A new "Better EHR" book and an observation re: health IT regulation, health IT amateurs, and user centered design (UCD) - "responding to user feature requests or complaints?"

A new book has appeared on improving usability of electronic health records.  The result of government-sponsored work, the book is available free for download.  It was announced via an AMIA (American Medical Informatics Association, http://www.amia.org/) listserv, among others:

From: Jiajie Zhang [support@lists.amia.org]
Sent: Tuesday, December 02, 2014 6:00 PM
To: implementation@lists.amia.org
Subject: [Implementation] - New Book on EHR Usability - "Better EHR: Usability, Workflow, and Cognitive Support in Electronic Health Records"

Dear Colleagues,

We are pleased to announce the availability of a free new book from the ONC supported SHARPC project: "Better EHR: Usability, Workflow, and Cognitive Support in Electronic Health Records". The electronic versions (both pdf and iBook) are freely available to the public at the following link: https://sbmi.uth.edu/nccd/better-ehr/

First, this book appears to be a very good resource at understanding issues related to EHR usability.  I particularly like the discussion of cognitive issues.

However, this book also holds messages about the state of the industry and the issue of regulation vs. no regulation, and impairment of innovation:

I think it axiomatic that user-centered design (UCD) is a key area for innovation, especially in life-critical software like clinical IT.  (I would opine that UCD is actually critical to safety and efficacy of these sophisticated information systems in a sociotechnically complex setting.)

I think it indisputable that the health IT industry has been largely unregulated for most of its existence, in the manner of other healthcare sectors such as pharma and traditional medical devices.

Yet, even in the absence of regulation, the book authors found this, per Section 5 - EHR Vendor Usability Practices:

a)  A research team of human factors, clinician/human factors, and clinician/informatics experts visited eleven EHR vendors and conducted semi-structured interviews about their UCD processes. "Process" was defined as any series of actions that iteratively incorporated user feedback throughout the design and development of an EHR system. Some vendors developed their own UCD processes while others followed published processes, such as ISO or NIST guidelines.

Vendor recruitment. Eleven vendors based on market position and type of knowledge that might be gained were recruited for a representative sample (Table 1). Vendors received no compensation and were ensured anonymity.

and

b)  RESULTS
Vendors generally fell into one of three UCD implementation categories:

Well-developed UCD: These vendors had a refined UCD process, including infrastructure and the expertise to study user requirements, an iterative design process, formative and summative testing. Importantly, these vendors developed efficient means of integrating design within the rigorous software development schedules common to the industry, such as maintaining a a network of test participants and remote testing capabilities. Vendors typically employed an extensive usability staff.

Basic UCD: These vendors understood the importance of UCD and were working toward developing and refining UCD processes to meet their needs. These vendors typically employed few usability experts and faced resource constraints making it difficult to develop a rigorous UCD process.

Misconceptions of UCD: These vendors did not have a UCD process in place and generally misunderstood the concept, in many cases believing that responding to user feature requests or complaints constituted UCD. These vendors generally did not have human factors/usability experts on staff. Leadership often held little appreciation for usability.

About a third of our vendor sample fell equally into each category.

In other words, a third of health IT sellers lacked the resources to do an adequate job of UCD and testing; and a third did not even understand the concept.

Let me reiterate:

In an unregulated life-critical industry, a third of these sampled sellers thought 'responding to user feature requests or complaints constituted UCD'.  And another third neglected UCD due to a 'lack of resources'.

I find that nothing short of remarkable.

I opine that this is only possible in healthcare in an unregulated healthcare sector.

Regulation, for example, that enforced good design practices and good manufacturing practices (GMP's) could, it follows, actually improve clinical IT innovation considering the observations found by these authors, through ensuring those without the resources either found them or removed themselves from the marketplace, and by making sure those sellers that did not understand such a fundamental concept either became experts it UCD, or also left the marketplace.

I can only wonder in what other fundamental(s) other sellers are lacking, hampering innovation, that could be improved through regulation.

As a final point, arguments that regulation hampers innovation seems to assume a fundamental level of competency and good practices to start with among those to be freed from regulation. In this case, that turns our to be an incorrect assumption. 

As a radio amateur, I often use the term "health IT amateurs" to describe persons and organizations who should not be in leadership roles in health IT, just as I, as a radio amateur, should not be (and would not want to be) in a leadership role in a mission-critical telecommunications project.

I think that, inadvertently, the writers of this book section gave real meaning to my term "health IT amateurs."  User centered design is not a post-accident or post-mortem activity.

-- SS

12/4/2014 Addendum:

I should add that in the terminology of IT, "we don't have enough resources" - a line I've heard numerous times in my CMIO and other IT-related leadership roles - often meant: we don't want to do extra work, to reduce our profits (or miss our budget targets), or hire someone who actually knows what they're doing because we don't really think that the expertise/tasks in question are really that important.

In other cases, the expertise is present. but when those experts opine an EHR product will kill people if released, they find the expert 'redundant', e.g., http://cci.drexel.edu/faculty/ssilverstein/cases/?loc=cases&sloc=lawsuit.

Put in more colloquial terms, this is a slovenly industry that has always made me uncomfortable, perhaps in part due to my experience having been a medical safety manager in public transit (SEPTA in Philadelphia), where lapses in basic safety processes could, and did, result in bloody train wrecks.

Perhaps some whose sole experience with indolence and incompetence-driven catastrophe has been in discussions over coffee in faculty lounges cannot appreciate that viewpoint.

Academic organizations like AMIA could do, and could have done, a whole lot more to help reform this industry, years ago.

-- SS

The Hospital CEO as Scrooge - Hired Managers Get Raises While Presiding Over Deficits, Layoffs and Pay Cuts

Million dollar plus managers of non-profit hospitals and health systems are now -forgive me - a dime a dozen. Payments to top managers continue to rise, faster than inflation, and faster than the pay given to other people in the health care field.

Top Hired Managers' Pay Increases Far Faster than Pay of Other Employees

For example, last August, Modern Healthcare published a summary article which included

Total cash compensation grew an average of 24.2% from 2011 to 2012 for the 147 chief executives included in Modern Healthcare's analysis of the most recent public information available for not-for-profit compensation. Of those 147 CEOs, 21, or 14.3%, saw their total cash compensation rise by more than 50%.

Another 51, or 35.7%, received total cash compensation increases of 10% or higher.

Furthermore,

The survey results suggest hospital system CEOs received increases in their base compensation that was about four times greater than average workers, who have gotten annual pay hikes of less than 2% in recent years. Of the 143 analyzed, 37, or 25.9%, received raises in their base compensation that were 10% or higher; another 69, or 48.3%, had raises between 2% and 9.9%; and just 23 of the group, or 16.1%, saw a decline in their base compensation, according to Form 990s.

The Talking Points Remain Unchanged

Yet the justification given for such munificent pay of the top hired managers of non-profit organizations that are supposed to put patient care (and sometimes teaching and research) ahead of personal enrichment never seem to go beyond the talking points we have previously discussed.

 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).

True to form, the Modern Healthcare article also included,

The "Competitive Rates" Talking Point - 

Hospital systems, their boards and outside compensation consultants justify these raises as adjustments necessary to keep pace with what the market dictates and to compete for talent that might flee to more-lucrative for-profit positions.

The "Retention" Talking Point

'We want to make sure we can recruit and retain the highest quality of staff, while balancing benefits and the salaries that are reasonable as compared to other organizations,' Mayo's [chief human resources officer Jill] Ragsdale said.

The "Brilliant Executive, Difficult Job" Talking Point

Jill Ragsdale, Mayo Clinic's chief human resources officer  [said] 'We want to make sure we can recruit and retain the highest quality of staff.'

Also,

'Not everyone can step up and step into running a healthcare system with 25 to 50 hospitals,' said Tom Flannery, a partner with consulting firm Mercer. 'It's a heck of a complex job.'

Questions Begged


Always left unsaid, and left unsaid in this article are answers to questions like:

Why are so called market comparisons limited to other CEOs or top managers, and never take into account other hospital employees, especially the health care professionals who actually provide the health care?

Why is the complexity of the managers' jobs never compared to complexity of other health care jobs, like the care of complex patients with multiple diseases, or neurosurgery, for example?

How is the "brilliance" of the managers measured, and compared to the brilliance of other employees, especially health care professionals?

These questions become more pointed when the size and rate of increase of executive, that his hired managers' pay seems obviously disproportionate to the trajectory of the financial performance, much less clinical quality of the hospitals the managers run.

In the recent months, we have found some striking examples of non-profit hospital executive pay that seems ridiculous in the context of what is going on at these managers' institutions.  Very briefly, some recent examples, alphabetical by state, include...



California - Washington Hospital Health System CEO Got Total Compensation Near $1 Million After Hundreds of Layoffs, and Charges of Conflicts of Interest and Poor Organizational Transparency

This story appeared in late September, 2014, in the Silicon Valley Business Journal, and noted that a local chapter of the Service Employees International Union (SEIU) was protesting the pay of the hospital's CEO,

Washington Hospital CEO Nancy Farber’s $593,000 salary ... [was] coupled with benefits that push compensation closer to $1 million

However, three months before,

an Alameda County grand jury report noted several potential conflicts of interest and poor organizational transparency at the institution, which the hospital's administration has since refuted or vowed to fix.

Furthermore,

The hospital laid off 200 workers two years ago and another 31 earlier this month. Washington Hospital’s most recent federal tax filing available show net assets of negative $16 million, plus expenses of $31.8 million, which outpaced revenue by $1.3 million during 2011.

The 2014 controversy over Ms Farber's pay is particularly notable since her pay has been raising concerns, and hackles, for more that 10 years, as we discussed in this 2013 post.  (In 2003, a local newspaper decried her 10% raise and her then $406,000 base salary.)  Yet none of these concerns seems to have affected her continuing generous remuneration despite ongoing problems at her small, partially publicly funded institution.  


Massachusetts - UMass Memorial Health Care CEO Received $4.8 Million Compensation Months Before Hospital Announced $55 Million Operating Loss

In this story from the August, 2014, Boston Globe, the contrast was between the CEO's rising remuneration and the hospital's worsening losses.  

The departing chief of UMass Memorial Health Care in Worcester earned $4.8 million in 2012, topping the list of Massachusetts hospital executives who received healthy increases in seven-figure pay packages — even as they faced growing pressure to bring costs under control.

John G. O’Brien, who retired in February 2013 after more than a decade at UMass Memorial, nearly doubled his compensation from 2011, when he earned $2.4 million as head of the biggest health care system in Central Massachusetts. Much of his 2012 compensation included retirement benefits earned during his tenure.

O’Brien’s payout came several months before UMass Memorial reported a staggering $55 million operating loss for the fiscal year ending September 2013.

Not only was the hospital losing a lot of money, soon after Mr O'Brien departed with his riches, it began laying off employees.

The system has since laid off hundreds of workers and made other changes to close the gap under the new chief, Dr. Eric W. Dickson.

The justification came from the system's top lawyer, included an example of the "our executives are brilliant" talking point,

Douglas Brown, UMass Memorial’s chief legal counsel, said O’Brien helped expand the health system and did 'a remarkable job' as chief executive.

Note that Mr Brown's official title is "Senior Vice President for Member Hospitals and Chief Legal Officer," per the UMass website, and thus was also a top hired manager who reported to Mr O'Brien.

To gloss over the counter-factual nature of this justification, Brown came up with an example of a double standard that was brilliant in its own way,

'It is true we suffered a lot in 2013,' Brown said. 'We certainly don’t blame that on John O’Brien.  We look at his [entire] tenure.'

So Mr O'Brien got credit for, and millions of dollars justified by all the good things that were said to have happened at UMass Memorial in the past, but somehow got to avoid responsibility for the recent financial losses.  That makes no sense.

Just to gild the lilly, Mr Brown added the "we have to be competitive" talking point, while reaffirming the "brilliant manager" talking point,

Brown added that the health system, which employs 12,000 and collects $2.5 billion in revenues, needs to pay well to attract top talent. 'We want to pay competitively with the markets so that we can get the best,' he said.

Of course, he did not present any facts showing why Mr O'Brien was "the best." But top hired counsel and top hired managers are paid well to come up with such creativity.

North Carolina - Novant Health Executives Got Raises While Core Revenue Drops, and Later Low Level Employees Got Pay Cut 

This story was in the Winston-Salem Journal by Richard Craver in August, 2014,

The top executive of Novant Health Inc., Carl Armato, received $1.05 million in salary during 2013, an 11.8 percent increase during a year in which the system had a slight dip in operating income.

Armato is in his third year as the system’s chief executive and president. His salary has risen 49.4 percent since taking over as top executive Jan. 1, 2012, following the retirement of Paul Wiles.

Armato’s incentive compensation rose 33.6 percent to $917,964. Altogether, what Armato received in direct compensation was $1.96 million, up 20.9 percent. He also received $39,372 in compensation, mostly nontaxable, company-paid insurance benefits. 

Other top executives also did well,

[Chief administrative officer Jacqueline] Daniels received a 1.2 percent raise in salary to $543,607 and an 11.9 percent increase in incentive pay to $545,680 [total direct compensation, $1,089,287]. Fred Hargett, chief financial officer, received a 10.1 percent salary increase to $611,703 and a 22.4 percent increase in incentive pay to $561,004 [$1,172,707].

Sallye Liner, chief clinical officer, received a 3.5 percent increase in salary to $501,462 and a 3 percent increase in incentive pay to $507,094 [$1,008,556]. Dr. Stephen Wallenhaupt, chief medical officer, received a 2.5 percent salary increase to $517,755 and a 12.3 percent in incentive pay at $523,518 [$1,041,273].

In addition, because of a one-time change in the corporate retirement program for top executives, all these managers also received large lump sum payouts, for example,

Making the change required Novant to close out the defined benefit plan, including paying out all the money owed to qualified executives in a lump sum.

For example, Armato received a $6.11 million payout – the second highest of 13 Novant qualified executives. The most, $8.66 million, was paid to Jacqueline Daniels, its chief administrative officer who has been with Novant 31 years. 

Note that this is not the first time we have discussed opulent pay for Novant managers.  As discussed in 2013, the previous CEO got $5.1 million in his last year. 

The article included the usual talking points to justify all this money going to a handful of top managers,

Novant, as do most not-for-profit health-care systems serving North Carolina, stresses high compensation levels are necessary to attract executives to run 'a very complex organization.' 

That was a mixture of the "competitive pay" and "brilliant executive, difficult job" talking points.  However, no one at the organization apparently was willing to explain how the increasing compensation related to what appears to be declining financial performance,

For fiscal 2013, Novant’s total operating revenue was up 1.1 percent to $3.59 billion, and total operating expenses rose 3.6 percent to $3.19 billion. Altogether, income from core health-care operations was down 40.6 percent to $109.8 million.

A few months after these munificent payments to top executives were disclosed, another Winston-Salem Journal article by Richard Craver reported that more lowly workers were taking pay cuts,

Novant Health Inc. confirmed Tuesday that it will reclassify the titles and duties for medical-unit secretaries in early January, as well as cut their pay.

The implementation of electronic health records at Novant facilities over the past year has led to a reduced workload for the medical secretaries, Novant said. Employees were told about the changes last week.

'The total number of individuals affected is 157, which includes employees in both Charlotte and Winston-Salem,' Novant spokeswoman Robin Baltimore said. 'We do not have the specific number broken down by market.'

The Charlotte Observer reported the pay cut could be up to 10 percent.

So Mr Armato's management allowed him and his fellow hired managers to make millions, and get raises, while he cut the pay of lowly unit secretaries because their jobs had supposedly become easier. 
This must be one of those difficult decisions that the CEO and his friends among top management get paid so much to make.  Maybe Mr Armato will get to play Scrooge in some version of A Christmas Carol this year.


Texas - El Paso University Medical Center CEO, Managers Gets Bonuses Despite Budget Deficit, Layoffs


A story from television station KVIA in mid-November noted that challenges for El Paso's University Medical Center,

According to UMC, El Paso Children’s Hospital owes it $70 million, which forced UMC to lay off 56 employees earlier this year.

And the hospital’s relationship with Texas Tech has been rocky.

So, no one at the hospital got a raise this year.  However,

[CEO Jim]Valenti’s base salary is $460,000.

But he did get a bonus because he met goals outlined in his contract. The board awarded him a $119,000 bonus. The El Paso Times reported in 2012 that Valenti received a $117,401 incentive bonus in 2010.

The explanation for giving the CEO a bonus under these circumstances fit the usual pattern.  There was this version of the "our CEO is brilliant" talking point,

board members praised the way Valenti has improved patient care at UMC and his work with medical reimbursements.

They said he’s a masterful manager of talent.

This was actually more specific than the usual "brilliance" argument, but hardly detailed enough to explain why he was apparently "brilliant" enough to deserve a bonus at a time when base pay for less exalted employees was frozen  (Actually, a later story in the El Paso Times suggested that while pay was frozen for the more plebian employees, 26 top managers got bonuses, although Mr Valenti's was the biggest.)  

And there was this version of the "we have to be competitive" talking point, courtesy the UMC board chairman, William Hanson,

'It's reasonable in the context of the market that Mr. Valenti works in,' Hanson said. 

Hanson says the pay is comparable to the salaries of other hospital CEOs around the region.

Again, it was not clear whether the supposed "market" for Mr Valenti's talents would not demand a discount for the leader of a hospital with frozen pay and a history of recent layoffs, or why the market for managerial employees was so different than the market for other employees .  


Washington - EvergreenHealth CEO Pay Up 18%, Average Employees Pay Up 1%

This story was from the Seattle Times in July, 2014,

Union members at EvergreenHealth medical center Thursday highlighted the comparison between the 1 percent pay raise they say the Kirkland hospital is offering them versus the 18 percent raise received by the CEO of the public hospital district facility last year.

Specifically,

[CEO Robert]  Malte’s pay, including retirement and benefits, went from $843,236 in 2012 to $996,268 for 2013.

 The only justification offered by Kay Taylor, the hospital's "vice president for communication," (that is, chief of its public relations department), was the usual "we have to pay competitive rates" talking point,

'Regarding our CEO’s compensation, it is important to remember that our board of commissioners benchmark CEO compensation to other similar organizations and create compensation that is at or near the 50th percentile,' Taylor said. 'With our CEO’s recent raise, his compensation is still on par — if not below — other CEOs of similar-sized healthcare organizations.'

Why it was imperative to compare the CEO's pay to that of other CEOs of other hospitals, meanwhile ignoring the obvious comparison of the size of the increase of the CEO's pay to that of other employees was not clear.

Summary

As health care organizations have become increasingly big and influential, their leadership has been increasingly in the hands of generic professional managers, not health care professionals.  These hired managers have commanded generous and ever increasing pay, which has been justified by the common talking points: managers have extremely hard jobs and are brilliant, and high pay is necessary in a competitive market to attract and maintain top leaders.

Yet none of the boosters of high pay for health care managers, who mainly seem to consist of the legal, marketing, and public relations personnel who answer to them, and occasionally the board members who also are hired manager, answer the obvious questions:
What is the evidence that managers are brilliant and their jobs are so hard, especially when compared to the highly-trained health care professionals at their own institutions?
Is their really a free market in hired managers, and why is it so isolated from the market for health care professionals and other people employed by health care organizations?

These justifications seem particularly ridiculous when managers whose results are obviously not brilliant, e.g., marked by deficits, losses, and lay-offs, are getting huge and increasing pay.  They also seem ridiculous when the "market" apparently dictates salary cuts and lay-offs for all employees other than the managers of a particular organization.

 Instead, it seems likely that hired health care managers make more and more because of the influence they have on their own pay.  This influence is partially generated by their control over their institutions' marketers, public relations flacks, and lawyers.  It is partially generated by their control over the make up of the boards of trustees who are supposed to exert governance, especially when these boards are subject to conflicts of interest and  are stacked with hired managers of other organizations.  Furthermore, per the dogma of pay for performance, their pay may be heavily tied to short-term financial results, rather than fulfillment of the patient care or academic mission. 

Thus, as in the larger economy, non-profit hospital managers have become "value extractors."  The opportunity to extract value has become a major driver of managerial decision making.  And this decision making is probably the major reason our health care system is so expensive and inaccessible, and why it provides such mediocre care for so much money. 

So to repeat, 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.

Is this why Abington Memorial Hospital tried to censor this blog - so they could shop around for a favorable ruling on Certificate of Merit attacks in future malpractice cases?

On the increasing corporatization of medicine and the conduct that results:

As I wrote on August 11, 2013 at "Who Would Have Thought That The Most Severe Form of Attempted Internet Censorship Could Originate in a Community Hospital, Abington Memorial?" (http://hcrenewal.blogspot.com/2013/08/who-would-have-thought-comrades-that.html), a community hospital whose EHR-related error led to my mother's injury and death tried to censor my writing through a Motion for Prior Restraint in the local courts in Montgomery County, Pennsylvania:

... I would not have thought such an attempt at abridgement of fundamental American rights could originate in a local hospital, until this Motion by the defense in the EHR-related lawsuit initiated by my deceased mother in which I am now substitute plaintiff proved otherwise:

75

E

4/19/2013

Motion

BY ABINGTON MEMORIAL HOSPITAL MOTION TO PROHIBIT COMMENTARY ABOUT THIS LITIGATION TO ANY PUBLIC CONTEXT WITH MEMORANDUM OF LAW WITH SERVICE ON 04/19/2013

No

9267260

The hospital was attempting to have the Court issue a Motion for Prior Restraint (http://en.wikipedia.org/wiki/Prior_restraint), including against my writings here in the Healthcare Renewal blog, in a civil matter.

Their motion for censorship was summarily rejected by the court, but...

I have always wondered why a hospital would go to such lengths, considering the jury selection process in any possible trial has a voir dire process in which potential jurors with knowledge of a case or other conflicts of interest are eliminated from jury service in that case.

voir dire - http://dictionary.law.com/Default.aspx?selected=2229
(vwahr [with a near-silent "r"] deer) n. from French "to see to speak," the questioning of prospective jurors by a judge and attorneys in court. Voir dire is used to determine if any juror is biased and/or cannot deal with the issues fairly, or if there is cause not to allow a juror to serve (knowledge of the facts; acquaintanceship with parties, witnesses or attorneys; occupation which might lead to bias; prejudice against the death penalty; or previous experiences such as having been sued in a similar case).

I believe I may have found the answer.

As I wrote on Feb. 2, 2013 at "The lengths a hospital will go to in order to protect their EHR - Motion for Reconsideration of Denial of Motion for Reconsideration of Denial of Objections" (http://hcrenewal.blogspot.com/2013/02/the-lengths-hospital-will-go-to-in.html), the object of the hospital's and defense team's wrath seemed to be my writing about the frivolous nature of their Certificate of Merit attacks, and later, their failure to mention to the judge their argument's earlier rejection by another PA court (in 2008, Stroud v. Abington Memorial Hospital).  

The Stroud v. AMH Certificate of Merit decision of August 2008 is at this link:  http://www.gpo.gov/fdsys/pkg/USCOURTS-paed-2_06-cv-04840/pdf/USCOURTS-paed-2_06-cv-04840-3.pdf - see Sec. II. Motion as to Vicarious Liability Claims Based on Other Actors’ Conduct.

Note that a Certificate of Merit is required in Pennsylvania for the initiation of a medical malpractice lawsuit, e.g., PA Code Rule 1042.3, http://www.pacode.com/secure/data/231/chapter1000/s1042.3.html.  It specifies that an appropriate and non-involved professional agrees with the merits of the case.  It is a simple paper form.

As I wrote at the aforementioned post:

... The(ir) major objection about the [Certificate of Merit] paperwork is, in essence, that a "Certificate of Merit" (a certification of case merit by a qualified medical professional) needed to be filed not just for Defendant (the hospital) but for each and every employee/agent for whom the Defendant is vicariously liable under the doctrine of Respondeat Superior...

... A major problem with this claim is that the law simply says otherwise.  Also, Certificates of Merit have, under the identification field where the sued party's name is penned in, the label "defendant" ... not "defendant, employees, agents, their uncles and aunts, and their little dogs too for whom defendant is vicariously liable."  Not to mention, among other issues, that such misconceptions are specifically put to rest by the actual Civil Procedural Rules Committee rules as published by the state's court administrative body:

"The [certificate of merit] rule requires the filing of only a single certificate of merit as to a claim against a defendant that is based on the activities of licensed professionals who are not named in the action."

The judge in Montgomery County, PA agreed, and threw out the hospital's Certificate of Merit attacks as well as their motion for reconsideration of his denial (and their motion for reconsideration of his rejection of their motion for reconsideration of his denial, if you can follow that, as well).

So why try to censor my writing on this blog about the matter, including that nearly the same attacks had been thrown out repeatedly, and that the defense team in Silverstein v. AMH did not mention the adverse ruling in Stroud as 'opposing authority' in their many filings in my locale, Montgomery County, in my mother's case?

Candor before the tribunal is codified in the American Bar Association rules for ethical conduct at http://www.americanbar.org/groups/professional_responsibility/publications/model_rules_of_professional_conduct/rule_3_3_candor_toward_the_tribunal.html, and PA has a similar rule:

... (a) A lawyer shall not knowingly:

(1) make a false statement of fact or law to a tribunal or fail to correct a false statement of material fact or law previously made to the tribunal by the lawyer;

(2) fail to disclose to the tribunal legal authority in the controlling jurisdiction known to the lawyer to be directly adverse to the position of the client and not disclosed by opposing counsel ...

Perhaps this is the reason...

So the hospital could try the argument/attack yet again to evade a lawsuit.

The same tactic, once again, in 2014, same hospital, same law firm, this time in Philadelphia County (adjacent to Montgomery County) indeed occurred.

Oh, and this time around defense appears to have neglected to mention the adverse rulings to their Certificate of Merit attacks - in both Stroud v. Abington Memorial Hospital as well as Silverstein v. Abington Memorial Hospital - in the latest lawsuit against the hospital, namely Thach v. Abington Memorial Hospital:

Judge Rejects Instant Certificate of Merit Appeal
http://www.thelegalintelligencer.com/id=1202669926394/Judge-Rejects-Instant-Certificate-of-Merit-Appeal
 P.J. D'Annunzio,
The Legal Intelligencer
 September 15, 2014

A hospital cannot instantly appeal a trial judge's order denying its request to have the plaintiff in a medical malpractice suit file separate certificates of merit for hospital personnel who are not defendants in the case, a Philadelphia judge has ruled.

In Thach v. Abington Memorial Hospital, Philadelphia Court of Common Pleas Judge Frederica Massiah-Jackson denied the hospital's motion to strike plaintiff Lyah H. Thach's certificate of merit. Thach claimed the hospital was vicariously liable for multiple strokes and other injuries she suffered while 28 weeks pregnant.

According to Massiah-Jackson's memorandum, the hospital requested that Thach produce certificates of merit for all identified and unidentified agents of the hospital who Thach's expert deemed to have provided negligent care.

In other words, in the same type of attack as prior, the hospital demanded a separate Certificate of Merit for each and every clinician involved, known and unknown, and if their names were not known, a Certificate of Merit for each class of clinician:

The actual request was this:

From DEFENDANT ABINGTON MEMORIAL HOSPITAL'S MOTION TO STRIKE THE APRIL 10, 2014 CERTIFICATE OF MERIT of April 17, 2014

... 19. One example of an appropriate Pa.R.C.P. 1042.3(a)(1) certificate of merit in the present case would include the following:

CERTIFICATE OF MERIT AS TO THE PHYSICIANS, NURSES, NURSE PRACTITIONERS, PHYSICIAN ASSISTANTS, WHO RENDERED CARDIOLOGY CARE TO LYAH THACH DURING HER ADMISSION TO ABINGTON MEMORIAL HOSPITAL ON MARCH 8, 2012

I, John Mirabella, Esquire, am an attorney for the Plaintiff in the above captioned matter. Pursuant to Pa.R.C.P. 1042.3, I hereby certify that an appropriate licensed professional has supplied a written statement to the undersigned that there is a basis to conclude that the care, skill or knowledge exercised or exhibited by the physicians, nurses, nurse practitioners, physicians' assistants who rendered CARDIOLOGY care to Lyah Thach during her admission to Abington Memorial Hospital on March 8, 2012 in the practice, treatment or work that is subject of the Complaint, fell outside the acceptable standards and that such conduct was the cause in bringing about harm to the plaintiff.

20. The above 1042.3(a)(1) certificate of merit certifies that a cardiology specialist reviewed the case on behalf of the Plaintiff and concluded that the cardiology care provided during the March 8, 2012 admission fell outside the acceptable standards of care. This requirement sufficiently fulfills the whole reasoning for requiring certificates of merit, which is to prevent the filing of unsubstantiated claims against health professionals.

21. The same should be repeated for any criticisms of the care provided to Plaintiff by other specialists who Plaintiff deems Abington Memorial Hospital vicariously liable, including radiology, neurology, hematology, infectious disease, etc.

I note that's s boatload of certificates being demanded.

In fact in the judge's decision, which I reviewed, the judge wrote:

"There is no suggestion expressed or implied in the Pennsylvania Rules of Civil Procedure that a plaintiff must file 36 Certificates of Merit when there is only one defendant."

Back to the Legal Intelligencer:

... When that request was denied, the hospital moved for an interlocutory [higher court - ed.] appeal of the order, which Massiah-Jackson also refused.

"Defendant-hospital contends that because in other cases, certain plaintiffs have filed multiple certificates of merit, then this trial court is bound by those 'precedents.' This court does not agree," Massiah-Jackson said. "There is no suggestion expressed or implied in the Pennsylvania Rules of Civil Procedure that a plaintiff must file [multiple] certificates of merit when there is only one defendant." [The hospital with its vicarious responsibility for the conduct of its employees, agents etc.- ed.]

There was no doubt in the judge's mind:

Massiah-Jackson said the guidelines governing the certificate of merit are clear and the defendant was trying to change the Rules of Civil Procedure. Moreover, Massiah-Jackson said the motion was part of a delaying tactic.

"In the case at bar, the defendant-hospital is faced with Rule 1042.3(s)(2) and Rule 1042.10 which are clear and free from all ambiguity," Massiah-Jackson said. "This defendant's attempts to add impediments to the litigation only days after the commencement of the civil action and prior to normal pretrial discovery, appear to be a pretext designed to delay Philadelphia case management protocols."

The hospital and its defense lawyers would still not give up:

The denial of Abington Memorial's subsequent request to strike the plaintiff's certificate of merit was followed by the hospital's July motion for appellate certification. According to Massiah-Jackson, that motion proposed new language not found in the Rules of Civil Procedure regarding the certificate of merit.

"If this defendant-hospital or its counsel propose new forms or new wording or other amendments, the proper forum for such recommendations is the Supreme Court's civil procedural rules committee," Massiah-Jackson said. "The hospital's bald suggestions are not a proper legal basis to support its motion to strike plaintiff Thach's certificate of merit."  Additionally, "Only the Supreme Court of Pennsylvania may amend or modify its Rules of Civil Procedure or the policy decisions relating to certificates of merit," Massiah-Jackson said.

Apparently this hospital thinks it has both the power to censor writers, and the power of the PA Supreme Court to rewrite PA law. (I also note that "bald" in legal documents is not a compliment.)

I note that Marshall Dennehey Warner Coleman & Goggin attorney Joseph Hoynoski III (http://www.marshalldennehey.com/attorneys/joseph-l-hoynoski-iii) wrote the following in the aforementioned brief:

Many courts of this Commonwealth which have been presented with the question as to whether Pa.R.C.P. 1042.3(b)(1) certificates of merit are required for the other licensed professionals for whom a plaintiff deemed a defendant vicariously liable, held that where a Plaintiff bases his/her claim on vicarious liability, a certificate of merit must be filed as to each licensed professional for whom the Defendant is allegedly responsible, whether they are named or unnamed.  These include, but are not limited to, the following cases:

A series of court cases are listed:

From the brief "DEFENDANT ABINGTON MEMORIAL HOSPITAL'S MOTION TO STRIKE THE APRIL 10, 2014 CERTIFICATE OF MERIT".  Click to enlarge.

Unfortunately, the past PA cases that ruled against the defense Certificate of Merit attacks being made in the present 2014 case, namely, the 2008 Stroud case and the 2010 Silverstein case, both involving the same hospital and same defense law firm, Marshall Dennehey Warner Coleman & Goggin, are missing.

In summary, I believe the motive behind the hospital and defense team's attempts to censor this writer in April 2013 may have had to do with a desire to try to shop the same Certificate of Merit attack around to another judge, while minimizing the chance anyone would notice the arguments had been discarded by two other Pennsylvania judges prior.

The conduct mentioned in these posts is the modus operandi of a Big Corporation, not the conduct expected from a community hospital, I add.   I believe this reflects the increasing corporatization of medicine.

-- SS

11/27/2014 Addendum:

If this Certificate of Merit attack is attempted again on another patient, there are now at least three PA cases where the arguments were rejected that I, and this defense law firm and this hospital, know of. (There may be others.)

In my opinion, failure to mention them to the tribunal under the "Candor" rules would be quite deliberate and likely merit a motion for sanctions and a complaint to the PA Bar Disciplinary Board, and perhaps a complaint to Pennsylvania hospital regulatory and PA human relations authorities as well.

This tactic stalled my late mother's case from being addressed for approximately two years.  She did not live to see the merits heard.  I do not believe others should have to experience that.

-- SS

Public Relations and the Obfuscation of Management Errors - Texas Health Resources Dodges its Ebola Questions

Our last posts about how revenue focused, generically managed US health care (non) system would have difficulty handling the threat of the Ebola virus were in mid-October, 2014.  Yet since then we have learned little about what went wrong when a single hospital dealt with the first Ebola patient to present de novo in the US, and two of the hospital's own nurses who acquired the infection caring for him.  So since we have not learned all we should about our first brush with Ebola, there is still reason to worry that things may not go better should another person be unlucky enough to show up at a US health care facility with a previously undiagnosed Ebola infection. 

Since the US media has apparently lost interest in Ebola, it is not too early to consider why we have learned so little about the country's first experience with the virus. 

Unanswered Questions

The first three Ebola cases diagnosed in the US were initially managed at Texas Health Presbyterian hospital, the flagship hospital for Texas Health Resources (THR).  On October 15, 2014, I noted that statements by the generic managers in charge of the hospital and the system left confusion on many points:
-  How was the decision to send the index patient, Mr Eric Duncan, home after his first emergency department presentation made (given he apparently had a fever in the ED, and an ED nurse knew he came from Africa)?
-  Why did THR leaders insist they were prepared for Ebola when later evidence suggested they had not set up organized processes and lacked proper equipment?
-  Did hospital managers try to prevent health care professionals from talking about what really went on?
Furthermore, as I noted on October 9, 2014 and InformaticsMD had discussed in depth, e.g., here, whether the the electronic health record (EHR) used by THR enabled Mr Duncan to go home undiagnosed remained unclear.

However, as stated in a Dallas Morning News editorial of October 14, 2014, taking better care of future patients requires better understanding of what went wrong when Texas Health Presbyterian first had to grapple with this disease previously unknown in the US:

now the hospital can do a world of good by helping the medical community learn from its experiences. This requires complete transparency and truth-telling

Yet the response of managers at Texas Health Resources since then seemed to be more about buffing their own image and protecting their own status than transparency and truth-telling.

A Week of Obfuscation after Public Relations Takes Over

As the NY Times reported on October 15, 2014, one of the first responses by THR to all these unanswered questions was to hire "Burson-Marsteller, the global public relations firm, to help tell its side [of the story]."  Through the next week, hospital managers' provided a lot of verbiage, some warm, some heated, but little useful information to inform the medical and public health response to the Ebola threat. 


October 15 - Vague Apologies

A top THR leader, Dr Daniel Varga, the chief clinical officer, testified to congress (per the (UK) Guardian),

'Unfortunately, in our initial treatment of Mr Duncan, despite our best intentions and highly skilled medical team, we made mistakes,' Varga wrote in testimony to the US Congress. 'We did not correctly diagnose his symptoms as those of Ebola. We are deeply sorry.'

However, he failed to provide much detail about these mistakes and why they were made.

October 16 - Nonspecific Refutations

The next day, Ms Brianna Aguirre, a nurse at Texas Health Presbyterian, went public about her concerns about the hospital handled Ebola.  Per the NY Times, she described a "confused and chaotic scene" when Mr Duncan returned to the hospital, leading to inadequate isolation of Mr Duncan for three hours.  She also claimed that staff caring for Ms Nina Pham, the first nurse to acquire Ebola while caring for Mr Duncan, it turn received inadequate protective gear, and had little training in its use.

That led to an indignant but nonspecific response from hospital management, per a Dallas Morning News article,

[To] claims that Duncan remained in an area with other patients for several hours before he was placed in isolation. Hospital officials said he was isolated immediately.

Also,

[To] complaints that personal protective equipment was inadequate and left them exposed, particularly at the neck. Nurses said they had to use penetrable medical tape to try to protect themselves. The hospital defended the equipment, saying it met the CDC’s guidelines at the time. Hospital officials said that it was the CDC that recommended using tape to pinch together the necks of the protective gowns and that hoods were ordered for the staff after concerns about the tape were raised.

October 16 - Shifting Blame, to the Government, "Outsiders," and the Media

At the same time, as reported by the Los Angeles Times, hospital managers were pointing fingers elsewhere,

The hospital's response -- its second in two days -- in part shifted responsibility to the federal Centers for Disease Control and Prevention and to the protocols the agency issued this summer to guide the handling of a patient infected by the virus, which is thought to have killed more than 4,400 people in West Africa. The hospital said the protocols changed frequently, frustrating caregivers and management.

They also implicated outside troublemakers,

The hospital also blasted 'third parties who ... are seeking to exploit a national crisis.' That was a dig at the National Nurses United union, which does not represent the Dallas hospital's nurses, but which made their complaints available to the media.

Then they blamed the media,

'Many of the comments we have seen or heard in the media are only loosely based on fact, but are often out of context and sensationalized,' the hospital statement said. 'Others are completely inaccurate.'

Finally, hospital managers resorted to indirection,

In televised interviews Thursday, Aguirre said she feared retaliation for speaking out about worker protection. An attorney accompanied her during the interviews.

“Texas Health Dallas has a strict non-retaliation policy,” the hospital statement said. “Employees are encouraged to raise issues and concerns via the chain of command.”

Left unsaid was whether the policy was enforced, and whether despite the policy there was any reason to fear retaliation.  

October 18  - More Vague Apologies and Assurances

Then, per the Dallas Morning News, the THR bought a full-page advertisement featuring its CEO's vague apologies and assurances,

Presbyterian 'is a safe place for employees and patients,' Berdan said in a full-page ad Sunday in The News.

Pitched as a 'letter to our community,' Berdan again apologized for mistakes the hospital made in Duncan’s treatment and in failing to have deployed fully its training and education programs before the virus struck. He said the hospital hasn’t determined how the nurses became infected.

October 20 - A "Tight-Lipped" Pep Rally

Finally, an blog post in the Dallas Observer noted,

On Monday afternoon, dozens of nurses, doctors and other healthcare employees convened at the front entrance of Texas Health Presbyterian Hospital to discuss the recent controversy about how the hospital handled the Ebola outbreak. Despite definitive comments in support of the hospital, Presby's nurses remained tight-lipped on what actually happened during Thomas Eric Duncan's care.

During the rally a top hospital leader provided a fitting epilogue end to the week,

'Today we want our community and our country to know that the nurses at Texas Health Presbyterian are so proud of our hospital and proud of what we do,' said Dr. Cole Edmonson, chief nursing officer at the hospital. 'There are a lot of questions being asked about what happened. And I can't answer those today. A number of reviews are underway.

So what was the point, other than to provide further cover for his fellow managers?

In any case, it seemed to work.  Since the week after THR hired Burson- Marsteller, coverage of Texas Health Resources and its role in the first US experience with domestic Ebola rapidly waned. 

More Silence Purchased, and Managers Go Unchallenged as Memories Fade

Since October, no patients have been diagnosed with an Ebola infection in the US.  The media have turned to other pursuits.  Texas Health Resources has departed the headlines. Although at the end of October, CNN noted that "the hospital has made confusing and sometimes misleading statements" that remain unexplained, in November, explanations appeared even more remote.

During this quiet period, THR seemed to purchase some more silence.  As reported by the Dallas Morning News, THR settled the lawsuit brought by the relatives of Mr Duncan, but the deal itself was "secret."  As columnist Mike Drago noted, family spokesman Josephus Weeks had

vowed,'our family will fight for transparency, accountability and answers, for my uncle and for the safety of the country we love.'

However,

We’ll never know whether the secret settlement announced Wednesday included any of the things Weeks indicated he was so determined to get.

In particular,

What the public will probably never know, thanks to the secret settlement, are the details of who said — and did — what to whom when Thomas Eric Duncan went to Presbyterian on Sept. 25.

To recap, we still do not know why Mr Duncan was sent home from the hospital after his first emergency department visit, despite a fever manifesting during that visit, and a nurse's determination that he came from Africa. We still do not know whether problems with the design or implementation of the hospital EHR enabled Mr Duncan's discharge. We still do not know why hospital managers were so certain that they were prepared for Ebola, and whether two nurses contracted Ebola because of poor training, poor equipment, lapses in established protocols, or some other reason.  We sill do not know whether hospital managers tried, and perhaps succeeded in silencing most hospital professionals' concerns about medical or management mistakes. 

Finally, in an interview published by Modern Healthcare, THR CEO Barclay Berdan felt comfortable enough to say,

It was really important to make sure we had a really high level of communication and maintained the trust level inside the organization while we were in many cases being attacked from the outside, as the world moved really from science to political science to social science to superstition and fear

The reporter did not ask whether the appearance of "trust inside the organization" might have been driven by fears about job loss, or the outside attacks could have really been appropriate skepticism?  He also did not challenge a "high level of communication" that seemed mainly devoted to obscuring specifics and preserving management's reputation.   But perhaps Mr Berdan counted on how "Ebola memories fade" to deplete interest in such questions.  

Summary


Public relations is an important tool used by generic managers to maintain control of their organizations, and hence their ability to continue living in the style to which they have become accustomed.  Aggressive use of PR may be particularly helpful when events highlight the gap between a health organization's high minded mission and its actual performance.  Perhaps Texas Health Resources' deployment of vague apologies and assurances, nonspecific but indignant refutations, and undocumented aspersions on the media and mysterious outsiders did let questions about management's  handling of the first Ebola patients diagnosed on US soil fade.

However, better medical care and public health, and future successful management of Ebola or the next unexpected infectious threat requires answers to these questions.  Health care and public health professionals, policy makers, and the public should not let health care managers put maintenance of their currently comfortable position ahead of patients' and the public's health.   

The aftermath of our first US Ebola crisis makes it clear that  we need true health care reform that focuses on the leadership of big health care organizations. In particular, we need leadership that is well-informed about health care and public health; that upholds the values of health care professionals, specifically by putting patients' and the public's health ahead of their own remuneration; is willing to be held accountable; and is honest and unconflicted.

Allowing the current dysfunction to continue, while it will be very profitable to the insiders who run the system, will continue to enable tragic outcomes for patients and the public.  

How Many Straws? - After $60 Million Settlement for Poor Manufacturing Quality, Hospira Warned by FDA, Then Assessed Punitive Damages for Firing Whistle-Blower

How many legal cases suggesting failures of leadership of large health care corporations will it take to break the back of health care? 

$60 Million Settlement of Class Action Alleging Cost Cutting Led to Poor Manufacturing of Drugs and Devices

Earlier this year, we posted about the $60 million settlement of a class action lawsuit brought by investors in Hospira Inc,  a drug and device manufacturer.  The plaintiffs had contended that "cost cutting aimed at boosting short-term profitability," and ostensibly "shareholder value" lead to "gutting quality control efforts," and ultimately to quality problems discovered by inspections by the US Food and Drug Administration (FDA).

This case was brought not by law enforcement officials or regulators, but by stock holders who believed that their investments were degraded by management misbehavior. Nonetheless, as is usual in most settlements of civil cases involving big health care organizations, according to Law360, Hospira managers were able to assert,

Defendants deny that they have violated the federal securities laws or any laws and maintain that their conduct was at all times proper and in compliance with all applicable provisions of law.

Note also that company executives, including CEO Michael Ball, were named as defendants, but I could find no record that they had to pay anything themselves.

So this, like many other legal settlements we have discussed, only seemed to serve as a marker of probable, but not definite misbehavior by the leadership of a big health organization that led to problems with the manufacture of drugs or devices. This is concerning since the public and health care professionals trust drug and device manufacturers to proffer products of good quality.  Yet the resolution of the case left lingering uncertainty because the defendants could settle without admitting any wrongdoing.

FDA Warnings, and Punitive Damages for Firing a Whistleblower

Some more evidence that there really were quality problems in Hospira's manufacturing operation appeared in October, 2014, when the FDA warned the company about particles found in drugs manufactured in its Australian factory (per the Chicago Tribune).  

Furthermore, in November, 2014, a story appeared that not only corroborated the existence of important issues with manufacturing quality at Hospira, but suggested that the company had tried to cover up these problems.  As reported by Crain's Chicago Business,

A Lake County jury awarded almost $10 million to a former Hospira employee, finding that the company fired him because he raised concerns that it covered up quality and safety issues with a product. 

In particular, 

The former employee, Angel Estrada, was a vice president of quality systems and compliance for the Lake Forest-based pharmaceutical company from September 2010 to September 2011, when the company fired him, according to a lawsuit filed in Lake County Circuit Court.

Estrada raised concerns to supervisors that Hospira was not addressing issues in one of its medical pumps that a hospital in Spain reported to the company. The hospital reported that air bubbles had occurred in the device when used on children, which can cause fatalities, according to the complaint.

The lawsuit alleges that Estrada reached out to his superiors, including Hospira CEO Michael Ball, to address the reported issues and notify the FDA and European regulators of the pump's alleged defects.

The lawsuit alleges that on the same day Estrada sent Ball a report, two employees under Estrada were fired 'purportedly for altering a record during the course of an audit.' Hospira fired Estrada 'under the pretext of not properly investigating' one of the employee's conduct during the audit, the lawsuit says.

The real reason he was fired 'was to quash his reporting of the dangers associated' with the pump, the suit alleges.

The jury issued its verdict earlier this month. Of the almost $10 million Estrada was awarded, $7 million was punitive damages.

So in this case, a high ranking corporate executive tried to blow the whistle because of quality problems affecting the manufacture of a medical device.  These problems put patients at risk, and pediatric patients at that. His whistleblowing was vigorous, going as high as the company CEO.  Yet, the jury found that the company responded by firing the whistleblower.  

Still, not surprisingly,

Hospira said it will appeal and that it maintains that the allegations are 'fully without merit.'

That remains management's contention, but the jury found otherwise, and emphasized this finding with punitive damages.

Summary

These cases, added to all our other discussions of legal settlements, crime, and corruption in health care, suggests that bad behavior by leaders of large health care organizations is rampant.  Yet these cases also suggest how hard it is to understand the scope of the problem.  Each of the cases above involving Hospira seemed to proceed in a vacuum, uninformed by previous cases.  None got much media attention.  (For example, the latest jury findings only appeared in two media outlets, as far as I can tell, and both were in Chicago.)  There have been few efforts, beyond those of your humble servant, to try to link various civil, criminal, and regulatory cases involving large health care organizations together in any sense.  Continued lack of awareness of the scope of the problem of management misbehavior in health care mitigates against finding any effective solutions.

Furthermore, the cases above, like most others we have discussed, did not lead to any negative consequences to any individuals for authorizing, directing, or implementing the bad behavior, even though the behavior may have lead to their individual enrichment.  Managers in this era of "shareholder value" are often lavishly awarded for cost cutting that increases short term revenue.  Note that the top executives of Hospira have been lavishly rewarded.  According to the company's 2014 proxy statement, its five top executives each had total compensation exceeding $2,750,000 in 2013.  CEO Michael Ball, who was named as a defendant in the case settled earlier this year, and allegedly ignored the whistleblower's warnings in the most recent case, received $9,892,283.  It is quite possible that all these executives at least indirectly benefited financially from the cost cutting that lead to the quality problems implied by the cases above. Yet as long as there is no accountability for any person who was directly involved in authorizing, directing, or implementing the bad behavior, or who might have benefited from being furnished plausible deniablity about it, future bad behavior will not be deterred.

So how many more cases will it take before we start holding the leaders of large health care organizations accountable?  Will we do so before the back of our health care system is broken?

Even Crazy Eddie Knows "Corporations Don't Commit Crimes, People Commit Crimes" - But Biotronik Settles

The deals the government gives are INSANE!!!  Just ask Crazy Eddie's former Chief Financial Officer.

The Former Crazy Eddie CFO on Impunity

Those of a certain age who were in or near the New York area remember Crazy Eddie, a discount appliance and electronics retailer with insane advertisements.




As reported by CNN, Sam F Antar, the former Chief Financial Officer of Crazy Eddie, was a speaker on a conference on financial fraud,

The U.S. government is losing the war against white collar crime.

That's the message from Sam E. Antar, one of the masterminds of the massive Crazy Eddie fraud of the 1980s.

'We are in the golden era of white-collar crime. My biggest regret is I should've been a criminal today rather than 20 years ago,' Antar told CNNMoney on the sidelines of a New Jersey securities fraud summit.

Antar drew a big round of applause when he pointed out that no one from Wall Street went to prison because of crimes that led to the financial crisis.

'We are devoting far less resources to combating crooks like myself today than back in my day,' he said.

Antar knows a thing or two about corporate fraud. He served as Chief Financial Officer of Crazy Eddie, the electronics retailer that became one of the symbols of white-collar crime in the 1980s.

Known for its loud commercials promising "INSAAAANE" prices, Crazy Eddie got into trouble for understating income to avoid taxes and then committing securities fraud once it decided to go public.

'Crazy Eddie was from Day One planned to be a criminal enterprise. We committed our crimes simply because we could,' said Antar, whose cousin Eddie Antar founded the chain.

Because he 'showed the feds where the bodies were buried,' Antar got off with only six months of house arrest, community service and tens of thousands of dollars in civil penalties. Crazy Eddie co-founder Eddie Antar served more than six years in prison.

Today, the convicted felon is advising the government and private companies about white-collar crime. Antar expressed frustration with the government's failure to put Wall Street bankers behind bars.

'We have turned prosecutors into tax collectors,' he said. 'Corporations don't commit crimes, people commit crimes.'

While the focus of this conference was corporate fraud and crime in the financial sector, we have frequently discussed corporate crime and corruption in the health care sector.  We have noted, especially in our posts on the march of legal settlements, that most wrongdoing by big health care organizations is punished - if it is punished at all - only by fines assessed against the organization, and perhaps a lightly enforced corporate integrity or deferred prosecution agreement.  Rarely does the organization admit wrongdoing.  Rarely are criminal charges involved (the settlements are usually civil).  Almost never do any individuals who authorized, directed or planned the wrongdoing suffer any negative consequences.

However, in health care, corporations do not do wrong.  People do wrong.

This brings us to our latest example.


Biotronik Settles Kickback Allegations for $4.9 Million

This story barely rippled the media waters, getting its most extensive coverage in the (Portland) Oregonian.

Biotronik, Inc, the Lake Oswego medical device manufacturing firm, will pay $4.9 million to the federal government to resolve allegations that the firm paid kickbacks to doctors in Nevada and Arizona to use its products.

In particular, the Department of Justice charged,

The settlement resolves allegations that Biotronik, through the payment of kickbacks to physicians, caused hospitals and ambulatory surgery centers to submit false claims to Medicare and Medicaid for the implantation of Biotronik pacemakers, defibrillators and cardiac resynchronization therapy devices.

Biotronik allegedly induced electrophysiologists and cardiologists practicing in Nevada and Arizona to continue using Biotronik devices, or to convert to Biotronik devices, by paying the implanting physician in the form of repeated meals at expensive restaurants and inflated payments for membership on a physician advisory board.

So the issue was not only defrauding the government, but giving kickbacks to doctors to induce them to use Biotronik devices, presumably whether or not such devices were the best treatments for their individual patients. Thus, the alleged conduct could have resulted in the unnecessary or inappropriate implantation of devices, leading to patient risks in the absence of benefits.

Nonetheless, as is usual in such cases, Biotronik did not admit any guilt, and in fact refused to talk to the reporter.  Furthermore, no one at Biotronik who authorized, directed or implemented the conduct in question suffered any negative consequence.

The light touch of the law on Biotronik was striking considering the company's track record.

Biotronik's Track Record: 2011 - 2013

Physicians Settle Allegations They Concealed Payments from Biotronik

In fact, the 2014 settlement was actually the second settlement resulting from allegations that Biotronik paid physicians to get them to use its devices.  As the Oregonian reported in 2013,

The state recently concluded a court case against two Salem doctors who put heart implants into patients without telling them that a manufacturer's training program put a sales representative into the operating room. The [Oregon] DOJ accused the doctors in the civil case of having 'misrepresented' their services as 'for the exclusive benefit of the patient' and 'concealing' from patients payments that created a potential "incentive" to use Biotronik implants -- defibrillators and pacemakers. The surgeons received between $400 and $1,250 for implant surgeries when a trainee was present.

This case was unusual in that the prosecutors, from the state of Oregon here, not the US Department of Justice, targeted the physicians who received the money rather than the corporation that provided it. So these individuals actually suffered some negative consequences, albeit rather minor,

cardiologists Matthew Fedor and Kyong Turk admitted no wrongdoing but agreed to pay $25,000 each and inform future patients of any payments from a drug or device maker in connection with their services to that patient and when admitting sales representative trainees to the operating room.

At the time,

At Biotronik's U.S. headquarters in Lake Oswego, president Jake Langer called the state's case unfair and detrimental to good health care.

'We are really clean when it comes to our relationships with physicians,' he said. He blamed the first-of-its-kind case on overzealous prosecutors trying 'to set up a new law' without going to the Legislature.

In 2011, Documents Revealed Biotronik's Marketing Tactics

Furthermore, the relatively meager penalties provided for by the 2014 and 2013 settlements were more incongruous given the colorful evidence provided by a disgruntled Biotronik employee reported in a 2011 New York Times article, about which we posted here.  The article suggested that Biotronik attempted to boost sales through "seeding trials," which are more about recruiting doctors than clinical research, paying "consulting fees" to doctors who wanted their patients implanted with Biotronik products, and  who actually implanted such products, and finally currying physicians' favor by hiring their spouses.

Summary

Those government settlements really are INSAAANE.


The Biotronik settlements followed a familiar pattern.  Now that we have been following organizational misbehavior in health care for some years, we see that organizations that get into trouble once are very likely to get into trouble again.

This may be enabled by how government regulators and law enforcement give large health care organizations such  gentle treatment.  We have talked about the march of legal settlements by such organizations before.  Allegations are usually resolved with legal settlements that involve no admissions of guilt, small monetary penalties (compared with these organizations' total revenues), and sometimes apparently toothless corporate integrity agreements.  Settlements get desultory public notice, rarely informed by previous settlements or other evidence of previous misbehavior.  No individual who may have authorized, encouraged, directed, or implemented the bad behavior is likely to suffer any negative consequences.   It does not help that while nominally public, these settlements get little press, and what coverage there is usually fails to put the whole pattern together.

So we would urge the reporters who cover the next settlements by big health care organizations at least look to see if the organizations had been involved in similar settlements in the past.

Furthermore, as we have said all to often,...   The failure of the current limp legal efforts against such corruption is evident by how many corporations have become ethical repeat offenders.  Pervasive bad behavior by large health care organizations has got to be a major cause of our ongoing health care dysfunction.  So, to really deter bad behavior, those who authorized, directed or implemented bad behavior must be held accountable. As long as they are not, expect the bad behavior to continue.

The Bigger They Come, the Softer They Fall - the Size of Pharma Companies and How Vigorously they are Prosecuted

After we found lessons to be learned from even  relatively small legal cases involving medical device companies, we reviewed some relatively small cases involving pharmaceutical companies made public in 2014.  Again, we had an index case that linked to larger issues

Merck Settled Fraud Allegations for $31 Million

This case got very little coverage in October, 2014.  A very short story by Reuters included these essentials,

A subsidiary of Merck & Co has agreed to pay U.S. states $31 million to settle claims that it overcharged their Medicaid programs for an antidepressant it had sold at a discount to pharmacy companies, attorney generals from three states said on Wednesday.

The officials from Idaho, New York and Florida said Organon USA Inc offered the drug, Remeron, to nursing home pharmacies at a discount to encourage its use over competitors. At the same time, the company reported the full cost of the drug when seeking reimbursements from state Medicaid programs, the states claimed.

New Jersey-based Organon, which did not admit any wrongdoing, also was accused of improperly promoting use of the drug by children and teens.

The agreement, which includes Washington, D.C., and every state besides Arizona, settled whistleblower lawsuits filed in 2007 in federal courts in Massachusetts and Texas.

That was the main content of the article.

Kickbacks to Promote Use of a Dangerous Drug

However, on the PharmaLot blog, Ed Silverman added important nuance,

Organon also allegedly offered kickbacks to nursing home pharmacies to encourage use of the Remeron antidepressant. The drug maker also allegedly promoted the medicine for uses not approved by the FDA. The marketing included targeting children and teenagers, according to a statement from New York Attorney General Eric Schneiderman.

So this was not merely financial fraud, but involved kickbacks to encourage excess use of a medicine for patients for whom it may have an enhanced risk of severe adverse effects.  In particular, Remeron (mirtazapine) may lead to higher risks of suicide attempts, including successful ones, by adolescents (look here for its official label).  So this case was not only about a company allegedly over-charging the government, but promoting a medicine that might be dangerous for vulnerable patients taking it. 


Merck's Track Record

Merck in some ways is the poster child for health care companies once renowned, but now troubled.  Merck's own voluminous Values and Standards document starts with this famous quote by founder George W Merck,

We try never to forget that medicine is for the people. It is not for the profits. The profits follow ,and if we have remembered that, they have never failed to appear.

Yet Merck was one of the first big multinational pharmaceutical companies to be tripped up by a big scandal in the 21st century.  As we wrote here, 

In summary, Vioxx (rofecoxib, Merck) a Cox-2 inhibitor non-steroidal anti-inflammatory drug used for pain, and touted for its ostensibly low risk of gastrointestinal side-effects, was withdrawn from the market in 2004 because of its cardiac risks.  The Vioxx case is flush with examples of how the company used deception to market a very profitable drug without regard to its risks to patients. 

A longer summary of the Vioxx scandal is in the Appendix below.

Furthermore, Merck also seems to have a chronic problem with honest discussion of another of its products, Zetia (look here).   Merck was also fined by the French government for a "smear campaign" against generic competitors (look here) and this month got a very poor rating for its global corporate transparency from Transparency International (look here). 

So this relatively small case reminds us that when a very large health care company is accused of misbehavior, including deceptive behavior that could have led to patient harms, not only are no individuals who might have authorized, directed or implemented the bad behavior held accountable, but the case is likely resolved in a seeming vacuum, totally uninformed about the company's previous record of similar problems.

Sheffield Pharmaceuticals CEO Pleaded Guilty of Felony for Discharge of Wastewater Without Permit

An interesting contrast is the case of one Mr Thomas Faria, as described by the New London (CT) Day in July, 2014,

Thomas H. Faria, who resigned in March as president and chief executive officer of Sheffield Pharmaceuticals, pleaded guilty in U.S. District Court Tuesday to a felony violation of the Clean Water Act for knowingly discharging untreated industrial wastewater to the New London sewage treatment plant from 1986 to 2011.

His penalty does not yet seem to be public, but could go considerably beyond loss of his job,

Faria pleaded guilty to one count of knowingly violating, or causing to be violated, the Clean Water Act, an offense that carries a maximum penalty of three years of imprisonment and a fine of not less than $5,000 but not more than $50,000 per day of the violation.

Yet the harms produced by the company's actions are not so clear,

The environmental impact of the violation over a 25-year-period is unknown, though Special Assistant U.S. Attorney Peter Kenyon from the Environmental Protection Agency said the EPA is unaware of any fish kills or direct harm suffered by humans.

'The possibility of impact from this type of discharge certainly exists,' Kenyon said during a conference call Tuesday.

So in this case, the offense was environmental, and had nothing directly to do with the over the counter drugs manufactured by the company, or their effects on patients.  The impact of the offense on the environment was unclear.  Nonetheless, the CEO of this small, privately held company lost his job, had a felony on his record, and is liable for large fines or up to three years in jail, pending sentencing.

Jury Found Takeda and Eli Lilly Concealed Cancer Risks of Actos, Company Subject to Punitive Damages of $36.8 Million

The basics of the case were reported by Medscape in April, 2014, and were also covered by Reuters and Bloomberg,

Drugmakers Takeda Pharmaceutical Co. and Eli Lilly and Co. promised to appeal an award of $9 billion in punitive damages — one of the largest in US history — after a federal jury found they had concealed the cancer risks for their type 2 diabetes drug pioglitazone (Actos).

In addition, the jury ordered the payment of $1.475 million in compensatory damages.

Pioglitazone is associated with an increased risk for bladder cancer among persons with type 2 diabetes, according to a 2012 study in BMJ, as reported by Medscape Medical News.  The US Food and Drug Administration in 2011 updated the pioglitazone label to warn against starting the drug in patients with active bladder cancer and to use caution if starting it in patients with a prior history of bladder cancer,...

In addition, the judge ruled that the company destroyed relevant documents to prevent their use in court proceedings,

attorney Mark Lanier said Takeda officials intentionally destroyed documents about the drug.

US District Judge Rebecca Doherty agreed and penalized the company, telling jurors they could infer that the files may have supported Allen's claims that the company wrongfully concealed the medication's health risks. 'The breadth of Takeda leadership whose files have been lost, deleted or destroyed is, in and of itself, disturbing,' Doherty wrote in a January ruling.

In late October, 2014, the judge reduced the award for punitive damages, per Reuters,

In her ruling, Doherty said the original $9 billion damages award was 'excessive' and violated the companies' constitutional rights to due process.

She ordered Takeda to pay $27.6 million and Eli Lilly to pay $9.2 million for a total of $36.8 million. Doherty said that, while far smaller than the jury's original award, the reduced punitive damages were still 'large enough to accomplish the jury's clear aim: to send a message to the defendants that their wrongdoing must stop...'>

I should note that apparently the judge found the amount excessive given the size of the compensatory award to the single plaintiff.  However, the judge reiterated her concerns about the companies' deceptive conduct,

The companies also had sought a new trial, arguing that the court had made prejudicial rulings on evidence and jury instructions that tainted the trial's outcome.

Doherty rejected that request Monday, writing that the evidence during the trial showed that the companies 'disregarded, denied, obfuscated and concealed' for more than a decade that Actos could increase patients' risk for bladder cancer.  

Note that in this civil case, a jury found the companies' deceptive conduct reprehensible, and a judge agreed that they "disregarded, denied, obfuscated and concealed" the truth.  No government prosecutors seemed to care to get involved with this particular case.  Because it was a civil case in which the companies were defendants, I am not sure whether any penalties affecting individuals were a possible outcome.  The results seem to suggest, at least in my humble opinion, that both ordinary people, like those sitting on juries, and judges may take greater exception to deceptive conduct that could harm patients than may government law enforcers and regulators.

Teva Pharmaceutical Industries Made $27.6 Million Settlement of Charges that it Induced Physicians' Excessive Prescriptions


This was well summarized by ProPublica in March, 2014,

Teva Pharmaceutical Industries Ltd. has agreed to pay more than $27.6 million to settle state and federal allegations that it induced Chicago psychiatrist Michael Reinstein to overprescribe clozapine, a powerful antipsychotic drug.

Reinstein has twice figured into ProPublica investigations.


Four years ago, ProPublica and the Chicago Tribune spotlighted Reinstein's prescribing pattern, finding that in 2007 he had prescribed more clozapine to patients in Medicaid's Illinois program than all of the doctors in the Medicaid programs of Texas, Florida and North Carolina combined. At least three of Reinstein's patients died of clozapine intoxication. At that time, Reinstein defended his prescription record, arguing that clozapine is effective and underprescribed.

Then, last spring, ProPublica reported that Reinstein prescribed even more of the drug in Medicare's prescription drug program for seniors and the disabled. ProPublica cited Reinstein in an investigation about how Medicare fails to monitor problem prescribers,...

Illinois Attorney General Lisa Madigan and the U.S. Justice Department claimed that IVAX, a Teva Pharmaceuticals subsidiary, paid Reinstein to overprescribe clozapine to Medicare and Medicaid patients. Yesterday Teva agreed to pay almost $15.5 million to the federal government and more than $12.1 million to Illinois to settle those allegations out of court.

Note that the government case seemed to be about how the government had to pay too much, not about harms to patients, despite the patient deaths described above.  Furthermore, the prosecutors, as they usually now do, allowed the case to be settled without any findings of wrongdoing,

Teva spokeswoman Denise Bradley told Reuters that the settlement does not mean that the company has admitted any liability.

It is interesting that the government is apparently pursuing a case against the physician as an individual, but not any cases against corporate managers who might have authorized, directed, or implemented the "inducements" to that physician,

In November 2012, federal prosecutors also filed suit against Reinstein, alleging that IVAX hadpaid him $50,000 a year to work as a consultant, paid his nurse to promote the drug and funded a study at an affiliated research institute. After the payments, Reinstein began overprescribing clozapine. The company also allegedly paid for trips and entertainment for Reinstein and his friends.

Otherwise, this case is typical of many US government and state prosecutors have pursued against big health care corporations.  There was a monetary settlement that might appear big to the public, but was tiny given the size of the company.  (According to Yahoo Finance, Teva's annual revenue is about $20 billion.)  The settlement did not involve any admission of wrongful behavior.  No one in the company who may have been involved with the wrongdoing that was not admitted suffered any negative consequences.  But, as is not usual, the government is pursuing a case against one individual, the physician who allegedly was paid as a "consultant," by maybe actually just to prescribe the company's product.

Summary

These cases add to the march of legal settlements about which we have often written.  These settlements and other legal cases suggest how frequently big health care organizations are involved in practices that may be unethical, illegal, and/or harmful to the patients they proclaim to serve.  Yet almost never do cases that involve US state and particularly federal law enforcement ever impose monetary penalties that are more than costs of doing business for the companies involved.  Almost never do they impose any negative consequences on any individuals within the companies who might have authorized, directed or implemented unethical, illegal, or harmful behavior.  

However, as we saw before, when the government asserts its law enforcement power against small organizations, small companies, or individuals, people may lose their livelihoods or go to jail.

The leniency of the government towards big health care corporations is very similar to the leniency shown towards big financial corporations.  A recent review of the book "Too Big to Jail" in the Washington Monthly noted that Mr Eric Holder, the current US Attorney General has urged leniency for big, and hence economically powerful corporations,

a memo written by Holder in 1999, during his stint as deputy U.S. attorney general. The document, 'Bringing Criminal Charges Against Corporations,' urged prosecutors to take into account 'collateral consequences' when pursuing cases against companies, lest they topple and take the economy down with them. Holder also raised the possibility of deferring prosecution against corporations in an effort to spur greater cooperation and reforms—a policy, unsurprisingly, later supported by the Bush administration.

The attorney general angered many last year when he reiterated those concerns at a congressional hearing, admitting 'that the size of some of these institutions becomes so large that it does become difficult for us to prosecute' because of the potential nasty economic effects of a major company failure.

Furthermore, the book provided some essentially epidemiological evidence that the government in fact has been more lenient towards bigger corporations, at least in the finance sphere,

There’s some compelling evidence that the largest, most established companies are more likely to win leniency with a delayed or canceled prosecution: 58 percent of the companies awarded such deals are public firms listed on a U.S. stock exchange, while publicly traded firms make up just 6 percent of those against whom the Department of Justice obtained convictions.

Yet there seems to be no evidence that this policy produces social good.  In particular, there seems to be no evidence that corporations treated leniently behave any better.

Finally, there is a question of essential fairness, and equal treatment under the laws.  It appears that executives of large finance, and likely health care corporations have virtual impunity.  Yet little people in health care, or finance, who do something wrong may go to jail.

True health care reform would establish a level playing field.  True health care reform would deter unethical behavior, especially when it harms patients.  True health care reform would make leaders of health care organizations accountable for putting patients' and the peoples' health first.   


Appendix- Vioxx Case

There is evidence is that the company knew about the cardiac risks of Vioxx since 2000, but suppressed the clinical research evidence until 2003.(1)  In particular, in 2005, the editors of the New England Journal of Medicine raised concerns that an article published in that journal in 2000 about the results of the VIGOR study of rofecoxib sponsored by Merck failed to report data that would have suggested that the drug caused excess cardiovascular risks.(2) In 2007, the company paid more than $4.9 billion to settle patient lawsuits alleging harm due to Vioxx.(3)  Also in 2008, the company made a $58 million settlement of claims its advertising of Vioxx deceptively minimized its risks.(4) In 2008, it became clear that at least one apparently clinical trial of Vioxx, the ADVANTAGE trial, was merely a "seeding trial,' that is, a marketing exercise.(5)

On Health Care Renewal, we starting writing about Vioxx in 2005, including,
- here about ghost-writing of a Vioxx research publication;
- here, and here about allegations that Merck executives tried to intimidate Vioxx critics;
- here about how advocates of an extreme laissez faire approach to regulation of health care corporations used illogical arguments about the Vioxx case;
- here about the ADVANTAGE "seeding trial," that is, a study really meant to recruit supposed physician-researchers as prescribers; and
- here about how one once prominent Vioxx researcher pleaded guilty to fraud in connection with his research on other drugs.
-  here about how in settling a shareholder lawsuit Merck vowed to improve its scientific and academic integrity, and refrain from manipulating and suppressing clinical research.

In 2010, we summarized the Vioxx case thus, " the Vioxx case provides a good lesson about some of the tactics used to deceptively and unethically promote health care products (pharmaceuticals in this case)." 

In case there are any doubts about the harms patients suffered as a result of using Vioxx as a pain reliever, in 2004, a cumulative meta-analysis of published trials of Vioxx known by then estimated the risk of myocardial infarction (heart attack) due to Vioxx compared with placebo or other non-steroidal anti-inflammatory drugs was 2.3 times the baseline rate.(6)  That analysis suggested that there was data by 2000 that Vioxx increased the risk of bad cardiovascular events.  A cumulative meta-analysis from 2009 suggested that the risk of death due to Vioxx was 1.7 times the baseline rate.(7)   That analysis suggested there was data by 2001 that Vioxx increased the risk of bad cardiovascular events.  Graham and colleagues' nested case-control study of Vioxx use in a large managed care organization lead them to estimate that "88 000 - 140 000 excess cases of serious coronary heart disease probably occurred in the USA over the market-life of rofecoxib."(8).

References

1. Topol EJ. Failing the public health - rofecoxib, Merck and the FDA. N Engl J Med 2004; 351: 1707-1709.  Link here.
2. Curfman GD, Morrisey S, Drazen JM et al.  Expression of concern reaffirmed. N Engl J Med 2006; 354:1193. Link here.
3. Charatan F. Merck to pay $5bn in rofecoxib claims. Brit Med J 2007; 335: 1011. Link here.
4. Charatan F. Merck to pay $58m in settlements over rofecoxib advertising. Brit Med J 2008; 336: 1208-1209. Link here.
5. Hill KP, Ross JS, Egilman DS, Krumholz HM. The ADVANTAGE seeding trial: a review of internal documents. Ann Int Med 2008; 149: 251-258. Link here.
6.  Juni P, Nartey L, Reichenbach S et al. Risk of cardiovascular events and rofecoxib: cumulative meta-analysis.  Lancet 2004; 364: 2021-2029.  Link here.
7.  Ross JS, Madigan D, Hill KP et al.  Pooled analysis of rofecoxib placebo-controlled clinical trial data: lessons for postmarket pharmaceutical safety surveillance.  Arch Intern Med 2009; 169: 1976-1984.  Link here.
8.  Graham DM, Campen D, Hui R et al.  Risk of acute myocardial infarction and sudden cardiac death in patients treated with cyclo-oxygenase 2 selective and non-selective non-steroidal anti-inflammatory drugs: nested case-control study.  Lancet 2005; 365: 475-481.  Link here.