Who Would Have Thought, Comrades, That The Most Severe Form of Attempted Internet Censorship Could Originate in a Community Hospital, Abington Memorial, That Alleges Itself A Non-Profit Public Servant?

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

75

E

4/19/2013

Motion

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

No

9267260

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

In my view this attempt sets a very deleterious precedent for others opposed to hospital practices.  A topic frequently discussed at this blog is imperial management.  Hospital management seems to have now become so arrogant that it apparently believes itself to have supra-Constitutional reach.  This bodes poorly for both patients' and clinicians' rights. How many other hospitals might try this, and not just against parties to litigation, hoping to get a favorable ruling?

Prior restraint (also referred to as prior censorship or pre-publication censorship) is censorship imposed, usually by a government, on expression before the expression actually takes place.

Prior restraint is often considered a particularly oppressive form of censorship in Anglo-American jurisprudence because it prevents the restricted material from being heard or distributed at all.  Prior restraint ... takes an idea or material completely out of the marketplace. Thus it is often considered to be the most extreme form of censorship.

... most of the early struggles for freedom of the press were against forms of prior restraint. Thus prior restraint came to be looked upon with a particular horror, and Anglo-American courts became particularly unwilling to approve it, when they might approve other forms of press restriction.

Excerpts of plaintiff attorney's legal response are below (full PDF of this civil document is available at http://cci.drexel.edu/faculty/ssilverstein/Abington_Memorial_Hospital_PL%20response%20to%20DF%20motion%20for%20prior%20restraint.PDF).  The response was, in fact, largely right out of the U.S. Constitution.   It is stunning that a community hospital, allegedly a servant of the public, would pull the legal stunts described which seem more akin to the methods of the former Soviet Union:

... as the entirety of the blog describes, Dr. Silverstein was troubled with, and expressed his opinion that, the defendant’s counsel’s repeatedly advancing an argument [that the same attorney had made three years prior regarding a medical malpractice case in the very same hospital - ed.] that was soundly rejected by another court [related to Certificates of Merit that delayed proceedings in my mother's case for almost two years - ed.], and the defendant’s failure to reference that case in any substantive way as opposing authority, was, in his protected opinion, malicious and unethical. As above, Dr. Silverstein’s comments on the matter are, as defendant agrees, his beliefs, opinions and viewpoints, all of which are protected speech under the Pennsylvania and United States Constitutions; that defendant’s counsel is dissatisfied with protected speech is not a matter for this court to address.

I would expect the defendant's counsel was following the instructions of, or at least was in collaboration with, hospital counsel, hospital senior management and the healthcare system Board of Directors.

... Unhappy that their improper tactics are now being exposed through Dr. Silverstein’s opinions in his blog, defense counsel initially threatened litigation. Now they ask this court to enjoin Dr. Silverstein, via prior restraint, from expressing his views. This extraordinary request comes in spite of the defendant offering nothing but pure speculation as the foundation upon which they ask this Court to strip the plaintiff of his First Amendment rights.

... Their request to strip plaintiff of his First Amendment rights is at odds with the Constitution, the caselaw, and the realities of the jury selection process, which has multiple safeguards in place to remove anyone who may have read and been influenced by Dr. Silverstein’s writings. Importantly, because of the defendant’s procedural tactics, this case, while over two years old, has only just begun discovery and the jury section process is nowhere in the near future.

... The simple fact is that Dr. Silverstein’s blog contains what defendant recognizes are his “beliefs, opinions and viewpoints” and, as such, they are protected. Neither defendant nor its counsel can meet the strict requirements of their unprecedented request to strip Dr. Silverstein of his constitutional rights. Their Motion must be swiftly denied.

Dated: 28 May 2013

The court, a civil Court of Common Pleas in this county in Pennsylvania, in fact did promptly make a decision: hospital motion for censorship denied.

182

6/24/2013

Order

OF 6/20/13 DANIELE,J MOTION IS DENIED; CC

No

9343590

The First Amendment lives, at least in Montgomery County, Pennsylvania.

However,  as the stories aggregated on this blog and others increasingly show, hospitals' mission of public service increasingly seems to be dying.

Attempted use of courts to abridge First Amendment rights by a hospital seems like the pinnacle of abandonment of pretenses of public service and accountability.  Corporate interests come first, not patients. 

This is a reason I increasingly am of the belief that hospital management cannot be trusted.  Accordingly, in my opinion, patients - especially acute inpatients - should have 24x7, independent advocates following every aspect of their care, receiving a daily full printout of any electronic records generated, and (if legal) even using one of the many new, small video/audio recording devices in encounters with hospital personnel.

"He said/she said" is no longer an option when dealing with a Сою́з Сове́тских Социалисти́ческих Респу́блик mentality.

Click for Patriotic music!

Perhaps Abington Memorial Hospital should consider adopting the rousing music above for their HR morale-building exercises.

I was a Medical Resident there in 1985-87.  Like Lev Davidovich Bronshtein, I guess I've been excommunicated for failure of obedience to the Party line.

My old residency ID.  I've now been excommuncated.

Da Svedanya for now, Comrades!

-- SS
 

How's this for patient rights? Affinity Medical Center manager: file a safety complaint, and I'll plaster it to your head!

At my June 19, 2013 post "Affinity RNs Call for Halt to Flawed Electronic Medical Records System Scheduled to Go Live Friday" (http://hcrenewal.blogspot.com/2013/06/affinity-rns-call-for-halt-to-flawed.html) I noted what appeared to be an imperial hospital leadership recklessly and negligently ignoring their own nurses' concerns about safety of a new EHR system implementation.

Now there's this at IndeOnline.com:

"Judge orders Affinity to bargain with union" (http://www.indeonline.com/news/x1808710525/Judge-orders-Affinity-to-bargain-with-union?zc_p=1)

CANTON (OH) — July 2, 2013

A judge ruled Affinity Medical Center violated federal labor laws and ordered the hospital to bargain with the registered nurses’ union and reinstate a nurse fired for union activity.

Affinity says it will appeal the decision.

National Labor Relations Board Administrative Law Judge Arthur Amchan issued a 36-page ruling Monday based on a hearings held April 29 through May 5 in Cleveland.

The National Nurses Organizing Committee-Ohio, an affiliate of National Nurses United, filed several labor complaints against Affinity and its parent company, Community Health Systems. The complaints cited the hospital’s refusal to bargain with the union, which was certified last year.

... The judge ordered the hospital to reinstate Ann Wayt, an orthopedic nurse for 23 years, with back pay and restitution of benefit or pension losses, and withdraw efforts to have Wayt’s nursing license pulled by the Ohio State Board of Nursing. Wayt was fired in September and never had been disciplined before that month.

“I was confident that the truth would come out,” Wayt said in a statement. “The judge has spoken for me. I want to thank the community, the nurses at Affinity, and the nurses across the country for their support.”

The judge also ordered the hospital to stop firing, disciplining or otherwise discriminating against other registered nurses.

Mentioned in the article is this:

The judge also ruled that the hospital must end threats and other acts of retaliation against nurses who submit objection forms to the employer documenting assignments they believe are unsafe. The hospital also must stop denying access to the hospital of union representatives ... Two weeks ago, nurses filed an unfair labor practice charge with the NLRB after requesting that the hospital delay a launch of the new electronic health record system, citing inadequate training and short staffing.

The nurses began to file objection forms related to the EHR.

What really caught my eye was this:

... In his ruling, the judge found one Affinity manager violated labor laws by threatening to plaster the objection forms on the forehead of any employee who submitted one. That same manager also began scrutinizing patient charts more closely, stated how much she would enjoy disciplining a prominent union supporter and retaliated against employees by reducing the number of nurses in the intensive-care unit [to make others work harder, patient safety be damned, apparently - ed.], according to the ruling.

I dislike stating the obvious, but this manager, a clear bully, is a danger to patient safety and clinician esprit de corps, and needs - at best - sensitivity training, ethics education and perhaps a psychiatric exam.

-- SS

Affinity RNs Call for Halt to Flawed Electronic Medical Records System Scheduled to Go Live Friday

At my May 30, 2013 post "Marin General Hospital's Nurses are Afraid a Defective EMR Implementation Will Harm or Kill Patients ... CEO Cites Defective HHS Paper and Red Herrings As Excuse Why He Knowingly Allows This To Continue" at http://hcrenewal.blogspot.com/2013/05/marin-general-hospitals-nurses-are.html, I lamented that hospital management felt they could ignore clinicians calling for implementation postponement of what they viewed as bad health IT, dangerous to patients, with impunity.

Finally, medical professionals stand up to imperial hospital management that, in a perhaps criminally negligent fashion (e.g., see my post on the ECRI Deep Dive Study on Health IT harm at this link), ignores its clinicians over too-rapid deployment of health IT.

Also see newspaper article at http://www.cantonrep.com/news/x393137745/Affinity-nurses-seek-delay-on-electronic-records#axzz2WcOMZpvF.

(The hospital management is extolling the safety of the new Cerner system.  What could possibly go wrong?  -- I'd bet the executives, despite their fiduciary duties towards maintaining a safe hospital environment, have no idea about Cerner defects such as at the FDA MAUDE database; see "MAUDE and HIT Risks: What in God's Name is Going on Here?" at http://hcrenewal.blogspot.com/2011/01/maude-and-hit-risk-mother-mary-what-in.html or are familiar with "Medical center has more than 6000 'issues' with Cerner CPOE system in four months" at http://hcrenewal.blogspot.com/2010/10/medical-center-has-more-than-6000.html.  Instead, unpaid bloggers do their work for them to protect patients....)

See this:

-----------------------------

For Immediate Release - June 18, 2013

For more information: Michelle Mahon, RN, 234-207-6706 or Liz Jacobs, RN, 510-273-2232

Affinity RNs Call for Halt to Flawed Electronic Medical Records System Scheduled to Go Live Friday

Affinity Medical Center RNs in Massillon, Ohio are calling on hospital officials to delay the planned June 21 implementation of the Cerner electronic medical records (EMR) system, until the hospital bargains with the nurses and proceeds in a safe manner.

The direct-care RNs, represented by the National Nurses Organizing Committee (NNOC) in Ohio, an affiliate of National Nurses United (NNU), say that nurses, the primary users of the complex system, have had insufficient training, which will put patients at risk. The implementation, which has been done without bargaining with NNOC, reflects yet another violation of federal labor law by Affinity, nurses say.

Nurses have documented their concerns in a detailed letter to hospital officials. Those concerns include woefully inadequate training, short staffing in the first days of the roll out, and the subsequent risk of harm to their patients.  The system, they say, has the potential of violating the Ohio Nursing Practice Act because it doesn’t permit RNs to communicate individualized, potentially life-saving information about their patients.

The letter, which RNs attempted to deliver to hospital officials on Friday, cites nationally recognized experts in health information technology who reinforce the RNs’ concerns. Most notably, the Institute of Medicine (IOM) has concluded that the failure to include RNs in all steps of this transition is one of the most significant barriers to successful, safe implementation of electronic health records systems.

Hospital officials have continued to refuse to meet with nurses, and would not accept the letter.  [Willful ignorance? - ed.] Without bargaining with the union or acknowledging the nurses’ concerns, the hospital added a few more trainings late Friday, but the RNs say that remains far from adequate.

Over the last few years, American healthcare corporations have invested heavily in information technology (IT) systems, which make up a multi-billion dollar market.

“RNs who actually use these systems day in and day out have found that the kind of care they can provide with this new technology is limited,” said NNOC Co-president Cokie Giles, RN. “The programs are often counterintuitive, cumbersome to use, and sometimes simply malfunction. Nurses are finding that the technology is taking time away from patients and fundamentally changing the nature of nursing.”

NNOC/NNU has successfully negotiated clauses in its contracts that allow RNs to play a greater role in reviewing and approving new technologies before they are introduced, and that the new technologies will not supersede RN professional judgment. 

“I have been chosen as a ‘super-user,’ said Amy Pulley, an RN who works in the endoscopy unit of the hospital. “I’m not sure what makes me ‘super’ with the limited training for this complex system that I’ve received. I’m concerned that the manner in which this technology is being implemented may pose serious disruptions in patient care.”

Highlights of RN Concerns on the Implementation of the Cerner Electronic Medical Records System at Affinity Medical Center

Inadequate Staffing

·        Several units will be severely short staffed for the transition, despite the fact that the hospital has been planning on the “go live” date for several months.

·        The entire hospital and all portions of the system will go live at once, referred to as the “big bang” approach, which has a very low rate of success, rather than implementing it in trial, pilot stages.

·        They are utilizing the ‘super-user’ model which will pull nurses from direct-care so they can be available to teach, leaving several units without enough nurses to care for patients.

·        The hospital refuses to decrease the number of elective procedures or provide additional staff during the transition time.

Lack of training

·        Some nurses have received only one day of training.

·        Super-users have received no education or training in the system beyond what is provided to the other users.

Design flaws

·        Placement of the workstations are ill conceived—RNs must turn their back to patients while documenting.

·        During one education session, the system crashed because 17 users at one time overloaded it.

Failure to consult nurses

·        Several concerns were brought to management’s attention which they were unable to answer. One example— how will RNs override the system in the event of an emergency?

Affinity is one of five hospitals in California, Ohio, and West Virginia that are part of one of the nation’s largest for-profit hospital chains, Tennessee-based Community Health Systems where affiliates of NNU are pursuing federal action for significant violations of RN rights.

The National Labor Relations Board held a five-day hearing in May in a complaint filed by the nurses and NNOC over Affinity’s refusal to bargain a first contract and retaliation against RNs for advocating for their patients and their colleagues. A decision by an NLRB administrative law judge is pending. CHS affiliated hospitals in West Virginia and California are facing similar sanction from federal officials. At one of the California hospitals last week, a U.S. District Court judge issued an injunction ordering the hospital to return to negotiations with the RNs.

CHS is the second largest for-profit hospital chain in the United States, and one of the wealthiest. Over the past five years, CHS reported over $1.5 billion in profits to the Securies Exchange Commission.

Michelle Mahon, RN

National Representative

National Nurses United

mmahon@nationalnursesunited.org

234-207-6706

I believe the nurses should strike if their concerns are not heeded.

I once worked in a highly-unionized city Transit Authority; I believe the unions would have shut the Authority down in the face of even a fraction of concerns like this that could impact pubic safety - and their own memberships' careers and lives.

-- SS

6/20/13 addendum:

I note that this EHR medical device (per FDA) is non-FDA approved, nor vetted by any regulatory agency.  Apparently the hospital believes it has the prerequisite skills and expertise to vet this device for safety.  Who, exactly, will take responsibility for bad outcomes?

FDA's Chair of the Center for Device and Radiological Health, Jeffrey Shuren, MD JD, stated explicitly that EHRs were medical devices on Feb. 25, 2010 (see testimony to the HHS Health Information Technology HIT Policy Committee at this PDF) that:

... Under the Federal, Food, Drug, and Cosmetic Act, [that regulates all drug, medical devices, etc. in the United States - ed.] HIT software is a medical device. Currently, the FDA mandates that manufacturers of other types of software devices comply with the laws and regulations that apply to more traditional medical device firms. These products include devices that contain one or more software components, parts, or accessories (such as electrocardiographic (ECG) systems used to monitor patient activity), as well as devices that are composed solely of software (such as laboratory information management systems)... To date, FDA has largely refrained from enforcing our regulatory requirements with respect to HIT devices.

I also note that patient informed consent to its use in their care is likely not being sought.  Should it?  If not, why not?

-- SS

9/2/2013 addendum

The comment by "Anonymous August 20, 2013 at 11:24:00" has many characteristics of a sockpuppet (see http://hcrenewal.blogspot.com/2010/01/more-on-perversity-in-hit-world.html) - ignoring everything written in the post and expressing perverse and deranged views.  See it, and my response, in the comment section.  A post about an anti-health IT union dispute such as this is a strong potential sockpuppet magnet.

-- SS

WellPoint's Former Manager-Queen Got $20.6 Million and Its Nobility Got Millions

Score another for our new would be royalty, that is, for the hired managers who run big corporations.  Early this month a few scattered reports came out showing just how much even apparently failed executives of big health care organizations can make on their way out the door. 

A New Fortune for the Abdicating Queen of WellPoint

Last year we discussed the abdication of Angela Braly, the former queen of giant insurance company WellPoint.  We then speculated about how much she might abscond with.  Now the Associated Press has reported:

 The compensation paid to outgoing Wellpoint Inc. CEO Angela Braly last year rose 56 percent, even as the company's shares slid on lower enrollment in its Blue Cross Blue Shield health plans.

Braly, who resigned in August, received 2012 compensation valued at $20.6 million, according to an Associated Press analysis of the company's annual proxy statement. Most of the increase came from stock options.

Braly, 51, became CEO in 2007. She received a $1.2 million salary last year, up slightly from $1.1 million in 2011. Her compensation included a performance-related bonus of nearly $1.4 million. More than 85 percent of Braly's compensation came from stock options and awards, which totaled $17.8 million. That total was up from about $10 million the year before.

She also received $179,618 in other compensation, including $3,700 spent on security measures for her and her family due to concerns about her safety 'as a result of the national health care debate,' according to the proxy, which was filed Tuesday with the Securities and Exchange Commission.

Despite Bad Financial Performance and Investors' Losses

Remember, though, that Braly was asked to leave:

 investors had grown frustrated with the company's performance, leading Braly to resign last August. 

In particular, in terms of financial performance

shares fell 8 percent last year to close 2012 at $60.92, while the Standard & Poor's 500 index rose more than 13 percent.

WellPoint's 2012 earnings were nearly flat compared to 2011. The insurer earned $2.65 billion, or $8.18 per share, last year, as total revenue climbed 1.6 percent to $61.71 billion.

A slightly different analysis by the Indianapolis Business Journal came up with similar results,

 WellPoint’s membership growth came mainly from its acquisition of Virginia-based Amerigroup Corp., which operates Medicaid managed care plans for states. The rest of WellPoint’s existing business lost customers during 2012.

And while WellPoint has boosted earnings per share by continuing to buy back shares, overall profit was unchanged last year compared with about $2.6 billion in 2011.

WellPoint raised its dividend in 2012 and acquired 1-800-Contacts Inc. But its stock price fell 8 percent to close the year at $60.92 per share. Even taking into account dividends, WellPoint shares lost 6.3 percent of their value during the year.

So while the nominal owners of the company, the investors, lost money on their investments, the CEO who presided over this loss left with a huge pile of cash.

The Royal Court of WellPoint Also Prospered

Incidentally, the Indianapolis Business Journal also showed that WellPoint executives who did not leave generally got big increases in their compensation, again while the company owners to whom they ostensibly report lost money,

WellPoint Inc.’s top brass all enjoyed double-digit bumps in 2012 compensation, according to a proxy released April 2, even though the stock price fell and the company admittedly did not meet its financial goals.

The Indianapolis-based health insurer’s board of directors approved higher salaries and larger potential stock awards heading into 2012 after most of its top executives saw their pay hold steady or decline in 2011.

The company’s performance merited its executives receiving only 83 percent of their target stock awards. But because the board had already established larger pools of stock to award to executives, the value of those awards still rose over previous years. Bonus amounts fell in 2012 compared with the previous year.

The extra cash and stock drove up Chief Financial Officer Wayne DeVeydt's overall pay 11.9 percent to nearly $4.4 million.

Ken Goulet, executive vice president of WellPoint's commercial insurance business, saw his total compensation rise 18.2 percent to nearly $4.4 million.

And Lori Beer, executive vice president of information technology, enjoyed a 17.9-percent boost. She earned $3.2 million, although that was still below the nearly $4.5 million she received in 2010.

John Cannon, the general counsel, saw his compensation more than double to nearly $6.5 million. But that was partly because WellPoint hiked his salary by $350,000 and gave him a $500,000 bonus for agreeing to serve as interim CEO after the August resignation of former CEO Angela Braly.

Despite Angry Policy-Holders and Ethical Missteps

So the compensation given the outgoing CEO and some of the remaining top hired managers seemed wildly out of proportion to the company's financial results.  Could the generosity they received be based on how well the company performed in other dimensions?  That, of course, seems equally improbable.

The Los Angeles Times noted,

 Braly had also caught the ire of consumers and even President Obama in 2010 for trying to raise rates by up to 39% in California. The national outrage that ensued helped Obama win approval for his healthcare overhaul in Congress.

Furthermore, as we have discussed again and again, most recently here, WellPoint has a very sorry record of ethical misadventures.   (The updated list is at the end of this post.)  So one could certainly not justify the huge payments given WellPoint hired managers by their upstanding ethical leadership.

Summary

In a new book just published by Robert A G Monks, entitled Citizens Disunited, the author describes one of the biggest problems affecting the US economy and society as the rise of "manager-kings."  Clearly, Angela Braly could be called the former "manager-queen" of WellPoint.  The company seemed to be run primarily for the benefit of the queen and her court, while its investors lost money, its customers became outraged, and it stumbled from one ethical quandary to another.

In the eighteenth century, British colonial subjects in North America succeeded in a revolution that lead them out from under the rule of a British King.  How many examples do we have to have before there is action to repudiate the rule of our new manager-kings and queens?  And to turn health care back into a calling meant to put patients' and the public's health first, rather than a feudal society meant to benefit its nobility?

As we have said again, again, again,...

True health care reform would decrease the size and scope of health care organizations, and make their leaders accountable to ownership, when appropriate, and to the community at large for patients' and the public health. 



Appendix: WellPoint's Ethical Misadventures

• settled a RICO (racketeer influenced corrupt organization) law-suit in California over its alleged systematic attempts to withhold payments from physicians (see 2005 post here).
• subsidiary New York Empire Blue Cross and Blue Shield misplaced a computer disc containing confidential information on 75,000 policy-holders (see 2007 story here).
• California Anthem Blue Cross subsidiary cancelled individual insurance policies after their owners made large claims (a practices sometimes called rescission).  The company was ordered to pay a million dollar fine in early 2007 for this (see post here).  A state agency charged that some of these cancellations by another WellPoint subsidiary were improper (see post here).  WellPoint was alleged to have pushed physicians to look for patients' medical problems that would allow rescission (see post here).  It turned out that California never collected the 2007 fine noted above, allegedly because the state agency feared that WellPoint had become too powerful to take on (see post here). But in 2008, WellPoint agreed to pay more fines for its rescission practices (see post here).  In 2009, WellPoint executives were defiant about their continued intention to make rescission in hearings before the US congress (see post here).
• California Blue Cross subsidiary allegedly attempted to get physicians to sign contracts whose confidentiality provisions would have prevented them from consulting lawyers about the contracts (see 2007 post here).
• formerly acclaimed CFO was fired for unclear reasons, and then allegations from numerous women of what now might be called Tiger Woods-like activities surfaced (see post here).
• announced that its investment portfolio was hardly immune from the losses prevalent in late 2008 (see post here).
• was sanctioned by the US government in early 2009 for erroneously denying coverage to senior patients who subscribed to its Medicare drug plans (see 2009 post here).
• settled charges that it had used a questionable data-base (built by Ingenix, a subsidiary of ostensible WellPoint competitor UnitedHealth) to determine fees paid to physicians for out-of-network care (see 2009 post here). 
• violated state law more than 700 times over a three-year period by failing to pay medical claims on time and misrepresenting policy provisions to customers, according to the California health insurance commissioner (see 2010 post here).
• exposed confidential data from about 470,000 patients (see 2010 post here) and settled the resulting lawsuit in 2011 (see post here).
• fired a top executive who publicly apologized for the company's excessively high charges (see 2010 post here).
• California Anthem subsidiary was fined for systematically failing to make fair and timely payments to doctors and hospitals (see 2010 post here).
• management was accused of hiding the company's political contributions from the company's own stock-holders (see 2012 posts here and here).
• settled charges that its Anthem subsidiary cheated former policy-holders out of money owed when that company was converted from a mutual insurance company (see 2012 post here)

It is Harder to Run a Small Public Hospital System than California? - Deep Seated Myths and Logical Fallacies Underpinning Health Care Executive Compensation

Hospital executive compensation, the gift that keeps on giving... 

A Public Hospital CEO's Current Compensation

A recent, somewhat obscure news article shows how deeply rooted is the current practice of paying top hired managers of health care organizations amounts that seem outlandish given the context.

The article, in the Argus - San Jose (CA) Mercury News, discussed the compensation given the CEO of a small public hospital district.  It opened with,

 Amid a budget crunch that has forced sweeping cutbacks at its medical facilities, the Washington Township Health Care District board of directors on Wednesday awarded its CEO $162,783 in incentive pay that raises her total annual compensation and contract perks this year to more than $800,000.

The bonus pushes Farber's total 2012-13 compensation past $813,915, less than the $936,349 she made in 2011 or her $912,519 pay in 2010, when she was among the top five paid government employees statewide in a survey by the state controller's office. 

Note first that Washington Township Health Care District is a public health district.  As an article from January, 2013 in The Argus - San Jose Mercury News explained,

The Washington Township Health Care District is a public agency in southern Alameda County and receives tax money from 320,000 district residents under voter-approved bond measures. 

The District is also under financial stress.  As the earlier Argus - Mercury News article stated,

Physician assistants, nurses and medical directors were among the 200 jobs recently eliminated by the Washington Township Health Care District to cut costs, according to new information released by the district.

In response to a request under the California Public Records Act, the district provided a list this week of the 75 job titles included in the approximately 132 vacant and 68 filled positions eliminated in recent months as part of a 13 percent workforce reduction.

Furthermore, as the newer Argus - Mercury News article noted,

 Farber was overseeing a 13 percent workforce reduction that eliminated 200 mostly vacant jobs. The district had seen operating profits plummet tens of millions of dollars last year from recent years.

So Ms Farber got a large salary plus bonus at a time when hospital "profits" were declining and many employees, including health care professionals with direct patient care responsibilities were being laid off. 

A Long History of Outsize Compensation

Note that this small public hospital system actually has a long history of paying its CEO a lot.


In 2003, the (Fremont-Newark, CA) Argus editorialized (the full article requires payment),

 HOW MUCH is too much?

We don't know the answer to that, but we're pretty sure $479,600 a year qualifies.

That's how much Washington Hospital is paying CEO Nancy Farber.

Farber will make a base salary of $406,000 during the 2003-04 fiscal year, a 10 percent raise from her 2002-03 salary of $368,000, plus she is getting a $73,000 bonus.

That editorial did not seem to prevent Farber from getting raise after raise in the subsequent years.

In 2011, the Los Angeles Times published an article with the headline, "Hospital executives occupy top tier of California's public workers."  It said this about the pay given Nancy Farber, still the CEO of Washington Township Health Care District,

The hospital's chief executive, Nancy Farber, is the second-highest-paid official covered in Chiang's database [of pay to public officials] so far. She was paid about $874,000 in 2009.

So Ms Farber's compensation has about doubled in the last 10 years, during which US cost of living has increased about 24% (look here).  And at least one local editorialist thought she was paid too much in 2003.

Justifying Large Payments with the Usual Talking Points

So why should the pay of the CEO of a relatively small public hospital system keep rising so fast, despite criticism.  To some extent in 2011, and quite clearly in 2013, her supporters trotted out the usual suspect arguments.

We previously have described (most recently here) how whenever anyone bothers to try to justify extravagant executive compensation at hospitals, and for that matter, most other health care organizations throughout the US, they seem to repeat the same set of talking points.    We first listed the talking points here, and then provided additional examples of their use here, here and here.   The talking points are:
-  we pay what everyone else pays
-  CEOs work hard and are brilliant, and so deserve high pay
-  high pay is needed to attract and retain competent, if not brilliant people.

In 2011, per the Los Angeles Times, "officials" of the health district combined all three in a single sentence, :

Officials at the Washington Township Health Care District in Fremont, Calif., also argued that they needed to pay 'market rate' to obtain top-quality staff.

In 2013,  the Argus - Mercury News described how Ms Farber's defenders used them all at length. 


CEOs Work Hard and are Brilliant

Board member Bernard Stewart, a local dentist who has served for more than a decade on Washington's board, said the salary comparison with other public employees was unfair.

'It's a temptation for all of us to compare the CEOs salary with other elected officials or other public officials, but I can't stress in the strongest means possible, that is an absolute error,' Stewart said. 'We in this hospital are a public hospital. We are a publicly elected board, but we are engaged in an incredibly competitive and difficult business and we are different from any other public organization in that regard.'

So one board member explicitly argued that being the CEO of a small public hospital system is much harder than any other kind of state government leadership position.

Since the article also included a comparison of Ms Farber's pay with that of the Governor of California,

By comparison, Gov. Jerry Brown will make just over $165,000 this year.

the board member implied that it is much harder to run a small public hospital district than the whole state.  That is breathtaking.


The board also more generally praised the CEO, 

 Ahead of the vote for the bonus Wednesday, all five board members praised Farber's leadership and said that, because of the difficulties facing the hospital, experienced leadership was needed.

In addition, note that hospital district board members suggested specific aspects of Ms Farber's performance worthy of high remuneration.

Board members credited Farber with implementing a new electronic records system, the construction of the district's new center for joint replacement on time and on budget, and for various accolades the district received last year. Among them, the district was ranked the fourth best hospital in the Bay Area by U.S. News & World Report and among the top 10 in the state for joint replacements by HealthGrades, a designation received for the last seven years.

Board members said Farber's decision to reduce the workforce was evidence of her exemplary leadership.

'Making the decision to downsize, or right-size, when necessary, is as much a part of being a responsible administrator as is building, growing and improving the health care system,' Nicholson said.

Board member Michael Wallace said Farber, 'has made tough and unpopular choices. The easy thing would have been to kick the can down the road, which is what we see happening all the time in Washington, but she didn't do that,'....

So we see here that the CEO is given personal credit for all good things, even good things that obviously required considerable work by other people.  I am certain that the CEO did not personally implement the EHR, did not construct the joint replacement center, and did not directly care for patients.   All the other employees who contributed to these apparent successes implicitly got no credit, and it is likely that some employees who actually contributed were laid off.

Furthermore, note that the board somehow believed that laying off employees in a time of financial stress, a hardly original business strategy in this day and age, and one presumably only undertaken due to a crisis, was somehow a sign of brilliant leadership.  Again, this is breathtaking.  

I would argue that asserting the CEO has a harder job than the state governor, giving the CEO credit for numerous activities that obviously required the work of many others, while denying her responsibility for financial distress amount to a prolonged logical fallacy, a prolonged appeal to authority.  The argument that whatever the CEO does MUST be brilliant, and its assessment should not be the subject of critical thought.


We Pay What Everyone Else Pays
High Pay is Needed for Recruitment and Retention

Admittedly, Ms Farber's defenders did not belabor these points as much, but, board member Michael Wallace said

'I don't want our leadership and management team wooed away by those monolithic systems willing to pay market compensation, which is a risk if we are not willing to do so.'

 He provided no evidence that this supposedly brilliant group of hired managers was in any danger of being recruited elsewhere.  As we have noted before, the evidence suggests that most top executives are recruited from within the organization, and hence this assertion is at best another kind of logical fallacy, an appeal to common practice.  

The Myth of the Divine Right of CEOs

We have seen again and again how top executives of health care organization, particularly CEOs, are given credit for everything good that happens, while avoiding responsibility for everything bad, and have the ability to continually enrich themselves regardless of the evidence about their personal performance, or about the context in which they work.  

Thus they are treated by those around them as some sort of aristocracy,  just short of omnipotent, minor deities.  In fact, as we wrote here, there is reason to think that some trends in economic thinking, combined, as we wrote here, with some trends in religious, or pseudo-religious thinking, have combined to promote something akin to the "divine right" of CEOs.

Yet CEOs and other health care executives are demonstrably human, and hence flawed.  Furthermore, shielding them from all accountability is a tremendous perverse incentive that is likely to lead to ever more incompetent, self-interested, mission-hostile, and even corrupt leadership.  

Somehow we need to start combating the talking points used to justify the lack of accountability and self-interest of top health care organizational leadership, and ultimately the whole notion of hired managers and executives as super human. 
As a society we need to wake up from our dazed acquiescence to ideas that border on crazy.  We need to challenge rote justifications and talking points for that which makes no sense, but serve to make the powerful more powerful.

No Skin in the Game - A Private Health System for the Very Rich

We have noted occasional hints that the very rich may have a separate health care system which may shield them from the vicissitudes of our dysfunctional health care system. A broader hint came in an interview in the Wall Street Journal.

The Company

 The subject of the interview was Leslie Michelson, the CEO of Private Health Management.  The activities of the company were defined somewhat vaguely,

an ultra high-end company that borrows from concierge medicine, managed care, applied-sciences research and information technology while fitting into no neat category. The best analogue might be the investment and tax specialists that the affluent employ to run their finances; Mr. Michelson does the same for their health care. 'Like private wealth management, just far more important,' he quips in his modern Beverly Hills offices, all green glass and steel, white walls, white floors.

The Clientele

The company manages health care for a select clientele:

Private Health caters to 'high net worth individuals' and to businesses that retain its services for their executives as a benefit. Mr. Michelson says he serves between 12,000 and 15,000 clients, 'principally in private equity, hedge funds, professional and financial services firms.'

Note that the clientele seem to come mainly from the ranks of top executives of financial firms, probably some of the richest of the rich in the US.

Rapid Response Team for Acute Illness

Private Health Management's most distinctive service is the rapid response team it can "parachute in" to provide care for an acute illness,

whenever one of its patients has a medical emergency or complex condition, say, a traumatic brain injury or newly diagnosed cancer. A personal-care team parachutes in, led by a clinician employed by the company, and compiles a brief on the patient. They centralize and digitize the patient's medical records, usually dog-eared paper piles that can run to thousands of pages. Research scientists immerse themselves in the latest findings and treatment regimens for the particular condition involved.

Tests are double-checked—biopsy tissues are sent to an outside pathologist, MRIs to another radiologist. For an era of targeted therapies, Private Health runs a full battery of molecular diagnostics 'to sequence the entire three billion base pairs of somebody's DNA in a couple of hours,' Mr. Michelson marvels.

The goal is to ensure an accurate diagnosis and lay out all the treatment options. Private Health functions as a kind of running, independent second opinion.

Physician Network

In addition, Private Health Management provides access to a network of ostensibly the very best physicians,

Mr. Michelson built a series of proprietary algorithms to distinguish 'the few who are the very best' from 'the many who are very good,' based on 'the factors that predict excellence.' For example, the premier caregivers for metastatic cancer are usually academic researchers on the cutting edge, not general oncologists. The best orthopedic surgeons perform many procedures as they master the clinical learning curve, ideally for a single injury.

His referral database includes 2,200 specialists across 160 medical fields, 'reified into far finer groupings of disease than is standard practice.' He says that 'the world becomes so much clearer when you are able to identify the physician with the deepest and narrowest expertise in exactly what you need.'

Mr. Michelson says doctors like to belong to his informal network because they're 'interested in excellence and what we stand for.'

However, next,

 He adds, with more than a little euphemism, 'In a world in which 98% of the conversations are about cost containment, it's a joy for them to have somebody who's focused on enhancing quality only.' No doubt true, though it probably doesn't hurt that providers also like to have a relationship with his client base, the sort of people who become university patrons or donate a hospital wing.

This raises the question of whether doctors in his network may exhibit some greed along with their putative excellence.

Questions Begged About How it Works

The article actually devoted more space to Mr Michelson rationalizing his business as part of his overall interest in reforming health care than to discussion of how it works and what its implications are.  The short description of the processes above actually raised more questions about how the Private Health System works than it answered.  Some examples are: how could an optimal rapid response team be quickly mobilized given that the nature of acute illnesses may not be immediately apparent?  How would such a team interact within a hospital setting, or does the company have its own parallel hospital system?  What about the rest of medicine and health care outside of acute and intensive care, particularly primary care and management of chronic disease?  How does the referral data base function, and how would a classification that seems focused on the "narrowest expertise" cope with patients with multiple common illnesses or patients with undefined or undiagnosed problems?  These begged questions suggest there may actually be much more to the Private Health Management system than was discussed in the article.

Perhaps instead the care provided by Private Health Management might not actually result in better outcomes for its patients.  Consider some other questions: given how hard it is to assess physician performance and measure quality of care, how can Private Health Management be assured that its physicians are really the best of the best?  Given the apparent financial incentives for participating in the system, would the doctors who most appreciate these incentives be likely to provide the best care?  Would the apparent bias of the system toward high technology and super specialized care, would the system over-treat most of its patients? 


Summary and Implications

Nonetheless, the article provides more evidence that the US has a secretive parallel health care system for the very rich.  The most important implication is that such a system could protect the very rich from the access problems and bureaucratic annoyances that plague ordinary patients in larger dysfunctional health care system.  By thus having "no skin in the game," those among the very rich who are not themselves directly involved with health care would have little reason to care or want to do anything about the problems besetting the larger health care system.  Since the very rich have become increasingly politically powerful, the absence of such interest or motivation for change among them would make true health care reform much more difficult. 

If there is a parallel health care system for the very rich, its real effects on health and health care are unknown.  As best as I can tell, the very concept is almost entirely anechoic except for our very limited discussions on Health Care Renewal.  The subject cries out for investigative reporting, and consideration by health care policy, research, and ethics experts. 

How Many Legal Settlements Does it Take... to Lead to Real Change in Johnson and Johnson Leadership?

And the latest Johnson & Johnson settlement is (as described in Bloomberg/ BusinessWeek):

Johnson & Johnson (JNJ) will pay $181 million to resolve claims by 36 states that it improperly marketed and advertised the antipsychotic drugs Risperdal and Invega.

J&J and its Janssen unit settled claims that it promoted the drugs from 1998 through 2004 for uses not approved by the U.S. Food and Drug Administration. New York Attorney General Eric Schneiderman said today the accord is the largest multistate consumer protection-based pharmaceutical settlement.

'This landmark settlement holds the companies accountable for practices that put patients in danger, and serves as a warning to other pharmaceutical giants that they must play by one set of rules,' Schneiderman said in a statement.

J&J agreed it won’t promote the drugs for off-label uses or tout them falsely.

Specific Bad Behaviors

The allegations were of the sorts of behavior that should make health professionals cringe,

Using speaker programs on unapproved uses, sham consulting programs for physicians, and lucrative agreements with doctors who prescribed off-label, J&J 'sought to enhance Risperdal’s off-label market penetration across a wide range of diagnoses and patient populations, according to Florida’s complaint.

So reading slightly between the lines, the behaviors included various ways to pay physicians ("sham consulting," "lucrative agreements") for prescribing drugs, providing physicians monetary incentives to violate the most core of their core values, putting the individual patient's welfare and needs ahead of personal enrichment. Why these were not labeled kickbacks or bribes is not obvious.

No Individuals Pay any Penalty

Nonetheless, as in nearly every other legal action by state or federal law enforcement against a big pharmaceutical company or other big health care company, the entire settlement involved no penalties to any individuals who may have authorized, directed or participated directly in the misbehavior. In fact,

The company, based in New Brunswick, New Jersey, settled 'to resolve the concerns of the attorneys general under state consumer protection laws and to avoid unnecessary expense and a prolonged legal process,' it said in a statement.

J&J didn’t admit wrongdoing or pay a fine or penalty.

The tough law enforcers claimed

The agreement 'sends a message to all pharmaceutical companies that these practices will not be tolerated,' Florida Attorney General Pam Bondi said in a statement.

Of course, there was another part to the settlement. The company promised not to do these sort of bad things again,

Bondi said Janssen agreed to several steps over five years. They include having policies to ensure that financial incentives aren’t given to encourage off-label marketing; sales and marketing employees can’t develop the medical contents of responses to health-care providers; and it must describe the effectiveness and risks of drugs in a balanced manner.

Should we believe them? Their record is not promising.

Earlier this year Johnson & Johnson was fined $1.1 billion by a judge in Arkansas for deceiving patients and physicians about the very same drug at issue in this suit, Risperdal (look here). That was just the latest in a remarkable string of legal cases suggesting an ongoing pattern of unethical and illegal behavior by this very large health care corporation. As we wrote recently, this included
- Convictions in two different states in 2010 for misleading marketing of Risperdal, as noted above
- A guilty plea for misbranding Topamax in 2010
- Guilty pleas to bribery in Europe in 2011 by J+J's DePuy subsidiary
- A guilty plea for marketing Risperdal for unapproved uses in 2011 (see this link for all of the above)
- Accusations that the company, which makes smoking cessation products, participated along with tobacco companies in efforts to lobby state legislators (see post here)
- A guilty plea to misbranding Natrecor by J+J subsidiary Scios (see post here)
- More recently, in 2012, testimony in a trial of allegations of unethical marketing of the drug Risperdal (risperidone) by the Janssen subsidiary revealed a systemic, deceptive stealth marketing campaign that fostered suppression of research whose results were unfavorable to the company, ghostwriting, the use of key opinion leaders as marketers in the guise of academics and professionals, and intimidation of whistleblowers. After these revelations, the company abruptly settled the case (see post here).
- Most recently, there are reports that the company is in negotiation with the US Department of Justice to settle other lawsuits about the marketing of Risperdal, perhaps for as much as $1.8 billion (see this BusinessWeek story.)

One might think that the leadership on whose watch this all occurred would be in disgrace. There has been, however, no major changes in leadership of the company. The CEO who was in power during the time when these settlements, and much of the behavior leading to them, will be retiring, after earning huge compensation, and with a retirement package valued somewhere between $143 and $197 million (see this post). Rather than disgrace, he recently was put on the committee responsible for investigating JP Morgan Chase's $5.8 billion dollar trading loss (as reported by Bloomberg, via NJ.com).

Summary

As we have noted again and again and again, many of largest and once proud health care organizations now have recent records of repeated, egregious ethical lapses. Not only have their leaders have nearly all avoided penalties, but they have become extremely rich while their companies have so misbehaved.

These leaders seem to have become like nobility, able to extract money from lesser folk, while remaining entirely unaccountable for bad results of their reigns. We can see from this case that health care organizations' leadership's nobility overlaps with the supposed "royalty" of the leaders of big financial firms, none of whom have gone to jail after the global financial collapse, great recession, and ongoing international financial disaster (look here). The current fashion of punishing behavior within health care organization with fines and agreements to behave better in the future appears to be more law enforcement theatre than serious deterrent.  As Massachusetts Governor Deval Patrick exhorted his fellow Democrats, I exhort state, federal (and international, for that  matter) law enforcement to "grow a backbone" and go after the people who were responsible for and most profited from the ongoing ethical debacle in health care.

As we have said before, true health care reform would make leaders of health care organization accountable for their organizations' bad behavior.

Duchess of WellPoint Abdicates, Likely to Escape with Much Loot

A change in the leadership of one of the biggest health care organizations reveals a little more about how such leadership has become our new corporate royalty and nobility.

The Departure of WellPoint CEO Angela Braly

The basics of the story, as reported by the Anna Wilde Matthews in the Wall Street Journal,

Under pressure from investors unhappy with the health insurer's performance and direction, WellPoint Inc. Chief Executive Angela Braly resigned Tuesday, and the company's board said it would begin a search for a permanent replacement.

The abrupt shift came as the board's leadership had been meeting with major investors in the wake of a disappointing second-quarter earnings report that sharpened concerns about Ms. Braly and the company's strategy

Note that while this change was seemingly dramatic,

In its statement, the board signaled that WellPoint's direction might not change dramatically. Ms. Ward said that the board 'continues to believe that time will prove the wisdom of potentially transformative actions taken under Angela's leadership…But now is the right time for a leadership change.' She also said the board believes 'the remaining executive team is dynamic and strong, with great potential to drive WellPoint's future success.'

In addition, the Indianapolis Star suggested that Ms Braly would be richly rewarded for her departure:

Details about her exit package were not released Tuesday, but under her contract, she is entitled to at least $7.7 million if terminated without cause.

Furthermore, recall how much the board apparently thought of Ms Braly's leadership in the immediate past, as evidenced by the compensation she received. In 2011, her total compensation was a mere $13.2 million (see this article in the Indianapolis Star), just slightly less than that in 2010, $13.4 million (see this post). Such compensation, of course is gargantuan compared to that received by mere mortals such as primary care physicians (actually, conservatively it is at least 66, and probably more like 100 times that of primary care physician, and over 250 times the median US family income) Such compensation, and the likelihood of a rich severance package, suggests that either the board applauded Ms Braly's leadership right up until now, or perhaps that Ms Braly, despite being a hired employee, actually had more power than the board, sufficient to virtually set her own pay.

Was Financialization the Reason She Had to Go?

So why get rid of her now? Aside from references to recent issues with only short-term revenue, there were few hints in the media. The WSJ article did note

a series of stumbles over the past few years, including an unexpected earnings hit last year tied largely to problems with a Medicare plan in California. In 2010, the company scaled back a proposed rate increase in California that had become a lightning rod in the policy debate over a health overhaul, leading to a loss.

A Forbes post suggested that one problem was Ms Braly supported President Obama's health care reform legislation, the Patient Protection and Affordable Care Act (PPACA, or ACA):

Many blame Braly and her team for putting The Affordable Care Act over the top in Congress after Wellpoint’s Anthem Blue Cross plan in California two years ago raised rates nearly 40 percent on individual policyholders before the increase was tamed. Many at the time say that provided President Obama and Sebelius political momentum and ammunition to tell the story of excessive rate increases by the loathed insurance industry.

However, no media report so far has raised the issue of the ethics of past WellPoint behavior. In fact, as we have discussed, (most recently here), the company has made a lengthy series of ethical missteps, to put it kindly. (The complete list appears in an appendix at the end of this post.) These problems have been going on for quite a while, and if they were not a concern before, there is no hint that they became a concern within the company recently.

So, one explanation for the sudden leadership change is the dominance of financialization of for-profit health care insurance (and likely of all health care organizations.) The notion, pushed by a few economists in the 1980s, that the only thing that should matter to corporate leadership is short-term financial results may be that powerful (see this post). Of course, that is profoundly troubling for health care organizations, since it dismisses the importance of any long-term results, especially of results that affect patients' and the public's health, and the importance of values like honesty.

Corporate Leadership as Our New Royalty and Nobility

Another explanation, which need not contradict the one above, was suggested by Charles Ferguson in Predator Nation. He wrote that the leadership of big financial corporations, which became the dominant organizations in the US and, indeed, in the world,

became corporate royalty, with all the absurd arrogance, disconnections from reality, ego poisoning, and cults of personality thereby implied.

If the leadership of big financial firms became royalty, then the leadership of big health care organizations became nobility. The issues above only would affect nobility slightly less. In that sense, the departure of Ms Braly likely resulted from personal and political battles among royalty. The good thing is that in this somewhat more enlightened age, the results are merely abdication, probably with a huge severance payment. In the old days, the results would likely have been imprisonment in the castle dungeon, if not beheading.

Nonetheless, the notion that top corporate leaders, including leaders of for-profit and non-profit health care corporations, are becoming the new royalty and nobility should be profoundly disturbing in the US, which was founded after a revolution against royalty's excess power.  They should be no less disturbing in other countries which have overthrown their former royal leaders, or instituted constitutional monarchies in which the royals and nobles have little political or real power. 

Obviously, the growing power and decreasing accountability of hired managers of large health care organizations has become a major reason, if not the major reason for health care dysfunction.  True health care reform would decrease the size and scope of health care organizations, and make their leaders accountable to ownership, when appropriate, and to the community at large for patients' and the public health. 

Appendix: WellPoint's Ethical Misadventures

• settled a RICO (racketeer influenced corrupt organization) law-suit in California over its alleged systematic attempts to withhold payments from physicians (see 2005 post here).
• subsidiary New York Empire Blue Cross and Blue Shield misplaced a computer disc containing confidential information on 75,000 policy-holders (see 2007 story here).
• California Anthem Blue Cross subsidiary cancelled individual insurance policies after their owners made large claims (a practices sometimes called rescission).  The company was ordered to pay a million dollar fine in early 2007 for this (see post here).  A state agency charged that some of these cancellations by another WellPoint subsidiary were improper (see post here).  WellPoint was alleged to have pushed physicians to look for patients' medical problems that would allow rescission (see post here).  It turned out that California never collected the 2007 fine noted above, allegedly because the state agency feared that WellPoint had become too powerful to take on (see post here). But in 2008, WellPoint agreed to pay more fines for its rescission practices (see post here).  In 2009, WellPoint executives were defiant about their continued intention to make rescission in hearings before the US congress (see post here).
• California Blue Cross subsidiary allegedly attempted to get physicians to sign contracts whose confidentiality provisions would have prevented them from consulting lawyers about the contracts (see 2007 post here).
• formerly acclaimed CFO was fired for unclear reasons, and then allegations from numerous women of what now might be called Tiger Woods-like activities surfaced (see post here).
• announced that its investment portfolio was hardly immune from the losses prevalent in late 2008 (see post here).
• was sanctioned by the US government in early 2009 for erroneously denying coverage to senior patients who subscribed to its Medicare drug plans (see 2009 post here).
• settled charges that it had used a questionable data-base (built by Ingenix, a subsidiary of ostensible WellPoint competitor UnitedHealth) to determine fees paid to physicians for out-of-network care (see 2009 post here). 
• violated state law more than 700 times over a three-year period by failing to pay medical claims on time and misrepresenting policy provisions to customers, according to the California health insurance commissioner (see 2010 post here).
• exposed confidential data from about 470,000 patients (see 2010 post here) and settled the resulting lawsuit in 2011 (see post here).
• fired a top executive who publicly apologized for the company's excessively high charges (see 2010 post here).
• California Anthem subsidiary was fined for systematically failing to make fair and timely payments to doctors and hospitals (see 2010 post here).
• management was accused of hiding the company's political contributions from the company's own stock-holders (see 2012 posts here and here).
• settled charges that its Anthem subsidiary cheated former policy-holders out of money owed when that company was converted from a mutual insurance company (see 2012 post here)

More "Visionary" Leadership That Turned Out to be "More Interested in Flash than Substance" - Continuing Troubles at the University of Miami

Over the last 20 years or so, health care organizational leaders somehow ceased to be mere mortals, and became visionaries.  The latest example of how their visions turned out to be cloudy appeared in the Miami Herald.

Background: Donna Shalala as "Visionary" President of the University of Miami

Donna Shalala, formerly the US Secretary for Health and Human Services, became President of the University of Miami in 2001 (see her official biography).  She has since been hailed literally for her "visionary leadership" (as recipient of the Health Leadership Award from the National Hispanic Medical Association in 2005).  In 2008, then US President George W Bush awarded her the US Medal of Freedom, the highest US civilian award, as "one of our nation’s most distinguished educators and public officials. She has worked tirelessly to ensure that all Americans can enjoy lives of hope, promise and dignity.")

At the University of Miami, as described in a detailed investigative report by Paul Basken in the Chronicle of Higher Education in 2011, Ms Shalala pursued a grand strategic vision to " bring the University of Miami into the ranks of the nation's elite research universities."  In an interview at that time, she claimed to have had "a very disciplined strategic plan to make this place much, much better, to move into the top ranks of American universities."

Cracks in the Wall Appear in 2011

However, Mr Basken reported that by 2011, that strategy was showing signs of failure.  He noted problems including rising deficits and a worsening credit rating; allegations that the university was failing to meet the needs of the poor patients for whom its doctors had traditionally cared for at Jachson Memorial Hospital while favoring paying patients at its newly acquired medical center; and concerns about conflicts of interest affecting top leadership of the university, including Ms Shalala (see our post here).  At the time, university leadership scoffed at the importance of these problems.  For example, Ms Shalala ridiculed doctors "who gripe" that the university had become over-extended by pushing research over patient care as "these people complaining they want to live their little lives without being researchers." 

After the 2011 report came out, Ms Shalala ridiculed  it in print as "a shocking example of irresponsible and lazy reporting."

Note that on Health Care Renewal, we had previously raised questions about Ms Shalala's conflicts of interests, particularly her role on the board of UnitedHealth at the time its CEO was receiving hundreds of millions in back-dated stock options (in 2006, look here); and about her priorities, including the contrast between her lavish compensation, which encompassed her residence in a fully-staffed mansion, and how the university treated its low level workers, particularly its janitors who did not receive health insurance (also in 2006, look here). 

The Cracks Widen in 2012

In retrospect, Mr Basken's article appears quite responsible and accurate.  Last week the Miami Herald reported that Ms Shalala's "ambitious moves vaulted UM’s medical school to the national stage — but they may also have seriously damaged it."  Soon after Ms Shalala ridiculed the Chronicle of Higher Education article, already internal reports showing even more trouble were appearing. 

As far back as October, billionaire car dealer Norman Braman wrote in a memo to fellow UM trustees that he and colleagues had been receiving anonymous letters for months 'outlining a host of wrongdoings, mostly at the medical school. Braman and others closely tied to the school warned UM officials the medical school was spending too much, too fast in the push to build a world-class medical center.

There were problems beyond those described by the CHE article:

The medical school also had major problems of its own. According to internal documents, the school suffered from bloated staffing, a faulty billing system and prices that sometimes ran much higher than at other South Florida hospitals. Internal controls apparently were weak at best: A whopping $14 million in expensive cancer drugs disappeared from a UM pharmacy over three years before an employee was charged with theft in June 2011.

The medical school’s difficulties even began to impede its relationship with the ailing, taxpayer-financed Jackson Health System, endangering a decades-long partnership with the public hospital system.

The Herald article includes substantially more detail to support these assertions.

Trustee Braman summarized it thus:

Poorly conceived decisions by the medical school administration have put the university at significant risk and, at the same time, injured Jackson Memorial Hospital.

As we noted, earlier this year the university's financial problems lead to layoffs, but at the same time, the university was building an even fancier mansion for President Shalala. After the lay-offs, Braman said they were:

a real tragedy that never should have happened. ... The people at the top were very much more interested in flash than substance.

Summary

Since the early 1990s we have suffered the rise of extremely confident, extremely well-paid, "visionary" health care leaders. Anyone within the organization who doubted their visions risked being labeled a malcontent or worse. Any skeptic outside the organization might be met by a barrage of propaganda from the organization's well financed public relations operation. Yet the visions these leaders produced often appeared to be clouded at best.

One of the most striking early examples remained anechoic for a long time. The then CEO of the Allegheny Health Education and Research Foundation, Sharif Abdelhak, was publicly labeled a "visionary" and "genius" for assembling a large, vertically oriented health care system, which eventually went bankrupt. Abedlhak went to jail. (Look here for summary). In the greater business world, whose culture now seems to rule health care, there are other examples of such failed visionaries (look here).  Yet this case, and other since, have largely been ignored.

However, as the case of the leadership of the University of Miami now seems to show in retrospect, many people seem to fall again and again for the now tired hucksterism of the "visionary," or "genius" leader selling grandiose and often self-serving pipe dreams.

Maybe it would be enough in health care to simply aspire to good patient care, responsible education, and honest research.

Meanwhile, health care professionals, health policy leaders, and the public at large should start showing appropriately pointed skepticism of our current self-proclaimed "visionary" leadership.