Wall Street Journal: "ObamaCare’s Electronic-Records Debacle"

This WSJ Op-Ed could have been entitled "President Sucker:  Led Down the Garden Path by The Healthcare IT Industry."

It is entitled "ObamaCare’s Electronic-Records Debacle", as below.  First, though:

On Feb. 18, 2009 the WSJ published the following Letter to the Editor authored by me (http://www.wsj.com/articles/SB123492035330205101):

Digitizing Medical Records May Help, but It's Complex

Dear WSJ:

You observe that the true political goal is socialized medicine facilitated by health care information technology. You note that the public is being deceived, as the rules behind this takeover were stealthily inserted in the stimulus bill.

I have a different view on who is deceiving whom. In fact, it is the government that has been deceived by the HIT industry and its pundits. Stated directly, the administration is deluded about the true difficulty of making large-scale health IT work. The beneficiaries will largely be the IT industry and IT management consultants.

For £12.7 billion the U.K., which already has socialized medicine, still does not have a working national HIT system, but instead has a major IT quagmire, some of it caused by U.S. HIT vendors.

HIT (with a few exceptions) is largely a disaster. I'm far more concerned about a mega-expensive IT misadventure than an IT-empowered takeover of medicine.

The stimulus bill, to its credit, recognizes the need for research on improving HIT. However this is a tool to facilitate clinical care, not a cybernetic miracle to revolutionize medicine. The government has bought the IT magic bullet exuberance hook, line and sinker.

I can only hope patients get something worthwhile for the $20 billion. 

Scot Silverstein, M.D.
Faculty
Biomedical Informatics
Drexel University Institute for Healthcare Informatics
Philadelphia

The UK's National Programme for Health IT in the NHS (NPfIT) has since died. (See my Sept. 22, 2011 post "NPfIT Programme goes PfffT" at http://hcrenewal.blogspot.com/2011/09/npfit-programme-going-pffft.html.)  Also see my Dec. 7, 2008 post "Open Letter to President Barack Obama on Healthcare Information Technology" warning of many issues at http://hcrenewal.blogspot.com/2008/12/open-letter-to-president-barack-obama.html.

Now, the WSJ, to which I and other colleagues have been speaking about the realities of healthcare information technology for years but which has seemed reluctant to publish what would amount to a stinging corporate rebuke, has published this Op-Ed by a surgeon, Jeffrey A. Singer:

http://www.wsj.com/articles/jeffrey-a-singer-obamacares-electronic-records-debacle-1424133213

ObamaCare’s Electronic-Records Debacle
The rule raises health-care costs even as it means doctors see fewer patients while providing worse care.

By Jeffrey A. Singer
Feb. 16, 2015 7:33 p.m. ET

The debate over ObamaCare has obscured another important example of government meddling in medicine. Starting this year, physicians like myself who treat Medicare patients must adopt electronic health records, known as EHRs, which are digital versions of a patient’s paper charts. If doctors do not comply, our reimbursement rates will be cut by 1%, rising to a maximum of 5% by the end of the decade.

I am an unwilling participant in this program. In my experience, EHRs harm patients more than they help.

I note that it's not just physicians who are unwilling participants in this medical experiment.  We all are - as patients - in this unregulated experiment. 

As a colleague puts it, with an addendum by me:

"Why are we implementing patient care tools that are not tested for harms, not evaluated for harms, not reported systematically for harms, while the government does not refute the statement that harms are caused by EHRs and admits the true magnitude of harms is unknown?"

The program was inspired by the record-keeping models used by integrated health systems, especially those of the nonprofit consortium Kaiser Permanente and the Department of Veterans Affairs.

Yet even in those environments, these systems cause major problems, e.g.,

http://www.modernhealthcare.com/article/20140620/NEWS/306209940
Complicated, confusing EHRs pose serious patient safety threats [at VA]

By Sabriya Rice
Posted: June 20, 2014 - 8:15 pm ET

Confusing displays, improperly configured software, upgrade glitches and systems failing to speak to one another—those are just a few electronic health record-related events that put patients in danger, according to a new study.

The more complex an EHR system, the more difficult it may be to trace problems, patient safety experts warn. Hospitals planning to add new software or make updates should be strategic about changes and proactively include ways to monitor events.

“Because EHR-related safety concerns have complex socio-technical origins, institutions with longstanding, as well as recent EHR implementations, should build a robust infrastructure to monitor and learn from them,” concluded the report published Friday in the Journal of the American Medical Informatics Association.

Researchers evaluated 100 closed safety investigations reported between August 2009 and May 2013 to the Informatics Patient Safety Office of the Veterans Health Administration.

Among the findings, 74 events resulted from unsafe technology, such as system failures, computer glitches, false alarms or “hidden dependencies,” a term for what happens when a change in one part of a system inadvertently leads to key changes in another part. Another 25 events involved unsafe use of technology such as an input error or a misinterpretation of a display.

The authors of that study admitted the data was very incomplete due to limitations of error recognition, data collection and diffusion, and other factors.

Back to the WSJ:

The federal government mandated in the 2009 stimulus bill that all medical providers that accept Medicare adopt the records by 2015. Bureaucrats and politicians argued that EHRs would facilitate “evidence-based medicine,” thereby improving the quality of care for patients.

This is the "silver bullet theory of IT-enabled transformation" at work.  Add computers and - Presto!  Better care!  After all, how hard can it be to get to the moon in a hot air balloon? 

The moon is "up" and balloons go "up", therefore, why not? All that's required are the right "processes" -- with which the Acme Hot Air Balloon Co. executives can accomplish anything -- and ignoring those pessimistic scientists, engineers and other experts who speak of vacuum of space and radiation and all those esoteric "gotchas" that are bad for business! (See my 2008 Powerpoint presentation to the IEEE Medical Technology Policy Committee on these issues entitled "To The Moon In A Hot Air Balloon: Why Is Clinical IT Difficult?" at this link.)

But for all the talk of “evidence-based medicine,” the federal government barely bothered to study electronic health records before nationalizing the program. The Department of Health and Human Services initiated a five-year pilot program in 2008 to encourage physicians in 12 cities and states to use electronic health records. One year later, the stimulus required EHRs nationwide. By moving forward without sufficient evidence, lawmakers ignored the possibility that what worked for Kaiser or the VA might not work as well for Dr. Jones.

Not only that, the government and industry are hell-bent on avoiding any meaningful quality regulation (see my April 9, 2014 post "FDA on health IT risk:  "We don't know the magnitude of the risk, and what we do know is the tip of the iceberg, but health IT is of 'sufficiently low risk' that we don't need to regulate it" (http://hcrenewal.blogspot.com/2014/04/fda-on-health-it-risk-reckless-or.html).

Even more critically, they didn't bother to seriously study harms.  Leave that to the independent ECRI Institute, whose findings were alarming (see http://hcrenewal.blogspot.com/2013/02/peering-underneath-icebergs-water-level.html).  The ECRI Institute has not followed up on this study that I am aware; being recipients of government money, as I understand it, to study the problems may have impaired their independence and softened their tone.)

Which is exactly what is happening today. Electronic health records are contributing to two major problems: lower quality of care and higher costs.

The former is evident in the attention-dividing nature of electronic health records. They force me to physically turn my attention away from patients and toward a computer screen—a shift from individual care to IT compliance. This is more than a mere nuisance; it is an impediment to providing personal medical attention.

As someone who formally entered the field in 1992 via postdoc in Medical Informatics at Yale School of Medicine, I can state emphatically that the whole concept of direct physician data entry was an experiment.  In medical informatics, we were exploring ways to avoid the known detriments of direct physician entry via creative applications of information technology.

That experiment has been a clear failure, at least as diffused into the commercial health IT sector in 2015.  However few in my field are willing to admit this due to, in large part, avoidance of dealing with the unpleasant consequences of that admission.  (One pioneer, Clement McDonald now at NIH, has admitted this.  See my Oct. 29, 2014 post "The tragedy of electronic medical records" (http://hcrenewal.blogspot.com/2014/10/the-tragedy-of-electronic-medical.html.)

Doctors now regularly field patient complaints about this unfortunate reality. The problem is so widespread that the American Medical Association—a prominent supporter of the electronic-health-record program—felt compelled to defend EHRs in a 2013 report [now supplanted - see below - ed.], implying that any negative experiences were the fault of bedside manner rather than the program.

AMA has changed its tone.

I think the author of this Op-Ed may have missed the Jan. 21, 2015 letter to HHS from multiple medical societies or submitted this Op-Ed prior to that date. 

A group of 37 medical societies led by the American Medical Association sent a letter to Health and Human Services last month saying the certification program is headed in the wrong direction, and that today's electronic records systems are cumbersome, decrease efficiency and, most importantly, can present safety problems for patients. 

I covered that Jan. 21, 2015 letter at http://hcrenewal.blogspot.com/2015/01/meaningful-use-not-so-meaningul.html. 

Apparently our poor bedside manner is a national crisis, judging by how my fellow physicians feel about the EHR program. A 2014 survey by the industry group Medical Economics discovered that 67% of doctors are “dissatisfied with [EHR] functionality.” Three of four physicians said electronic health records “do not save them time,” according to Deloitte. Doctors reported spending—or more accurately, wasting—an average of 48 minutes each day dealing with this system.

Nurses are having similar experiences.  I've written previously about substantial problems nurses at Affinity Medical Center, Ohio (http://www.affinitymedicalcenter.com/) and other organizations are having with EHRs, and how hospital executives were ignoring their complaints.  The complaints have been made openly, I believe, in large part due to the protection afforded by nurses' unions.

See for example my July 2013 post "RNs Say Sutter’s New Electronic System Causing Serious Disruptions to Safe Patient Care at East Bay Hospitals" at http://hcrenewal.blogspot.com/2013/07/rns-say-sutters-new-electronic-system.html (there are links there to still more examples), and my June 2013 post  "Affinity RNs Call for Halt to Flawed Electronic Medical Records System Scheduled to Go Live Friday" at http://hcrenewal.blogspot.com/2013/06/affinity-rns-call-for-halt-to-flawed.html, along with links therein to other similar situations.

Particularly see my July 2013 post "How's this for patient rights? Affinity Medical Center manager: file a safety complaint, and I'll plaster it to your head!" at http://hcrenewal.blogspot.com/2013/07/hows-this-for-patient-rights-affinity.html, where a judge had to intervene in a situation of apparent employee harassment for complaints about patient safety risks.  Also see my post about an open letter to the Chief Nursing Officer (CNO) dated August 15, 2013, at http://hcrenewal.blogspot.com/2013/11/another-survey-on-ehrs-affinity-medical.html.

That plays into the issue of higher costs. The Deloitte survey also found that three of four physicians think electronic health records “increase costs.” There are three reasons. First, physicians can no longer see as many patients as they once did. Doctors must then charge higher prices for the fewer patients they see. This is also true for EHRs’ high implementation costs—the second culprit. A November report from the Agency for Healthcare Research and Quality found that the average five-physician primary-care practice would spend $162,000 to implement the system, followed by $85,000 in first-year maintenance costs. Like any business, physicians pass these costs along to their customers—patients.

Then there’s the third cause: Small private practices often find it difficult to pay such sums, so they increasingly turn to hospitals for relief. In recent years, hospitals have purchased swaths of independent and physician-owned practices, which accounted for two-thirds of medical practices a decade ago but only half today. Two studies in the Journal of the American Medical Association and one in Health Affairs published in 2014 found that, in the words of the latter, this “vertical integration” leads to “higher hospital prices and spending.”

I do not enjoy the fact that this occurred to my own personal physicians who are now employees of a hospital against which I am substitute plaintiff for my deceased mother, whose injuries were EHR-related.  See "On EHR Warnings: Sure, The Experts Think You Shouldn't Ride A Bicycle Into The Eye Of A Hurricane, But We Have Our Own Theory" at
http://hcrenewal.blogspot.com/2013/09/on-ehr-warnings-sure-experts-think-you.html, actually penned in 2011.

Proponents of electronic health records nonetheless claim that EHRs decrease record-keeping errors and increase efficiency. My own experience again indicates otherwise and is corroborated by research.

The EHR system assumes that the patient in front of me is the “average patient.” When I’m in the treatment room, I must fill out a template to demonstrate to the federal government that I made “meaningful use” of the system. This rigidity inhibits my ability to tailor my questions and treatment to my patient’s actual medical needs. It promotes tunnel vision in which physicians become so focused on complying with the EHR work sheet that they surrender a degree of critical thinking and medical investigation.

"Critical thinking always, or your patient's dead" - Victor P. Satinsky MD, heart surgery pioneer, Hahenemann Hospital.

Distractions to the doctor-patient interaction are unwelcome and damn well better have a very high payback - which the experiment with health IT is showing is simply not there at the stage of development of this commercial technology in 2015.

Not surprisingly, a recent study in Perspectives in Health Information Management found that electronic health records encourage errors that can “endanger patient safety or decrease the quality of care.” America saw a real-life example during the recent Ebola crisis, when “patient zero” in Dallas, Thomas Eric Duncan, received a delayed diagnosis due in part to problems with EHRs.

That event could have led to catastrophe, but such errors are daily occurrences in hospitals all across the country.  See the many posts on this blog of EHR risks under the index link http://hcrenewal.blogspot.com/search/label/glitch.

Congress has devoted scant attention to this issue, instead focusing on the larger ObamaCare debate. But ending the mandatory electronic-health-record program should be a plank in the Republican Party’s health-care agenda. For all the good intentions of the politicians who passed them, electronic health records have harmed my practice and my patients.

Dr. Singer practices general surgery in Phoenix and is an adjunct scholar at the Cato Institute.

I would change that to "... ending the mandatory electronic-health-record program should be a plank in the government's health-care agenda."

Finally, of the author's adjunct affiliation, it seems bad health IT affects physicians all across the political spectrum.

-- SS

11:33 AM

WSJ "There's a Medical App for That—Or Not" - Misinformation on Health IT Safety Regulation?

There's a health IT meme that just won't die (patients may, but not the meme).

It's the meme that health IT "certification" is a certification of safety.

I expressed concern about the term "certification" being misunderstood even before the meme formally appeared, when the term was adopted by HHS with regard to evaluation of health IT for adherence to the "meaningful use" pre-flight features checklist.  See my mid-2009 post "CCHIT Has Company" where I observed:

HIT "certification." ... is a term I put in quotes since it really is "features qualification" at this point, not certification such as a physician receives after passing Specialty Boards.

The "features qualification" is an assurance that the EHR functions in way that could enable an eligible provider or eligible hospital to meet the Center for Medicare & Medicaid Services' (CMS) requirements of "Meaningful Use."  No rigorous safety testing in any meaningful sense is done, and no testing under real-world conditions is done at all.

I've seen the meme in various publications and venues.  I've even seen it in legal documents in medical malpractice cases where EHR's were involved, as an attempted defense.

Now the WSJ has fallen for the health IT Certification meme.

An article "There's a Medical App for That—Or Not" was published on May 29, 2012.  Its theme is special regulatory accommodation for health IT in the form of opposition to FDA regulation of devices such as "portable health records and programs that let doctors and patients keep track of data on iPads."

In the article, this assertion about health IT "certification" is made:

... The FDA's approach to health-information technology risks snuffing out activity at a critical frontier of health care. Poor, slow regulation would encourage programmers to move on, leaving health care to roil away for yet another generation, fragmented, disconnected and choking on paperwork.

The process already exists for safeguarding the public for computers in health care. It's not FDA premarket review but the health information technology certification program, established under President George W. Bush and still working fine under the Obama Health and Human Services Department. The government sets the standards and an independent nonprofit [ATCB, i.e., ONC Authorized Testing and Certification Bodies - ed.] ensures that apps meet those standards. It's a regulatory process as nimble as the breakout industry it's meant to monitor. That is where and how these apps should be regulated.

It's a wonderful meme.  Unfortunately, it's wrong.  Dead wrong.

Certification by an ATCB does not "safeguard the public."   Two ONC Authorized Testing and Certification Bodies (ATCB's) admitted this in email, as in my Feb. 2012 post "Hospitals and Doctors Use Health IT at Their Own Risk - Even if Certified".  I had asked them, point-blank:

"Is EHR certification by an ATCB a certification of EHR safety, effectiveness, and a legal indemnification, i.e., certifying freedom from liability for EHR use of clinical users or organizations? Or does it signify less than that?"

I received two replies from major ONC ATCB's indicating that "certification" is merely assurance that HIT meets a minimal set of "meaningful use" guidelines, not that it's been vetted for safety.  For instance:

From: Joani Hughes (Drummond Group)
Sent: Monday, March 05, 2012 1:06 PM
To: Scot Silverstein
Subject: RE: EHR certification question

Per our testing team:

It is less than that. It does not address indemnification although a certification could be used as a conditional part of some other form of indemnification function, such as a waiver or TOA, but that is ultimately out of the scope of the certification itself. Certification in this sense is an assurance that the EHR functions in way that could enable an eligible provider or eligible hospital to meet the CMS requirements of Meaningful Use Stage 1. Or to restate it more directly, CMS is expecting eligible providers or eligible hospitals to use their EHR in “meaningful way” quantified by various quantitative measure metrics and eligible providers or eligible hospitals can only be assured they can do this if they obtain a certified EHR technology.

Please let me know if you have any questions.

Thank you,
Joani.

Joani Hughes
Client Services Coordinator
Drummond Group Inc.

The other ATCB, ICSA Labs, stated that:

... Certification by an ATCB signifies that the product or system tested has the capabilities to meet specific criteria published by NIST and approved by the Office of the National Coordinator. In this case the criteria are designed to support providers and hospitals achieve "Meaningful Use." A subset of the criteria deal with the security and patient privacy capabilities of the system.

Here is a list of the specific criteria involved in our testing:
http://healthcare.nist.gov/use_testing/effective_requirements.html

In a nutshell, ONC-ATCB Certification deals with testing the capabilities of a system, some of them relate to patient safety, privacy and security functions (audit logging, encryption, emergency access, etc.).

What was suggested in the email below (freedom from liability for users of the system, etc.) would be out of scope for ONC-ATCB testing based on the given criteria. [I.e., certification criteria - ed.] I hope that helps to answer your question.

I had noted that:

... My question was certainly answered [by the ATCB responses]. ONC certification is not a safety validation, such as in a document from NASA on aerospace software safety certification, "Certification Processes for Safety-Critical and Mission-Critical Aerospace Software" (PDF) which specifies at pg. 6-7:

In order to meet most regulatory guidelines, developers must build a safety case as a means of documenting the safety justification of a system. The safety case is a record of all safety activities associated with a system throughout its life. Items contained in a safety case include the following:

• Description of the system/software
• Evidence of competence of personnel involved in development of safety-critical software and any
safety activity
• Specification of safety requirements
• Results of hazard and risk analysis
• Details of risk reduction techniques employed
• Results of design analysis showing that the system design meets all required safety targets
• Verification and validation strategy
• Results of all verification and validation activities
• Records of safety reviews
• Records of any incidents which occur throughout the life of the system
• Records of all changes to the system and justification of its continued safety

A CCHIT ATCB juror, a physician informatics specialist, has also done a guest post in Jan. 2012 on HC Renewal about the certification process, reproducing his testimony to HHS on the issue.  That post is "Interesting HIT Testimony to HHS Standards Committee, Jan. 11, 2011, by Dr. Monteith."  Dr. Monteith testified (emphases mine):

... I’m “pro-HIT.” For all intents and purposes, I haven’t handwritten a prescription since 1999.

That said and with all due respect to the capable people who have worked hard to try to improve health care through HIT, here’s my frank message:

ONC’s strategy has put the cart before the horse. HIT is not ready for widespread implementation. 

... ONC has promoted HIT as if there are clear evidence-based products and processes supporting widespread HIT implementation.

But what’s clear is that we are experimenting…with lives, privacy and careers.

... I have documented scores of error types with our certified EHR, and literally hundreds of EHR-generated errors, including consistently incorrect diagnoses, ambiguous eRxs, etc.

As a CCHIT Juror, I’ve seen an inadequate process. Don’t get me wrong, the problem is not CCHIT. The problem stems from MU.

EHRs are being certified even though they take 20 minutes to do a simple task that should take about 20 seconds to do in the field.  [Which can contribute to mistakes and "use error" - ed.] Certification is an “open book” test. How can so many do so poorly?

For example, our EHR is certified, even though it cannot generate eRxs from within the EHR, as required by MU.

To CCHIT’s credit, our EHR vendor did not pass certification. Sadly, our vendor went to another certification body, and now they’re certified.

MU does not address many important issues. Usability has received little more than lip-service. What about safety problems and reporting safety problems? What about computer generated alerts, almost all of which are known to be ignored or overridden (usually for good reason)?

 

The concept of “unintended consequences” comes to mind.

All that said, the problem really isn’t MU and its gross shortcomings, it is ONC trying to do the impossible:

ONC is trying to artificially force a cure for cancer, basically trying to promote one into being, when in fact we need to let one evolve through an evidence-based, disciplined process of scientific discovery and the marketplace.

Needless to say, as was learned at great cost in past decades, a "disciplined process" in medicine includes meaningful safety regulation by objective outside experts.

Further, the certifiers have no authority to do important things such as forcibly remove dangerous software from the market.  An example is the forced Class 1 recall of a defective system as I wrote about in my Dec. 2011 post "FDA Recalls Draeger Health IT Device Because This Product May Cause Serious Adverse Health Consequences, Including Death".   Class 1 recalls are the most serious type of recall and involve situations in which there is a reasonable probability that use of these products will cause serious adverse health consequences or death.

In that situation, the producer had been simply advising users (in critical care environments, no less) to "work around the defects" that could indicate incorrect recommended dosage values of critical meds, including a drug dosage up to ten times the indicated dosage, as well as corrupt critical cardiovascular monitoring data.  As I observed:

... I find a software company advising clinicians to make sure to "work around" blatant IT defects in "acute care environments" the height of arrogance and contempt for patient safety.

Without formal regulatory authority to take actions such as this FDA recall, "safeguarding the public" is a meaningless platitude.

It's also likely the ATCB's, which are private businesses, would not want the responsibility of "safeguarding the public."  That responsibility would open them up to litigation when patient injuries or death were caused, or were contributed to, by "certified" health IT.

I have in the past also noted that the use of the term "certification" might have been deliberate, to mislead potential buyers exactly into thinking that "certification" is akin to a UL certification of an electrical appliance for safety, or an FAA approval of a new aircraft's flight-worthiness.

The WSJ needs to clarify and/or retract its statement, as the statement is misinformation.

At my Feb. 2012 post "Health IT Ddulites and Disregard for the Rights of Others" I observed:

Ddulites [HIT hyper-enthusiasts - ed.] ... ignore the downsides (patient harms) of health IT.

This is despite being already aware of, or informed of patient harms, even by reputable sources such as FDA (Internal FDA memo on H-IT risks), The Joint Commission (Sentinel Events Alert on health IT), the NHS (Examples of potential harm presented by health software - Annex A starting at p. 38), and the ECRI Institute (Top ten healthcare technology risks), to name just a few.

In fact, the hyper-enthusiastic health IT technophiles will go out of their way to incorrectly dismiss risk management-valuable case reports as "anecdotes" not worthy of consideration (see "Anecdotes and medicine" essay at this link).

They will also make unsubstantiated, often hysterical-sounding claims that health IT systems are necessary to, or simply will "transform" (into what, exactly, is usually left a mystery) or even "revolutionize" medicine (whatever that means).

Health IT is a potentially dangerous technology.   It requires meaningful regulation to "safeguard the public."  How many incidents like this and this will it take before that is understood by the hyper-enthusiasts?

I've emailed the ATCB's that had responded to my aforementioned query for clarification on the WSJ assertion about their role, being that the statement is in contradiction to their earlier replies to me.  I also advised them of the potential liability issues.

However, if it turns out to be true that the ONC-ATCB's do intend themselves as the ultimate watchdog and assurer of public safety related to EHR's, that needs to be known by the public and their representatives.

-- SS

1:27 PM

Wall Street Journal Defends Hired WellPoint Executives' Lack of Accountability to the Company's Owners

The lack of accountability of the hired managers (or executives or bureaucrats) of health care organizations came into sharper focus thanks to a bizarre, in my humble opinion, Wall Street Journal editorial from last week. 

Background: Shareholder Campaign for Oversight of Hired Executives Use of Corporate Money for Political Purposes

In the background is the campaign by some of the owners, that is, shareholders of giant publicly held for-profit insurance company WellPoint to make its executives' attempts to involve the company in politics more transparent and accountable.  (See our previous post here.)  As noted more recently in Fortune (by way of CNN),

shareholders and major U.S. companies have been meeting behind the scenes to discuss improvements in oversight and disclosure practices. 'Companies need to remember that shareholders have a right to know how their money is being spent,' wrote Eric Sumberg, spokesperson for New York State Comptroller Thomas P. DiNapoli, representing the New York State pension fund, in an email. 'Transparency and full disclosure will help to deter high risk political spending that could hurt shareholder value.'

Aetna and WellPoint are two companies contending with shareholder proposals on political spending disclosure this year.

The Center for Public Accountability (CPA) rates the disclosures at Aetna and WellPoint as having 'room for improvement.' Both WellPoint and Aetna have disclosure practices that 'leave significant room for serious misrepresentation of the company's political spending through trade associations,' according to the Center's Political Accountability and Transparency Reports. According to the Center reports, both companies gave money to AHIP (American Health Insurance Plans). And $86 million in funds from AHIP were allegedly funneled to the Chamber of Commerce to lobby against health care reform, according to reports from Bloomberg and the National Journal.

Note that this money was supposedly used by WellPoint executives to undermine the Obama administration's health care reform proposals while the company was publicly supporting aspects of these proposals.

The Wall Street Journal Says Hired Executives Not Accountable to Shareholders

The Wall Street Journal's editorial page's denunciation of this campaign by corporate owners to assert their rights, and the accountability of hired managers opened thus,

The campaign to intimidate companies from exercising their free-speech rights is in high gear as shareholder proxy season arrives, and the most prominent early target is health-insurer WellPoint. The arc of this attack will be one of the election year's political leitmotifs, and it should be on the radar of every corporate boardroom.

In the favored new tactic of the left, unions and activists are using politicized shareholder resolutions to send a message to corporations: Drop support for free-market and conservative causes, or you'll take a political beating.

The Journal conveniently ignored that the campaign is not from outside the corporation, but from its very owners, and that the people they are supposedly trying to intimidate are actually supposed to be responsible to them.  In addition, it begged the question of how political spending by hired corporate bureaucrats unaccountable to the people who own the company could possible have anything to do with free markets.

If some owners do not think that executives should be spending company money on political causes (especially presumably causes that the executives favor, or that reflect the executives' self-interest), they have a perfect right to think so, and to act on their thoughts.


Then the  Journal went on to assail the shareholders' challenge to some members of the WellPoint board of directors.  After first defining Change to Win as a "union front group," -

Change to Win is now targeting WellPoint's annual meeting on May 16 when it will demand that shareholders vote against board members Julie Hill and Susan Bayh (wife of former Indiana Democratic Senator Evan Bayh) because the company has refused to disclose or stop all of its political spending. Among the company's crimes? Corporate funding of, you guessed it, ALEC.

Now let us back up a minute. This is about a campaign by stockholders, that is, people who are owners, albeit fractional owners of WellPoint. It is some shareholders who want to vote against the particular board members.  WellPoint directors are supposed to have a fiduciary duty to represent the stockholders', that is, the owners' financial interests. If stockholders think members of the board of directors are not representing the stockholders' interests, the stockholders have a perfect right to vote against them. 

However, the Journal fulminated,

The union attack on WellPoint is notable for targeting two board members by name and the effort to make extra hay out of Susan Bayh's political profile. (Added frisson: Evan Bayh has worked as a consultant to the Chamber.) The ad hominem attack is right out of the Saul Alinsky playbook and is intended as a warning to other corporate directors that their personal reputation will be damaged if they don't force companies to stop donating to industry groups.

Note further that all stockholders are owners, whether they are also union members, or have green hair. Note further that the owners again have a perfect right to criticize or vote against board members who they believe are not properly exercising their fiduciary responsibilities to stockholders, that doing so has nothing to do with the ad hominem fallacy, and that this right is not nullified for stockholders with particular political opinions, or stockholders whom the Wall Street Journal does not like.

Summary

So we see the Wall Street Journal, supposed defender of capitalism, attacking a fundamental part of capitalism, the right of ownership, corporate ownership in this case. Instead, presumably, the Journal editorialists thinks that hired corporate executives ought to be completely unaccountable to the stockholders, and able to do whatever they want, including to do what is in their self-interest but not the owners' interests.

So this is how far the coup d'etat by hired executives/ managers/ bureaucrats has progressed. Supposed defenders of capitalism are now defending the rule of hired corporate insiders, completely disregarding the rights of owners. All we are lacking is a catchy name for rule by the hired managers/ bureaucrats/ executives. I am open to suggestions.

We have long criticized leaders of health care organizations who are ill-informed, unaware or hostile to health care professionals' core values, self-interested, or even corrupt.  We have discussed how bad leadership has advanced as leaders have become less accountable.  It appears that the lack of accountability of health care leaders, and their tendencies to put their own interests first, is part of a larger problem.  This is the take-over by most of society's important organizations by the managers, bureaucrats, and executives who were hired to run them.  For profit corporate hired leaders have become unaccountable to the corporations' owners.  Non-profit organizations' hired leaders have become unaccountable for the mission, or for their organizations' stakeholders. 

If we want health care, and democratic society to survive, we need to counter the managers' coup d'etat and make leaders accountable once again. 

1:29 PM

Who Is Now Scolding the "Pharmascolds?"

Ah, there they go again. This week, the Wall Street Journal published an op-ed by David A Shaywitz and Dr Thomas P Stossel whose title says it all, "It's Time to Fight the 'Pharmascolds.'"
On the Hooked: Ethics, Medicine and Pharma Blog, Dr Howard Brody provided a pithy point by point response to Shaywitz and Stossel, which is very much worth reading. But given the sweeping nature of Shaywitz and Stossel's arguments, and the prominent forum in which they appeared, I thought I could add to the discussion.

Shaywitz and Stossel's main point was that "relationships between university researchers and medical product companies are under relentless attack by critics who portray these associations as a morality play in which noble academics struggle to resist the dark, corrupting influence of industry." They castigated

the disproportionate influence of a coterie of prominent critics we have previously dubbed 'pharmascolds,' who routinely vilify the medical products industry and portray academics working with it as traitors and sellouts. These critics are pious academics, self-righteous medical journal editors, and opportunistic politicians and journalists. Their condemnation of anyone's legitimate profit -- it's all 'corruption' in their book -- has in fact materially enhanced their own careers. They extrapolate from occasional behavioral lapses in industry -- which is equally, if not more prevalent, in universities -- to demonize the market and portray scientific medicine as an ascetic religion, which it is not.

I can't claim to be "prominent," and my career has certainly not been "materially enhanced" so far by my writing on Health Care Renewal, but I am sure some of what my colleagues and I have written puts us at least in the company of more prominent "pharmascolds," in Shaywitz and Stossel's book.

However, their arguments seem to be based on a slippery slope, or, on over-generalization of criticism of certain kinds of relationships among certain people and organizations under certain circumstances.

In particular, I see nothing wrong, in general, with "relationships" among academics and industry. However, there are specific kinds of conflicts of interest in academic medicine that ought to cause concern. So let me take this opportunity to first postulate a simple definition of conflict of interest in this context, and provide specific examples of the sorts of conflicts that ought to be troubling.

Definition: An individual conflict of interest occurs when a person with entrusted responsibility has another interest that may conflict with the proper exercise of that responsibility.

Examples of conflicts of interest relevant to academic medicine include:

- A physician entrusted to take the best possible care of individual patients receives payments from a drug manufacturer which might bias his or her decisions to use that company's drugs even for patients for whom these drugs would not be the best possible treatment.
- A clinical teacher entrusted to honestly impart information, skills, and judgment receives payments from a drug manufacturer which might bias his or her teaching in favor of that company's products
- A clinical researcher entrusted to discover and disseminate the truth based on research on human beings receives payments from a drug manufacturer which might bias the design, implementation, analysis or dissemination of studies on humans in favor of that manufacturer's products, or against its competitor's products
- An administrator entrusted to uphold the mission of the academic institution receives payments from a drug manufacturer that might bias his or her management decisions in favor of that company's interests, but against the institution's mission
- An academic entrusted to provide honest, clear health policy advice receives payments from a drug manufacturer that might bias his or her advice in favor of that company's interests

On the other hand, I do not have a problem with true collaboration among academics and industry that does not involve industry paying the academics money, or paying the academics' institutions money for which the individuals receive credit. One can envision all sorts of collaborations that do not involve one party paying the other.

Furthermore, I do not necessarily have a problem with industry paying an academic in the course of the conduct of basic science, that is in this case, science that does not involve research done on humans. Shaywitz and Stossel seem most concerned with the damage "pharmascolds" might do to basic and translational research. They warned of dire results from barriers that might mainly be designed to discourage the sorts of conflicts of interest listed above, but would damage the progress of basic science and translational research. For example, they warn

each new barrier -- such as the National Institutes of Health's ban on paid consulting for industry -- erected between publicly funded researchers and companies, especially cash-strapped start-ups where many of the breakthroughs occur, slows the progress of potential treatments.

There is the germ of an important idea in there. In fact, many medical academics simultaneously wear many hats. So someone who sees patients in practice, and teaches students about clinical medicine may also do bench research in the laboratory. Banning such an individual from receiving consulting payments from drug, biotechnology, device and other companies to prevent bias in his or her patient care or teaching might conceivably adversely affect his or her biomedical research. How to handle such trade-offs has not been widely discussed, but needs to be.

But the notion that all relationships among medical academics and industry are meant to promote science and find new cures for disease, but not to market products or influence policy in favor or industry, is at best naive.

So Shaywitz and Stossel's dire warnings that seemed based on this notion seem as naive as the notion they attribute to their opponents, that all relationships among academics and industry are evil.

Finally, Shaywitz and Stossel did some scolding of their own, addressed to medical academics who do not stand up for their relationships with industry

When challenged by reporters, most academic consultants to industry refuse to comment or offer a meek explanation, instead of retorting that industry pays them because they add critically important value. This evasion has only emboldened industry critics, disheartened company employees, and caused even allies to wonder if there really is something to hide.

They concluded with plea that academics with industry relationships stand up for these relationships, to wit,

For the sake of the many patients whose diseases require innovative treatments -- and for the medical philanthropists determined to make it happen -- it's time for the leaders of the medical products industry to take pride in their purpose and start fighting back.

They are entitled to their opinion, of course. However, there is just a whiff of hypocrisy emanating from this.

Just below it, Dr Stossel identifies himself as "a professor of medicine at Harvard and a fellow at the Manhattan Institute," which is surely true.

But it is also surely incomplete. As we have posted before, Dr Stossel himself has multiple relationships with industry, some of which he has revealed in other venues.

As we wrote in 2007, in a commentary in the New England Journal(1) in which Stossel attacked the rigorous conflicts of interest rules that were once again imposed on the US National Institutes of Health (NIH), Stossel disclosed

having received consulting fees from ZymeQuest, owning stock options in ZymeQuest and Biogen, and having pending and issued patents, owned by Brigham and Women's Hospital, some of which are licensed to ZymeQuest.

In another paean to a laissez-faire approach to conflicts of interest in Perspectives in Biology and Medicine(2), Stossel also disclosed that he

is a member of the Board of Directors of Zymequest Inc, and the Scientific Leadership Advisory Board of Merck & Co. The author is a founding scientist of Critical Biologics Corporation and a consultant to Boston Scientific, Inc., and Gerson-Lehrman, Inc.

In a commentary in the British Medical Journal(3) arguing once again that concerns with conflicts of interest have gone too far, he disclosed, he

is on the boards of directors and owns stock options in ZymeQuest and Critical Biologics Corporations, and his employer has licensed intellectual property to these companies, which may result in his receiving milestone payments, royalties and in the stock options having financial value. He receives fees for speaking to corporations and other organisations on the topic of conflict of interest. He has served on scientific advisory boards for Biogen, Dyax, and Merck.

So maybe Dr Stossel should take his own advice, and proudly declare his complex relationships with industry in the course of yet another of his arguments that any criticism of any relationships among medical academics and industry under any circumstances will deprive humanity of future cures of dread diseases. As long as medical academics with relationships to industry, of all kinds and in all contexts, fail to disclose such relationships when they might be germane to the topic at hand, others will continue to wonder if they indeed do have something to hide.


References

1. Stossel TP. Regulating academic-industrial research relationships - solving problems or stifling progress? N Engl J Med 2005; 353: 1060-1065. Link here.
2. Stossel TP. Regulation of financial conflicts of interest in medical practice and medical research. Perspect Biol Med 2007; 50: 54-71. Link here.
3. Stossel TP. Has the hunt for conflicts of interst gone too far? - Yes. Brit Med J 2008; 336: 476. Link here.

7:45 AM