The Mystery of the Northwestern Settlement

Watson, quick, the game's afoot.  We have discussed a large number of legal settlements by large health care organizations that serve as markers of misbehavior and often lack of leaderships' responsibility for same.  These settlements often follow a common pattern.  Yet this week a settlement appeared that was quite different, and hence raised some important questions.

The Basics of the Settlement

I will summarize the settlement as described by the Wall Street Journal.  The basic points were:

Northwestern University agreed to pay nearly $3 million to settle claims that a former cancer researcher fraudulently used federal grant money for personal expenses, including food, hotels and airfare for family trips between 2003 and 2010.

The settlement in the civil suit was unsealed Tuesday by the U.S. Attorney for the Northern District of Illinois, which investigated claims brought by a whistle blower under the False Claims Act.

The settlement seemed to be more about the researcher, Dr Charles L Bennett, than Northwestern,

At the time of the alleged fraud, Dr. Bennett was the principal investigator on research funded by the National Institutes of Health, studying adverse drug events, multiple myeloma, a blood disorder known as thrombotic thrombocytopenic purpura, and quality of care for cancer patients.

According to the settlement agreement, he allegedly billed federal grants for family trips, meals and hotels for himself and friends, and for 'consulting fees' for unqualified friends and family. Northwestern also allegedly improperly subcontracted, at Dr. Bennett's request, with various universities for services that were paid for by the NIH grants.

'Allowing researchers to use federal grant money to pay for personal travel, hotels, and meals and to hire unqualified friends and relatives as 'consultants' violates the public trust and federal law,' U.S. Attorney Gary S. Shapiro said in a statement.

Meanwhile,

 Northwestern, which is in Evanston, Ill., cooperated with the investigators and didn't admit to any wrongdoing, according to a statement by the university.

The settlement was the result of the actions of a purported whistle-blower,

The whistleblower, Melissa Theis, worked as a purchasing coordinator in the Feinberg school's department of hematology and oncology, processing invoices when she 'noticed some red flags,' according to her attorney, Linda Wyetzner, of the Evanston firm Behn & Wyetzner Chartered.

The federal False Claims Act allows private citizens who allege government programs are being defrauded to file actions on behalf of the government and receive a portion, usually 15% to 30%, of any recovered damages. Ms. Theis will get $498,100 in settlement proceeds, according to the agreement.

The settlement resulted from the efforts of multiple federal agencies,

 The allegations were investigated by the NIH, Federal Bureau of Investigation, U.S. Department of Health and Human Services Office of Inspector General and the U.S. attorney's office.

Curious Aspects and the Questions They Raise

So here is yet another settlement by a large health care organization, in this case, the prestigious academic medical center of a well known university.  This one, however, does not follow the usual pattern, and includes some quite curious aspects.

Media Attention vs Severity

The settlement so far has generated articles in the WSJ (above), the Chicago Tribune, the Chicago Sun-Times, Crains Chicago Business, Medscape, Modern Healthcare, UPI, Bloomberg, other local Chicago and university publications, and local outlets in South Carolina, the state in which Dr Bennett currently works.
 
The amount of the grants that Dr Bennett allegedly misused was $8 million, according to the University Herald.

There are no allegations that any activities of Dr Bennett or the university affected the quality of clinical research, clinical teaching, or patient care.

Contrast that substantial media attention to that generated by another recent settlement we just discussed, that of Pfizer misbranding of Rapamune (look here.)  This involved the excess promotion of a relatively dangerous drug that likely resulted in harm to many patients.  The over-promotion may have caused up to 90% of the drug's $200 million yearly sales.  The settlement itself was for $491 million.  Yet while it got more coverage, mainly from local media outlets which covered it because the settlement will result in payments to individual states, only four big national outlets have covered it so far, again the Wall Street Journal, and  the New York Times, Reuters and Businessweek.

Why did a relatively small settlement of alleged financial misbehavior without clinical implications get nearly as much attention as a settlement fifty times bigger that involved actions that likely harmed patients?

Intensity of the Government Response

Dr Bennett's alleged misuse of grant funds required investigation by four different federal agencies, including the FBI.  Pfizer's misbranding of a dangerous drug seemingly was handled only by one, and the FBI was not obviously involved.  In fact, the FBI rarely has rarely been mentioned in the media coverage of most of the legal settlements we have discussed.

Why did again a case of relatively small alleged financial misbehavior require such massive federal resources when much bigger cases which had implications for clinical care, policy, or research seemed to command lesser resources?

Naming and Shaming

The settlement did not involve any admission of any wrongdoing by Northwestern.

In contrast, nearly all the news coverage of this settlement emphasized the role of Dr Charles L Bennett.  The coverage seemed to be following the lead of the Department of Justice press release, which included,

 Northwestern allegedly allowed one of its researchers, Dr. Charles L. Bennett, to submit false claims under research grants from the National Institutes of Health. The settlement covers improper claims that Dr. Bennett submitted for reimbursement from the federal grants for professional and consulting services, subcontracts, food, hotels, travel and other expenses that benefited Dr. Bennett, his friends, and family from Jan. 1, 2003, through Aug. 31, 2010.

Yet Dr Bennett appeared not to be a party in this settlement, and it was unclear whether he had a direct opportunity to respond to it.  The Wall Street Journal did note that after it was announced,

 James M. Becker, an attorney for Dr. Bennett, said, 'We deny the allegations.…We are actively engaged in discussions to resolve the allegations.'

We have discussed numerous legal settlements by large health care organizations, often involving hundreds of millions or even billions of dollars, sometimes involving guilty pleas by the companies involved or their subsidiaries.  Almost never do these settlements name or involve in any way persons who authorized, directed, or implemented the misbehavior.  In fact, we have commented again and again about the impunity of health care organizational managers and executives.  For example, the recent $491 million Pfizer settlement did not name or punish any individuals.  Furthermore, Pfizer's $2.3 billion settlement for deceptive marketing of a drug later pulled from the market (Bextra) did not name much less penalize any responsible individuals (look here.)  Also, GlaxoSmithKline's $3 billion settlement of numerous unethical practices did not name much less penalize any responsible individuals (look here).

So why was naming and shaming Dr Charles L Bennett such an important part of the relatively small Northwestern settlement, when much larger settlements, many involving unethical behavior that could have harmed patients or distorted medical research, and some of which involved corporate guilty pleas to criminal charges did not involve naming and shaming any responsible person?    
 
How Accountable was Dr Bennett?

As in the Wall Street Journal version, the settlement implies that Dr Bennett was the person most responsible.  The Chicago Sun-Times put it this way,

 Dr. Charles L. Bennett allegedly took his wife on personal trips, then illegally billed the flights, hotels and meals to the National Institutes of Health, claiming it was part of his cancer-fighting work. And he allegedly submitted phony bills for his work over a seven-year period beginning in 2003.

Here I will have to interject a bit of information about how federal grants work.  As I learned when I was a young faculty member, and as I confirmed with several other experienced researchers who have run and reviewed federal grants, these grants are made to institutions.  In the current case, the grant apparently went to Northwestern University.  The institution that receives the grant is responsible for making all payments and disbursements related to that grant.  The grant's Principal Investigator is responsible for the scientific conduct of the grant, but NOT payments, disbursements, business management or accounting.  The Principal Investigator can request that payments be made for various things, including travel expenses and consulting work.  But the Principal Investigator cannot directly authorize or make these payments.  They are authorized, signed, and made by institutional administrators, usually in grants and contracts offices or the equivalent, and usually only after copious paperwork to justify the payments.

So Dr Bennett may have requested reimbursement for travel expenses, or requested the university to hire a consultant.  But university managers must have made those payments, unless the university's grants administration mechanism had completely broken down.  Note that given the usual ways grants are administered, it would appear that Ms Theis, the ostensible whistle-blower, who will receive nearly one half of a million dollars from this settlement, actually may have had more direct responsibility for making the payments in question than did Dr Bennett.

Presumably, that is why the settlement was made by Northwestern.

Why then did the settlement, the DOJ press release, and the media coverage so emphasize Dr Bennett's responsibility, and so minimize the role of the university?  

Was Anyone Else Accountable?

The DOJ press release, and all the media articles on the case,  save one, mention only Dr Bennett as the person at fault.  Crain's Chicago Healthcare Daily, however, suggested someone else was responsible,

Northwestern University's nearly $3 million settlement of fraud claims by the federal government protects the director of the school's cancer center, who allegedly failed to supervise a researcher who used grant money to cover personal expenses over a seven-year period.

Dr. Steven Rosen, director of the Robert H. Lurie Comprehensive Center for Cancer, and Dr. Charles L. Bennett, a researcher who is no longer with the center, were both named in a whistleblower complaint unsealed on Tuesday, when the settlement was announced.

Dr. Bennett used federal grant money for family trips and fraudulent consulting fees for his brother and cousin from 2003-10, the government alleges.

Dr. Rosen 'failed to exercise appropriate responsibility,' Randall Samborn, a spokesman for the U.S. Attorney's office said. 'It was a supervisory function that he didn't adequately fulfill.'

When the settlement was announced, Mr. Samborn said the agreement did not cover either doctor. On Wednesday, he corrected himself, saying that settlement covered Dr. Rosen, but not Dr. Bennett.

As I noted above, the way federal grants work, it was the university, and its managers and leaders, who were responsible for making all payments on this and other federal grants.

Why did the government press release and the media coverage emphasize Dr Bennett's alleged role, while ignoring any possible responsibility of anyone else, especially his supervisor?


Backgrounds of the Principles

Dr Bennett and Dr Rosen, who seemingly were treated so differently in this settlement, travel in very different circles.

Most media articles described Dr Bennett as a prolific researcher and medical academic.  Although some described his areas of interest in hematology and oncology, only Medscape described one particular project of his.  

Dr. Bennett's research efforts included a 2008 study on which he was the first author (JAMA. 2008;299:914-924). The study was the first meta-analysis to identify an increased mortality risk in cancer patients associated with erythropoiesis-stimulating agents.(1)

In fact, as we discussed here,  Dr Bennett was the first author of a meta-analysis that was the first to show that epoetins increased the rates of adverse effects and death for cancer patients.  This evidence lead to reduced use of some very expensive drugs made by Johnson and Johnson and Amgen, and hence reduced revenues for both companies.

The JAMA article noted that at the time he wrote it, Dr Bennett had financial relationships with Amgen.  He and a coauthor "reported serving as consultants to AMGEN and Dr Bennett reported he has received grant support from AMGEN previously."

Note that Amgen pleaded guilty to misbranding its epoetin, Aranesp, and therefore paid fine and a civil settlement totaling $762 million.  Given the data on this drug class' adverse events, as shown by Dr Bennett and others, it is likely that the misbranding lead to patients being harmed by the drug without receiving any benefits (look here.) 

After writing that article, Dr Bennett became known as a strong skeptic of the pharmaceutical industry.  Just before the JAMA article was published, he coauthored an editorial which wondered if conflicts of interest would ever prove to be acceptable once sufficient research was done.(2)  In that article, he disclosed consulting for, and receiving honoraria and research grants from Amgen.  In 2010, he published research showing the effects of conflicts of interest on reporting of possible adverse effects based on basic science research about epoetins.(3)  By then he apparently no longer had financial relationships with Amgen.  In 2011, he reported a survey of major cases of pharmaceutical fraud resulting in legal actions.(4)

Dr Bennett became known for skepticism about the practices of pharmaceutical companies, and for publishing about the harms of specific drugs, despite his previous financial relationships with Amgen. 

However, Dr Rosen apparently has continued to work closely with industry.  His faculty disclosure page revealed  the following industry relationships

Consulting / Related Activities
Faculty member engaged in activities such as speaking, advising, consulting, or providing educational programs for the following companies or other for-profit entities:

• Allos Therapeutics, Inc.
• Carden Jennings Publishing Co., Ltd.
• Cerner Corporation
• Dava Oncology, LP
• Elorac, Inc.
• Envision Communications
• Health Practices Consulting - unverified entity
• Plexus Communications
• Prostrakan, Inc.
• Seattle Genetics, Inc.
• Studio ER Congressi (Triumph Group, Inc.)
• The Medal Group Corp.

In addition, faculty member received compensation for medical record consultation and/or expert witness testimony.

Ownership or Investment Interests
Faculty member had an ownership or investment interest in the following companies:

• AuraSense, LLC
• Nanosphere, Inc.

Royalty Payments and Inventor Share
Faculty member has the right to receive payments or may receive future financial benefits for inventions or discoveries related to the following companies or other entities:

• Nanosphere, Inc. 

We have seen various important effects of individual and institutional conflicts of interest in health care.  We have seen corporatism and regulatory capture affecting government and its dealings in health care.  

Did Dr Bennett's break with a powerful industry make it easier to set him up as the villain in this story?

Summary   

The settlement by Northwestern University, which was mainly about allegations made against Dr Charles L Bennett, who was not a party to the settlement, was very different that the vast majority of the march of legal settlements whose continuation we have frequently discussed.

The settlement and its media coverage raised important questions whose answers would be important to the assessment of  our current regulatory and legal response to misbehavior by and within large health care organizations.  Health Care Renewal is about raising such issues by commenting on public information, media reports, and research.  I hope those with capacity to investigate will consider these questions.  Inquiring minds want to know.

Roy M. Poses MD in Health Care Renewal 

References

1.  Bennett CI, Silver SM, Djulbegovic B et al.  Venous thromboembolism and mortality associated with recombinant erythropoietin and darbepoetin adminstration for the treatment of cancer-associated anemia.  JAMA 2008; 299: 914-924.
2.  Djulbegovic B, Angolotta C, Knox KE, Bennett CI. The sound and the fury: financial conflicts of interest in oncology.  J Clin Oncol 2007; 25:3567-3568.  Link here 
3.  Bennett CI, Lai SY, Henke M et al.  Association between pharmaceutical support and basic science research on erythropoiesis-stimulating agents.  Arch Intern Med 2010; 170: 1490-1498.  Link here.
4.  Qureshi Z, Sartor O, Xirasagar S, Liu Y, Bennett CI.  Pharmaceutical fraud and abuse in the United States, 1996-2010.  Arch Intern Med 2011; 171: 1503-1506.  Link here.

Pfizer's Umpteenth Settlement (for $491 Million Plus a Guilty Plea), but No Person Held Responsible

The world's largest research based pharmaceutical company was in court again, as reported by the New York Times,

 The drug maker Pfizer agreed to pay $491 million to settle criminal and civil charges over the illegal marketing of the kidney-transplant drug Rapamune, the Justice Department announced on Tuesday. 

In particular,

 The recent case centers on the practices of Wyeth Pharmaceuticals, which Pfizer acquired in 2009.

Rapamune, which prevents the body’s immune system from rejecting a transplanted organ, was approved by the Food and Drug Administration in 1999 for use in patients receiving a kidney transplant. However, federal officials said Wyeth aggressively promoted the drug for use in patients receiving other organ transplants, even offering financial incentives to its sales force to do so.

Accusations of Wyeth’s practices became public in 2010 after a whistle-blower lawsuit filed by two former employees was unsealed.

After lawmakers announced a Congressional inquiry, the Justice Department opted to join the lawsuit. The settlement announced Tuesday, which also resolves a second, similar whistle-blower suit, includes a criminal fine and forfeiture of $233.5 million, and a civil settlement of $257.4 million with the federal government, all 50 states and the District of Columbia. 

The case did not get much media coverage.  So far, the only other somewhat detailed article on it was put out by Bloomberg.   In fact, the lawyer for two of the whistle-blowers who alerted federal authorities to what Wyeth was doing had to say

the spate of pharmaceutical settlements in recent years had blunted reaction to what he said were shameful practices. 'Everybody’s been asking me why this case is different than any other,' he said. 'We used to trust these companies. You can’t trust these companies anymore.'

However, we should not be too blase.  This case was not only about money.  The over-promotion of a potentially dangerous drug likely lead to patients being harmed in the absence of any benefits.  Rapamune suppresses the immune system and increases risks of serious infections and malignancy.  Specific serious adverse events have been reported when it is used in transplants of organs other than the kidney (e.g., lung and liver transplants).  (See full prescribing information here.)  Bloomberg reported that 90% of Wyeth's revenues from Rapamune came from off-label uses, suggesting that quite a few people may have been adversely affected by its excess use. 

As in most other members of the march of legal settlements by big health care organizations, this case involved no negative consequences for anybody who authorized, directed, or implemented the improper marketing practices.  While such people must have existed, they were not even named in the press coverage.  At least this settlement involved a guilty plea to a crime, albeit a misdemeanor (misbranding as reported by Bloomberg), so the company did have to admit some wrongdoing.  

A Pfizer manager, however, tried to disavow responsibility, as noted by Bloomberg,

'Pfizer was not a subject or target of this matter, and cooperated fully with the government from the time it learned of this investigation in October 2009,' Chris Loder, a Pfizer spokesman,...

But Pfizer had purchased Wyeth, and in doing so got not only assets and profits, but responsibility for actions.

Also, neither the settlement nor the criminal plea seemed to take into account Pfizer's amazingly sorry recent track record.  I am losing count of all of Pfizer's settlements and/or guilty plea or convictions since 2000.  (The updated list of previous legal results is in the Appendix.)  

People found guilty of small-time Medicaid or Medicare fraud often forfeit all their assets and go to jail.  Yet actions by large pharmaceutical companies that may harm patients and cost many millions of dollars almost never result in any individual facing any negative consequences, or even being named and shamed.  Meanwhile, the managers of these companies may make gargantuan amounts of money partially rationalized by the revenues produced by such recurrent misbehavior.  In 2012, according to the company's 2013 proxy filing, Pfizer CEO Ian Reed's total compensation was  $25,634,136, and the four next most highly paid executives all made more than $5,000,000. 

So the Kabuki play that is regulation of and law enforcement for large health care organizations goes on.  As our society is being increasingly divided into a huge majority in increasingly difficult economic circumstances and a small and  increasingly rich minority, it also seems to be increasingly divided into little people who may be ruined by lawsuits, and imprisoned for even minor infractions, and big people who have impunity.  

True health care reform would need to start by making leaders of big health care organizations accountable for their organizations' misbehavior. 

APPENDIX - Pfizer's Settlements

In the beginning of the 21st century, according to the Philadelphia Inquirer, Pfizer made three major settlements,

October 2002: Pfizer and subsidiaries Warner-Lambert and Parke-Davis agreed to pay $49 million to settle allegations that the company fraudulently avoided paying fully rebates owed to the state and federal governments under the national Medicaid Rebate program for the cholesterol-lowering drug Lipitor.

May 2004: Pfizer agreed to pay $430 million to settle DOJ claims involving the off-label promotion of the epilepsy drug Neurontin by subsidiary Warner-Lambert. The promotions included flying doctors to lavish resorts and paying them hefty speakers' fees to tout the drug. The company said the activity took place years before it bought Warner-Lambert in 2000.

April 2007: Pfizer agreed to pay $34.7 million in fines to settle Department of Justice allegations that it improperly promoted the human growth hormone product Genotropin. The drugmaker's Pharmacia & Upjohn Co. subsidiary pleaded guilty to offering a kickback to a pharmacy-benefits manager to sell more of the drug.

Thereafter, Pfizer paid a $2.3 billion settlement in 2009 of civil and criminal allegations and a Pfizer subsidiary entered a guilty plea to charges it violated federal law regarding its marketing of Bextra (see post here). 

 Pfizer was involved in two other major cases from then to early 2010, including one in which a jury found the company guilty of violating the RICO (racketeer-influenced corrupt organization) statute (see post here).  

The company was listed as one of the pharmaceutical "big four" companies in terms of defrauding the government (see post here).  

Pfizer's Pharmacia subsidiary settled allegations that it inflated drugs costs paid by New York in early 2011 (see post here).   

In March, 2011, a settlement was announced in a long-running class action case which involved allegations that another Pfizer subsidiary had exposed many people to asbestos (see this story in Bloomberg).  

In October, 2011, Pfizer settled allegations that it illegally marketed bladder control drug Detrol (see this post). 

In August, 2012, Pfizer settled allegations that its subsidiaries bribed foreign (that is, with respect to the US) government officials, including government-employed doctors (see this post).

In December, 2012, Pfizer settled federal charges that its Wyeth subsidiary deceptively marketed the proton pump inhibitor drug Protonix, using systematic efforts to deceive approved by top management, and settled charges by multiple states' Attorneys' General that it deceptively marketed Zyvox and Lyrica (see this post).  

 In January, 2013, Pfizer settled Texas charges that it had misreported information to and over-billed Medicaid (see this post). 

Shut Up and Sell - the Corporate Physician's New Motto?

Evidence has been seeping into public view about the extent physicians who sign up to take care of patients as corporate employees give up their professionalism.

Shut Up...

In April, 2013, Medscape published an article whose striking title was "Can You Speak Out Without Getting Fired or Being Labeled a Troublemaker?"  The answer was basically "no."

Physicians often see problems at their workplaces relating to patient quality of care, financial practices, mistreatment of staff, and other issues. But as more doctors take jobs as employees of hospitals, medical groups, and other large organizations, they increasingly face the same dilemmas as millions of other working stiffs. When they come across actions or policies that they don't think are right, they have to decide whether it's worth it to speak out and get labeled as a troublemaker -- or perhaps even get fired.

 Across the country, a growing number of physicians are indeed losing their jobs -- and often their hospital staff privileges -- after protesting employment conditions. Such complaints may involve patient quality-of-care problems, short staffing, misallocation of funds, improper financial incentives, fraud and abuse, discrimination, overuse or withholding of medical services, or other misconduct, say organized medical groups, employment attorneys, and physician recruiters.

Of course, physicians swear oaths to put the needs of their individual patients first, and doing so within a large organization might well involve protesting conditions and practices that may affect the quality of care or even endanger patients.  But woe unto physicians who try to fulfill their professional responsibility when doing so goes up against the top executives to whom the physicians must now report.

'We were naive when we went into this,' says Maria Rivero, MD, who with her professional colleague and significant other Derek Kerr, MD, filed administrative complaints against their long-time hospital employer in 2010. 'We thought if we just brought it to people's attention, they would fix the problem and leave us alone. But if you blow the whistle on high-level executives, you need to prepare to be harassed and lose your job.'

Even working within the system to fix problems can lead to big trouble,

Still, the formal professional approach doesn't always work either. Cloyd Gatrell, MD, an emergency physician who was employed by EmCare, says that he and his wife Kathryn, a nurse, voiced concerns and presented data to executives at Carlisle Regional Medical Center in Pennsylvania in 2008 and 2009 on what they saw as inadequate nurse staffing levels that endangered patients.

After getting no results, Dr. Gatrell contacted the state health department, prompting a state inspection that found insufficient staffing. In 2010, he was fired by EmCare at the request of the hospital, according to his 2011 lawsuit against the hospital and EmCare claiming violation of whistleblower protection laws. His wife was fired earlier, and she sued separately. The hospital issued a statement declining comment on the litigation.

'We're supposed to be advocates for patients, but being employed puts us in a precarious position in taking a position on patient interests that's against what the hospital administration favors,' says Dr. Gatrell, whose suit is in the discovery stage. 'I think a physician still has that responsibility.'

Physicians who sign contracts with corporate employers, perhaps thinking that they will have less bureaucracy with which to contend and a more certain salary than they did in private practice, seem blissfully, or willfully unaware that those contracts may take away their ability to control their practices and stand up for their patients.

Still, federal and state whistleblower laws only provide protection from retaliation for physicians in certain situations, such as those employed by public entities or those who complain about civil rights violations or Medicare and Medicaid fraud and abuse. Otherwise doctors may have to rely on contract provisions or on state employment law, which may not offer much protection.

[An anesthesiologist on the AMA Board of Trustees and his hospital system's board,] Dr. Annis says that the AMA's new statement of principles for physician employment -- which asserts that physicians should not be retaliated against by their employers for speaking out on patient care issues -- provides support for doctors when they raise legitimate professional concerns with their employers. He says it's best for physicians to work through their medical staff organization.

But Dr. Gatrell points out that the AMA statement explicitly accepts that physician employment contracts may allow hospitals to strip doctors of their medical staff membership and clinical privileges at the same time they are terminated, known as a 'clean sweep' clause. 'If that's accepted by the AMA, the rest of the principles protecting physicians are meaningless," he argues. "If physicians can be fired without cause and then automatically lose their medical staff membership and its due process protection, how many will dare be a patient advocate?'

Some experts advise physicians not to sign employment agreements with such onerous provisions. But others say that physicians often have little leverage to remove them. 'It's not an equal negotiating table,' says Dr. Gatrell, who's now working for a small urgent care practice.

A May, 2013 article again in Medscape about the "4 Top Complaints of Employed Doctors," explained why physicians often see a lot they could or should protest to assure the quality of their patients' care,

 Some doctors report that hospital administrators treat them with a lack of respect. One female doctor said, also on condition of anonymity, that her biggest challenge on her job was 'how to handle nonphysician high school grads bossing you around when they function as your 'superiors' in your employer's organization. They manage their insecurities by bullying physicians and through passive aggressiveness, but always seem to gain the upper hand with those at the top.'

These are the sorts of brilliant administrators often hired by brilliant top executives, maybe at a cheap price to keep the bottom line and executive compensation healthy..  Furthermore, given that as we have discussed, "financialization" of hospital management often puts a bigger priority on short-term revenue than on quality care, as per one senior physician,

 'physicians are being increasingly targeted when they get in the way' of hospitals' agendas

To make more money faster, many hospital systems now seem to want physicians to only make referrals for lucrative tests and treatments within the system, even if some patients might be better served elsewhere,

The AMA recently issued guidelines for physician employment stating that 'a physician's paramount responsibility is to his or her patients.' Employers should not retaliate against physicians for asserting their patients' interests, according to these guidelines. 'In any situation where the economic or other interests of the employer are in conflict with patient welfare, patient welfare must take priority,' the AMA says.

The guidelines also call for employers and employed physicians to disclose to patients any agreements or understandings they have that restrict, discourage, or encourage particular treatment or referral options.

Nevertheless, employed physicians are often expected to refer patients within their own groups and send tests to a hospital laboratory or imaging center. Hospitals may tell employed surgeons which kinds of joint implants to use, and according to a New York Times article even whether to implant defibrillators in Medicaid patients. It's unclear how often any of this is disclosed to patients.

'What we doctors say is that we're ethically bound to our patients because we took an oath, and that's what our license is based on,' says Linda Brodsky. 'But many hospitals say, 'No, you're employed here, and what we say goes.'

Note that so far there seems to be little evidence that the AMA guidelines about physician employment are being honored other than in the breach.  It is also disappointing that the leadership of the medical society that represents internists seems so unworried,

 David L. Bronson, MD, President of the American College of Physicians, disputes Brodsky's assertion that hospitals tend to squelch doctors who criticize leadership for policies that they believe harm patient care. In fact, he says, healthcare organizations may identify outspoken physicians as potential leaders, 'as long as they're collaborative and trying to solve problems, and not just be a thorn in the side of everyone they know. Organizations are looking for physician leaders, and physicians who can collaborate and not just be adversarial can go far inside organizations.'

I would guess, having seen so many examples of generic management, mission-hostile management, management that seems more focused on the money than patient care, and management that seems to be able to make itself rich without evidence that it has done anything noteworthy to uphold hospitals' clinical missions, that hospital systems that promote physicians who are willing to speak out against hired executives are vanishingly rare.

And Sell

In June, 2013, Beckers Hospital Review published an article suggesting that now hospitals are going beyond just pressuring employed physicians to refer potentially profitable patients within the system, and now are pressuring physicians to act as salespeople to their colleagues,

 A few hospitals are beginning to train their employed physicians to "sell" the hospital, which involves asking referring doctors in the community to send patients their way....  the pressure to bring doctors into sales is mounting.

The author, the former publisher of Modern Healthcare, made a remarkable argument based on a definition that seems wildly optimistic,

 Customer service lies at the core of salesmanship. The Business Dictionary defines salesmanship as satisfying customer needs through a sincere and mutually beneficial process aimed at a long-term relationship.

Of course, skeptical physicians used to exposure to the sales tactics pharmaceutical and device companies use (look here, here, and here,  for example) might wonder why the author did not discuss such marketing tactics as the employment of half-truths and biased information, and the use of emotional appeals to trump reason and logic.

That the author was serious was shown by his list of seven pointers for hospitals seeking to transform its employed physicians into marketers.

Of course, physicians who are already "key opinion leaders" employed by drug and device companies, whose marketing executives may think. that "key opinion leaders were sales people for us," (see this post), might not be fazed by now being asked to market their own hospital.  Never mind about Principle II of the AMA Code of Ethics

II. A physician shall uphold the standards of professionalism, be honest in all professional interactions, and strive to report physicians deficient in character or competence, or engaging in fraud or deception, to appropriate entities.

The Moral of the Story

We have previously discussed various aspects of the travails of the brave new world of the corporate physician.  Physicians and other health professionals who sign on as full-time employees of large corporate entities have to realize that they are now beholden to managers and executives who may be hostile to their professional values, and who are subject to perverse incentives that support such hostility, including the potential for huge executive compensation.  Physicians seem to be willing to sign contracts that underline their new subservience to their corporate overlords, and likely trap them within confidentiality clauses that make blowing the whistle likely to lead to extreme unpleasantness.

It is disappointing that even medical societies that ostensibly support physicians' professional values have been afraid to warn against such employment, or do much to help physicians trapped within it.

Physicians who go to work for big corporations have to realize that they may be forced to put corporate executives' vested interests ahead of their patients.  Patients whose physicians work for big corporations must realize that their health care will now be corporate, with all that entails.

  As I have said before, we need to challenge the notion that direct health care should ever be provided, or that medicine ought to be practiced by for-profit corporations. I submit that we will not be able to have good quality, accessible health care at an affordable price until we restore physicians as independent, ethical health care professionals, and until we restore small, independent, community responsible, non-profit hospitals as the locus for inpatient care.

C R Bard Settles Allegations of Kickbacks to Promote Radiation Treatment for Prostate Cancer

Screening for and aggressive treatment of prostate cancer has become an enormously lucrative business, if not necessarily a life-saving medical strategy.  The minimal media coverage of a recent settlement suggests that at least to some degree, it has been fueled by some questionable practices.

The CR Bard Settlement

As reported by the Atlanta Journal Constitution,

A medical device company on Monday agreed to pay a $48.2 million settlement to resolve claims by a Georgia employee that it paid kickbacks to doctors and customers who bought radiation treatment for prostate cancer.

C.R. Bard Inc., which is headquartered in New Jersey and has offices in Covington, resolved a whistle-blower suit filed by the employee in 2006. The suit alleged that the company paid off doctors and hospitals to induce them to prescribe brachytherapy seeds, which are implanted in the prostate and deliver a dose of radiation to cancer cells.

Another brief report in the Macon (GA) Telegraph gave a tiny bit more detail about what was given to physicians to get them to use Bard's radiation therapy products,

 Customers could order the seeds, used in brachytherapy to deliver a prescribed dose of radiation directly to cancer cells, from multiple companies. But Bard allegedly offered doctors grant money, rebates, free medical equipment and advertising campaigns to entice them to buy their product at inflated prices, according to a news release issued by [whistle-blower Julie] Darity’s legal team....

The Usual Elements of Legal Settlements of Allegations of Health Care Corporate Bad Behavior

The story, briefly told as it was, included many of the usual elements of stories of legal settlements of wrong-doing by large health care corporations.

Slow Justice

The settlement, hence justice, as it were, took a long time, about 7 years since the most recent behavior, and 15 years since its start.  Per the AJC,

 Bard employed its kickback scheme from 1998 to 2006, federal prosecutors said.

 Penalties Not as Big as They Appeared

The penalties were not as big as they seemed.  There was the seemingly large fine, $48.2 million dollars.  However, that should be compared to the company's net sales of over $2.95 billion and net income of $530 million in 2012, according to the company's annual report.  It should also be compared to the total compensation of the company's chairman and CEO in 2012, over $8.7 million, and to that of its president and chief operating officer, over $6.0 million, according to the company's 2012 proxy statement.   Apparently, the fine came out of the company's treasury, so its impact was diffused among all shareholders, employees, customers, and patients, not directed to those who may have authorized, directed or implemented the kickbacks to physicians. 

No Penalties for Individuals, No Acknowledgement of Wrong-Doing

The settlement did not involve any sort of direct penalties to those who authorized, directed, or implemented the kickbacks.

The corporation did not even acknowledge any bad behavior.  As per the AJC,

Bard is pleased to settle the claims, Scott Lowry, a company spokesman, said in a statement.

'This resolution allows the company to put this matter behind it and continue to focus on delivering life-enhancing medical devices and technologies to patients around the world,' he said. 'We remain committed to continuously enhancing and improving our compliance programs in accordance with industry standards.'

Suppression of Whistle-Blowing

It may not be part of all such settlements, but note that in this case there seemed to be an attempt to shut up the whistle-blower.  So, there is reason to think that justice, such as it was, was delayed because the company seemingly tried to punish the whistle-blower, rather than listen to what she had to say.  Per the Macon Telegraph,

 Darity, 56, said she first reported what she suspected as questionable activities to her supervisors.

'I did exactly what was outlined in the company ethics policy,' she said. 'I wanted to think things were being corrected.'
In time, she realized nothing had changed. She filed an internal whistle-blower complaint.

Her job was eliminated in November 2005, soon after an investigation was launched into her whistle-blower complaint, she said.

Darity had worked for Bard, which has an office in Covington, for more than 18 years. When her job was eliminated, she was a manager in the Brachytherapy Contracts Administration division.

Out of a job, Darity filed the lawsuit in U.S. District Court for the Northern District of Georgia in January 2006.

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Nonetheless, the government seemingly trusted C R Bard to fix its own behavior going forward, per the Wall Street Journal,

 As part of a non-prosecution agreement, C.R. Bard agreed to pay an additional $2.2 million and take remedial steps to enhance compliance. The company had said in a regulatory filing last year that it expected the settlement to include a corporate integrity agreement, which typically require companies to obey restrictions on their sales and marketing practices, but no such agreement was announced Monday. 

Note that here we discussed a case in which an academic medical institution seemingly tried to punish faculty members who questioned that organization's overly enthusiastic approach to prostate cancer.

Summary - the Profitable but Unsubstantiated Aggressive Approach to Prostate Cancer

So its just another day at the office. This was a typical settlement of allegations of unethical behavior by a large health care organization.    A large health care company allegedly bribed doctors to use its products.  It seemingly tried to shut up a whistle-blower.  Seven years later, the company got a financial slap on the wrist, but no one directly involved in the alleged kickbacks, and no one whose compensation may have been enlarged due to such apparently unethical activity paid a price.  Never mind that the alleged kickbacks may have induced doctors to use treatments that provided no overall benefit, but could have harmed patients. 

Before ending with our usual fulmination, I should note that this case appears to be one small piece in the puzzle of our national infatuation with an aggressive approach to prostate cancer, despite a lack of essentially any good evidence that this approach does any good.  Brachytherapy, the treatment pushed allegedly by kickbacks, is one kind of aggressive treatment for prostate cancer.  Yet there is no good evidence from randomized controlled trials that is prolongs life.  In fact, a recent (and the only major) randomized controlled trial of aggressive treatment of prostate cancer on initial diagnosis failed to show any overall survival benefit.(1)  There has been a huge push to screen all men of a certain age for prostate cancer.  Yet now two new trials also failed to show any overall survival benefit from screening.(2,3)   

But the prostate cancer business is very lucrative.  On the Reforming Health blog, a post summarized a lecture given by Dr Otis Brawley, chief medical officer of the American Cancer Society in which Dr Brawley described the financial scheme underlying the aggressive approach to prostate cancer,

Brawley recounts an experience he had on a site visit to a hospital in 1998 while an Assistant Director at the National Cancer Institute. During the visit a marketing executive explains to Brawley the publicity value and financial rewards of a free prostate screening program offered by the hospital at a local mall. The plan is to screen the first 1,000 men over 50 who come to the mall for testing. I’ve transcribed Brawley’s recollections from the video and they provide a great explanation for the profit-driven practices that continue to occur today, 14 years later:

'If they screen 1,000 men they’re going to have 145 abnormals. They’re going to charge about $3,000 to figure out what is abnormal about these abnormals, that’s how they pay for the free screening. About 10 of the 145 won’t come to this hospital so that’s business for their competitors, but they’ll get 135 times $3,500 on average. Of the 135, 45 are going to die of prostate cancer and the other percentage are going to get radical prostatectomy at about $30-40,000 a case; there’s a percentage that’s going to get seeds at about $30,000 a case; a percentage were going to get radiation therapy that (at the time) was about $60,000. Then [the marketing executive’s] business plan goes further, he knows how many guys are going to have so much incontinence that diapers aren’t going to do it so he had in his business plan how many artificial sphincters urologists were going to implant. And then he was a little apologetic because there was this new thing called Viagra that screwed up his estimates for how many penile implants he was going to sell because guys were upset about impotence related to prostate cancer treatment.'

Brawley says, 'this is 1998, I ask him, if you screen 1,000 people how many lives are you going to save? He took off his glasses and looked at me like I was some kind of fool and said, ‘Don’t you know, nobody’s ever shown that prostate cancer screening saves lives, I can’t give you an estimate on that.’'

Presumably because he was a marketing executive, the manager whom Brawley quoted did not have to feel doubt about all the men subjected to needless procedures, and who would be at risk of serious and unpleasant adverse effects of these procedures, all to make money but not to prolong their lives.  Of course, not only the hospitals make money, but also quite obviously the companies that sell them the drugs and devices needed for all this medical aggression make money, as do the doctors who go along with it all. 

Now we suspect that one small reason the doctors have gone along with it is that they may have gotten inducements from those companies.

Time to fulminate,...

We will not deter unethical behavior by health care organizations until the people who authorize, direct or implement bad behavior fear some meaningfully negative consequences. Real health care reform needs to make health care leaders accountable, and especially accountable for the bad behavior that helped make them rich.

References

1.  Wilt TJ, Brewer MK, Jones KM et al.  Radical prostatectomy versus observation for localized prostate cancer.  N Engl J Med 2012; 367: 203-13.  [Link here]
2.  Andriole GL, Crawford ED, Grubb RL et al.  Mortality results from a randomized prostate-cancer screening trial.  N Engl J Med 2009; 360: 1310-9. [Link here]
3.  Schroder FH, Gugosson J, Roobl MJ et al.  Screening and prostate-cancer mortality in a randomized European study.  N Engl J Med 2009: 360: 1320-8.[Link here]

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