Second Order Generic Management: Lobbyist Named CEO of American Hospital Association

A long time ago, in a universe far, far away, hospitals had relatively small administrations, usually lead by a older physician or nurse who served as executive director or superintendent.  Leading a hospital was seen as a calling, not a means to become rich.  With the rise of generic management, hospital management grew, and became dominated by generic managers who were trained as managers, not as health care professionals.

So if hospitals are now usually lead by generic managers, it should be no surprise that hospital organizations are lead by generic managers.  So it should be no surprise that the current CEO of the American Hospital Association, Richard J. Umbdenstock, was formerly " executive vice president of Providence Health & Services and president and chief executive officer of the former Providence Services, Spokane, Washington." (Look here.)

What should be a surprise, however, is what was just reported in Modern Healthcare,

The American Hospital Association has chosen Richard Pollack, its longtime lead lobbyist, to succeed Richard Umbdenstock as CEO. Hospital leaders say Pollack is the right pick, even though he never led a hospital or health system.

Pollack, 59, has been with the AHA for more than three decades and has served as the group's executive vice president for advocacy and public policy since 1991. He will take over the top post in September, the AHA announced Monday during its annual meeting in Washington.

Pollack has developed a sterling reputation for pressing the hospital group's agenda on Capitol Hill and beyond. He's played an integral role in top healthcare policy discussions in recent years, including passage of the Affordable Care Act.

Chip Kahn, president of the Federation of American Hospitals, which represents investor-owned hospitals, called Pollack a 'wise Washington hand.'

In addition,

John Rother, president of the nonpartisan National Coalition on Health Care, noted that it's an unusual pick in the sense that Pollack has not overseen a major hospital system. Before joining the AHA, Pollack served as a lobbyist for the American Nurses Association. The Brooklyn native started his professional career in 1977 as a legislative assistant for Rep. David Obey (D-Wis.)

So, the incoming American Hospital Association CEO is not a doctor or a nurse.  He has not had any known direct experience in patient care.  He has no training or experience in public health or biomedical sciences.  Furthermore, he has no direct experience working, even just as a manager, in a hospital or any organization that provides patient care or for the public health.

His entire experience is in Washington, DC, first as a legislative staffer, and then - not to put too fine a point on it - as a lobbyist.

This would make sense if he were going to lead a lobbying firm.  However, the AHA says:

In summer 1995, after regional policy board (RPB) review, the Board of Trustees approved vision and mission statements:

Vision: The AHA vision is of a society of healthy communities, where all individuals reach their highest potential for health.

Mission: To advance the health of individuals and communities. The AHA leads, represents and serves hospitals, health systems and other related organizations that are accountable to the community and committed to health improvement.

So now we have hospitals largely run by generic managers.  Furthermore, hospital associations, whose members are largely represented by generic managers, now may be run by lobbyists, people even more removed from actual health care.  Hence, perhaps too archly, I suggest that Mr Pollack is the first known example of a second order generic manager.

Summary

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

The managers who first took over health care may have had some health care background.  Now it seems that health care managers are decreasingly likely to have any health care background, and increasingly likely to be from the world of finance.  Meanwhile, for a long time, business schools seem to have been teaching managers that they have a God given right to manage every organization and every aspect of society, regardless how little they know about what the particular context, business, calling, etc involves.  Presumably this is based on a faith or ideology that modern management tools are universally applicable and nigh onto supernatural in their powers.  Of course, there is not much evidence to support this, especially in health care.

We have discussed other examples of bizarre proclamations by generic managers and their supporters that seem to corroborate their belief in such divine powers.  Most recently, there was the multimillionaire hospital system CEO who proclaimed new artificial intelligence technology could replace doctors in short order (look here).   Top hospital managers are regularly lauded as "brilliant," or "extraordinary," often in terms of their managerial skills (look here), but at times because of their supposed ownership of all aspects of patient care, e.g., (look here)

They literally are on call 24/7, 365 days a year and they are running an institution where lives are at stake....

As noted above, if the new generic managers work in offices that are physically, intellectually and spiritually distant from the real world of health care, a lobbyist running a hospital association would be at best distant even from the management suite.

It is way past time for health care professionals to take back health care from generic managers.  True health care reform would restore leadership by people who understand the health care context, uphold health professionals' values, are willing to be held accountable, and put patients' and the public's health ahead of self-interest.

6:49 AM

On Generic Management in Health Care: Hospital Chief Information Officers (CIOs) Say Patient Engagement is All About ... Themselves?

To laugh or to cry? - now it seems that hospital CIOs think they "own" patient engagement. 

An article in Medscape summarized a presentation at the Healthcare Information and Management Systems Society (HIMSS) Annual meeting that provided a surprising insight into how some hospital managers think.  The survey focused on the concept of patient engagement:

In separate surveys, researchers polled a national sample of 125 chief information officers, 359 primary care physicians, and 2567 patients who visited their doctor in the previous 90 days. Questions centered on beliefs about engagement, the perceived roles of the stakeholders, and barriers.

The patients seemed to have a sensible idea about their own engagement,

From the patient perspective, getting help from a provider they trust is most important, said Mazi Rasulnia, PhD, from M Consulting LLC, who is cofounder of Pack Health, a patient-activation company in Birmingham, Alabama.

What they expect most, according to the survey, is a provider who listens to them and helps them understand treatment options before they make a decision.

'Patients want questions answered around the specificity of their own health, not just what generally happens with 'patients like you' or from a population standpoint,' Dr Rasulnia said.

'What they don't really care for or expect is for providers to 'give me a website so I can access my medical information'.' That, and asking patients about their personal life, ranked lowest on patients' lists of expectations.

They want providers to help them navigate not only their disease, but also the health system. Providing access is important, but that alone won't help patients engage, he explained.

The article did not provide much information about the physicians' responses, but did suggest

When physicians talk about patient engagement, they tend to think in terms of the doctor–patient relationship,...

So in general, the doctors and patients were on the same page, but

doctors believe patients need to take more responsibility for their outcomes, and patients say they can't because their doctors, who are responsible for engaging them, don't spend enough time with them.

Setting aside the causes and approaches to the problem of insufficient time during patient encounters, the chief information officers (CIOs), had a radically different idea,

when healthcare executives talk about the patient engagement envisioned under the Affordable Care Act, they think in terms of transactions,...

Furthermore,

 Chief information officers believe they are responsible because patient engagement involves technology,...

Also,

The chief information officers surveyed 'clearly saw themselves as the owners of patient engagement,' said Lorren Pettit, MBA, vice president of market research for HIMSS Analytics, who reported on the systems perspective.

When chief information officers were asked who is most accountable for patient engagement in their organizations, 46.4% said they were, but 14.4% thought nurses were accountable for patient engagement, not physicians or patients.

Comment - on the Hubris of Generic Managers

I have to assume that the article, presentation, or the survey were hopelessly garbled. If not, what on earth were the chief information officers thinking?

Chief information officers think they are the "owners of patient engagement?"  While "patient engagement" does not seem to be a well-defined term (look here), and seems like an example of bureaucrat speak or politically correctness, it surely seems to be related to communication between patients and health care professionals.  It surely does not seem to be directly about information technology. At best, the health care information technology CIOs manage could support patient engagement.    Furthermore, the explanation apparently offered by the CIOs, that patient engagement involves technology, is not helpful because at this time, all of medicine and health care to some extent "involves technology."

So why would CIOs claim to "own" patient engagement?  Maybe they are simply clueless about what patient engagement really involves.  CIOs rarely interact with patients.  Most CIOs have no direct health care experience, and are not trained as doctors or nurses.  For example, a recent list of "100 Hospital and Health System CIOs to Know" included only 10 with health professional degrees (seven MDs, three RNs).

Why then, not simply admit that the issue is out of their area of expertise, rather than claiming "ownership."  My best guess is this is the bravado, or arrogance of generic managers.

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

The managers who first took over health care may have had some health care background.  Now it seems that health care managers are decreasingly likely to have any health care background, and increasingly likely to be from the world of finance.  Meanwhile, for a long time, business schools and the like seem to have teaching managers that they have a God given right to manage every organization and every aspect of society, regardless how little they know about what the particular context, business, calling, etc involves.  Presumably this is based on a faith or ideology that modern management tools are universally applicable and nigh onto supernatural in their powers.  Of course, there is not much evidence to support this, especially in health care.

We have discussed other examples of bizarre proclamations by generic managers and their supporters that seem to corroborate their belief in such divine powers.  Most recently, there was the multimillionaire hospital system CEO who proclaimed new artificial intelligence technology could replace doctors in short order (look here).   Top hospital managers are regularly lauded as "brilliant," or "extraordinary," often in terms of their managerial skills (look here), but at times because of their supposed ownership of all aspects of patient care, e.g., (look here)

They literally are on call 24/7, 365 days a year and they are running an institution where lives are at stake....

If hospital CEOs, who spend lots of time in offices, at meetings, and raising money, really see themselves as perpetually on call, and directly responsible for patients' lives, then maybe it's not surprising that their CIOs think they own patient engagment.

So in summary this latest survey shows the continued hubris of the generic manager, and hence their continued unsuitability to run health care organizations.  It is time for health care professionals to take back health care from generic managers.  True health care reform would restore leadership by people who understand the health care context, uphold health professionals' values, are willing to be held accountable, and put patients' and the public's health ahead of self-interest. 

ADDENDUM (20 April, 2015) - This post was republished on Naked Capitalism. 

2:27 PM

Health Care Run by Those "Who See the Practice of Medicine as a Set of Economic Transactions," or as a "Moral Endeavor?"

Calls are getting louder for restoring medicine and health care as a calling that puts patients first, versus a business that puts money first.  For example, in the conclusion of her opening talk for the 2015 Lown Institute Annual Conference: the Road to RightCare, Shannon Brownlee said, [with italics added for emphasis]

So today I stand before you not as a writer turned health policy expert turned health care activist, though I’m still all of those things. I stand before you as a mother, a wife, a daughter . . . and a citizen. I stand before you filled on the one hand, with dismay . . . and on the other hand with a full measure of hope. I stand here to welcome you to the work we are all doing to transform healthcare.

And our first step is to name our task. It is not just stamping out overuse, though we must do that. It is not just ensuring that patients get the care they need. Though that is unfinished business.

Getting to the right care also requires that we recognize the historic choice we face between opposing world views. On one side are those who see the practice of medicine as a set of economic transactions, and healthcare as just another business. This side thinks the market solves all ills. This side sees the health professions as the labor needed to run a highly profitable industry. You are the 'providers' of services -- the help. Patients are revenue. Excuse me, 'consumers.'

On the other side of this divide are those who see healthcare as a moral endeavor. This side seeks to serve both patients and the common social good. This side knows that ignoring the patient as vulnerable human being is the quintessential failure of our system. This side acknowledges our need for hospitals, and for companies to manufacture drugs, and devices, and scalpels and surgical gloves. But the delivery of healthcare should not be designed for their benefit.

If we want to get to the right care, we must begin to envision a vastly different system. A just system. A system whose purpose is to serve patients and communities. A system that is not just reformed, but radically transformed.

The purpose of this conference, the reason we are all here today, is to find our way towards that transformation.

[The above was reprinted with Ms Brownlee's permission.]

On Health Care Renewal, we have long been showing the consequences of health care run by generic managers who believe the business school dogma of promoting "shareholder" value, even when their organization has no shareholders, by putting short term revenue ahead of all else.  They are backed by market fundamentalists who believe all of human life can be reduced to business transactions.  The results have been very profitable to some, particularly to the very same generic managers, in terms of every rising executive compensation untethered to any clear evidence for these managers' achievements, beyond making money.  I have suggested that this has become a major cause of health care dysfunction, of ever rising costs, shrinking access, and threatened quality.  True health reform, or transformation, to use Ms Brownlee's term, would restore the priority of patients' and the public's health, and return health care to those who see it as a calling, not just a way to get rich. 

8:35 PM

A "PR Pawn" Confounds the Public Relations Burnishing of Texas Health Resources and its CEO

The Ebola virus epidemic in Africa is hopefully winding down.  The uproar, if not panic, over Ebola virus in the US has been eclipsed by the latest  internet craze.  However, we are still learning from the echoes of the brief, and thankfully very localized US experience with Ebola.

In particular, the country's response to the virus should continue to inspire unease about how our supposedly market based, managerially focused health care non-system can handle real public health threats.

Background - Ebola at Texas Health Presbyterian

Starting on October 2, 2015, we discussed numerous concerns about whether problems with leadership or management at Texas Health Presbyterian hospital, part of the Texas Health Resources system, contributed to the poor outcomes of its Ebola patients.  First, InformaticsMD raised questions about whether a badly designed or implemented electronic health record at the hospital enabled the initial misdiagnosis of Eric Duncan, the first patient to present with the Ebola virus on US soil.  These questions were reinforced when hospital managers gave conflicting responses on this issue.  He expanded on these questions here.

A week later, I wrote about the "mystery of the discharged Ebola patient," asking:  why don't we know yet exactly what happened when our Ebola patient zero first appeared?  I wondered then whether a decision by management to shift the health system's emphasis from acute care to "population health management," whatever that is, might have lead to problems addressing what was a severe, acute medical problem (albeit with public health implications.)    About a week later, I wrote about the questions raised by inconsistencies in hospital managers' statements, about Mr Duncan's clinical status and the failure to initially accurately diagnose his infection, about the hospital's readiness to handle Ebola patients, and about whether hospital professional staff may have been silenced by administrators, and if so, why?


By late November, 2014, a Texas Health Presbyterian nurse had gone public with accusations that the initial care of Mr Duncan had been chaotic; Mr Duncan had died; and two nurses who cared for him after he was admitted after his second emergency visit to Texas Health Presbyterian had contracted Ebola infections; but no new Ebola cases had been diagnosed in the US, and Ebola was starting to fade from the media.   At that time, I wrote that the three questions above remained unanswered.  However, Texas Health Resources, the parent system for Texas Health Presbyterian, had hired Burton-Marsteller, a big public relations firm, and  managers of both companies generated considerable verbiage, but no specific answers and no real enlightenment.  Hospital managers had already pointed their fingers elsewhere, at the US Centers for Disease Control and Prevention (CDC) for inadequate guidelines, unnamed third parties for exploiting the crisis, and the media for sensationalizing it. Hospital managers had sponsored a pep rally, but the health professionals who appeared there either seemed to stick to talking points, or remained "tight lipped."   The hospital settled a lawsuit filed by Mr Duncan's relatives, and Micahel Barden, the THR president, submitted to an interview in which he boasted of a "high level of communication" and asserted the system had "maintained the trust level," but did not supply any specifics.

Since November, 2014, no further specifics have appeared about what happened at Texas Health Presbyterian.

The Public Relations Burnishing of Texas Health Resource Management

Instead, since October, 2014, a series of events and media reports seemed more about burnishing the management of Texas Health Resources, and particularly its CEO, Barclay Berdan, than about learning from the problems that occurred when the US first encountered the Ebola virus.

On November 29, 2014, Modern Healthcare published an interview with Mr Berdan including leading questions like:

Has this Ebola crisis caused you to take a broader look at hospital-acquired infections?

How were you able to maintain high staff morale throughout this crisis?

The answer to that last question was particularly upbeat:

It was really important to make sure that we had a high level of communication and that we maintained trust inside the organization while we were in many cases being attacked from the outside, as the world moved from science to political science to social science to superstition and fear. That helped us keep the morale of the organization up and to keep people focused on the fact that we had a lot of patients to take care of.

Even though our patient census dropped by 20%, we told everybody we weren't going to reduce staffing. We were going to keep people working at their regular rates and times. We kept everybody really focused on this challenge, that we had to stay strong and get through this period of time.

Note that this implied communications had always been good, trust had always been maintained, and morale had never declined. There were no followup questions, particularly whether staff morale could have seemed good because dissent had been silenced? 

On December 5, 2014, the D Healthcare Daily reported on an event in which Mr Berdan participated, and treated him as an honored expert.  Berdan was quoted, for example,

The best thing you can do—if you’re a local hospital, if you’re a rural hospital or an urban hospital—is to try and figure out how to manage the safety of your employees, the safety of your institution, the safety of patients who may present with, in this case, a disease that already causes people great fear.

The article trumpeted how selflessly Berdan has led THR to teach other hospitals about Ebola, with the underlying assumption that it had valuable lessons to teach:
 

THR has shared what it’s learned with other hospitals, both in North Texas and across the country. It held a webinar with 1,200 medical professionals to share what it learned and changed....

On December 5, 2014, D Healthcare Daily also noted that at the event, an award was given to caregivers who dealt with ebola at Texas Health Presbyterian, but who accepted the award on their behalf? 

Barclay Berdan, CEO of Texas Health Resources, was center-stage on Tuesday at the Sheraton downtown, flanked by more than a dozen staffers representing the 100-plus caregivers who helped treat the three Ebola patients in October.

The Dallas Regional Chamber presented the caregivers of Texas Health Presbyterian Dallas with the Courage of Public Service Award, an annual recognition that honors groups or officials who 'demonstrated significant leadership on important issues.'

After Berdan gave his little speech, next up on stage were:

Texas Health Resources Board Chair Anne Bass and Presbyterian Hospital Board Chair Stan Rabin walked up first,... 

Although the actual caregivers were supposedly being honored, airtime and coverage went to board chairs.

Then last month (February, 2015), it began again. Another interview with Mr Berdan appeared in D Healthcare Daily. It allowed Mr Berdan to pontificate on issues like the hospital system's growth plans, and to go back to the idea of population health as more important than acute care,

I think we’re looking always to find good opportunities to improve the health of the people in the communities we serve, and that’s our mission. In fact, we have really changed the scope and direction of our organization over the last four or five years from being a great acute care hospital company—you referenced all of our hospital properties in North Texas—to really being a health company.

Ebola, and the questions I raised above, were not featured. 

Finally, in the March issue (available in late February, 2015), D Magazine published, "How Texas Health Managed its Ebola Crisis," focused, of course, on CEO Barcaly Berdan. It featured a large color photograph of Mr Berdan.  It seemed to suggest that the most important issue was maintaining the reputation of the hospital system, rather than for example, being transparent about and learning from mistakes. It featured a big informal portrait of Mr Berdan, and started with how Mr Berdan managed the first news conference about Ebola, rather than, for example, the details of Mr Duncan's encounters with THR.

To Berdan, it was important to show that Presby—one of Dallas County’s largest and busiest hospitals—was safe and open for business.

The article described Berdan as an "unassuming man who speaks with confidence and fatherly authority," an "able communicator," a man whose "word is his bond," and eventually, "a battle tested CEO." It stated that "the treatment of Duncan - and the safety of the men and women who volunteered to care for him - rested squarely on his shoulders." Yet, of course, Mr Berdan's highest degree was an MBA, from University of Chicago, no less. He may have had a public relations battle, but he did not have to walk into a room containing a highly infectious Ebola patient. He actually should not have had any authority over the actual treatment of Mr Duncan. That should have been in the hands of the patient's doctors and nurses.

The article obliquely addressed the unanswered questions, but did provide substantive answers. Why was Mr Duncan not diagnosed accurately?

Privacy laws prevented the hospital from discussing the care provided Duncan until he permitted them to....

Was the hospital prepared to take care of Ebola patients?

We were moving in parallel with the CDC's ongoing recommendations....

Were health professionals silenced? The hospital paraded four nurses in front of 60 Minutes' cameras:

On the evening of Oct. 26, wearing blue scrubs and seated in front of a jet-black background, nurses Sidia Rose, John Mulligan, Richard Townsend, and Krista Schaefer offered a poignant and moving narrative of Duncan’s treatment. It was the most substantive account offered to that point.

The final section of the article was entitled, "On the Mend." Again, the emphasis was on PR.

THR had positive momentum. Once a pin-cushion, its public reputation was improving.

The hospital settled a lawsuit with Mr Duncan's relatives for an undisclosed sum. After the settlement was announced, Mr Duncan's nephew proclaimed:

This facility is an outstanding facility, and we as humans are not perfect.

Maybe getting a big sum of money can make one more philosophical about human imperfections.

The article ended up describing how

North Texas seems to have appreciated the efforts of THR under Berdan....

It all sounded so rosy, at least for a few days.

A "PR Pawn" Strikes Back, or, Nina Pham Administers a Corrective

Only a few days after the D Magazine piece appeared, the Dallas Morning News published an article about Nina Pham, the first THR nurse to have been infected with Ebola virus after caring for Mr Duncan.  Pham had never previously been portrayed as a dissident, and had been seen in the media as a young professional gamely facing down the virus and supporting her fellow nurses.  Now, however, rather than participating further in the feel good celebration of THR and Mr Berdan, Ms Pham announced she would be suing the hospital and THR.

She says the hospital and its parent company, Texas Health Resources, failed her and her colleagues who cared for Thomas Eric Duncan, the first person in the United States diagnosed with Ebola.

'I wanted to believe that they would have my back and take care of me, but they just haven’t risen to the occasion,' Pham told The Dallas Morning News

Pham reaffirmed the contention that Texas Health Presbyterian was not prepared to care for Ebola patients.

In her 90-minute interview, Pham described working in chaotic surroundings at the hospital with ill-prepared nurses who received little guidance on how to treat Ebola and protect themselves.

In particular,

She said the extent of her Ebola training was a printout of guidelines that her supervisor found on the Web.

And

The day Duncan moved to ICU, Pham said, she and the charge nurse went in with double gloves taped to double gowns and wore double booties and a face shield. The hospital did not have hazmat-type suits, and Pham said her neck was always exposed.

'We’ve had nurses that I’ve worked with that worked in other states, and they worked in hazmat suits for flu and H1N1,' Pham said. 'Why aren’t we wearing hazmat suits for Ebola?'

After days of asking, Pham said, the nurses were given hazmat suits. She said all the decisions to upgrade the protective gear and precautions were made by the nurses 'on the fly.'

 Meanwhile, the nurses devised their own hazardous waste area. In a room adjacent to Duncan’s, the nurses set up a place to take off their protective gear and shower after caring for him. In another nearby room, they placed bags of dirty linens, towels and other soiled items.

Finally,

while she became the American face of the fight against the disease, the hospital’s lack of training and proper equipment and violations of her privacy made her 'a symbol of corporate neglect — a casualty of a hospital system’s failure to prepare for a known and impending medical crisis.'

She also contradicted much of the feel good public relations speak found in the articles above.  The D Magazine article had referred to Pham and the other nurses who care for Mr Duncan as "the men and women who volunteered to care for him."  In contrast, the Dallas Morning News article said "she did not volunteer to care for Duncan, but felt she couldn't say no."

During the crisis, Pham was seen in a video where she appeared gamely optimistic.  However,

She says that Texas Health Resources violated her privacy while she was a patient at Presbyterian by ignoring her request that 'no information' be released about her. She said a doctor recorded her on video in her hospital room and released it to the public without her permission.

While the hospital argued that Pham gave permission to make the video,

The day Pham was transferred to NIH, a notation was made in her medical file that 'she does not have the mental capability to make end-of-life decisions,' [Pham's attorney Charla] Aldous said. But PR people from Texas Health were trying to talk to her for a media release 'about how much she loves Presbyterian,' Aldous said.

Texas Health, with a PR firm’s help, developed a slogan — 'Presby Proud' — aimed at restoring the community’s faith in the beleaguered hospital.

Before Pham’s flight to Maryland on Oct. 16, she said, a doctor wearing a video camera under his protective hood came into her room and said he was filming her for educational purposes. Pham said she did not give permission for the video, which was released to the media.

'Thanks for getting well. Thanks for being part of the volunteer team to take care of our first patient,' a man’s voice said in the video. 'It means a lot. This has been a huge effort by all of you guys.'

'I could tell they wanted me to stay just because they kind of knew, they could see I was getting better. They wanted that ‘yes we cured her’ kind of attitude. They wanted a win, especially after a loss.' - Nina Pham

Charla Aldous, Pham’s attorney, put it all more simply:

Texas Health Resources 'used Nina as a PR pawn.'

Summary

So it looks like back to the drawing board for the public relations flacks who have been defending the "reputation" of Texas Health Resources, and, in my humble opinion, mainly the reputation of its CEO, Barclay Berdan.  After questions about its preparedness for and the care of Ebola patients, and about whether managers overrode and silenced health care professionals, the hospital system had put on a big public relations campaign, in concert with a big outside PR firm.  Yet all the questions have now resurfaced as one of the hospital nurses put before the public as brave yet ever loyal to "Presby" now says she was turned into a "PR pawn." 

Of course, the immediate response by the hospital and the CEO were to trot out the old talking points.  In the Dallas Morning News article, spokesman Wendell Watson said,

Nina Pham bravely served Texas Health Dallas during a most difficult time.  We continue to support and wish the best for her, and we remain positive that constructive dialogue can resolve this matter.

Later, as again reported by the Dallas Morning News, CEO Barclay Berdan tried to refute Ms Pham's contention that her privacy was violated by saying:

We adhered to HIPAA rules in determining what information to share publicly.  

But HIPAA rules are notoriously hard to interpret and implement.

Also,

We had Nina's consent to share the information about her that was released.

But she had contended she was too ill, and confused on pain relief medicines to give informed consent, and aspects of her record apparently corroborate that. 

So the questions about what was going on at THR persist.  The latest twist in the story does emphasize how important public relations has become to contemporary hospital managers.  One cannot avoid the notion that most of what went on in the C-suites of Texas Health Presbyterian and Texas Health Resources in response to the presence of three Ebola patients was about public relations, protecting the reputation of the hospital, and particularly celebrating its very well paid MBA CEO.  Of course if leaders focus on public relations, maybe they will not do such a good job supporting the health care professionals who actually care for patients, and ultimately supporting the patients' and the public's health.

So as I said a while ago about this case, the rise of generic managers who value, among other things, favorable public relations perhaps to the detriment of patient care, threatens the US' ability to care for acutely ill patients, especially in the context of new or epidemic diseases.  True health care reform would restore leadership by people who understand the health care context, uphold health professionals' values, are willing to be held accountable, and put patients' and the public's health ahead of self-interest.

12:51 PM

Promises, Promises - Dendreon Bankrupt, Steward Healthcare Closes Quincy Hospital

Physicians and other health professionals are trained to attempt to make realistic, unbiased predictions, most frequently of the prognoses of individual patients.  Thus physicians may not question apparently authoritative predictions, claims, and promises made in the health care context.  They may not question, for example, predictions about the efficacy and safety of drugs and devices, even by people working for drug and device companies; predictions of the benefits of health care services, even by people working for the hospitals that provide them; and predictions of the benefits of health policies, even by politicians or organizations that stand to benefit if they are adapted.  Yet such predictions may influence health care policies and decisions.

However, in the business culture, confidence is often conflated with competence.  Generic managers, trained in business schools, and steeped in business culture, now run most health care organizations.  Managers are responsible for most of the sorts of predictions listed above, perhaps mediated through their marketing and public relations staffs.


Thus it should come as no surprise that a lot of the predictions, claims, and promises we now hear in health care eventually come to naught, but long after they have already influenced decisions and policy. 

Dendreon Bankruptcy

In 2007, we first wrote about biotechnology company Dendreon, and its single product, a vaccine meant to treat prostate cancer with the trade name Provenge ( generic name, sipuleucel-T).  Provenge has aroused unusual passions.  When the US Food and Drug Administration delayed its approval after a single small trial showed equivocal results, much hoopla produced by Dendreon partisans occurred.  Investors and patient advocates protested, at times picketing the FDA.  Someone threatened physicians who were publicly skeptical of the vaccine.  It did appear that Dendreon funded a patient advocacy group which was one of the vaccine's vocal supporters.

In 2009, Matthew Herper, writing in Forbes, reported that the company had released preliminary data from a new trial before the results were presented at any conference or published, apparently after breaking the treatment blinding, causing one biostatistics expert to say, "I'm shocked."  At that point, company CEO Mitch Gold

has been using the [controversial, unpublished] data to talk up Provenge. 'We’re clearly within shooting range,' Gold told analysts at a JP Morgan investor conference in January. 'Sometimes I use a football analogy where we are on the 10-yard line and we are in the red zone, and we need to punch it in the end zone right now.'

A TheStreet.com article noted that

Dendreon threw a celebratory cocktail party Tuesday night at a Chicago hotel just off the Miracle Mile. CEO Mitch Gold was beaming as he slapped backs, shook hands and hugged employees, investors and supporters.

In 2010, the FDA approved the vaccine based on the eventually published study that showed that Provenge prolonged survival for an average of about four months.  The company then priced a course of therapy at $93,000, starting one of the early big controversies about extremely expensive new drugs with apparently small benefits  (see this Washington Post article) .  

According to a 2011 article by Jim Edwards for CBS, through 2010 and into 2011, CEO Gold and Chief Operating Officer Hans Bishop continued to make optimistic forecasts about sales of Provenge.  But during the same time period, Gold and other insiders sold $87 million in stock.  Then in 2011, the company announced that its revenue projections had been far too optimistic.

Things continued downhill from there.  Dendreon settled for $40 million an investor class action lawsuit that asserted corporate executives made "false or misleading statements about the company," according to one very brief story in the Seattle Times.  

Then, on November 10, 2014, per the Seattle Times, the company announced it would file for bankruptcy,

Dendreon said it has filed for bankruptcy protection as part of a plan to restructure $620 million in debt, a move likely to effectively wipe out the value of its common stock.

The biotechnology company, once Seattle’s largest, filed a voluntary Chapter 11 bankruptcy petition Monday in Delaware.

"Within shooting range" - no more.  Yet from 2007 to 2011, the company CEO (and COO), aided by corporate marketers and public relations, created a huge brouhaha over the company's one product, making management insiders rich meanwhile.  The high price the company charged for the vaccine may have driven up the stock price early, facilitating the amassing of wealth by top management insiders.  While this pricing decision may have helped other health care corporations pursue gigantic revenues from new products, it may have ultimately damped demand and lead to bankruptcy.  How much money the managers who created the hoopla will keep remains to be seen.  Why skepticism about the executives fabulous predictions was not initially higher is unclear. 

ADDENDUM (20 November, 2014) - Added paragraph re 2013 investor class action settlement.

Steward Healthcare Closes Quincy Hospital

Starting in 2010, we wrote about the takeover of the Massachusetts non-profit Catholic hospital system Caritas Christi by private equity firm Cerberus Capital Management (named for the mythological three-headed dog that guards the gates of the underworld, look here.)  Despite some controversy, and the apparent contrast between Catholicism and the three-headed dog guarding the gates of hell, the takeover was approved, yielding the now privately held, for-profit Steward Healthcare.

Over the time period, proponents of the sale gave some big assurances.  In 2010, the Boston Globe reported,

Brett Ingersoll, co-head of private equity at Cerberus, called the Caritas acquisition 'a big win for the hard-working communities of Greater Boston.'’ Ingersoll said the new owners 'plan to create jobs, expand local tax bases, and provide world-class health care facilities.'

Similarly, from a Boston Herald article,

'Cerberus is pleased to be making a long-term investment that will help ensure the viability and future success of the Caritas Christi health care system,' said W. Brett Ingersoll, co-director of private equity at Cerberus in a statement.  'Caritas is the region's largest community hospital network, and our investment will give physicians, nurses, and other health professionals the additional tools they need to deliver world-class care to patients in the communities they serve.'

Later in October, Dr Ralph De La Torre, Caritas Christi CEO, a former cardiovascular surgeon who apparently no longer held an active medical license (look here), intoned per the Globe,

'The business plan, the strategy, or whatever you want to call it, is all about keeping care locally,' he said. 'If we improve the facilities, improve the infrastructure, make it so that our very own patients want to stay in our hospitals, that’s the business plan.'

Furthermore, at the same meeting,

The new holding company 'will continue to promote the public interest after this transaction,' Lisa Gray, Cerberus general counsel executive and a Steward board member, told the council.

A few days later, again per the Globe, Caritas Christi spokesman Chris Murphy said,

Once finalized, the sale will ensure the future of our system, the jobs of our employees, and the pensions of our retirees.

The takeover was eventually completed, and the new Steward Healthcare commenced acquisitions of other hospitals.  CEO De La Torre had become the most highly paid hospital system CEO in the Boston area, and was widely anticipated to be on the way to even higher compensation under Steward (look here). 

In 2011, Steward set its sights on Quincy Medical Center.  Once again, promises were made, per the Boston Herald,

In a statement today, interim CEO John Kastanis said the hospital's announcement is 'the culmination of an exhaustive process to find a capital partner who is committed to our mission, our employees and physicians, and the communities we serve.'

'We have found the partner in Steward,' Katsanis said.  'Steward is a community-based hospital system with tremendous resources that will enable us to grow and continue to provide world-class health care for generations to come.'

The Massachusetts Attorney General approved the sale of Quincy Medical Center to Steward, but with some conditions, as a September 8, 2011, Boston Globe article noted,

[Attorney General Martha]  Coakley imposed multiple conditions on the deal that are meant to safeguard patients and employees of the financially struggling hospitals. They included a guarantee that Boston-based Steward will not sell either one for at least five years, that it will keep making capital improvements after five years,...

Also, Steward

agreed to a 10-year “no close’’ period for both hospitals, though the deals included clauses that would allow Steward to close the hospitals under certain conditions in the last three years if financial targets aren’t met.

It all sounded so good.  However, on November 6, 2014, slightly more than three years after the sale of Quincy Medical Center was approved with the conditions above, per the Globe,

Steward Health Care System said Thursday that it would close Quincy Medical Center and displace nearly 700 workers after the long-struggling hospital finally succumbed to the intense competition for patients south of Boston.

 The shutdown, scheduled to be completed by the end the year, marks the biggest hospital closing in the state in at least a decade and the first failure for Steward, the for-profit company that promised to reinvent community health care when it entered the Massachusetts market four years ago.

So what happened to "world class health care for generations to come," or being "committed to our employees?"  The commitment lasted a little over three years, the employees will need to find new jobs, and the patients will need to go elsewhere for health care, whether world class or not.  At least Attorney General Coakley is looking into options given that Steward Health Care seemed to have violated that 2011 agreement, per the Herald,

The Attorney General’s Office is investigating whether Steward Health Care System violated the terms of a 2011 agreement when it announced yesterday that Quincy Medical Center will shut down operations by the end of the year, a spokesman said.

'We have just been notified about this decision and are currently reviewing it in the context of Steward’s legal obligations,' said Brad Puffer, a spokesman for Attorney General Martha Coakley.
When Steward bought the 196-bed Quincy hospital in a bankruptcy auction in 2011, it signed an agreement with Coakley that included a 10-year 'No Close Period' requiring that it 'maintain an acute care hospital in Quincy providing at least the same scope of services as Quincy Medical Center currently provides.'

Steward could close Quincy Medical in the last three-and-a-half years of that 10-year period if it could show the hospital 'experienced two consecutive fiscal years of negative operating margins' and provide the state’s Department of Public Health with 'at least 18 months prior written notice of its intent to close,' according to the agreement.

A Steward spokeswoman declined to comment when asked about the no-close clause last night.

 In any case, while there was plenty of skepticism about the acquisition of Caritas Christi by Cerberus Capital Management, and the ambitious expansion plans of the resulting Steward Healthcare, it was insufficient to slow down these aggressive plans.  I could speculate that had more skepticism come from physicians and health care policy experts, maybe things would have been different.  It is likely that Steward Healthcare/ Cerberus Capital Management insiders made plenty of money from the deals, although now that the hospital system is privately held, little about individual compensation has been disclosed.  The takeover of a once religious based, non-profit health care system by private equity, and the aggressive initial expansion of the new for-profit system, were in part enabled by extravagant promises and claims.  While this expansion is now clearly seen as not an unalloyed good, those making the claims likely have already personally profited from it. 

Summary

There have been lots of other expansive predictions in our era of commercialized health care that have come to naught.  In general, lots of physicians seemed convinced by predictions that:
- commercial managed care would improve access and quality, and cut costs
- large, vertically integrated hospital systems would improve access and quality, and cut costs
- commercial electronic health records would - guest what - improve access and quality, and cut costs.

How did those turn out?

There were lots of more specific and local predictions that proved equally inoperative.  Remember the former CEO of the Allegheny Health Education and Research Foundation (AHERF), one of the first really large vertically integrated health care systems, promising to create a more flexible, adoptable, and agile organization.  That organization was soon bankrupt, and he was soon in jail.  (Look here).

So now we have two new reminders that even apparently authoritative health care claims, predictions, and promises, particularly when made by executives or managers, when enabled through public relations or marketing, or appear likely to be self-serving, ought to be regarded with extreme skepticism, if not outright ridicule.  Many doctors now realize that they should not trust advertising of health care products and services.  Nor should they trust flowery pronouncements of business people about health care products, services, and policies when the predictors are in a position to benefit from short term actions adherent to these predictions.

True health care reform would restore leadership of health care that is knowledgeable about health care, committed to its values, and held accountable for patients' and the public's health.  Meanwhile, we ought to be extremely skeptical of claims, predictions, and promises made by health care organizations' management. 

8:44 AM

The Mystery of the Discharged Ebola Patient - Where is Sherlock Holmes When We Need Him?

As discussion, if not outright panic, about Ebola infections increases in the US, it is still hard to figure out what heath care professionals and the health care system need to do to protect patients and the public in a very changed world.

One pressing question is how to identify people at risk of having the infection so as to best care for them, and to protect the public from further spread of the infection, without swamping the health care system, needlessly reducing civil liberties, or spreading further panic.

To better answer question, better understanding why the first patient who was diagnosed with and then died from Ebola in the US was initially not diagnosed might help.  However, at this time, the whole thing seems mysterious. As a column published on October 7, 2014 in the Dallas Observer was entitled,


"Why Don't We Know Yet Exactly What Happened When Our Ebola Patient Zero Appeared?"
 

On this blog, InformaticsMD was the first to speculate that problems with the design and implementation of an electronic health record (EHR) might have enabled the discharge of this patient, after he presented to the emergency department with non-specific symptoms soon after returning from Liberia.  The next day, an official statement from Texas Health Resources seemed to confirm that a "flaw" in the hospital's EHR prevented adequate communication of the patient's travel history between  a nurse and a physician.  However, one day later, as InformaticsMD discussed here, the hospital reversed itself, releasing another statement that there was no "flaw" in the EHR.  That statement, however, did not explain either why the first statement came out, or anything more about the diagnostic failure.

So, as the Dallas Observer column stated,

The question of why Duncan was sent home initially instead of isolated is still the most stubborn mystery in the saga of 'Ebola Comes to Dallas.'

As columnist Jim Schultze explained, this question has implications for health care professionals and health care organizations who need to figure out how to best deal with the next patient who shows up who might or might not have Ebola.

If Duncan's dismissal from the emergency room on his first visit was a bungle, then it's reasonable to assume that everybody knows about the bungle by now and a similar goof is unlikely to happen again at any decent hospital in America. But if the handling of Duncan grew out of something more systemic, especially a business or management style or policy, then it may be less reasonable to assume the next hospital will be immune from the same issue.

In other words,

if the Eric Duncan mistake flowed from something more systemic, then we absolutely need to know what it was and how it happened so that we can look for the same problems everywhere else. If it was a non-medical problem, I can almost guarantee you it will turn out to be an issue not be unique to this hospital.

Mr Schultze is not the only one to point out the critical need to solve this mystery.  He quoted

former Boston hospital CEO, Paul Levy, called on Texas Health to open up: 'A failure by a hospital to be open about what went wrong in a major medical case such as this," Levy said, "does a major disservice to everyone else in the health care industry.'

Similarly, the editor of FierceEMR wrote,

The Texas Health situation may be setting a dangerous precedent. This is a major world health crisis for which providers worldwide are trying to prepare. If truly the mistake Texas Health made in releasing Duncan was its mistake alone, so be it.

But if there really was a design flaw, then every provider--and every vendor--needs to know about it, evaluate whether it has the same problem, and correct it.

The patients deserve no less.

So far, to date, we have heard nothing more from the managers of Texas Health Presbyterian or its parent non-profit corporation, Texas Health Resources.  It appears we need a reincarnation of Sherlock Holmes to solve this one.

Sifting a Few Clues

I am not he.  But I do believe there are some clues, however, weak, that suggest system flaws.  They can be found in an interview of the new Texas Health Resources chief operating officer (COO), Dr Jeffrey Canose, published in Healthcare Informatics a few weeks before Mr Duncan presented first to the Texas Health Presbyterian emergency department.

One of his points was that the hospital system is changing its emphasis from acute care to population health (however that may be defined),

we made the decision to become more of an integrated health system, and started to build the infrastructure for population health

Then,

The biggest challenge is to continue on our journey to increase our capabilities as a fully integrated health system; to develop the competency to be a high-performing system in the realm of population health management; to shift our focus from sick care to actually managing well-being....

Also, he referred to participation in the Pioneer ACO program as

one of our first significant efforts in shifting our focus from being acute-care-centric to being more focused on the full continuum of care

Recall Mr Schulze's point that the failure to diagnose Mr Duncan could have been due to a business management style or policy.  So maybe we have a clue that the hospital's policy to reduce emphasis on acute care, including the emergency department, might have had to do with problems in the ED leading to a diagnostic misadventure.

 In addition, Dr Canose noted,

 the electronic health record is a huge enabler to all this; the next challenge will be to enable things further, including through data mining, working with big data, and clinical and operational support

So,

around collaboration at the sharp point of redesigning patient care—... people in IT are mission-critical partners in hearing what kinds of problems we’re trying to solve, and in helping us to figure out how to drive clinical transformation and care design, and how to drive efficiency.

So maybe we have a clue that the management was very heavily intellectually invested in their health care information technology infrastructure, and perhaps thus less willing to think about how health care IT could be the cause, rather than solution of problems, such as diagnostic problems in the ED.

Finally, this may be just a hint, but Dr Canose spoke

We have a clear focus on continuing to elaborate the infrastructure we need in order to do population health management, and we’re continuing to build those capabilities over time, and explore ways we can deploy through our employed physician groups,...

This implies that many physicians who practice at Texas Health Resources hospitals are in fact its employees.  We have at times written about the perils being a corporate physician.  One is loss of autonomy, as physician employees become beholden to organizational managers.  So maybe we have a clue that physicians' loss of autonomy, perhaps the autonomy to put patients ahead of corporate policies and managerial edicts, such as those deemphasizing emergency care, could have enabled the failure to diagnose the Ebola "patient zero?"

Summary

We wrote earlier that the rise of generic managers as leaders of health care organizations degrade the US' ability to deal with Ebola.  In the mystery of the discharged Ebola patient, we seem to see the sort of managerial obfuscation that seems characteristic of many generic managers.  More transparency from the management of Texas Health Resources would surely help the US deal better with the ongoing challenge of Ebola.  In the long run, Ebola may teach us a hard lesson about the need to put health care leadership in the hands of people who understand health care, and subscribe to its mission to put patients and the public health first.   

ADDENDUM (10 October, 20140 - This post was re-posted on the Naked Capitalism blog.

2:04 PM

Merging Finance and Health Care Leadership - Robert Rubin Proteges Running DHHS, Spouse of Hedge Fund Magnate Running the FDA

Hidden between the lines of some not very prominent news stories were reminders of how close health care and financial leadership have become in these times of continuing economic unrest after the global financial collapse/ great recession.

After the events of 2008, it became more apparent that the dysfunction in academics and health care  paralleled that seen in finance.  One reason may have been the overlapping leadership of finance and health care.  For example, in 2008 we first posted about how Robert Rubin, who was then a Fellow of the Harvard Corporation, the top group responsible for the governance of that great academic and medical institution, bore responsibility for the global financial collapse/ great recession.  Mr Rubin as Treasury Secretary was a proponent of financial deregulation in the Clinton administration.  Later, he became a top leader of Citigroup, whose near collapse helped usher in the crisis of 2008 (look at our 2008 post here and our 2010 post here.  Rubin just stepped down from his Harvard position this year,)  Since 2008 we found many other links among the leadership of Wall Street and of academic medicine and of big health care corporations.  These links, if anything, seem to be getting stronger. 

From the Department of Health and Human Services to Citigroup and then back to the Department of HHS

A tiny, four sentence Reuters story noted an apparently routine appointment to upper management at the US Department of Health and Human Services.  The first three sentences were:

U.S. Health Secretary Sylvia Burwell named Citigroup Inc executive Kevin Thurm as senior counselor of the U.S. Department of Health and Human Services (HHS), which is implementing the controversial U.S. Affordable Care Act.

Thurm has served in a number of roles at Citi since joining the bank in 2001, including senior adviser for compliance and regulatory affairs and deputy general counsel.

Before joining Citi, Thurm, a former Rhodes scholar, was the deputy secretary of the U.S. Department of Health and Human Services.

Why is that significant?  First, the near bankruptcy of the huge, badly led Citigroup was widely acknowledged to be a cause of the global financial collapse.  A 2011 New Yorker article on the role of the revolving door between Washington and Wall Street ("Revolver," by Gabriel Sherman) summarized the plight of Citigroup and the role of Robert Rubin in it,

Citigroup was the most high-profile of Wall Street’s basket cases, the definitionally too-big-to-fail institution. With massive exposure to the housing crash and abysmal risk management, the firm cratered, surviving as a virtual ward of the state after the government injected billions and took a 36 percent ownership position. Along with AIG and Fannie and Freddie, Citi came to be seen as a pariah institution, felled by management dysfunction and heedless greed in pursuit of profits. Complicating matters for Citi, the wounded bank found itself tangled in the populist vortex that swirled in the crash’s wake. On the left, there were calls that Citi should be outright nationalized, stripped down, and sold off for parts. Pandit was called before irate congressional-committee members to answer for Citi’s sins, an ignominious inquisition captured on live television. In January 2009, under pressure, Citi canceled an order for a new $50 million corporate jet.

There was plenty of blame to go around at Citi. Chuck Prince, a lawyer by training who succeeded Citi’s outsize former CEO Sandy Weill, had little grasp of the complex mortgage securities Citi’s traders were gambling on. As late as the summer of 2007, when the housing market was in free fall, Prince infamously told the Financial Times that 'as long as the music is playing, you’ve got to get up and dance.'

Bob Rubin himself pushed the bank to take on more risk in order to increase its profitability, a move that Citi’s dismal risk management was ill-equipped to handle. Pandit, whom Rubin had helped to recruit in 2007 just as the economy began to unravel, was tasked with cleaning up the mess when he became CEO in December of that year, and his early tenure had a deer-in-headlights character. Eventually, he realized that the asset class Citi lacked most was human capital, of the blue-chip variety.  

The article also summarized Rubin's role in the fervor of deregulation in service of market triumphalism that lead to the financial collapse,

In tapping Rubin to run Treasury, Clinton was sanctioning a revolution in the Democratic Party, one that fundamentally redefined the party’s relationship with Wall Street. Rubin, along with Alan Greenspan and Larry Summers, believed in an enlightened capitalism, which would spread prosperity widely. This enchantment with the beneficence of markets became the dominant view in Democratic Washington, hard to argue with when the economy was booming, as it was in the second half of the nineties. Rubin recognized that derivatives posed a risk but effectively blocked efforts to regulate them and pushed for the repeal of the Glass-Steagall Act, the Depression-era legislation that prevented commercial banks from merging with investment and insurance firms (the new law essentially legalized the $70 billion merger in 1998 of Citicorp and Travelers Group that created Citigroup).

Circling back to recent events, Once he got to Citigroup, Rubin assembled a team, partially from his old associates in the Clinton administration,

He also recruited several former Clinton aides to Citi, including former Health and Human Services deputy secretary Kevin Thurm....

So Kevin Thurm became something of a Robert Rubin protege at Citigroup. In fact, he rose to an important leadership position at the same time Citigroup was getting ready to become a "basket case," in part apparently because of the advice of Robert Rubin.  According to a 2013 version of Mr Thurm's official Citigroup bio,

Kevin L. Thurm is Senior Advisor for Compliance and Regulatory Affairs at Citigroup.

Previously, Thurm served as the Chief Compliance Officer of Citi. In that role, Thurm led Global Compliance which protects Citi by helping the Firm comply with applicable laws, regulations, and other standards of conduct, and is responsible for identifying, evaluating, mitigating and reporting on compliance and reputational risks and driving a strong culture of compliance and control. Since joining Citi in 2001, Thurm has also served as Deputy General Counsel of Citi, where he led the Corporate Legal group, overseeing a number of Company-wide Legal functions and providing support on day to day matters, including issues involving the Board, senior executives, and regulators; Chief  Administrative Officer of Consumer Banking North America, where he helped lead the business group and was responsible for a variety of functions including Community Relations, Compliance, Legal and Public Affairs; Director for Administration in the Corporate Center; Chief of Staff to the President and Chief Operating Officer of Citigroup; and as the Director of Consumer Planning in the Global  Consumer Group.

To recap, Mr Kevin Thurm was a top compliance executive of Citigroup while the company was imploding, and being a protege of Robert Rubin, an architect of the financial deregulation that led to the global financial collapse, and a leader of Citigroup responsible for the risky behavior of that company that led to its near collapse, which was another precipitant of the global financial collapse or great recession.  It is not obvious that these are great qualifications to be Senior Counselor at DHHS.

Moreover, Mr Thurm's responsibilities at DHHS would not be limited to compliance or financial leadership.  According to the official DHHS press release announcing his appointment,

As a Senior Counselor, Thurm will work closely with the Department’s senior staff on a wide range of cross-cutting strategic initiatives, key policy challenges, and engagement with external partners.

Yet, there is nothing in Mr Thurm's public record to indicate that he has any actual experience in health care, medicine, public health, or biologic science.  So it is not obvious why he should be entrusted with leading "cross-cutting strategic initiatives, [and] key policy challenges."

On the other hand, Mr Thurm might be simpatico with the new Secretary of DHHS, Ms Sylvia Burwell.  According to a Washington Post article at the time of the hearings about her nomination,

despite her Washington experience, ... is not well known in health-policy circles, and, during her confirmation hearings, she gave little concrete sense of the direction in which she will take the complex department she will inherit.

This seems to be a polite way to see she also has no actual experience in health care, medicine, public health, or biologic science.   Her official biography lists no such experience.  However, she was also a Robert Rubin associate, and perhaps protege, during the Clinton administration,

During the Clinton administration, Burwell held several economic roles — as staff director of the White House National Economic Council, as chief of staff under then-Treasury Secretary Robert Rubin,...

To summarize so far, the new Secretary of the Department of Health and Human Services, and now her new Senior Counselor, were both closely associated with Robert Rubin, who seems to bear major responsibility for the global financial collapse, and the new Senior Counselor worked with Rubin at Citigroup, whose near bankruptcy helped accelerate that collapse.  On the other hand, neither of these leaders has any experience in health care, public health, medicine, or biological science. 

Hedge Funds, Tax Avoidance, and the US Food and Drug Administration

This story is even less obvious.  A July, 2014, report in Bloomberg recounted plans for a Senate hearing on tax avoidance by huge, lucrative hedge funds.  The basics were,

A Renaissance Technologies LLC hedge fund’s investors probably avoided more than $6 billion in U.S. income taxes over 14 years through transactions with Barclays Plc and Deutsche Bank AG, a Senate committee said.

The hedge fund used contracts with the banks to establish the 'fiction' that it wasn’t the owner of thousands of stocks traded each day, said Senator Carl Levin, a Michigan Democrat and chairman of the Permanent Subcommittee on Investigations. The maneuver sought to transform profits from rapid trading into long-term capital gains taxed at a lower rate, he said.

An accompanying Bloomberg/ Businessweek story described testimony at a Senate hearing by the Renaissance co-Chief Executive Officer Peter F Brown,

Renaissance was founded by the mathematician James H. Simons, whose fortune is now estimated by Bloomberg Billionaires Index at about $15.5 billion.

Brown became co-CEO with Robert L. Mercer in 2010 after Simons retired and became non-executive chairman. Before joining the firm in 1993, he was a language-recognition specialist at International Business Machines Corp.

Mr Brown testified that the company was not so much trying to avoid taxes by the complex strategy but simply to make even more money.    But, per the New York Times, Senator Levin

focused on the lucrative nature of the transactions, most of which took place using Renaissance employees’ money. Between 1999 and 2010, the fund used basket options to produce profits of more than $30 billion, Mr. Levin said. Barclays and Deutsche Bank together made more than $1 billion in revenue.

Mr Brown's firm seems, unlike Citigroup, to have a record of financial success, and no one is accusing Mr Brown or his firm of being responsible for the global financial collapse.  However, Mr Brown is certainly a very rich Wall Street insider.  Also, as we noted in 2009, his firm clearly has had major involvement in health care investments.   And the current hearings emphasize concerns that his firm has been executing questionable tax avoidance strategies.

Mr Brown has one other very major tie to health care.  As  noted in 2009 on Health Care Renewal, but apparently only parenthetically by one recent news article, (again from Bloomberg, written before the Senate hearing),

Brown lives in Washington with his wife, Margaret Hamburg, the commissioner of the U.S. Food and Drug Administration. She was appointed by President Barack Obama in 2009.

In 2009, we noted that as a condition of Dr Hamburg's leadership of the US FDA, her husband, Mr Brown, would have to divest his shares of four Renaissance funds.  However, it is obvious that he remained at and became the co-CEO of Renaissance since. 

While the current leader of the FDA clearly has medical and health care experience, she is also steeped in the culture of finance and Wall Street.

Summary

Thus we have two recent stories of how top health care leadership positions in the US government are held by people with strong ties to the world of finance, but not always with any direct health care or public health experience.  Why was the wife of a hedge fund magnate the best person to run the FDA?  Why was a person not known in "health policy [or health care] circles" the best person to run the Department of Health and Human Services?  Why was a Robert Rubin protege from Citigroup the best person to be a Senior Counselor at DHHS?  Presumably there were many plausible candidates for these government positions.  Why was it not possible to find people to fill them who were not tied to Wall Street?  Why was it not possible to find people with profound understanding of and sympathy for the values of health care and public health to fill all of them?   

The leadership of health care and finance continue to merge.  This seems to be one broad explanation for why both fields continue to be notably dysfunctional.  While Wall Street has spread around plenty of money to influence public opinion and political leaders, many still remember how its foolish and greedy leadership nearly caused another great depression.  It is likely that the influence of Wall Street culture on the leadership of health care organizations, be they governmental, academic, other non-profit, or commercial, has fostered the continuing financialization of health care, with its focus on "shareholder value," that is, putting short-term revenue ahead of patients' and the public's health.

I strongly believe health care would be better served by leadership that puts patients' and the public's health first.  Occasionally people with such values may come from a finance or economics background.  However, in an era where many people continue to believe "greed is good," we at least ought to confirm that health care leaders really are about health care first, and money a distant second.

ADDENDUM (20 August, 2014) - This was re-posted on the Naked Capitalism blog.

8:27 AM