Money vs Mission - How Generic Managers vs Physicians Think

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

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

Making Widgets vs Treating Patients

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

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

Also,

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

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

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

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

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

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

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

Also,

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

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

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

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

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

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

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

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



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

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

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

Furthermore, Mr Kislak wrote

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

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

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

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

Yet he noted that

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

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

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

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. 


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

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

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

ADDENDUM - This post was re-posted on the Naked Capitalism blog. 
 

Our Man in the NQF? - CareFusion Settles Kickback Allegations for $40.1 Million and Government Alleges They Meant to Manipulate National Quality Forum Standards

What appeared to be yet another entry in the march of legal settlements turns out to be more interesting than it first appeared.

The Basic Story: Off-Label Marketing 

The story was initially briefly reported in the media.  A report in the Seattle Post-Intelligencer on 9 January, 2014, was perhaps the most complete,

CareFusion, a manufacturer of medical and surgical supplies and medical devices, has agreed to settle charges of illegal marketing practices and kickback payments for promoting sales of the company’s surgical preparation solution, Chloraprep.

Under the terms of the settlement with Washington, other states, and the federal government, CareFusion will pay a total of $40.1 million.

In particular,
 

When the FDA approves a surgical solution such as Chloraprep as safe and effective, its manufacturer can’t market or promote it for an 'off-label' use – any use not approved by the FDA.

Chloraprep was approved for specific inpatient hospital procedures, including the preparation of a patient’s skin prior to surgery or an injection. The FDA rejected its use for prepping the skin prior to inserting catheters into veins for administering medications, or cleaning the skin as part of closing wounds.

The lawsuit alleges that from Sept. 1, 2009 to Aug. 31, 2011, CareFusion promoted Chloraprep for improper uses. CareFusion also allegedly publicized unverified information about Chloraprep during the same time period, Ferguson said.

So this follows a template we have seen before, most recently here.  A company promotes a drug or device for "off-label" uses.  While physicians are legally allowed to prescribe a drug or use a device for reasons other than its official indications, companies are not legally allowed to promote such uses.  Sometimes it turns out that the drug has benefits that outweigh its harms when used off-label, in which case the violation could be considered technical.  In other cases, the drug might turn out to be useless or even net harmful when used off-label, so the violation indicates putting revenue ahead of patients' welfare.  

The reporting on the CareFusion Chloraprep settlement did not clearly suggest that the off-label use was harmful to patients.

Allegations of Kickbacks to Promote Off-Label Use, but How?

It gets more interesting.  The Post-Intelligencer also noted,

The states also contend that in 2008 CareFusion’s predecessor corporation entered into agreements that CareFusion assumed legal and financial responsibility for. This included payments to Health Care Concepts Inc., payments that were allegedly made to hide kickbacks to the physician-owner of HCC for promoting and influencing providers to use Chloraprep, he said. This violates federal and state anti-kickback laws.

Now the allegations also include kickbacks to the "physician-owner" of a company to facilitate off-label promotion.  So the issue goes beyond a technical violation of the law.  The Post-Intelligence report, however, did not make clear what Health Care Concepts Inc actually did to contribute to off-label promotion.

A quick attempt to find out more about this company via the web was not fruitful.  There are lots of companies/ organizations called Health Care Concepts or some variant.  The most relevant may be this one, which lists CareFusion as a "partner" on its main web-page.  What this company actually does is a bit unclear.  Its business model is described as "a private incubator of early products, services, and technologies, as well as an accelerator of mature solutions that will be taken to scale." What that has to do with off-label promotion of a product of a big established company like CareFusion is not clear.  How this company could have influenced providers is not clear, given that it is not an advertising firm, public relations firm, or medical education and communication company (MECC).

So what is going on here?  

Allegations of a $11.6 Million Payment to Manipulate the National Quality Forum Standards


Yesterday, 21 January, 2014, Modern Healthcare began to explain the mystery.   

Many healthcare companies have been accused of paying kickbacks to influence physicians' medical decisions, but one major supplier allegedly tried to steer an entire industry by influencing the recommendations of the National Quality Forum

The NQF, which reviews medical evidence and makes recommendations for improving healthcare, acknowledges that a well-known patient safety advocate is alleged to have received millions of dollars to promote a surgical sterilization product while co-chairing an NQF committee that suggested hospitals use that product. 

Federal officials say Dr. Charles Denham, co-chair of NQF's Safe Practices Committee in 2010, received $11.6 million from San Diego-based CareFusion to promote the company's ChloraPrep line of skin-preparation products. Denham's committee at the NQF also recommended surgeons use ChloraPrep products to prevent surgical infections, the NQF said.

The allegations about the role of Dr Denham in the NQF also did appear in the the official US Department of Justice press release.

Allegations of Bogus Contracts, and Non-Denial Denials

The allegations produced some non-denial denials (in the phrase found in All the President's Men).

Dr Denham responded, but through a lawyer:

A statement from Denham's attorney, Larry Gondelman of Powers Pyles Sutter & Verville in Washington, said reports that the underlying lawsuit involved Dr. Denham were 'blatantly false.'

Denham was not accused of wrong-doing in the whistleblower lawsuit, and Gondelman said Denham has and continues to cooperate with investigators in the case.

Note that while the attorney denied that Dr Denham was named in the underlying lawsuit, he did not apparently specifically deny the allegations.

The NQF also reponded,

 An NQF review committee removed the reference to the specific product before final publication of 'Safe Practices for Better Healthcare' in 2010.

'An NQF ad hoc review did not find sufficient evidence to support one skin preparation over another,' a statement from the organization said. 'The ad hoc review effectively served its role of rapidly responding when a potential issue is identified.'

Note that the NQF press release did not deny that the CareFusion money was given to Dr Denham's organization, nor that the NQF report might have promoted the use of a class of products in which CareFusion's Chloraprep resides.

A follow-up story in Modern Healthcare noted that Dr Denham confirmed the payment of the money to his company, but not its purpose,

 Renowned quality expert Dr. Charles Denham confirms that CareFusion paid his company more than $11 million, but Denham says he was surprised to see the U.S. Justice Department describe the money as kickbacks intended to influence national quality-of-care guidelines published by the National Quality Forum.

Dr Denham's lawyer confirmed the payment, but did not further explain it:

Denham's lawyer, Larry Gondelman of Powers Pyles Sutter & Verville in Washington, acknowledged that CareFusion did pay Denham's company under two contracts. 

And,

Gondelman said the $11.6 million paid to Denham's company covered 'an array of services' and that he could not elaborate.

Again, note that Mr Gondelman did not specifically deny that the money served as a kickback.

Meanwhile, the Department of Justice alleged something more elaborate, and nefarious, 

The Justice Department, though, says the contracts were written to look as though CareFusion was buying consulting, software development and strategic marketing services, as well as the completion of three unnamed projects. The value of the deals, the government alleges, far exceeded the fair-market costs of those services, and that one of the actual purposes of the deals was to conceal kickbacks to Denham while he served on the National Quality Forum.

Interval Summary

So what is clear so far is that:
-  CareFusion agreed to a $40.1 million settlement of allegations that it provided kickbacks to promote off-label use of its product.
-  CareFusion paid $11.6 million to Health Care Concepts
-  Health Care Concepts is run (and possibly owned) by Dr Charles Denham, who chaired a National Quality Forum committee that recommended use of CareFusion's product ChloraPrep in a performance standard and the final version of the NQF standard recommended use of a group of products including ChloraPrep

We have frequently discussed how health care corporations may promote goods, particularly drugs and devices and services through deceptive and unethical practices, including inducements ranging form creation of conflicts of interest to outright bribes and kickbacks.   We have also discussed the influence of individual and institutional conflicts of interest on clinical practice guidelines.  This has become an important enough problem for the US Institute of Medicine to weigh in with standards for trustworthy guidelines that markedly limit such conflicts of interest. 

This case seems notable because it may link the problems of deceptive and unethical promotion with the influencing of clinical practice guidelines.  It is particularly notable because the organization generating the guidelines in question, the National Quality Forum, has become large, influential, and authoritative.  Re the latter point, the latest Modern Healthcare article affirmed,

The NQF is a standards-setting organization for the healthcare provider industry. It holds the exclusive contract to provide Medicare and Medicaid with recommendations on a national quality-of-care strategy and the measures used to gauge improvements.

In fact, while the NQF performance standards can function as guidelines, they also may be bases for pay for performance schemes that attach real incentives to guidelines, which could become perverse if the guidelines have been manipulated.

Can the NQF Defend Against Conflicts, and If Not, Should it Remain So Authoritative?

So the big question is whether the NQF, given its unique influence, has any meaningful approach to prevent its standards from being influenced by conflicts of interest?

The NQF does have a recent conflicts of interest policy. However, according to my reading, it neither bans committee members with conflicts of interest, nor even requires public disclosure of conflicts of interest.  All it seems to require is that committee members disclose conflicts internally and voluntarily recuse themselves from deliberations which may be affected by them.  Although the policy states that conflicts of interest may be made public, I could find nothing in the report which Dr Denham co-authored about conflicts of interest or competing interests affecting any of the authors, including Dr Denham

Furthermore, a very quick look at information publicly available on the NQF web-site suggests the organization itself may have major institutional conflicts of interest.  The NQF is one of those "public-private partnerships" that have become all the rage.  Several members of its board of directors have leadership positions in large health corporations, financial firms with large health care interests, or trade associations for large health care corporations: 

- Elizabeth J. Fowler, PhD, JD, is Vice President, Global Health Policy, in the Government Affairs & Policy group at Johnson & Johnson.

- Robert Galvin, MD, is Chief Executive Officer, Equity Healthcare, at The Blackstone Group.

 - Karen Ignagni, President and Chief Executive Officer of America’s Health Insurance Plans (AHIP), is the voice of health insurance plans....

- J Mark Overhage MD, PhD,  Chief Medical Informatics Officer, Health Services, Siemens Healthcare


Thus it is conceivable that they could personally profit, and that their organizations could institutionally profit from standards that favor their organizations' interests.  

Furthermore, NQF receives funding from the US government and private foundations, but also from pharmaceutical companies and their in-house foundations:

the Bristol-Myers Squibb Foundation, the Cardinal Health Foundation, Pfizer Inc., Sanofi-aventis,...

Unless the current case leads to big changes in the prevalence of conflicts of interest among the NQF board, the continuation of its institutional conflicts of interest generated by its sources of funding, and its weak policy on conflicts affecting committee members, the question becomes whether it should continue to have such an authoritative role?

As we have said over and over, pervasive conflicts of interest affect health care decision-makers and policy makers and the organizations within which they function.  Such conflicts threaten to put various private interests way ahead of patients' and the public's health.  If we really want health care that will put patients' and the public's health first, we need to end such arrangements that favor private gain.  

 Roy M. Poses MD on Health Care Renewal

ADDENDUM (23 January, 2014) - A closer re-reading of the NQF conflict of interest policy made it clear that recusal is not voluntary, and that conflicts of interest may be revealed publicly, but that such disclosure is not mandatory.  The paragraph above dealing with these issues was revised accordingly.