The Failure of "Success Healthcare" - When Financial Maneuvering Takes Precedence Over the Health Care Mission

In the last few years, it seems that the whole world got tangled up in a web of complex financial dealings that mostly benefited those moving the money and paper, but often harmed everyone else.  So it should be no surprise that health care was similarly affected. 

A story from the St. Louis Post-Dispatch provided an illustrative case.  The news article began discussing the current difficulties of two local St Louis hospitals, then provided an explanation in what amounted to a series of flashbacks. Let me re sequence it a bit, starting with the background of two local hospitals that got caught up in web.

Background

For several decades, Forest Park Hospital � founded in 1889 as Deaconess Central Hospital � was one of the city�s leading community hospitals, serving a broad spectrum of patients including many African-American residents from north St. Louis.

But in recent years, the hospital�s revenues and its number of patient visits had waned because, in part, of the emergence of major hospitals in west St. Louis County and its decision in 2006 to discontinue obstetric services.

As the hospital struggled, it continued to be passed along from one owner to the next. In 2004, it was acquired by Argilla Healthcare Inc. Argilla merged with Doctors Community Healthcare Corp. of Scottsdale, Ariz., which became Envision Hospital Corp.

Former board member Buford said Forest Park�s downfall began several years ago when Envision executives made the decision to use the hospital�s profits to help prop up a faltering hospital that Envision owned in Washington.

In 2005, Envision sold the buildings and land of Forest Park Hospital and St. Alexius Hospital to Medline Industries, the Illinois manufacturer of surgical supplies.

How the Hospitals were Sold to Success Healthcare LLC

To address its financial problems, Envision decided to sell its accounts receivable to a firm in Florida. Here is the rationale:

Less successful hospitals operate on razor-thin profit margins, waiting for slow-paying state and federal agencies to provide Medicaid and Medicare reimbursements. Such hospitals have difficulty obtaining financing and lack dependable cash flow.

To provide support to a distressed hospital, the Florida partners would purchase its accounts receivables at a discount. For instance, if the government, a health insurer or patient owed a hospital for services, the partners would purchase that invoice for less money. The hospital, in turn, would have cash in hand.

Note that "hospitals tend to avoid such cash-flow companies, because some of them use heavy-handed collection tactics." However,

For struggling Forest Park and St. Alexius, selling their accounts receivables was an alluring option.

So,

Forest Park also was dogged by creditors and having difficulty making its payroll and paying utility bills.

That�s when Envision began doing business with one of the Florida partners� firms, Sun Capital Healthcare Inc., which purchased $61 million in receivables from Forest Park and St. Alexius.

When Envision defaulted on its sales agreement in September 2008, the Florida partners formed Success [Healthcare LLC] to purchase the two hospitals for $39.5 million.

The Promise of a Turn Around

To the public and the struggling hospitals, the purchase by Success Healthcare LLC seemed a promise of deliverance:

Eighteen months ago, the new buyers of Forest Park Hospital vowed to revive the beleaguered institution.


They voiced optimism that the once-thriving, 450-bed medical center could be saved by fresh capital and determined leadership. They seemed equally enthusiastic about their other acquisition � St. Alexius Hospital in south St. Louis. Even the name of their company � Success Healthcare LLC � evoked the sense that better days were ahead.

Also,

When Success Healthcare bought Forest Park Hospital in December 2008, company officials spoke of transitions, not cutbacks.

In a statement, the company called Forest Park and St. Alexius hospitals important community assets, saying that it planned to enact a 'turnaround plan and financial strategy' in the next six months �that will support the immediate and long-term objectives for the hospitals.'

The Actual Results

Better days were not ahead.  Instead, as summarized by the Post-Dispatch article,

But the three partners from South Florida were ill-prepared to make good on their words. In reality, they were already deep in a financial scandal that involved the potential loss of more than $500 million in investor funds, the suicide of an investment manager in Bermuda, and allegations of fraud and self-dealing.

The mess resulted from the involvement of what became Success Healthcare LLC and an off-shore financier. First, here is some information on the history of the ironically named Success Healthcare LLC:

In recent years, [Peter] Baronoff, [Howard] Koslow and [Lawrence] Leder had built a small empire of health-related companies, whose holdings include at least 18 hospitals, and two finance firms. The firms share an office building at 999 Yamato Road in Boca Raton, Fla.

Baronoff, a former deputy mayor of Boca Raton, had worked as a wine and spirits importer. Koslow had experience in financial services and real estate. Leder, an accountant, was a former supervisory auditor for the U.S. General Accounting Office.

The partners marketed themselves as 'rescuing health care clients in financial emergencies,' including providers that file for bankruptcy protection or are considering such a filing.

Then enter the off-shore financier:

Court records indicate that the Florida partners approached [William] Gunlicks in 1999 to invest in the health care receivables business. Two of the partners � Koslow and Baronoff � formed a Bermuda-based venture with Gunlicks in December 2009 called Stewards & Partners Ltd. to attract offshore investors.

But between 1999 and December, 2009, things had had gone bad,

The first sign of serious problems appeared in April 2009, when the Securities and Exchange Commission filed a case against money manager William Gunlicks, a former Chicago banker whose investment funds provided hundreds of millions of dollars to the Florida partners to help finance their ventures. The SEC accused Gunlicks of placing at risk about $550 million in investor funds, including $5 million invested by the archdiocese of New Orleans.

Soon after, Gunlicks� fund manager in Bermuda killed himself with an overdose of pills, upset that he had lured investors to the troubled fund, according to media reports. Gunlicks, who declined to comment, settled the SEC case � agreeing not to operate another investment fund.

In July 2009, a receiver appointed by a federal judge � whose mission is to recover Gunlicks� investor�s money � sued the Florida partners� finance companies for allegedly defaulting on loan payments to Gunlicks. The receiver accused the partners of fraudulently transferring hundreds of millions of dollars to purchase or prop up distressed hospitals that they owned. Investors also have sued the Florida partners.

The troubles afflicting Success Healthcare LLC quickly affected the hospitals they had promised to save:

There are conflicting accounts about the financial strength of the Florida partners, but this is clear: They do not appear to have the wherewithal to operate Forest Park as a full-service hospital, and their financial troubles could also negatively affect St. Alexius, which reported in 2008 a bare-bones profit margin of 1.38 percent.

Daniel Newman, the court-appointed receiver, has asserted that the Florida partners� finance firms 'had long been insolvent ... and had been losing money.' He has accused them of overstating their revenues and assets to conceal at least $50 million in losses in recent years.

The results on local health care were not good:

By April of this year, Forest Park Hospital had laid off about three-quarters of its staff and reduced its operations to a small emergency department, 20-bed psychiatric ward, laboratory and pharmacy.

'It�s a very dire situation,' said Dr. James Buford, president of the Urban League and a former member of the Forest Park Hospital�s board. 'It wouldn�t surprise me if the hospital went under. There hasn�t been a necessary infusion of capital to make it work.'

Today, Forest Park Hospital is an almost empty landmark that overlooks the renovated Highway 40 (Interstate 64). The hospital is trying to use only one of its six floors and staffs a few dozen patient beds. Meanwhile, St. Alexius Hospital continues to offer a range of patient services, though it staffs only about one-third of its 456 licensed beds.

Summary

First, I must admit that it is possible that the two St Louis hospitals could not have been maintained in their original configurations by even the most knowledgeable, dedicated, and visionary leadership. It may be that there location was untenable, given the growth of powerful competitors.

However, it is hard to believe that the complex financial maneuvers in which they were caught up provided any benefits to patients, health care, or health professionals. Instead, it is likely that these maneuvers provided considerable personal gains to the people behind them (although these were not investigated in the St Louis Post Dispatch story).

The big lesson: be very skeptical of glorious promises, especially those that come from new health care leaders who turn out to have no knowledge or background in health care. (Note that the leaders of Success Healthcare had no apparent background in actually providing health care, and no apparent commitment to the values health care professionals ought to support.) When you meet the new boss, assume at best he or she will be "same as the old boss," (to the lyrics of "Won't Get Fooled Again.")  We seem to be caught up in a business culture in which every new leader and fashionable management strategy is hyped and spun, and somehow people believe it all, forgetting how badly the previously hyped leaders and strategies crashed.

How many times have we health professionals been told the new CEO, the new corporation taking over, the new business strategy will make everything better? How often has that been true?

Health care desperately needs leadership that understand the context, and believes in the values.  The quick buck artists have been making themselves rich, while health care on the ground becomes poor.  How much money goes into the pocket of the clever leaders for their fancy financial maneuvers, rather than to provide patient care?  The answer might explain why US health care is the most expensive in the world, while primary care, and in this case, basic hospital acute care becomes less available.

Sanofi-Funded Society of Hospital Medicine Stands Up for Lovenox

Here is another case to raise questions about the true goal of some medical societies.  As reported by Alicia Mundy in the Wall Street Journal in late June,

A medical researcher and two medical groups with financial ties to Sanofi-Aventis SA have asked federal regulators to hold off on approving generic forms of a Sanofi blood-thinner....

Citing potential patient safety issues, the head of the Society of Hospital Medicine and a medical researcher at Duke University last month sent letters to the Food and Drug Administration contending that Lovenox is too complex for any generic maker to copy fully.

Earlier this year, another Sanofi-sponsored medical group, the North American Thrombosis Forum, sent two letters in favor of Sanofi's position opposing generic Lovenox. None of the letters mentions the signer's financial support from Sanofi.

Two small drug companies, Amphastar Pharmaceuticals Inc. and Momenta Pharmaceuticals Inc., filed applications to the FDA in 2003 and 2005 respectively seeking to sell generic Lovenox, called enoxaparin.

Of course, the two medical societies involved denied that there was any relationship between their support from Sanofi-Aventis and their concerns about the safety of biogeneric medications that might compete with a Sanofi-Aventis product (which, as the WSJ article noted, "had global sales of $4.57 billion in 2009").

Laurence Wellikson, chief executive of The Society of Hospital Medicine, which represents doctors who coordinate patient care, said his letter to the agency 'was based entirely on the best evidence-based medicine available and the collective experience of SHM's senior hospitalists.'

Also

Ilene Sussman, executive director of the North American Thrombosis Forum, said the group's doctors are concerned about generic Lovenox, and its letter was independent of Sanofi.

The CEO of the SHM denied even a responsibility to disclose the Society's support from Sanofi-Aventis:

Dr. Wellikson said it wasn't necessary to disclose that the group receives financial support from Sanofi because its letter 'focused on providing the best, most effective care to the hospitalized patient.'

In fact, the SHM web-site includes a "disclosure of organizational support" page which suggests Sanofi-Aventis provided somewhere between $200,000 to $800,000 for three projects of the Society's projects, "pharmacoeconomics," "improving glycemic control," and "preventing VTE." The latter presumably could have something to do with anti-coagulants such as Lovenox. (The numbers are vague because the statement only discloses the amount of support provided in broad ranges.) Thus, support by Sanofi-Aventis could provide as little as 2.7% or as much as 11.1% of the Society's total income, which was noted to be $7,203,596 in its 2009 Form 990 filed with the IRS, and publicly available via Guidestar.

Given the broad mission of the SHM

SHM is dedicated to promoting the highest quality care for all hospitalized patients. SHM is committed to promoting excellence in the practice of hospital medicine through education, advocacy and research.

one wonders why it would want to get officially entangled in the approval process for specific biogeneric drugs.  If the leadership of the Society is so concerned about the safety of anti-coagulants, one wonders why they did not speak up about the case of the lethal contaminated heparin, about which we have blogged extensively, most recently here.  (I can find nothing on the web to suggest the Society, or Dr Wellikson, ever noted any concerns about this issue.)  Of course, that case involved heparin sold by Baxter International, whose production was out-sourced to a questionable supply chain.  SHM also receives support, amounting to something between 0 and $100,000, according to its "disclosure of organizational support" page, from Baxter International. 

Thus it appears that the leadership of SHM was very concerned about the safety of an anti-coagulant manufactured by a competitor of Sanofi-Aventis which could threaten that company's revenues from the drug, while Sanofi-Aventis is one of the Society's major financial supporters.  On the other hand, the leadership seemed unconcerned about the safety of an anti-coagulant sold under the Baxter International label, while Baxter-International is also one of the Society's major financial supporters.  So it is hard to tell whether the leadership is more concerned about the safety of anti-coagulants, or the financial interests of the drug companies that support it. 

The problem with the funding of health care professional societies by health care corporations that sell products or services that doctors can prescribe or order is that it raises the suspicion that such societies may use their considerable influence to serve the corporations', not patients' interests, and so undermine the professional values of the societies' members.  For this reason, Rothman et al suggested that such societies sever most of their financial ties to such corporations.(1)  (See our blog post here.)  As long as the SHM chooses to accept support from drug and device companies, questions will be asked about the effects of such support on how the Society uses its influence.  Furthermore, assertions that such support is so irrelevant that the Society need not even disclose it will only fuel more suspicion.

If ostensibly mission-driven not-for-profit health care organizations, like health care professional societies, but also including medical schools, academic medical centers, and patient advocacy groups, want the public and health care professionals to believe that they really are mission-driven, they need to spurn funding from organizations with vested interests whose service might distort these missions.

Hat tip to Steve Lucas for his comment here.

References

1. Rothman DJ, McDonald WJ, Berkowitz CD et al. Professional medical associations and their relationships with industry. JAMA 2009; 301: 1367-1372. (Link here.)

Jurassic Attitudes about Medical Informatics: in the U.S. Navy?

The message below to a listserv for Chief Medical Informatics Officers and related positions was recently forwarded to me by a colleague. I cannot believe what I am reading, as it reflects attitudes I'd thought were extinct by the late 1990's ("I don't see the value of clinical informatics").

The last time I'd heard such nakedly Jurassic views, and other anti-physician informatics attitudes as in this 1999 essay I penned, was from the C-level officers of the hospital where I was CMIO in that time frame, Christiana Care Health System in Delaware.

From: (Withheld)
Date: Sun, Jul 4, 2010 at 9:24 AM

Hi All,

I was recently told by one of our senior leaders that he saw no value to Clinical Informatics and followed that up by disbanding the Clinical Informatics Directorate at the BUMED (Headquarters of Navy Medicine) level.

I successfully countered that argument with a more senior leader, but I tried to find objective evidence of the value of Clinical Informatics without success. As an academic family physician who lives, eats and breathes evidence-based medicine, I try to make all my decisions and arguments for and against positions/programs based on the best available evidence. In this case, all I could use was potential value and logic.

My question is this: Does anyone out there (and I have already discussed this with [name redacted - ed.]) have any objective evidence that shows the value of clinical informatics to the Enterprise (which has multiple definitions, but suffice it to mean across an entire health care system.however large)? I have already talked with [name redacted - ed.] about including a survey of CEO's/COO's/CMO's/CIO's as to the value they see in clinical informatics, but that is some time in the future. I really need some data now. Anyone have anything? Any and all assistance is greatly appreciated.

In the face of the apparent spectacular failure of AHLTA ($4 Billion Military EMR "AHLTA" to be Put Out of Its Misery? Also, Does the VA Have $150 Million to Burn on IT That Was Never Used?), I certainly view such statements as extraordinary, and in a very negative sense.

It has become my opinion that Jurassic attitudes about medical informatics are virtually unremediable; they suggest an underlying technical and mental deficit in those who proffer such opinions that is not correctible by evidence and logic. (I can predict with a good degree of certainty that this "senior leader" had a role in AHLTA's demise.)

I suggest a different approach: surely patients received suboptimal care (and perhaps suffered injury) under AHLTA. The freebie newspapers serving the soldiers such as I have seen in my visits to Fort Dix, where my mother has commissary/PX privileges as a result of my father's service-connected injuries and disability, might find such a story "interesting."

In the meantime, I am doing a John Galt regarding persons espousing the "I don't see the value of informatics" view. I'm frankly tired that such people remain in the healthcare workforce. While I could provide a lot of material supporting the value of informatics (actually, its essential nature) that I and others have written over the years, I choose to no longer do so.

The military person proffering this view is apparently a "senior leader"; it's their responsibility and indeed obligation to make the Navy better. Let them lead.

And let the pieces fall where they may.

-- SS

Wellcare Settles Again, but Wait, There is More...

We posted several times, most recently in 2009 (here and here), about misbehavior by the health insurance company/ managed care organization Wellcare.  That year, the company settled criminal charges that it defrauded the Florida state Medicaid program by paying a fine and accepting a deferred prosecution agreement.  Previously, the state of Connecticut had canceled its arrangement with Wellcare to run a Medicaid program in that state after the company refused to provide the state with requested data.  Then the company signed a consent order with the Florida Elections Commission in which it admitted making "questionable" political contributions.

Then this year, it was announced that the company would settle additional civil charges, as per the St. Petersburg (FL) Times,

Tampa-based WellCare Health Plans Inc. has agreed to pay $137.5 million to the U.S. Department of Justice and other federal agencies to settle civil lawsuits accusing the company of overcharging for its Medicaid and Medicare programs.

Also,

Under the tentative deal, which must be approved in court, WellCare would have three years to make payments to the Justice Department's civil division, the U.S. Attorney's Office for the Middle District of Florida and the U.S. Attorney's Office for Connecticut.

WellCare said the payments will include the approximately $23 million owed to the Florida Agency for Health Care Administration for overpayments received by the company in 2005.

The civil settlement is separate from a deal struck last year on the criminal front. In that case, WellCare agreed to pay $80 million to settle a charge of conspiracy to defraud the Florida Medicaid program and the Florida Healthy Kids Corp.

It also previously agreed to a $10 million civil penalty settling an informal inquiry by the Securities and Exchange Commission that regulatory filings reflected more than $40 million in profits that WellCare failed to return to the Florida agencies from 2003 to 2007.

WellCare, which is Florida's largest Medicaid plan operator, has acknowledged that it overcharged Florida and Illinois health programs by about $46.5 million.

But wait, there is more. No sooner than this settlement been announced than it was challenged. While considering the settlement, the judge involved unsealed a set of complaints by whistle-blowers about Wellcare. First, as reported by the Miami Herald,

The complaint, filed by former WellCare financial analyst Sean J. Hellein, portrays a company so ethically challenged that it rewarded employees who dumped hundreds of sick newborns and terminally ill patients from the membership rolls, thereby pumping up profits by millions of dollars.

It describes a company that embraced fraudulent accounting as a business model, eventually stealing between $400 million and $600 million from Medicare and Medicaid programs in several states, perhaps most of it from Florida.

See these specifics:

Hellein, who wore a wire for more than a year to gather evidence for federal agents, says in the complaint that:

- WellCare moved money between accounts to make it appear that patients' treatment cost much more than it actually did. In some cases, the company made payments years in advance to jack up the apparent cost of care to fool states into increasing Medicaid premiums. It worked, he said.

- When states made overpayment errors, WellCare didn't pay the money back, as its contract requires. Florida Medicaid made a series of overpayment blunders that fattened WellCare's bottom line by many millions; those who made the errors included both state officials and contractors.

- Sometimes hospitals and physician groups helped WellCare hide its true spending from Medicaid programs by accepting payments through one account for expenses incurred by another. Sometimes they allowed WellCare to pay for future years' expenses to make it appear spending for the current year was higher than it actually was.

Hellein named two hospital systems - one in Illinois and one in Florida - that he said participated in the sham arrangement, but he said it was common.

WellCare pushed expenses into certain programs - behavioral health programs in Florida and Illinois and the Healthy Kids program in Florida, a program for uninsured children of families with modest incomes - because they required repayment if the cost of treatment fell below a certain threshold.

Florida public officials were repeatedly duped by WellCare. The director of the Florida Medicaid program from 2004 to 2007, while much of the alleged fraud was going on, was Tom Arnold. He currently is Secretary of the Agency for Health Care Administration.

Another agency that fell for WellCare's line was the Office of Insurance Regulation, where an actuary found nothing wrong with a WellCare subsidiary in the Cayman Islands acting as the company's reinsurer.

The reinsurance arrangement enabled WellCare to bank $5 for each insured while making it appear that the cost was just 11 cents, the complaint says.

After Wall Street analysts raised questions about the legality of the reinsurance arrangement in 2007, some thought it might be reviewed by Chief Financial Officer Alex Sink. But nothing ever came of it.

WellCare conducted a study to figure out which Medicaid recipients were profitable and which were not so that it could engage in "cherry-picking," a term for enrolling only the profitable members. The study found that disenrolling a baby born with health problems saved the company an average of $20,000; each terminally ill patient saved $11,500.

Those who were persuaded to resign from WellCare went into the general Medicaid or Medicare fee-for-service programs.

WellCare also restructured its benefit package to discourage the least-profitable Medicaid recipients from enrolling and encouraging those who were more profitable to sign up.

Low-income mothers and children yielded a net of only about 10 percent, while the physically and mentally disabled paid for by Medicare yielded a net of 30 percent, the complaint says.

The complaint names about 20 employees of WellCare who knew about the fraudulent activities. Only one, Gregory West, has been charged. He pleaded guilty in December 2007 but sentencing has been postponed several times.

No charges have been brought against three former executives of the company named in the complaint as orchestrating the fraud: President, CEO and Chairman Todd Farha, CFO Paul Behrens and General Counsel Thaddeus Bereday.

They all resigned in January of 2008, three months after the FBI and other law-enforcement agents raided the Tampa campus of WellCare and carted off computers and files.

The the St. Petersburg Times reported about two more complaints that were unsealed:

Clark J. Bolton, a former supervisor of special investigations at WellCare, said the insurer encouraged overbilling and refused to audit claims for fraud in order to curry favor with doctors and hospitals and build market share. The result was millions in excessive and illegal expenses passed through to federal Medicare and state Medicaid programs, Bolton said.

Eugene Gonzalez, a referral coordinator for seven years, claimed WellCare met government customer service standards only because it had employees create backdated documents and make bogus calls to the company's phone lines. Failure to meet these standards would have resulted in the loss of billions of dollars worth of Medicare and Medicaid contracts.

As we have before, we see a striking contrast between the scope of the allegations and the response by the government agencies that are supposed to regulate insurers, insure that public money is spent wisely, and investigate and seek punishment for illegal activities. As the latter St. Petersburg Times article noted,

U.S. Rep. Kathy Castor criticized the proposed settlement as wholly inadequate in a letter this week to Attorney General Eric Holder. 'Where is the penalty and punishment for such egregious actions?' she wrote. 'It appears that companies such as these simply build such payments into the 'cost of doing business.' We cannot allow this to continue.'

This notion should be familiar to readers of Health Care Renewal. The Wellcare case fits right into the parade of legal settlements we have discussed. As we have said again and again, the usual sorts of legal settlements we have described do not seem to be an effective way to deter future unethical behavior by health care organizations. Even large fines can be regarded just as a cost of doing business. Furthermore, the fine's impact may be diffused over the whole company, and ultimately comes out of the pockets of stockholders, employees, and customers alike. It provides no negative incentives for those who authorized, directed, or implemented the behavior in question. My refrain has been: 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.

Also note that the case of Wellcare remains relatively anechoic. Despite the severity of allegations, and the national scope of the company, the case has only been mentioned in news stories, mainly in Florida where the company has its headquarters, and in a few health care trade publications. It, like many of the cases we discuss on Health Care Renewal, has not been mentioned in the medical/ health care research/ health care policy literature.

If we cannot even speak about the sort of very bad management that afflicted Wellcare as a cause of many of the ills of our health care system, how do we really expect to constructively reform that system?

Quackwatch being sued by "Doctor's Data", a laboratory that caters to chelation therapists

Quackwatch is being sued by "Doctor's Data", a laboratory that caters to chelation therapists. See the post "Why Doctor's Data Is Trying to Shut Me Up" by Stephen Barrett, MD at this link.

(I have no connections to either Quackwatch or "Doctor's Data", and do not know Dr. Barrett. However, this case caught my eye.)

From a law firm, Augustine, Kern and Levens, Ltd. of Chicago:

Dear Dr. Barrett:

It has recently come to the attention of our client, Doctor's Data, Inc., an Illinois corporation, that you have, on a continuing basis, harmed Doctor's Data by transmitting false, fraudulent and defamatory information about this company in a variety of ways, including on the internet and in other publications. Doctor's Data is shocked that you would intentionally try to harm its business and its relationship not only with doctors but also with the public. Doctor's Data has also learned that you have apparently conspired with and encouraged individuals to seek litigation against it, and have filed false complaints at various government and regulatory agencies against Doctor's Data.

"It is never libelous," you have said, "to criticize an idea." However, you have gone way beyond the idea stage, and our client will not tolerate it. You apparently have carried on this conduct in an intentional manner and with the assistance of others. It is clear that you have a specific intent to harm Doctor's Data, and this conduct must stop immediately.

We demand that you cease and desist any and all comments regarding Doctor's Data, which have been and are false, fraudulent, defamatory or otherwise not truthful, and make a complete and full retraction of all statements you have made in the past, including those which have led in some instances to litigation. Such comments include, but are not limited to, those made in your article entitled, "How the 'Urine Toxic Metals' Test Is Used to Defraud Patients," which you authored and posted on Quackwatch.com. "The best evidence for reckless disregard," you have written, "is failure to modify where notified." Consider this notice to you that if you do not make these full and complete retractions within 10 days of the date of this letter, in each and every place in which you have made false and fraudulent, untruthful or otherwise defamatory statements, Doctor's Data will proceed with litigation against you and any organizations, entities and individuals acting in common cause or concert with you, to the full extent of the law, and will seek injunctive relief and monetary damages, both compensatory and punitive.

Doctor's Data is a CLlA-certified company in full compliance with all state and federal regulatory and CLlA standards, and your false, fraudulent, defamatory and otherwise untruthful comments have been made to intentionally damage Doctor's Data, Inc. This conduct will no longer be tolerated and if the retractions are not made as written above, the lawsuit shall be filed imminently.

Very truly yours,

Algis Augustine

Dr. Barrett of Quackwatch replied:

Dear Mr. Augustine:

Thank you for your letter of June 4th in which you accuse me of "transmitting false, fraudulent and defamatory information" about Doctor's Data. Your letter asks me to:

Cease and desist any and all comments regarding Doctor's Data, which have been and are false, fraudulent, defamatory or otherwise not truthful. and make a complete and full retraction of all statements you have made in the past.

Make . . . full and complete retractions within 10 days of the date of this letter, in each and every place in which you have made false and fraudulent, untruthful or otherwise defamatory statements.

I take great pride in being accurate and carefully consider complaints about what I write. However, your letter does not identify a single statement by me that you believe is inaccurate or "fraudulent." The only thing you mention is my article about how the urine toxic metals test is used to defraud patients: (http://www.quackwatch.org/t). The article's title reflects my opinion, the basis of which the article explains in detail.

If you want me to consider modifying the article, please identify every sentence to which you object and explain why you believe it is not correct.

If you want me to consider statements other than those in the article, please send me a complete list of such statements and the people to whom you believe they were made.

Thank you,

Stephen Barrett, MD

To which the response was predictable, resulting in this:

On June 18th, Doctor's Data filed suit against me [Barrett], the National Council Against Health Fraud, Inc., Quackwatch, Inc., and Consumer Health Digest, accusing us of restraint of trade; trademark dilution; business libel; tortious interference with existing and potential business relationships; fraud or intentional misrepresetation; and violating federal and state laws against deceptive trade practices. (On June 29th, Consumer Health Digest was dropped as a defendant.) The complaint asks for more than $10 million in compensatory and punitive damages. The suit objects to seven articles on my Web sites:

• How the Urine Toxic Metals Test Is Used to Defraud Patients
• CARE Clinics, Doctor's Data, Sued for Fraud
• Be Wary of CARE Clinics and the Center for Autistic Spectrum Disorders (CASD)
• Three brief articles in Consumer Health Digest:
  • Slate article blasts the urine toxic metals test
  • Shady clinic and lab under legal assault
  • "Autism specialists" sued
• Laboratories Doing Nonstandard Laboratory Tests

My personal opinion of "offbeat practitioners"

Barrett also writes:

Very few people provide the type of information I do. One reason for this is the fear of being sued. Knowledgeable observers believe that Doctor's Data is trying to intimidate me and perhaps to discourage others from making similar criticisms. However, I have a right to express well-reasoned opinions and will continue to do so. If you would like to help with the cost of my defense, please follow the instructions on our donations page.

This seems like a case of legal intimidation and may be a case for Senator Grassley's whistleblower hotline (whistleblower@finance-rep.senate.gov).

Finally, as a Medical Informatics specialist once called "Doctor Data", I find the company name "Doctor's Data" for a company in this business ironic indeed.

-- SS

$4 Billion Military EMR "AHLTA" to be Put Out of Its Misery? Also, Does the VA Have $150 Million to Burn on IT That Was Never Used?

I have heard from numerous reliable sources that the military's $4 billion+ EMR known as "Armed Forces Health Longitudinal Technology Application" (AHLTA) is to be declared a failure, and replaced.

I'd written about AHLTA's considerable problems at the post "If The Military Can't Get Electronic Health Records Right, Why Would We Think Conflicted EHR Companies And IT-Backwater Hospitals Can?" at http://hcrenewal.blogspot.com/2009/06/if-military-cant-get-electronic-health.html .

From that post:

[AHLTA has been described as] difficult for physicians to use. Intolerable. Slow. Unreliable. Frequently crashes. Near mutiny. Morale. Affecting patient care, decreasing patient load. Can it get worse?

Yes ... When the Army's Surgeon General observes that clinicians "spend as much or more time working around the system as they do with the system", and that the superusers are not enthusiastic about the system, and a Congressional hearing is held entitled "where do we go from here?" (it's clear to this author that they have no clue), one should start to very critically question basic assumptions about health IT.

One wonders if anyone responsible for AHLTA ever read my now decade-old site on health IT dysfunction, now at this link at Drexel University, or its many hyperlinks to additional resources.

Meanwhile, the VA is having its own problems as noted on the HISTalk blog:

[HISTalk News 6/30/10] Back in March, I dug out a juicy nugget from an internal VA report: it was scrapping a $150 million patient scheduling system without ever bringing it live. The GAO weighs in with its official report (warning: PDF), pegging the cost at $127 million and saying �VA has not implemented any of the planned system�s capabilities and is essentially starting over.� The contractor that developed the system with �a large number of defects� walks away with $65 million. GAO finds much to criticize about the VA�s involvement: lack of competitive bidding, sloppy specs, unreliable status reports, and lack of action by project oversight groups when the project started tanking.

The linked PDF report from the U.S. Government Accountability Office (GAO), entitled "INFORMATION TECHNOLOGY - Management Improvements Are Essential to VA�s Second Effort to Replace Its Outpatient Scheduling System", reveals errors that cause me to question whether the project leadership ever passed their introductory undergraduate IT courses (assuming they had any).

From that report:

VA�s efforts to successfully complete the Scheduling Replacement Project were hindered by weaknesses in several key project management disciplines and a lack of effective oversight that, if not addressed, could undermine the department�s second effort to replace its scheduling system:

• VA did not adequately plan its acquisition of the scheduling application and did not obtain the benefits of competition.
• VA did not ensure requirements were complete and sufficiently detailed to guide development of the scheduling system.
• VA performed system tests concurrently, increasing the risk that the system would not perform as intended, and did not always follow its own guidance, leading to software passing through the testing process with unaddressed critical defects.
• VA�s project progress and status reports were not reliable, and included data that provided inconsistent views of project performance.
• VA did not effectively identify, mitigate, and communicate project risks due to, among other things, staff members� reluctance to raise issues to the department�s leadership.
• VA�s various oversight boards had responsibility for overseeing the Scheduling Replacement Project; however, they did not take corrective actions despite the department becoming aware of significant issues.
  

The impact of the scheduling project on the HealtheVet initiative cannot yet be determined because VA has not developed a comprehensive plan for HealtheVet that, among other things, documents the dependencies among the projects that comprise the initiative.

My question is:

By what miracle of God will the military's AHLTA's and the VA's scheduling system "replacements" be any better than what now exists? Through reliance on commercial EMR vendors and management consultant "experts", perhaps?

If so, I wish the military and VA the best of luck. They will need it.

The problems with computing in complex settings such as medicine are pervasive, far beyond the military. It is increasingly clear that the leadership of the healthcare IT ecosystem (and probably even the broader IT ecosystem) consists of recycled incompetents, never held accountable for project failures, even massive ones, instead moving on to wreak mayhem elsewhere. This has certainly been my own experience in both the hospital and pharma sectors.

Competent experts who actually try to do meaningful work (a.k.a. "rock the boat" or "non-team players" in the parlance of the incompetent and/or the power seekers) have become hopelessly marginalized - or unemployed. See the post "Edwin Lee on the Tiger We Are Now Riding" by Roy Poses. Our economy and even society is falling apart as a result of these leadership problems; Lee's post "Lightweight oil executives produce worthless disaster plans" as linked above is pathognomonic of these failures. Writes Lee:

... This week the executives of the other major oil companies (besides BP) presented their oil spill contingency plans to Congress. Several things were immediately evident: the plans were all grossly inadequate and carelessly done, they were all developed by the same outside consulting firm and they were essentially carbon copies of BP�s nearly useless plans. In other words, they were empty �cover your ass� documents rather than serious contingency plans. Some people may find this surprising. From my experience, it�s what we can and should expect from the vast majority of large, public institutions because of a universal and deeply flawed process for selecting their leaders.

... Those who are chosen to lead fit a mold: mediocre, short term thinkers with similar work experiences, outlooks, temperaments and personal incentives. Disaster response, creative thinking and fundamental changes are outside their limited range of interests or competencies.

Here is the major problem in a nutshell: no real accountability where it matters.

What follows from this is a first principle:

Recycled incompetents will never produce good information systems.

Major health IT commercial vendor CEO's have been reported as making statements that health IT usability -- one of AHLTA's major deficiencies - "will be part of certification over her dead body" (as described in my post at http://hcrenewal.blogspot.com/2010/05/did-epic-ceo-judy-faulkner-of-epic.html).

Why don't we recycle physicians with track records of killing patients? Better yet, make them Chairs of clinical departments?

The answer is obvious, but the IT culture seems immune to such considerations.

The UK's National Programme for IT in the NHS (NPfIT) is AHLTA on a national scale:

The UK Public Accounts Committee report on disastrous problems in their �12.7 billion national EMR program is here.

Gateway reviews of the UK National Programme for IT from the Office of Government Commerce (OGC) are here (released under the UK�s Freedom of Information Act), and a summary of 16 key points is here.

My prediction is this:

I do not believe health IT has advanced enough beyond the experimental stage for clinically efficacious, safe, cost effective mass dissemination.

Further, I do not believe that the human capital necessary to make such dissemination happen in a clinically efficacious, safe, cost effective manner exists in the IT industry.

Talent management in that industry -- based on cheap, just-in-time, "programming language/platform du jour", "smart people cannot or should not learn but should be declared obsolete", and Bart Simpson-style attitudes about ability and expertise -- does not allow the needed human capital to exist. A remarkable and revealing example comes from an article about health IT leadership a number of years ago in the journal �Healthcare Informatics�:

I don't think a degree gets you anything," says healthcare recruiter Lion Goodman, president of the Goodman Group in San Rafael, California about CIO's and other healthcare MIS staffers. Healthcare MIS recruiter Betsy Hersher of Hersher Associates, Northbrook, Illinois, agreed, stating "There's nothing like the school of hard knocks." In seeking out CIO talent, recruiter Lion Goodman "doesn't think clinical experience yields [hospital] IT people who have broad enough perspective. Physicians in particular make poor choices for CIOs. They don't think of the business issues at hand because they're consumed with patient care issues," according to Goodman.

The "management improvements" sought by the VA may simply not be possible, until the IT field undergoes something comparable to the "Flexner report" that the medical professions and their educational programs underwent a century ago.

And perhaps until health IT leadership personnel begin to lose their homes and fortunes in court to harmed patient plaintiffs, to the point where the leadership start begging competent, marginalized professionals who actually know what they're doing to save their sorry asses.

-- SS

7/6 addendum:

For more on the topic of dinosaur-era attitudes about Medical Informatics that lead to such debacles, see my July 5, 2010 post "Jurassic Attitudes about Medical Informatics: in the U.S. Navy?"

A Source of the Anechoic Effect Discovered: the Public Relations Person in the Room

A series of posts in journalism blogs last month revealed a mechanism used by health care organizational leaders to shape discussion of the issues that affect their interests, but one that is probably unfamiliar to most health care professionals and the public at large.  Let me provide the key quotes in chronological order.

First, from the Covering Health blog of the Association for Health Care Journalism (10 June, 2010):

Have you recently tried to get information from the federal government or arrange an interview with a federal official?

AHCJ�s Right-to-Know Committee is calling on journalists to report their experiences, as part of a continuing effort to pry open the doors of the federal government. We�re looking for recent anecdotes about journalists� experiences with public information officers, especially at the Department of Health and Human Services and any of the agencies that are part of it (e.g., CDC, FDA, CMS etc.).

Please write to Felice J. Freyer, Right-to-Know Committee chair, at felice.freyer@cox.net, about problems you have encountered, including mandates to clear interviews with the press office, slow responses, refused interviews, burdensome requirements (such as written questions and answers only), extreme time limitations on interviews, PIOs listening in on your conversations, or anything else that made it hard for you to get the information and quotes that you needed in time.

The implication here, of course, is that the committee was concerned that journalists attempting to interview employees and officials of US government health agencies may encounter a variety of problems, including public information officers "listening in on your conversation."

Of course, just because the committee was concerned about a possible problem does not mean the problem exists, or is if it exists, is important.

However, a week later this post appeared in the Covering Health blog (17 June, 2010):

MedPage Today, an online breaking-news service for physicians, today instituted a rule requiring reporters to inform readers whenever a press officer has listened in on an interview.

'If a source�s comments are monitored by a press officer, then the person may not have been speaking freely,' said Peggy Peck, vice president and executive editor. 'That�s information readers should have.'

Peck instructed her staff to use phrases like 'said in a telephone interview that was monitored by a public information officer' whenever using quotes from such an interview.

Peck emphasized that a reporter�s goal should be to avoid having a press officer listening to calls or attending face-to-face interviews. 'But if that is the only way a researcher will talk, we need to let our readers know that,' said Peck�s memo to eight reporters.

Peck is a member of AHCJ�s Right-to-Know Committee, and the rule sprang from the committee�s work to end interference by public information officers in newsgathering, especially in the federal government.

'I applaud MedPage Today for taking this step and encourage reporters and editors everywhere to follow suit,' said Felice J. Freyer, chair of the Right-to-Know Committee and a member of AHCJ�s Board of Directors.

'Reporters have come to accept the presence of public relations people at interviews, but it�s really not acceptable. We all know that such eavesdropping hinders the free flow of information � and we need to let our readers know that this is happening.'

Now this is much more clear. Apparently some, maybe most of the information obtained by journalists from interviews of officials and employees of government health care agencies was monitored by public relations people, presumably to keep the interviewees "on message," and remind them not to say anything that did not fit the party line.  Furthermore, such monitoring was not often disclosed by the reports when they wrote about the interview. 

In addition, Paul Raeburn posted this on the Knight Science Journalism Tracker blog:

I�ve long been troubled by the insistence of some 'public' information officers (they are paid to work for their institutions, not the public, although the interests of the two can sometimes coincide) to listen in or sit in on interviews. Even if they don�t say a word, their presence inevitably changes the interview.

Imagine telling colleagues about the last story you wrote, and what you had to do to get it. Now imagine the same conversation with your colleagues while your editor�on whom your livelihood depends�listens in. I don�t imagine myself dissembling in either set of circumstances, but I can certainly imagine myself telling the story a little differently in each case.

The point is not that information officers are always trying to limit or shape the interview, although that clearly happens. The point is not to challenge the integrity of information officers, although, like reporters, some are better at what they do than are others. The point is that the presence of an institutional representative changes the interview. And we owe it to out readers to conduct interviews without that presence whenever possible.

Mr Raeburn seemed to make an effort to be exquisitely polite, but still managed to affirm that the public relations person in the room is a real and important phenomenon in reporting about health care.
This reinforces the notion that monitoring of interviews with journalists by public relations people is common practice, but one heretofore not discussed publicly.  It seems obvious that the point of this practice was to keep the interviewee on message, and to restrain any discussion that might not fit with the public relations persons' bosses interests.

If we did not know about the practice of keeping a public relations person in the room for interviews with people working for the government, it seems likely that we also did not know about similar practices affecting interviews with people in other kinds of health care organizations, e.g., for-profit corporations, and not-for-profit organizations.

We have frequently discussed the "anechoic effect," how important cases, stories, and data about the negative effects of concentration and abuse of power in health care, and about ill-informed, incompetent, self-interested, conflicted, or even corrupt leadership of health care organizations, and the unaccountable, unrepresentative, opaque, and often unethical governance that enables it are often just not discussed, and when discussed, produce few echoes.  Now we see another mechanism that maintains this effect.  Large health care organizations deploy substantial money and personnel to market their products and massage their messages.  These people apparently use a variety of tactics to control the flow of information to journalists.  While journalists seem to be provide much more information about the problems in health care we discuss on Health Care Renewal than professional and academic publications and meetings, we now see one more mechanism that has impeded them from doing so openly and fully.

In my humble opinion, disclosing that interviews were monitored by public relations personnel is one small, but important step in beginning free enquiry into what has gone wrong with health care.  Bravo to the people who have stood up for it.