1998 with the support of Gov. Ridge and Mayor Rendell after the catastrophic Allegheny bankruptcy, saving 13,000 jobs and an irreplaceable medical resource. The college today is strong both financially and academically, earning the highest possible evaluation from its accrediting body and attracting a high caliber of applicants.

As long as your readers know the facts, they will understand that Drexel's reputation as one of the most successful and respected universities in the nation is unassailable. We are owed an apology and a retraction.

Note that Jacovini did not dispute the facts about Archibald, or any other administrators from UMDNJ who were hired by Drexel, that appeared in the original Philadelphia Inquirer story. The concerns I raised above were not about the financial management of Drexel, but about Archibald's alleged involvement with a no-bid contract at UMDNJ, and the protests against him by Drexel Department chairs based on his lack of any direct health care experience or credentials, which they apparently felt were not appropriate for a Vice President for Health Sciences, to whom the Dean of the Medical School and all faculty reported.

Note further that Jacovini, the Chairman of the Dillworth Paxson law firm, is also on the board of directors of Corcell, a health care corporation that provides cord blood stem cell banking services.

Post Title → The Cloud Spreads from UMDNJ

The Consequences of Breaking the Physicians' "Guild"

In 1988, Alain Enthoven, an original member and driving force of the Jackson Hole group, published a short manifesto about "managed competition." (Entoven AC. Theory and Practice of Managed Competition in Health Care Finance. Amsterdam: North Holland, 1988.) This is now not easy to find (but see Amazon here).

In this volume, Enthoven expounded on his scheme to wrest power over health care from physicians and give it to managers and bureaucrats. Enthoven thought of physicians as part of a tightly organized "guild," that is, an economic alliance. His model for this was a pre-World War II document from a French medical society. Basically, he thought such guilds, which he believed to be in place in all Western democracies except in the UK and Scandinavia, were based on principles that were "not the natural expression of a free market in health care," (p.33) and furthermore, that the guild model associated with health insurance "makes it very difficult for government or private payors to control cost growth," (p.41) while they paradoxically "can also produce poor service (p. 42). To combat physicians' overwhelming economic power, Enthoven called for managers to use "tools they have found to counteract market failure." (p. 98) Finally, he suggested using a coordinated strategy to "break up the guild," noting that "overcoming the guild has not been easy in the United States.... However, the guild has broken down." (P. 122)

Some recent opinion pieces document the consequences of breaking up the guild, and turning health care over to managers and bureaucrats.

Debunking Business Dogmas

US News and World Report reminds us that the conventional wisdom among business managers has often proved to be wrong. Yet many health care managers were big supporters of the dogmas debunked by two two management professors, Jeffrey Pfeffer and Robert Sutton. (See the amazingly titled Hard Facts, Dangerous Half-Truths, and Total Nonsense: Profiting From Evidence-Based Management) :

• Financial Incentives Drive Good Performance (but instead, they have driven a huge number of health care dollars into the pockets of management, for example, see this recent post).
• First Movers Have the Advantage
• Layoffs Are Good Ways to Cut Costs (still the philosophy of too many health care executives who see everyone, except themselves, as interchangable, and are quick to dispatch those with whom they disagree)
• Mergers Are a Good Idea (but remember the mergers of NYU-Mt Sinai, UCSF -Stanford, and especially the mergers that created the Allegheny Health Education and Research Foundation, all now defunct)
• Life and Work Should Be Kept Separate (which really meant don't treat your employees very well, because they can always return to their lives outside of work).

Let's see how long it takes for the news to get out to health care managers.
A Melancholic Look at the Marketing of Pharmaceuticals
In the Atlantic Monthly, Carl Elliott's take on the commercialization of American health care, and how drug marketing has compromised physicians is a must-read. (Web access requires a subscription. The article was briefly posted in its entirety here, but the Atlantic Monthly forced the web-site to take it down. Therefore, I have provided some key quotes, and hope that the Atlantic Monthly will not find them excessive:

For better or worse, America has turned its healthcare system over to the same market forces that transformed the village hardware store into Home Depot and the corner pharmacy into a strip-mall CVS.

For decades the medical community has debated whether gifts and perks from reps have any real effect. Doctors insist that they do not. Studies in the medical literature indicate just the opposite. Doctors who take gifts from a company, studies show, are more likely to prescribe that company’s drugs or ask that they be added to their hospital’s formulary. The pharmaceutical industry has managed this debate skillfully, pouring vast resources into gifts for doctors while simultaneously reassuring them that their integrity prevents them from being influenced.

Doctors’ belief in their own incorruptibility appears to be honestly held. It is rare to hear a doctor—even in private, off-the-record conversation—admit that industry gifts have made a difference in his or her prescribing. In fact, according to one small study of medical residents in the Canadian Medical Association Journal, one way to convince doctors that they cannot be influenced by gifts may be to give them one; the more gifts a doctor takes, the more likely that doctor is to believe that the gifts have had no effect. This helps explain why it makes sense for reps to give away even small gifts. A particular gift may have no influence, but it might make a doctor more apt to think that he or she would not be influenced by larger gifts in the future.

The late 1980s and the 1990s [were] a period when the drug industry was undergoing
key transformations. Its ethos was changing from that of the country-club establishment to the aggressive, newmoney entrepreneur. Impressed by the success of AIDS activists in pushing for faster drug approvals, the drug industry increased pressure on the FDA to let companies bring drugs to the market more quickly. As a result, in 1992 Congress passed the Prescription Drug User Fee Act, under which drug companies pay a variety of fees to the FDA, with the aim of speeding up drug approval (thereby making the drug industry a major funder of the agency set up to regulate it). In 1997 the FDA dropped most restrictions on direct-to-consumer advertising of prescription drugs, opening the gate for the eventual Levitra ads on Super Bowl Sunday and Zoloft cartoons during daytime television shows. The drug industry also became a big political player in Washington: by 2005, according to The Center for Public Integrity, its lobbying organization had become the largest in the country.

Many companies started hitting for the fences, concentrating on potential blockbuster drugs for chronic illnesses in huge populations: Claritin for allergies, Viagra for impotence, Vioxx for arthritis, Prozac for depression. Successful drugs were followed by a flurry of competing me-too drugs. For most of the 1990s and the early part of this decade, the pharmaceutical industry was easily the most profitable business sector in America. In 2002, according to Public Citizen,
a nonprofit watchdog group, the combined profits of the top ten pharmaceutical companies in the Fortune 500 exceeded the combined profits of the other 490 companies.

During this period reps began to feel the influence of a new generation of executives intent on bringing market values to an industry that had been slow to embrace them. Anthony Wild, who was hired to lead Parke-Davis in the mid-1990s, told the journalist Greg Critser, the author of Generation Rx, that one of his first moves upon his appointment was to increase the incentive pay given to successful reps. Wild saw no reason to cap reps’ incentives. As he said to the company’s older executives, “Why not let them get rich?”

The industry began hiring more and more reps, many with backgrounds in sales (rather than, say, pharmacy, nursing, or biology). Some older reps say that during this period the industry replaced the serious detail man with “Pharma Barbie” and “Pharma Ken,” whose medical knowledge was exceeded by their looks and catering skills. A newer, regimented style of selling began to replace the improvisational, more personal style of the old-school reps. Whatever was left of an ethic of service gave way to an ethic of salesmanship.

Many doctors began to feel as though they deserved whatever gifts and perks they could get because reps were such an irritation.

The trick is to give doctors gifts without making them feel that they are being bought. “Bribes that aren’t considered bribes,” Oldani says. “This, my friend, is the essence of pharmaceutical gifting.” According to Oldani, the way to make a gift feel different from a bribe is to make it personal.

Such gifts do not come with an explicit quid pro quo, of course. Whatever obligation doctors feel to write scripts for a rep’s products usually comes from the general sense of reciprocity implied by the ritual of gift-giving. But it is impossible to avoid the hard reality informing these ritualized exchanges: reps would not give doctors free stuff if they did not expect more scripts.

Drug company–sponsored consultancies, advisory-board memberships, and speaking engagements have become so common,especially among medical-school faculty.... The industry as a whole is hiring more and more doctors as speakers. In 2004, it sponsored nearly twice as many educational events led by doctors as by reps. Not long before, the numbers had been roughly equal. This raises the question, Are doctors becoming the new drug reps?

According to an internal study by Merck, reported in The Wall Street Journal, doctors who attended a lecture by another doctor subsequently wrote nearly four times more prescriptions for Vioxx than doctors who attended an event led by a rep. The return on investment for doctor-led events was nearly twice that of rep-led events, even after subtracting the generous fees Merck paid to the doctors who spoke. These speaking invitations work much like gifts. While reps hope, of course, that a doctor who is speaking on behalf of their company will give their drugs good PR, they also know that such a doctor is more likely to write prescriptions for their drugs.

The semi-official industry term for these speakers and consultants is “thought leaders,” or “key opinion leaders.” Some thought leaders do not stay loyal to one company but rather generate a tidy supplemental income by speaking and consulting for a number of different companies. Reps refer to these doctors as “drug whores.”
Thought leaders serve an indispensable function when it comes to a potentially very lucrative marketing niche: offlabel promotion, or promoting a drug for uses other than those for which it was approved by the FDA—something reps are strictly forbidden to do.

Now for the most melancholy conclusions,

In 1997, John Lantos, a pediatrician and ethicist at the University of Chicago, wrote a book called Do We Still Need Doctors? We will always need health care, of course. But, as Lantos observes, it is not clear that we will always need to get our health care from doctors. Many of us already get it from other providers—nurses, physical therapists, clinical psychologists, nutritionists, respiratory therapists, and so on. The figure of “the doctor” is not cast in stone.

We simply live in a country that has decided that the traditional figure of the doctor is not worth preserving in the face of modern economics. Instead, we put our trust in the market.

Not if Health Care Renewal can help it!

The Seven Minute Visit

Peter Salgo is a physician who is also upset about the demise of the traditional figure of the doctor, but seemingly despairs about doctors' prospects for challenging the managers and bureaucrats. He just wrote an op-ed in the New York Times. He sees the problem beginning when managers broke the physicians' "guild,"

Patients aren't unhappy just because health care costs too much (though they would certainly like it to be more affordable). Rather, people sense a malaise within the system that has eroded the respect they feel patients deserve.

As health-care dollars became scarce in the 1980's and 90's, hospitals asked their business people to attend clinical meetings. The object was to see what doctors were doing that cost a lot of money, then to try and do things more efficiently. Almost immediately, I noticed that business jargon was becoming commonplace. "Patients" began to disappear. They were replaced by "consumers." They eventually became "customers."

Doctors in hospitals all over the country began hearing the same business language and facing the same pressures to "keep things moving." I used to be asked how well my patients were doing. Suddenly administrators were asking how long I was planning on keeping sick people in the intensive care unit.

Yet, he seems to feel a degree of learned helplessness,

Doctors know you cannot provide compassion in seven-minute aliquots. But we have felt powerless to change things. The medical establishment has, many of us feel, simply rolled over and gone along to get along. It has sacrificed patients' best interests on the altar of financial return.
This leaves the solution to the problem in the hands of our patients. You, the patient, are the system's best hope. Evaluate what it is you expect from your doctor, then ask for it. If you are unhappy with your doctor, fire him. If you cannot get more than a seven-minute face-to-face encounter with your doctor, he needs fewer patients.

The problem with this scheme, of course, is that primary care doctors are getting scarcer and scarcer. The American College of Physicians just reported, for example, that the number of medical school graduates training in general internal medicine has reached a new low. So in my humble opinion, we doctors cannot just wearily leave the field, hoping that patients alone will be able to take on the bureaucrats and managers. The doctors, along with other health professionals, and patients are all in this mess together, and we will all need to work to clean it up.

I do agree with Salgo's hopes for the results of doing something.

In one respect the business people are right. Restoring the doctor-patient relationship will not save anyone any money. But I submit that it doesn't have to. There are other ways to curtail health care costs. Some involve high technology; others do not. None of them requires patients to sacrifice their self-respect.

We can and must reduce health care expenses. But we cannot do it at the expense of patients' well-being. The doctor-patient relationship is critical to the integrity of the health care system. It is not disposable. Turning doctors into shopkeepers who regard patients as customers is unacceptable.

Post Title → The Consequences of Breaking the Physicians' "Guild"

A Growing Proliferation of Managers

A while back, we had a dialog with EconBlog about the myth of US health care waste. One issue I had discussed was adminstrative overhead. (See my first previous post here, and follow-up here., and on cost of high-technology, here.)
I argued that my experience as a physician (and discussion with other physicians) suggests that there is a huge administrative and bureaucratic load on physicians, and that this contributes directly and indirectly to health care costs. The best I could do at the time was to cite a study that showed that physicians in practice spend an inordinate amount (a little less than US $25K a year per physician) on "unnecessarily complex or redundant administrative tasks."
I just found some fascinating data along these lines, available from the Center for Medicare and Medicaid Services (CMS) in a series of charts (here.)
See in particular Table 1.13, Health Care Employment by Occupation.
It shows that from 1983 to 2000, the numbers of health care managers grew at a rate that far outstripped any other kind of health occupation. Taking the numbers off the PowerPoint presentation,

• The number of managers grew from 91,ooo in 1983 to 174,000 in 1990, to 752,000 in 2000.
• That could be compared with the numbers of physicians in those years (519,000 to 577,000 to 719,000), and the number of registered nurses (1,372,000 to 1,667,000 to 2,111,000)

So the growth rates from 1983 to 2000 were 1.39x (39%) for physicians, 1.54x (54%) for nurses, and a whopping 8.26x (726%) for managers.
Another way to look at it is, in 1983 there was 1 manager for every 5.7 physicians and every 15.1 nurses. In 2000, there was 1 manager for every 0.96 physicians and every 2.9 nurses. Again, by 2000, the number of health care managers exceeded the number of physicians. There were more managers than any other species of health care worker other than nurses.
If health care could function in 1983 with one manager for nearly every 6 doctors, why in the world did we need one manager per doctor in 2000?
I would love hear if anyone can come up with a justification for this massive increase in numbers, or show how this proliferation has lead to any improvement in health care.
On the other hand, ecological correlations are not a good way to prove causation, of course, but I would argue that this data suggests that attributing the simultaneous rise in health care costs, decrease in access, stagnation in quality, and dissatisfaction of health professionals like physicians and nurses to the incredible proliferation of managers (and attendant bureaucracy) is not far-fetched.

Post Title → A Growing Proliferation of Managers