Thursday, July 24, 2014

Sovaldi, a Quantum Leap? - Backwards to the Days Before Randomized Controlled Trials

The Sovaldi (sofosbuvir - Gilead) media circus is continuing.  The New York Times just reported that sales of the new drug for hepatitis C were about $3.5 billion for the last quarter, which should intensify the kerfuffle over its US price ($1000 per pill, $84,000 for a 12 week course of medication).

Meanwhile, reports of its wondrous properties continue to appear in medical journals.

The latest was announced this way in Bloomberg,

Gilead Science Inc Solvadi, controversial because of its price, helps cure hepatitis C in people with HIV, according to researchers who say the drug has the potential to limit a top cause of death in these patients.

In a study of 223 HIV-infected patients, Solvadi combined with ribavirin cleared the most common US strain of hepatitis C in 76 percent of newly treated patients over 24 weeks. Only seven participants stopped treatment because of side effects and there were no adverse effects on HIV treatment, according to a report in the Journal of the American Medical Association.

Not unexpectedly, the study investigators were thrilled,

This is 'the first clinical trial to demonstrate that we can cure hepatitis C in patients with HIV co-infection without the use of interferon,' said Mark Sulkowski, the study author and medical director of the John Hopkins Infectious Disease Center for Viral Hepatitis in Baltimore. 'It represents a transformative step in our approach to this therapeutic area.'

Furthermore, as noted in a Medscape report,

In an accompanying editorial,(1) Michael Saag, MD, also of the University of Alabama at Birmingham, said the finding is a 'quantum leap' forward for people coping with both viruses.

What Clinical Trial?

I have posted previously about the controversy over the high price of Sovaldi.  I noted that most of the arguments, even from people most incensed about paying $1000 per pill, assumed that the drug was nearly miraculous, e.g., "a triumph," or "a revolution" in medicine.  Yet my reading suggested that the published evidence from clinical studies of the drug was in fact weak.  Critical reviews of the evidence from groups in the US, the UK, and Germany (look here, here, and here) also questioned the evidence backing Sovaldi.  Yet doubts about the drug's benefits versus harms have yet to influence the public discussion, which is focused on whether $1000 a pill is too much to charge for a miracle drug.

So I thought that "quantum leap" demonstrated in the latest trial(2) would bear further scrutiny.

The most important feature of the "trial" is how its design is described,

In this multicenter, open-label, nonrandomized, uncontrolled phase 3 trial, all patients received 400 mg of sofosbuvir (Gilead Sciences) administered orally once daily along with ribavirin (Ribasphere, Kadmon) administered orally twice daily, with doses determined according to body weight....

Let me make very clear, in this "trial," all patients got the same therapy.  There was no comparison group.  The study description is therefore inherently self-contradictory.  In fact, this study was a case-series, not a clinical trial.  It had no control group.

The classic Users Guides to the Medical Literature suggests that the first question a critical reviewer should ask about a study to assess a treatment is "was the assignment of patients to treatment randomized?"(3) The rationale was that studies of patients for whom clinicians made treatment decisions could easily be confounded by the reasons clinicians used to make these decisions.  Clinicians are trained to individual treatment decisions, and thus patients prescribed a treatment are likely to greatly differ from those not assigned that treatment.  The ways they differ could have as much, or more effect on their outcomes than the treatments themselves.  Although complex statistical adjustment methods could be used to try to compensate for these differences, it is rarely possible to be assured that all important differences have been taken into account. 

However, this still assumes a comparison between patients getting different treatments, or treatment versus no treatment.  In the case-series of sofosbuvir, there were no patients getting alternative treatments.  Thus the study itself could not be used to make comparative assessments of sofosbuvir.  

Of course, one could imply comparisons with the results of other studies.  However, such comparisons would not only be susceptible to confounding by reasons for treatment decisions as above, but to bias due to  differences between the current case series and previous studies, e.g., in characteristics of patients recruited, details of treatments given, study settings, and changes in patients, diseases, and treatments over time.   

Thus, a very basic rule in critical review is thou shalt not draw any conclusions about therapy from case-series unless the results are truly extraordinary, i.e., patients clearly doomed to die suddenly become completely well.  There were no such extraordinary results in the case-series of patients with HIV treated with Sovaldi for hepatitis C. 

The latest study of Sovaldi for patients with HIV and hepatitis C is virtually useless to assess whether Sovaldi might be the preferred therapy for such patients.   

Comparable Results?

Yet in an accompanying editorial(1), Dr Michael S Saag asserted that this non-trial 

demonstrates the efficacy of the all-oral regiment of the directly acting agent sofosbuvir plus ribavirin in patients with HCV who are coninfected with HIV

To demonstrate efficacy means to show that the treatment caused good effects.  But without a control group, it is not possible to assess causation.


The PHOTON-1 trial demonstrates that the all-oral combination of sofosbuvir plus ribavirin yielded results comparable with those of standard pegylated-interferon-ribavirin-vased regimens for each of the genotypic groups, thereby demonstrating that an all-oral combination could achieve similar outcomes as those derived from an injectable therapy.

However, this case-series could not assess comparability, because it included no comparison.

There Goes the Neighborhood - Throwing Out Skeptical Evaluation in the Rush to Promote "Innovation"

For years, the randomized, and usually double-blind, controlled trial has been considered the scientific cornerstone of the evaluation of new treatments.  Yet in the rush to bring new "innovative" treatments to market, presaging often tremendous revenues for their manufacturers, suddenly the randomized controlled trial does not seem so necessary.  In the US, the Food and Drug Administration (FDA) no longer seems to require randomized controlled trials to demonstrate efficacy of new drugs deemed to be "breakthroughs."   As noted by Steinbrook and Redberg in the July, 2014, issue of JAMA Internal Medicine(4)

these drugs [for hepatitis C] were approved quickly based on the surrogate endpoint of sustained viral response rate; they were studied in limited populations without long-term follow-up.  Under the US Food and Drug Administration's breakthrough therapy designation, the marketing for sofosbuvir did not include requirements for randomized clinical trials.

Yet without such trials, how could one ever determine if the drug is really so efficacious as to constitute a "breakthrough?"  

As we noted earlier, the two real randomized controlled trials of sofosbuvir did not assess its effects long term, even though it is a drug meant to treat a chronic disease, and particularly did not assess whether it affect clinical outcomes, that is, reduce rates of cirrhosis, liver failure, or liver cancer.  In fact, there has never been a controlled trial meant to assess whether any treatment of hepatitis C affects these outcomes.  Furthermore, while the first author of the case-series above, and many others have claimed the Sovaldi cures hepatitis C, it has never been shown that SVR equals cure.  As Gluud et al wrote in a letter to Lancet,(5)

The claim of cure rests solely on sustained virological response (SVR).  Since some patients who achieve SVRs still go on to develop end-stage liver disease and might die from the interventions, this concept is not correct and might even be wrong in principle.

However, despite all the words written, the concernthat Sovaldi (and possibly other new drugs for hepatitis C) might not be wondrous quantum leaps, because there is really no good evidence to that effect, has remained anechoic.  Not only does the evidence about the benefits and harms of this new drug need to be part of the discussion whether its price is excessive, there needs to be a larger discussion of whether in our rush for "innovation," we will throw out the baby of scientifically valid assessment of new therapies with the bathwater.

Finally,  the Sovaldi case is a signal example of how our health care system is awash in marketing hype and public relations buzz that has swamped rational skeptical thinking about logic and evidence.  That marketing and PR is ever enriching managers while it will send the rest of us, health care professionals included, to the poor house.  And all the money we spend will not buy us the promised miracles and triumphs.

As we have said until blue in the face, true health care reform would bring some skeptical thinking and regard for evidence and logic into the health policy discussion.  


1. Saag MS. Quantum leaps, microeconomics, and the treatment of patients with hepatitis C and HIV coinfection. JAMA 2014; 312: 347. doi:10.1001/jama.2014.7735.  Link here.

2. Sulkowski MS et al.  Sofosbuvir and ribavirin for hepatitis C for patients with HIV coninfection.  JAMA 2014; 312: 353.  doi:10.1001/jama.2014.7734.  Link here.
3. Guyatt GH, Sackett DL, Cook DJ et al. Users' Guides to the Medical Literature: II. How to Use an Article About Therapy or Prevention A. Are the Results of the Study Valid? JAMA. 1993; 270(21): 2598-2601. doi:10.1001/jama.1993.03510210084032. Link here.
4.  Steinbrook R, Redberg R. The high price of the new hepatitis c virus drugs.  JAMA Int Med 2014; 174: 1172.  Link here
5.  Gluud C, Koretz R, Gurusamy K. Hepatitis C: a new direction, but an old story? Lancet 2014; 383: 2122-2123.  Link here.

Tuesday, July 22, 2014

Money vs Mission - How Generic Managers vs Physicians Think

On Health Care Renewal, we emphasize problems in leadership and governance in large health care organizations, and how they affect health care professionals' attempts to carry out their mission, and ultimately how they affect patients' and the public's health.  Large health care organizations are increasingly lead by people trained in business, not health care professionals, thus generic managers.  The stewards of these organizations, the members of their boards of directors or boards of trustees, are also increasingly current or former managers without direct health care experience. Yet all too often, health care leadership is ill-informed, incompetent, unsympathetic or hostile to health care professionals' values, self-interested, conflicted, dishonest, or even corrupt.

Recently, in an effort to "bridge the gap" between physicians and MBAs, a new article in Becker's Hospital Review by Todd Kislak discussed differences in the thinking and values among business trained health care managers and physicians.  The author, an MBA, listed nine issues on which MDs and MBAs have different views.  I have summarized below what appear to me to be the main points, somewhat reorganized from how he did it. Whether he meant to or not, Mr Kislak showed why physicians may have reason not to trust their new generic managers. 

Making Widgets vs Treating Patients

Mr Kislak wrote that MBAs see health care in terms of orderly, uniform and standardized processes, while physicians see it in terms of the complexity and variability of patients, the ambiguity of diagnosis, and the unpredictability of outcomes.  

 2. Scalability. As a rule, MBAs tend to seek solutions to problems in a way that they perceive to be scalable and replicable, trained in the belief that the capacity to perform repetitively and consistently leads to better efficiency and quality. One-off situations are by definition outliers, and as such their importance tends to be downplayed.


 3. Centralization....   MBAs, ... tend to seek centralized approaches to decision-making, often appearing in the guise of policies, programs and processes. 

So, the gist is MBAs see health care as analogous to an assembly line.  The idea is to provide uniform, consistent services that conform to the policies, programs and processes that come down from central headquarters, run by MBAs.

On the other hand, he noted that physicians think that "every case has the potential to be unique in some way," while MBAs "view the unusual case as an unwelcome break in the routine, adding cost while slowing down the efficient care of other patients."

IMHO, common sense, and a raft of epidemiological data support the MDs.  Patients differ in demographics, biopsychosocial characteristics, co-morbid conditions, histories of previous treatment, responses to therapy, etc, etc, etc.  Patients, their complaints, and their situations are complex and variable.   Furthermore, acute illnesses, complications of chronic illnesses, accidents occur unexpectedly, in unexpected ways.  Diagnosis are often unclear and ambiguous.  Patients' prognoses and responses to therapy are unpredictable.  Thus, IMHO, seeing health care like an assembly, in terms of regularity and uniformity, seems dissociated from reality.  I have a hard time believing that MBAs who actually require medical care want to be treated as if they were identical to the next 10 patients.

"You Manage What You Measure" vs Complexity, Variability, Ambiguity, and Unpredictability of Patients, Diseases, Prognoses, and Treatments 

Mr Kislak suggested that MBAs emphasize measurement, especially the measurement of physicians' performance,

5. Performance. One of the healthcare MBA's favorite analytical tools is performance rankings of the MDs. Quantifying 'results' based on pre-determined metrics, assigning them a weight for averaging purposes and reducing performance down to a number is, to the MBA, how MDs and indeed all workers should be measured. 'You manage what you measure' is the MBA's mantra.


6. Productivity. MBAs look at MDs' productivity statistics (another performance measure) and wonder why so many MDs claim they are overworked. Looking at work hour statistics supplied by the Medical Group Management Association, one would not come away convinced that most MDs are logging more hours than, say, the typical healthcare MBA or indeed any high-caliber professional service provider.

Mr Kislak noted that physicians object to pay for performance and "may viscerally react to this uniform approach to performance assessment as inappropriate and even fundamentally at odds with the practice of medicine. Too much context is lost in the numbers, and too many factors beyond their personal control bear upon the performance 'data.'"   He did explain why MBAs are unconcerned about the accuracy and meaning of the measures they manage. 

The "you manage what you measure" heuristic seems based on the concept, or better yet fallacy that everything in health care is uniform and predictable.  This seems an extended version of what has been called the streetlight effect or the drunkard's search.  (See, for example, the version from Wikipedia, attributed to David H Freedman.  (2010). Wrong: Why Experts Keep Failing Us)  It begs the question of what is practical to measure is worth measuring, that is, is accurate, reliable, and meaningful.
Furthermore, there is now a considerable literature in medicine and health care showing that it is extremely difficult to develop performance measures that are reliable and meaningfully predictive.  (I cannot claim to have written comprehensively on this topic, but see posts here, and here.  For some good informal writing on why pay for performance [P4P] may not work, see Dr Robert Centor's blog DBs Medical Rants)

Considerable research has also shown that P4P rarely improves performance, and may make it worse.   For example, the results of a systematic review published in 2012 [Houle SKD, McAlister FA, Jackevicius CA et al.  Does performance-based remuneration for individual health care practitioners affect patient care? - a systematic review.  Ann Intern Med 2012; 157: 889-899.  Link here.] were that

The effect of P4P targeting individual practitioners on quality of care and outcomes remains largely uncertain.

Furthermore, a 2012 analysis of pay for performance [Glasziou PP, Buchan H, Del Mar C et al.  When financial incentives do more good than harm: a checklist.  Brit Med J 2012; 345: e5047. Link here.] included the summary statement,

Current evidence on the effectiveness of financial incentives is modest and inconsistent.

Thus, it would seem that the MBAs have neither good logic nor good evidence to support their faith in their current metrics, particularly those they use to assess physicians' performance. 

Power and Money vs Patients' and the Public's Health

Mr Kislak saw himself as supporting physicians in "their mission to provide high quality and effective care to their patients."  In the conclusion to his article, he asserted that physicians and MBAs "share the same overarching goals ... - effective healthcare delivery...."  However, in the body of the article, Mr Kislak suggested that MBAs see their goals in terms of power and money...  

4. Leadership. MBAs like to think of themselves as either nascent or actual leaders. It is understood that their intention is to build a career trajectory that will move them up in their organization (or in another organization) into positions of increasing authority and control. After all, this is an important reason why they become MBAs in the first place.

Furthermore, Mr Kislak wrote

8. Language. MDs and MBAs usually work for some type of business entity, whether that entity is for-profit, nonprofit, academic, government or sole proprietorship. To the MBA, however, it is all too apparent that with few exceptions MDs have little training in the language of business that all entities speak — the language of finance and accounting.

He noted that "this is a significant disconnect and a root cause of why MDs and MBAs often find themselves talking past each other on even the most basic business issues."  However, interestingly he did not even mention that MBAs may have as little facility with the language of medicine and health care as physicians have with the language of finance or accounting.  Furthermore, he seemed unaware that it makes as little sense to say that discourse in health care should be in the language of finance as to say discourse in finance should be in the language of health care. 

Finally, Mr Kislak made it very clear that to MBAs, money comes ahead of patient care,

9. Growth. MBAs are trained to look for ways to grow the organization's revenues and profits to the long-term benefit of the owners or stewards of that organization. Improvements to quality, efficiency, profits, revenues, technology and the like are generally viewed as a means to that end of growing,

Yet he noted that

the MDs sometimes wonder what all the growth talk may be costing their own priorities, including their compensation. This issue can become rather sensitive when it implies that the MD is less concerned with the long-term health of the organization than the MBA, and can devolve into finger-wagging about lack of engagement or weak physician-hospital alignment.

It is a measure of how much generic managers have taken over that the physicians may be blamed for lack of interest in the long-term "health of the organization," while the MBAs seem totally unconcerned about what effects the organization has on the real health of patients or the public.

Thus, fundamentally, MBAs running health care organizations are mainly interested in growing their organizations so that they bring in more money.  MBAs hope to leverage their organizations' financial performance so that they personally can rise to positions of greater power and wealth.  Health care is simply a "means to that end."  Mr Kislak seems to have confirmed my worst fears that most of health care's current generic managers put short-term revenue, and their own wealth and power, ahead of patients' and the public's health. 


In 1988, Alain Enthoven advocated in Theory and Practice of Managed Competition in Health Care Finance, a book published in the Netherlands, that to decrease health care costs it would be necessary to break up the "physicians' guild" and replace leadership by clinicians with leadership by managers (see 2006 post here). Thus from 1983 to 2000, the number of managers working in the US health care system grew 726%, while the number of physicians grew 39%, so the manager/physician ratio went from roughly one to six to one to one (see 2005 post here). As we noted here, the growth continued, so there are now 10 managers for every US physician. 

Now we have one MBA with considerable experience inside health care, and personal sympathy for the goals of high quality and effective care for patients, who. perhaps inadvertently, suggested why this managers' coup d'etat was a terrible idea, and why MBAs should not be allowed to lead health care organizations.  He corroborated our concerns that generic managers may be ill-informed and do not understand the health care context, particularly the variability and complexity of patients and their problems, the ambiguity of diagnosis, and the unpredictability of prognosis and response to therapy.  They believe in simplistic management approaches, particularly the usefulness of measurement and metrics, even in the absence of logic or evidence supporting them.  Furthermore, they may be heedless of the mission of health care, particularly of the primacy of the patient, and in fact put their own organizations' revenue ahead of patient care, and ultimately may pursue power and money rather than patients' and the public's health.  

As I have said before,  true health care reform would put in place leadership that understands the health care context, upholds health care professionals' values, and puts patients' and the public's health ahead of extraneous, particularly short-term financial concerns. We need health care governance that holds health care leaders accountable, and ensures their transparency, integrity and honesty.

But this sort of reform would challenge the interests of managers who are getting very rich off the current system.  So I am afraid the US may end up going far down this final common pathway before enough people manifest enough strength to make real changes.

Thursday, July 17, 2014

For Hospital CEOs, Retirement May Mean Never Having to Lose Your Paycheck

 Dr Herbert Pardes was once one of the best paid CEOs of a US non-profit hospital system.  A new New York Times article reported that the hospital system continued to pay him millions after his retirement. 

Introduction - the Best Paid Non-Profit Hospital System CEO in 2008

In 2009, we first discussed the compensation given to Dr Herbert Pardes, the CEO of New York - Presbyterian Healthcare System, which appeared to make him one of the best paid, if not the best paid non-profit hospital system CEO in the US.  His total compensation for 2008 was $9.8 million, according to the NY Post.  While his compensation was lower in 2007, approximately $5.1 million, 9 other executives made over $1 million, and the 10 together made over $26 million.  This amount was approximately 20% of the system's total surplus, and 1% of its total budget.

The Times reported that since then, Dr Padres continued to do very well financially,

Dr. Pardes’s compensation has consistently been among the highest of any New York hospital C.E.O. His compensation in 2011, his last year as chief executive, was $4.1 million, including base pay of $1.7 million and a bonus of $1.8 million.

Retirement Means Never Having to Lose Your Paycheck

According to the Times, after Dr Pardes retired in 2011,

The next year, Dr. Pardes earned $5.6 million, which included $1 million in base salary, a $1.8 million bonus for his final year as chief executive and more than $2 million in deferred compensation, according to hospital tax records. That exceeded the amount earned by Dr. Pardes’s successor, Dr. Steven Corwin, who made $3.6 million that year.

Three years after retirement, Dr. Pardes is still employed by the hospital as the executive vice chairman of its board of trustees, a position that compensation experts say is rare in the nonprofit world,...

So the year after Dr Pardes retired, he made as much from what most people might have thought was his former employer as he did in 2007 as CEO, when he was one of the best paid non-profit CEOs in the country, and more than he made in 2011, the year of his retirement.

Why Pay a Retired CEO Millions More?

At least one prominent US Senator interviewed by the Times suggested that Dr Pardes' remunerative (non)retirement was questionable,

 Senator Charles E. Grassley, Republican of Iowa, who has been pressing for tax-exempt hospitals to be more accountable for the salaries they pay, said on Tuesday that Dr. Pardes’s compensation was an example of how 'major nonprofit hospitals often are indistinguishable from for-profit hospitals in their operations.' The senator added: 'It’s not enough to say high compensation is necessary and leave it at that. A nonprofit hospital should show how that compensation benefits its patients.'

Of course, supposedly non-profit hospitals escape corporate income taxes, and can solicit donations which provide tax deductions to the donors.  Non-profit hospitals are supposed to be more charitable than for-profit hospitals to deserve these benefits, but it seems hard to square the compensation given to top executives at New York - Presbyterian with is nominally charitable nature.  

Furthermore, the Times article noted how Dr Pardes' new position as a highly paid leader of the board of trustees of the hospital system may have detrimental effects on the system's leadership and governance.

'To have a former C.E.O. on the board is actually a big no-no,' said Uwe Reinhardt, a Princeton University health care economist. 'It’s not considered good board manners. Inevitably they begin to meddle and micromanage.'

The Times reporter asked the chairman of the hospital system board to justify the continued payments of millions to former CEO Pardes, 

Frank A. Bennack Jr., the chairman of the hospital and former chief executive of the Hearst Corporation (and executive vice chairman of the Hearst board, in a role similar to Dr. Pardes’s), said in a statement that Dr. Pardes was 'extraordinary' and was kept on for 'urgent fund-raising activities and a range of other institutional needs with which he could assist his superb successor.'

Furthermore, the Times article suggested that Dr Pardes' pay was justified based on comparisons with other executives,

The hospital’s tax return, which is public because the organization is a nonprofit, said that in paying its executives, NewYork-Presbyterian looked at compensation patterns in nonprofit and for-profit health care systems. Michael L. Wyland, a partner in a consulting firm to health care and other nonprofits, said that was permissible, because 'the I.R.S. explicitly allows comparison with for-profit as well as nonprofit entities.'

In addition, despite his comments above, Prof Reinhardt also found justification for the amount paid someone who is apparently his friend,
But Dr. Reinhardt, who said he was friendly with Dr. Pardes, and Mr. Wyland agreed that while Dr. Pardes’s position was unusual, it might not be unjustified. They said that after 12 years as chief, he had presumably forged strong relationships with donors that the board would consider worth paying handsomely to maintain.

They said that running a hospital was as challenging as running many corporations, because doctors tended to resent authority and because the job required not only management skills but also an understanding of government reimbursements, the insurance industry and medical and malpractice issues. 

The Talking Points Again

In 2011, we noticed that justifications of sky high compensation given to health care executives (especially hospital CEOs) seemed to follow a pattern.  As we just summarized,

It seems nearly every attempt made to defend the outsize compensation given hospital and health system executives involves the same arguments, thus suggesting they are talking points, possibly crafted as a public relations ploy.   We first listed the talking points here, and then provided additional examples of their use here, here here, here, here, and here, and here

They are:
- We have to pay competitive rates
- We have to pay enough to retain at least competent executives, given how hard it is to be an executive
- Our executives are not merely competitive, but brilliant (and have to be to do such a difficult job).

The talking points are usually supplied by hospital public relations personnel, sometimes by hospital trustees or executives, sometime by various health care consultants.  The talking points are rarely questioned.

Furthermore, we just found evidence that these really are talking points.  A former public relations executive for a major for-profit health insurance company acknowledged using almost these exact justifications as talking points to justify his company's executive compensation.  

Now we have our first example of the compensation given to a retired hospital CEO justified with these talking points:

- Competitive rates - see the comments by the consultant, Mr Wayland
- How hard it is to be an executive -  see the comments by Prof Reinhardt, especially, "the job required not only management skills but also an understanding of government reimbursements, the insurance industry and medical and malpractice issues"
- Brilliance - see how the board chairman called Dr Pardes "extraordinary"

Finally, note that the apologia for Dr Pardes' extraordinary post-retirement compensation provide no new support for the talking points.  

In particular, consider the comments by Prof Reinhardt about all the sorts of expertise required of a hospital CEO.  What he did not acknowledge was that modern hospital systems have lots of people other than the CEO to deal with these issues.  Reporting to the CEO are numerous top executives who are themselves paid very well, and their pay is presumably justified by their own expertise.  For example, in 2011, in addition to Dr Pardes, New York - Presbyterian not only had a CEO, Dr Steven J Corwin, whose total compensation was over $3.5 million, but also 13 other executives who each received compensation over $1 million, and another 14 with compensation greater than $500,000  (see the system's 2012 990 form).  In turn, each of those must have had numerous senior managers reporting to them.  So why should Dr Pardes have to be an expert in, for example, "malpractice issues" when he had "Kathleen M Burke Esq, VP Board Ret, Secr & Counsel," with total compensation of $346,153, and "Maxine Frank Esq, exec SVP, CLO & Gen Counsel," with total compensation of $1,639,739 to advise him? 

Instead, the real reasons for ballooning executive compensation in health care appear to be cronyism on the boards of trustees who are supposed to be exercising stewardship over the hospital and supervision over the executives; the ratcheting up of compensation due to comparison with other executives, as opposed to other kinds of employees, when all boards want to think their executives are above average; and the dogma that CEOs must be "great men," or even have some divine endorsement. (See this post.)


The compensation given top executives of health care organizations gets ever more floridly exaggerated.  More and more this compensation seems to denote how these organizations have been taken over by insiders who make it a priority to benefit themselves.  Prof Reinhardt, who is himself on the board of directors of Boston Scientific (look here), suggested that such compensation should not be a worry because it "would not affect the bottom line," and that those who protest it are suffering from "social envy."  However, as we noted, current trends in executive compensation in health care could cause declining morale of other employees, increasing isolation of top executives, poor organizational performance, income equality and a declining economy, and ultimately social unrest.     

Although the transition of executives into a new aristocracy is a society wide, if not a global problem, we in health care cannot be complacent that someone else will solve it.  True health care reform would enable accountable leadership that puts the health care mission and patients' and the public's health ahead of personal gain.   

Tuesday, July 15, 2014

When Money Talks, the Sick Will Walk, or Crawl - Three Illustrations of the Brave New World of Health Care

In the quaint days of yesteryear, there were those health professionals who thought of what they did as a calling.  The best care of the individual patient was supposed to come first, especially ahead of maximizing one's own income.  Now in the brave new world of neoliberalism, economism, unregulated, laissez faire capitalism - call it what you want - health care has become a business, an industry.  Protests that it still should be a calling are anechoic.

For example, who noticed when a very famous person wrote this in 2012?

Hospitals and other facilities 'must rethink their particular role in order to avoid having health become a simple 'commodity,' subordinate to the laws of the market, and, therefore, a good reserved to a few, rather than a universal good to be guaranteed and defended,'

For those who cannot tell who that was, see the end of this post.

Recently, some illustrations of how health care now puts money ahead of patients came to light.

Intellectual Property Rights Ahead of Sick Patients

The first example is from the KevinMD blog, written by medical and business student Samyutka Mullangi.

 My business ethics class recently discussed the case of Cipla Pharmaceuticals, an Indian generic drug manufacturer drawing the ire of big pharma by blithely ignoring international patents or employing workarounds to manufacture low-cost generics in direct violation of the patents. Cipla’s founder, Dr. Yusuf Hamied, stressed that Cipla’s goal wasn’t to steal from the bottom line of the likes of Merck and Eli Lilly, but rather to serve its mission of helping the world’s poor gain access to life-saving medications that they could otherwise not afford.

Of course,

 Students hailing from careers in pharma vehemently stated their opposition to Cipla’s cause, invoking the necessity for pharmaceutical companies to amortize their costs through sales. Though the incremental costs per pill of actual manufacturing were negligible, the high initial investments in research trials and production required a modicum of intellectual property protection.

The argument was briefly halted when 

 a classmate from the Middle East, who had been holding back furious tears through most of the discussion, raised a trembling hand and broke his silence. He told us of how his father, when he contracted diabetes, would not have survived if not for the availability of exactly such generic drugs.

He said, 'This entire discussion disgusts me.'  

However, very soon another student piped up and started talking about incentivizing.  Mullangi noted that

 At the business school, we use words like incentives, value proposition and return on equity. The liberals in the room had to couch their arguments in these terms. It would have been indelicate to talk about human rights and moral obligations.

While the end of the post suggested that medical students may not understand the language of business students, while business students may not understand the language of medical students.  However, it is clearly discussion of what matters to patients, empathy, ethics, morals that is "indelicate," and incentives, value propositions, and returns on equity have won out.

Efficiency Ahead of Patients' Needs

Just published online in JAMA was a commentary by Dr Christine K Cassel, and Robert S Saunders of the National Quality Forum summarizing recent findings by the US President's Council of Advisors on Science and Technology on Health Care [Cassel CK, Saunders RS. Engineering a better health care system; a report from the President's Council of Advisors on Science and Technology.  JAMA 2014; doi:10.1001/jama.2014.8906.]  While it started with the usual paean to

an increased need to ensure care remains high quality, affordable, and centered around the needs of patients and families.

What it was really about was how

systems engineering ... includes a range of tools to improve efficiency and reliability

So, for example, while some people dislike the US fee-for-service payment system because it may encourage unneeded, useless, or even dangerous care, these authors noted just that it

rewards inefficiency and serves as a disincentive to more efficient care.

The whole point was about increasing efficiency.  But efficiency according to economists is "the use of resources so as to maximize the production of goods and services." (per Wikipedia.)  It is not about health care outcomes, benefits versus harms, or health care quality.  And there was not a word in the paper about patients' values or preferences, benefits or harms, or adverse effects of medical interventions.

The Highest Bidder, not the Sickest Patient, Gets the Earliest Appointment

The starkest example appeared in a Bloomberg article, aptly titled "Doctors for the 1 Percent."  The new start-up HelloMD is

a company that connects patients with the best doctors in San Francisco, Los Angeles and Las Vegas, as determined through a selection process. HelloMD offers faster appointments than regular patients can get, for a price: Its customers pay the doctors higher rates than insurance plans offer. And they pay those rates in cash.


HelloMD is a portal to the top specialists in every field, letting you buy your way to the front of the line.

So in the brave new world of HelloMD, presumably a wealthy patient with a chronic or even trivial problem could bid his or her way to specialty care ahead of a more acutely and severely ill patient who lacks the extra money (and even if the latter patient has full conventional health insurance.)   Most codes of medical conduct suggest that the needs (meaning clinical needs) of individual patients come first, presumably ahead of the wants of wealthier patients.  Yet HelloMD allows the wants of the rich trump the needs of the less rich.  (For any rich people who think that may be good for them, remember there is always somebody richer.)  To an old school doctor, this seems completely unethical.  (And some lawyers might think that participating doctors risk violating any contracts they have with health insurance companies.) 

(Note: see another post about HelloMD on the Health Business Blog.O


So right now those who believe that health care should be a business, not a calling, are winning.  In an era of deregulation and rampant suspicion of anything government can do to level the playing field, those with more money will win, and patients, no matter how sick, will lose.

By the way, anyone thinking that they are rich enough to buy their way to good care in this brave new world, remember there will always be someone ahead of you who is richer. 

Good health care will not survive long in a time when it is indelicate to talk about human rights and moral obligations.  Obviously, true health care reform will take more than talk.

Answer to Quiz - Pope Benedict XVI, see this post.

Thursday, July 10, 2014

The Price of Compassion - Commercialized Hospices and the Mistreatment of Vulnerable Patients

Introduction - Commercialized Hospices

We have occasionally written about the rise of the commercialized hospice industry, and concerns that commercialized hospices may not be providing the compassionate care they promise.  As we have discussed before, the hospice movement began with small, non-profit, community based organizations meant to provide compassionate palliative care to the terminally ill.  However, in the US, the hospice movement has been co-opted by commercial hospices, often run by large corporations, which may put profit ahead of compassion.

Several long investigative articles have appeared this year that focus largely on the commercial part of the hospice movement:
Terminal neglect? - how some hospices decline to treat the dying, Washington Post, May 3, 2014, by Peter Whoriskey and Dan Keating
How dying became a multibillion-dollar industry, Huffington Post, June 19, 2014, by Ben Hallman
Is that hospice safe? - infrequent inspections mean it may be impossible to know, Washington Post, June 26, 2014, by Peter Whoriskey.

As we have discussed before, the biggest risk of the rush to commercialize hospices is that it may lead to the enrollment of patients who are not terminally ill.  To try to achieve a dignified death in as much comfort as possible, the hospice movement emphasizes aggressive use of analgesics, including narcotics, and other psychoactive drugs.  Also, hospice patients cannot expect treatments meant to prolong life or cure acute problems, since in terminal patients these may cause unpleasant side effects and will not, by definition, work.  Therefore, a patient who is not terminal enrolled in hospice runs risks of being drugged into a stupor, and could be doomed were he or she to develop an acute illness for which treatment is available, like a bacterial pneumonia that might respond to antibiotics, because in hospice antibiotics are not given for acute infections.  Thus the whole hospice model depends on the ability of hospices to enroll only terminally ill patients.

This is difficult because prognosis is difficult to predict.  Beyond that, we discussed how commercial hospices may have financial incentives to enroll patients who are not terminally ill because they can make a lot of money from such patients.

The recent articles add more evidence that commercial hospices may enroll patients who are not terminal, and such patients may end up suffering or dying prematurely because of excess pain treatment or withholding of treatment of acute illness inherent in the hospice model.

A Long Anecdote Illustrating the Dangers of Commercialized Hospices

The Huffington Post article provided an extended anecdote about what happened to a patient enrolled in a commercial hospice despite the lack of an identified terminal condition. The patient was Mary Maples.

By the fall of 2011, her health was often poor. She ate a special diet to keep her diabetes in check and likely also suffered from COPD, a disease that often afflicts ex-smokers and makes it hard to breathe. Still, she retained her wit and sense of humor

She was hospitalized briefly for a urinary tract infection. Her family felt she needed rehabilitation, but apparently had run out of eligibility for Medicare payment for it. Then somehow the family was approached by marketers for Vitas Inc, a commercial hospice company owned by Chemed, also the parent company of Roto-Rooter.

Spry doesn’t recall exactly when she first spoke to a representative from Vitas, or how the company found out that her mother might be a candidate for hospice. But Vitas staff told HuffPost that the medical director of the Titusville rehabilitation center is also on the Vitas payroll, as a team leader.

Spry said a Vitas nurse persuaded her that hospice was the correct choice for her mother. The nurse touted the at-home care and help with other chores that had grown difficult, such as bathing her mother,
Note that what the Vitas nurse allegedly emphasized were ancillary benefits of hospice, not its key function.  The implication is that at a time of vulnerability, the Vitas marketing pitch was deceptive.

It is not clear that Ms Maples or anyone with the legal power to make decisions for her understood the implications of hospice, or consented for her enrollment.

Spry signed the admission forms, even though she did not have the legal right to do so. Dunn, Maples’ grandson, actually had power of attorney over her affairs.

'I didn’t know what I was getting us into,' Spry said.

Vitas said patients or patient representatives must sign a consent form that clearly spells out the hospice mission before they can be enrolled. Records provided to HuffPost from Maples' family, obtained from Vitas, did not include this consent form.


It’s also not clear that Maples consented to hospice treatment, at least initially. She did not sign the documents authorizing her enrollment 'due to weakness,' according to Vitas records. Yet that same day, according to other nursing notes provided by her family, she was strong enough to move about using a walker during a physical therapy session. 

Enrolling the patient without her consent, or consent from a person with legal authority over her, appears to be a serious ethical failure by Vitas. 

Hospice records did not show the patient had a terminal illness.

Maples did not have a terminal illness. Her diagnosis was 'debility, unspecified,' according to her records. This is a catch-all term for frail patients that Medicare’s regulator has said hospices are no longer allowed to use, because so many claims made under the diagnosis were later rejected or determined fraudulent. 

So the patient did not have a terminal illness and did not consent to hospital enrollment, and the hospital company apparently did not make it clear that hospice is only supposed to be for terminal patients.  Furthermore, later it turned out that the family thought Ms Maples would be a candidate for resuscitation, yet hospice care is specifically not supposed to include such aggressive attempts at life prolongation.  Again, this suggests a serious failure by hospice personnel to communicate clearly at best, and perhaps outright deception.

Maples’ records show she or her family repeatedly indicated that she was full code, meaning she wanted life-saving treatment.

Nonetheless, the patient was apparently treated with narcotics and anti-psychotics even though she did not have chronic pain.  This appears to be very bad medical practice, and potentially very dangerous.

Maples was elevated to continuous care even when she wasn’t experiencing any pain at all, her records show. By doing so, Vitas boosted its daily billing rate from the standard $146.20 a day to $853.30.

Documents shared with HuffPost show that in the Melbourne office, at least, managers were encouraged to increase continuous care counts. In the fourth quarter of 2009, for example, one of four 'management program goals' was for continuous care to average 17 patients a day. Managers said they received bonuses pegged to whether they met this and other patient count targets.

The most difficult part of Maples’ experience to evaluate concerns her medication. Her records show she was given morphine, along with Ativan, a type of sedative, and Haldol, a powerful antipsychotic drug.

All three medications are contained in the 'comfort pack' that hospices ship to a patient’s house on admission. They are typically used in the final weeks of the patient’s life, when he or she is near death. 

Ultimately, Ms Maples suffered an acute event that the hospice did not apparently treat adequately.  A relative talked to her on the telephone, and found,

Her speech was garbled and she wasn’t making any sense, he recalled.

He then called the head office of the local Vitas chapter in Melbourne, Florida, and asked that his grandmother be discharged — he wanted to quit Vitas. The receptionist said Maples’ doctor was out of town, and nothing could happen until he returned the next week, according to Dunn.

Later that day, Vitas transferred Maples from her home to its inpatient unit at Courtenay Springs Nursing Home on Merritt Island.

Maples’ records indicate she was moved for 'constipation' — often a side effect of the medications she was receiving — and 'nausea.'


An ambulance brought Maples to Cape Canaveral Hospital, where she was 'unresponsive and in respiratory failure' on arrival, according to records. She was diagnosed with septic shock — a severe blood infection that is often fatal, especially in elderly patients. 

This implied that hospice personnel failed to adequately manage a potentially fatal acute problem, septic shock, extremely poor medical practice.  However, it would make no sense to aggressively treat septic shock afflicting a patient who was terminal, but, as noted above, Ms Maples did not have a terminal condition.  Although Ms Maples survived that episode, she died weeks later.

So in this one detailed case, a patient who had chronic problems but was not terminally ill was enrolled in hospice, apparently without adequate consent, and after a marketing pitch that did not seem to explain that hospice is only for terminal care.  The patient received apparently very bad medical care, including the use of narcotics for no apparent reason, and an initially inadequate response to a severe acute medical problem, probably hastening her death.  This suggests that commercialized hospices over-selling their services to the wrong patients can hurt, and sometimes even kill patients.

Overly Aggressive and Deceptive Marketing

The Huffington Post and two Washington Post articles also contained other illustrations of these problems.  In the Huffington Post article was the general observation that

Every day, hospice marketers descend on doctor’s offices, rehab centers and hospitals. These workers have been known to rifle through patient logs at nursing stations, scramble to sign up what some in the industry call 'last gasp' patients — people with just hours left to live — and even scuffle with each other in hospital corridors over the right to sign up dying people, according to current and former hospice employees and allegations made in federal lawsuits.

Such a frenzy suggests a certain lack of care about whether the targeted patients are appropriate. Furthermore, the article included specific examples of the push to enroll more patients, no matter what.  

'The pressure was direct from operations on a daily basis,' said James Robbins, a former sales manager at AseraCare Hospice, a chain operating in 19 states. 'What are you not doing? Why are we not getting more patients? We’d have constant conference calls, meetings.'

Robbins, who lives in Atlanta, said he would 'cruise' nursing home lobbies and try to pressure medical directors at those facilities to refer directly to him. 'It's not even about patient care anymore; they’ve gone to the dark side,' he said. 'It’s all about money.'

'I’m a nurse, not a saleswoman,' said Pamela Schiffman, a hospice nurse and patient case manager in California who said she has quit four jobs in the last decade because she was ordered to keep pestering families who resisted her pitch.

Note that AseraCare is a commercial hospice system owned by Golden Living, which in turn is a privately held corporation partially owned and entirely managed by Fillmore Partners, and San Francisco based private equity group (look here). 

Also, there is evidence that marketers were pushed by management to obscure the nature of hospice, and deceive patients into thinking that they would not be denied acute care should they need it.

'One huge problem I had to deal with on a daily basis is patients not understanding they were dying and truly on a real hospice,' said a former manager at a Vitas branch in Florida, who requested anonymity for fear of losing her current job in the industry. 'The admission and marketing staff would tell them, 'This is the new hospice, we are not for dying people, the rules have changed, we can just help you.'

Note that the idea that the rules have changed and hospice is not for dying people anymore is absolute nonsense. 

Furthermore, there is evidence that once enrolled, hospices may resist discharging patients even if it becomes apparent that they are not terminally ill.

A nurse who currently works for Vitas in the same Melbourne, Florida-based location that enrolled Maples said that nurses who tried to suggest at meetings that a patient was no longer appropriate for hospice were routinely 'humiliated.'

Medical Mismanagement

In the Huffington Post article, there were several anecdotes about excess use of pain medicine,

In one example described in court filings, prosecutors allege a Vitas patient was given crushed morphine, even though she wasn’t in pain. The morphine treatment continued even after the patient showed signs of having a toxic reaction to it — even seizures, prosecutors claim. 


Mary Gubacz fell into a ditch across the street from her assisted living facility at 2 a.m. after she was prescribed the powerful antipsychotic Seroquel while under care of Odyssey Hospice in Michigan, her daughter Marilyn Little said. 

Note that Odyssey hospices are one of multiple chains of hospices owned by Gentiva.

The Washington Post article, Terminal Neglect, provided data about many hospices' inability to manage worsening symptoms (but presumably mainly for patients who were terminally ill.)  In particular, it showed that many hospices never provide what is called continuous nursing care which is usually required by patients with worsening symptoms.  For example,

One of the largest such hospices in the country is the Heartland Hospice Services in Santa Rosa, Calif., a facility owned by HCR ManorCare, a company that was turned private in 2007 by the Carlyle Group, a private equity firm.

Its hospice in Santa Rosa billed Medicare in 2012 for more than 50,000 days of routine hospice care, but no patient received continuous care or general inpatient care, according to the Medicare billing records.

A spokesman for HCR ManorCare portrayed the absence of those services as a statistical anomaly.

Note that given the size of the sample, that would have to be a pretty major statistical anomaly.  


Other records, too, indicate that many hospices offer very little nursing care in the last days of life.

For example, Medicare tracks how often a hospice sends a skilled nurse to a patient in the 48 hours preceding death.  

But at about 12 percent of hospices, more than one-third of patients die without seeing a skilled nurse in the last 48 hours of their life. Indeed, at 34 hospices, no patient saw a skilled nurse during that time.

The newer Washington Post article, Is That Hospice Safe?, documented many instances of apparently inadequate care of worsening clinical problems,

A woman dying of liver cancer, battling nausea and breathing difficulties, waited weeks for someone to drain fluid from her swelling abdomen and died still waiting, according to records. Another cancer patient had a feeding tube that oozed pus where it pierced his skin and did not actually reach his stomach. He had received no fluids from it for five days, emergency room doctors said. At the same time, a patient complaining about chest pain waited two days for a recorded visit and eventually was taken to a emergency room and diagnosed with pleurisy.

Many of these problems may go unnoticed, because the article noted that hospices are inspected very infrequently, if ever, by government agencies.


The three recent articles add to the evidence that commercial hospices often enroll patients who are not terminally ill, although hospice is meant only for the terminally ill.  There may be strong incentives for hospice employees to do so, and such enrollment may be induced by deceptive marketing and not accompanied by true informed consent.  Once in hospice, many patients may get poor medical management.  Patients who are not terminally ill may be at risk of getting inadequate care, and perhaps dying due to this lack, were they to get acutely ill, since hospice is not meant to provide life prolonging or potentially curative care for acute problems.

Note that most of the examples above concern the largest commercialized hospices, owned by large publicly held corporations (Vitas owned by Chemmed and, Odyssey owned by Gentiva), or by large corporations owned by private equity (AseraCare, owned by Golden Living, run by Fillmore Partners, and HCR ManorCare, owned by Carlyle Group).  Such large and rich organizations ought to be particularly held accountable for what they are doing to vulnerable patients. 

The US is in the midst of a great, uncontrolled experiment.  We have systematically taken medical and health care services previously lead by health care professionals and sited within community non-profit organizations and given them to for-profit firms, often huge corporations.  Meanwhile, rather than increasing regulation to account for this, we have systematically deregulated health care organizations.  There is more evidence that an increasingly commercial health care system within the framework of wild West, laissez faire capitalism is expensive and dangerous.  It is particularly dangerous for vulnerable populations especially when they are unaware that their caregivers must answer to huge corporations.

In my humble opinion, we should return control of direct patient care, especially of the most vulnerable patients, to health care professionals and if necessary small non-profit community organizations.  We ought to give strong consideration to banning corporate hospices, and banning all forms of the corporate practice of medicine and corporate health care "delivery."

Given how many insiders make so much money from the current version of laissez faire capitalism in health care, however, I would expect strong resistance should such apparently "radical," but actually conservative proposals actually get any mainstream attention.    

Tuesday, July 08, 2014

There They Go Again - Merck Threatened Legal Action Against Italian Doctor who Criticized Zetia

It seems that when confronted with unfavorable facts or opinions, Merck executives like to threaten legal action, rather than just argue their side of the case.  Last month we discussed how Merck officials used the US court system to try to prevent a physician from publicizing evidence uncovered in prior litigation that suggested Merck employees had concealed the risks of Vioxx from research subjects.

Legal Threats to Shut Up a Critic

Recently, a British Medical Journal news article explained how Merck tried to shut up an Italian physician who dared criticize another of its drugs, Zetia (ezetimibe).

The Italian branch of the drug company Merck Sharp and Dohme (MSD) has stopped a leading public health doctor and administrator from circulating texts to GPs advising them about the use of one of the company’s drugs. 

In the texts, Alberto Donzelli—the head of education, appropriateness, and evidence based medicine at the public health authority of Milan (Milan Healthcare)—had analysed the published evidence on the cholesterol lowering drug ezetimibe and discouraged its prescription in addition to statins.

A letter telling Donzelli to 'cease and desist' was sent in February by MSD’s medical director, Patrizia Nardini, and was cosigned by the company’s director of legal affairs. They accused Donzelli of serious misconduct and a breach of medical ethics and threatened to sue him and Milan Healthcare for as much as €1.3m (£1m; $1.78m).

Dr Donzelli was defended by Dr Roberto Carlo Rossi, the Director of the Order of Physicians of Milan, the local regulatory body,

 Rossi replied in April, declaring that the medical commission had analysed and discussed the issue in depth and concluding that there was no reason to object on ethical grounds to Donzelli’s behaviour.


in late May the company sent a second 'cease and desist' letter to Donzelli 


In mid-June, Donzelli bowed to the request and removed the relevant material from his website....

The Anechoic Effect Trumped

Up to then, the story line was familiar.  We have often noted the anechoic effect, that facts or ideas that offend the rich and powerful in health care often get little circulation, have few echoes.  Health care professionals' may fear that speaking out may lead to great unpleasantness.  Self-censorship may be reinforced by knowledge that the pervasiveness of conflicts of interest in health care means that one's friends, colleagues, family members, or more particularly supervisors are likely to have financial relationships with big health care corporations.  Similarly, those in the media and in the medical and health care scholarly literature may have similar fears, knowing that advertising revenue often comes from health care corporations, and their executives and boards may have their own conflicts of interest.

But in this case, Dr Donzelli was not cowed at first.  Furthermore, neither was the BMJ, and then some people in the media.  Instead of quieting the issue, Merck's legal threats resulted in the BMJ news article.  Then, in short order, the story was picked up by Larry Husten blogging for Forbes, and by Ed Silverman's PharmaLot blog for the Wall Street Journal.  Amazingly, this time it only took Merck one day after this negative publicity to change its position.  Per Matthew Herper, again in Forbes,

Merck says that it 'regrets' using legal threats to push a leading Italian researcher to muffle his public critiques of one of the company’s cholesterol drugs.

Herper was able to get confirmation from Merck spokesman Steve Cragle who said

the physician would be able to post his arguments about the drug, ezetimibe, on his web site again without fear of legal reprisal coming from Merck.
So in this case, sunlight was an effective disinfectant.  Perhaps if some of  the health care professionals who have silently acquiesced to pressure to maintain the anechoic effect decided they would not take it any more, there could be a lot more disinfection.

Note that Merck seems to have a chronic problem with honest discussion about Zetia (as well as Vioxx).  In 2007, we first blogged about reports that Merck had suppressed results of clinical research that showed the drug could cause adverse effects on the liver.  Eventually in 2013, a Reuters article that somehow got by us at the time, but was summarized in FiercePharma, announced that Merck would "pay $688 million to settle two U.S. class-action lawsuits by shareholders who said they lost money because the company concealed the poor results of a clinical trial of the anti-cholesterol drug Vytorin [a combination drug that included ezetimibe]."  Although, "the settlements include no admission of liability or wrongdoing.  'There's probably some merit (to the claims) or they wouldn't have settled for such a large amount,' Judson Clark, a health care analyst with Edward Jones,..."  

Merck managers, like many other health care leaders, got away with making facts and opinions they did not like taboo as topics of conversation for a long time.  Maybe if the health care leaders who are used to producing the anechoic effect for their own benefit saw that doing so will not be so easy in the future, the fog that obscures honest discussion of health care dysfunction might start to lift.  True health care reform would enable such honest discussion, no matter who among the powerful it might offend.  

ADDENDUM (8 July, 2014) - See also comments in the Shearlings Got Plowed blog.  

Wednesday, July 02, 2014

What Does the Blumsohn - Procter and Gamble -Sheffield University Affair Say About the Fitness of the Latest VA Secretary Candidate?

Introduction - New Leadership for the US Department of Veterans Affairs

After reports of problems with access, manipulation of data about waiting times, and most recently "a corrosive culture," the US Department of Veterans Affairs, the country's large government run health system, has had a massive leadership overhaul.  President Obama's nominee to head the agency is now Robert A McDonald, former CEO of Procter and Gamble.

The choice of a former CEO or a large corporation was called "unorthodox" by the Boston Globe, but many saw merit in a business leader running the VA.  As reported by the Globe, House Speaker John Boehner said that as a "private sector" leader,  Mr McDonald is the "kind of person who is capable of implementing the kind of dramatic systemic change that is badly needed and long overdue at the VA."  The Chairman of Boeing, also a member of the P&G board, hailed Mr McDonald as the person who "navigated Procter & Gamble through the difficult post-financial-crisis years, where he expanded business in developing markets and made substantial progress improving the efficiency of the company’s internal operations...."

On the other hand, a column in the Washington Post suggested that expertise in "selling Tide and Pantene" might not be relevant to fixing the VA. Yet aside from a single article on the Ring of Fire web site, all news coverage and discussion so far has ignored Mr McDonald previous experience in health care leadership, but also that his relevant track record ought to raise questions about his fitness for the VA position.

Procter and Gamble and Health Care

According to Mr McDonald's official P&G biograpy, after various roles in various countries, before becoming CEO, 

Bob returned to the U.S. as the Vice Chairman of Global Operations (2004 to 2007) and later P&G’s Chief Operating Officer (2007 to 2009).

Although not widely known as a pharmaceutical company, P&G actually had a subsidiary that made prescription drugs, which Mr McDonald sold off in 2009 (see this Wall Street Journal report.)  As we noted here, its products still include over the counter pharmaceuticals (e.g., Pepto-Bismal, Metamucil, Prilosec OTC).  Also, while Procter & Gamble does not make it very obvious, it has owned MDVIP, a company that employs physicians to provide concierge medical services, since 2010, although as just reported, it will soon sell this unit to private equity.  So during Mr McDonald's tenure, his company was to some extent a pharmaceutical company, and a health care provider.

The Blumsohn - Procter and Gamble - Sheffield University Case

Furthermore, on Mr McDonald's watch as Vice Chairman of Global operations and Chief Operating Officer, there was a case involving Procter and Gamble that raised multiple concerns about the ethics of its pharmaceuticals operations.  We first posted about the case in 2005 (here).  For all relevant posts, look here. In 2009 we described the case thus,

The case involved suppression and manipulation of research, ghost-writing, institutional conflicts of interest, and attempts to silence a whistle blower. It provides lessons about the downsides of letting commercial firms sponsor and hence control human research designed to evaluate the products or services they sell; and of academic medicine becoming dependent on research money from such firms for such research.

We previously summarized the case's events

  • Dr Aubrey Blumsohn, a senior lecturer at Sheffield University, and Professor Richard Eastell performed a research project on the effects of the drug risedronate (Actonel, made by Procter & Gamble Pharmaceuticals [P&G]) under a contract between P&G and the University.
  • Although the research contract designated Blumsohn and Eastell as "Investigators" under whose direction the project would be carried out, Blumsohn was not given access to the original data collected by the project.
  • Despite numerous requests, (like this one), P&G refused access to this data repeatedly.
    Blumsohn was concerned that he and Eastell could be accused of scientific fraud if they continued to make presentations and write articles and abstracts without access to the data which they were supposedly writing about.
  • Blumsohn became suspicious that some of the analyses done by P&G could be misleading, especially related to a graph shown to him that omitted 40% of patient data.
  • Blumsohn objected to P&G arranging for papers and abstracts to be written by a professional writer, but with Blumsohn listed as first author. Blumsohn was concerned that such ghost-written documents were mainly meant to convey "key messages" in support of P&G's commercial interests.
  • Eastell warned Blumsohn not to aggravate P&G, because the company was providing a grant to the University which "is a good source of income."
  • After repeated failed attempt to get the data, Blumsohn complained to numerous officials at Sheffield University, including Eastell, medical school Dean Tony Weetman, University Vice-Chancellor Robert Boucher, and the Head of the University's Department of Human Resources, Ms R Valerio.
  • Still unable to get the data, he spoke with news reporters about his case. At this point, Sheffield suspended him, but then offered him a severance agreement if he signed a contract binding him not to make any detrimental or derogatory statements about the University and its leaders.
So the case involved suppression and manipulation of research, ghost-writing, institutional conflicts of interest, and attempts to silence a whistle blower. It provides lessons about the downsides of letting commercial firms sponsor and hence control human research designed to evaluate the products or services they sell; and of academic medicine becoming dependent on research money from such firms for such research.

Although this case occurred in the UK, it involved actions by the US based Procter and Gamble.  While many of the events in the case occurred before 2004, from 2004 to 2009 it became clear that Procter and Gamble was not going to go easy on Dr Blumsohn.  For example, according to Dr Blumsohn, in 2006, P&G released some scientific data relevant to the case, but not complete enough data to be meaningful.  In 2007, there was still shady business going on involving scientific abstract submissions apparently made in Dr Blumsohn's name by P&G operatives.

Since Procter and Gamble never made any known attempt to apologize, explain its conduct, or ameliorate Dr Blumsohn's plight during 2004 - 2009, as one of the most senior leaders of Procter and Gamble, seemingly with direct authority over its pharmaceutical operations in the UK during that time period, Mr McDonald ought to be held accountable for the company's misbehavior described above.  To my knowledge, though, no one at P&G, including Mr McDonald, has ever admitted responsibility or been made accountable in any way.  


Since Mr McDonald recently was an executive of a company that sold prescription and non-prescription pharmaceuticals, and provided direct health care, confirmation as Veterans Affairs secretary could be regarded as a transit through the revolving door, and hence open to question.  Since Mr McDonald got $15,928,015 in total compensation during his last year as CEO (2012-13) (see the company's 2013 proxy statement), and had accumulated 2,247,593 shares of stock or equivalent by 2013, worth approximately $179 million at today's price of $79.67, his ability to understand the needs of the often poor veterans whom the VA serves is also open to question. 

More importantly, while Mr McDonald held high executive positions at Procter and Gamble, the company was involved in a dodgy affair involving conflicts of interest, manipulation of research, and attempted silencing of whistle blowers.  In my humble opinion, given that these events occurred directly on his watch, his fitness to run a huge health care system ought to be in question unless his responsibility for these events is disproved.

The widespread huzzahs for Mr McDonald as potential VA leader based mainly on his exalted status as CEO of a big corporation show that many in the US still see corporate CEOs as aristocracy.  True health care reform would hold health care leaders accountable, particularly for upholding the health care mission and putting patients' and the public's health ahead of revenue generation and especially personal profit.

ADDENDUM (7 July, 2014) - Link to McDonald's official P&G biography fixed. 

ADDENDUM (8 July, 2014) - This post has been re-posted on Naked Capitalism, and on Open Health News