Was a Private Equity Takeover of Bausch and Lomb Meant to Conceal Its Legal Settlements of Cases of Eye Infections?

This week, the Associated Press reported on yet another way health care corporations may keep information that reflects poorly on their products out of public view. The story involved fungal eye infections that particularly afflicted users of a specific contact lens cleaning solution:

More than 700 lens wearers in the United States and Asia say they were exposed to a potentially blinding infection known as Fusarium keratitis while using ReNu with MoistureLoc, a new-formula multipurpose solution for cleaning, storing and moistening soft contact lenses.

Sometimes, the damage was irreparable. Seven people in Florida, Maryland, New York, Oregon, Tennessee and West Virginia had to have an eye removed. At least 60 more Americans needed vision-saving corneal transplants.

The U.S. Centers for Disease Control and Prevention confirmed 180 cases in 35 states from June 2005 through September 2006, when the agency's dedicated surveillance stopped, according to Dr. Benjamin Park, a CDC epidemiologist. CDC continued to hear of sporadic, unconfirmed cases in the months after MoistureLoc was withdrawn, Park said.

'Surveillance usually captures the tip of the iceberg and sometimes it captures a larger tip than other times,' Park said in an interview.

Among out-of-court settlements reached in May was a potential bellwether case brought by Andrea Martin, a Broadway actress and comedienne whose eye was scarred. In Colorado, a corneal transplant ended a race-car driver's career. In Baltimore, a chimney-sweep business owner who lost an eye got hooked on painkillers.

Leading eye doctors and government scientists concluded that MoistureLoc, launched in 2004 with novel disinfectant and moisturizing ingredients, was the only lens solution that contributed to the outbreak. Yet the mechanics of how it caused the problem are still not fully clear.

AP alleged that Bausch and Lomb kept the cases out of public view by using a previously unknown (at least to me) strategy:

Contact lens maker Bausch & Lomb Inc. had an overriding reason for going private in 2007: It wanted to handle a devastating recall of its flagship lens cleaner, its chief executive said, 'without a lot of outside distraction.'

Over the past year, away from the glare of public scrutiny, the optical products company has quietly settled nearly 600 fungal-infection lawsuits — with dozens more individual claims yet to be resolved. The cost so far: Upward of $250 million.

With some fungal lawsuits still unresolved, the prospect of Bausch & Lomb's health care nightmare being aired in court has not entirely faded — which heartens some lawyers and doctors.

'The truth has been very carefully buried, and it appears to have been buried going back to the beginnings of the outbreak,' said Dr. Arthur Epstein, who was chairman of the American Optometric Association's contact lens and cornea section during the highly publicized crisis.

'All settlements were predicated on silence about the clinical findings and blame and so forth. My hope was that what actually happened would become part of public record in a courtroom. That way, we'd be able to learn from it and move on and make sure it never happened again.'

When Bausch & Lomb was acquired by private equity firm Warburg Pincus for $3.67 billion in October 2007, Chief Executive Ronald Zarrella said the deal would allow the company 'to pursue the growth path we were on ... without a lot of outside distraction.'Zarrella retired last year.

'hey can do all this out of the public eye — guys like me aren't sitting there scrutinizing the financial impact of every single settlement,'said analyst Jeff Johnson of Robert W. Baird & Co. in Milwaukee. 'you can completely focus on your brand and on doing what's right by the patient.'

So, if I understand this correctly, after Warburg Pincus took the company private, it was no longer required to file certain reports with the US Securities and Exchange Commission (SEC), including reports that would have had to acknowledge the multiple settlements the company made of cases alleging adverse effects of its contact lens solution. What is striking is the allegation by the AP that "taking the company" private was a strategy meant to conceal the settlements of these cases, (rather than a strategy implemented to fulfill other aims, which had the side effect of diminishing reporting of these cases' results.)

Again, I am hardly an expert, but relatively opaque private equity firms like Warburg Pincus seem to have become increasingly influential in the US economy, and to have an increasing role in health care. In 2007, we had posted how private equity firms running nursing homes, including Warburg Pincus, seemed to contribute to the opacity of their operations. More recently, we posted about how leaders of private equity, and of other kinds of firms in the finance arena, seem to also increasingly be leaders to which medical schools report.

One final note... A quick tour through the Warburg Pincus website reveals how involved the firm is in health care. The firm claimed that as a "direct equity investor in healthcare for more than 30 years, Warburg Pincus has invested more than $4 billion in approximately 120 healthcare companies." Furthermore, the firm seems quite intertwined with the leadership of academic medicine. It has a Life Sciences Advisory Board, of which three of four members are current leaders in academic medicine. The most prominent, Dr Michael Rosenblatt, Dean of the Tufts University School of Medicine, did not disclose this relationship in several versions of his biography published on the university web-site. (See the Tufts administration version here, and the Tufts Medical Center version here.)

Oh, what a tangled web we have weaved in health care, a web that continually frustrates transparency and makes it hard to figure out who was responsible for what when things go wrong.

The Lyon Diet-Heart Study: Background

To appreciate the full significance of the Lyon diet-heart study, we have to go back in time a bit. We're off to 1982, the year the U.S. National Heart, Lung and Blood Institute published the results of their massive study, the Multiple Risk Factor Intervention Trail (MRFIT).

By 1982, the idea of the "prudent diet" was well ingrained in American medicine, despite a lack of direct evidence to support it, and even a certain amount of evidence at odds with it (such as the ill-fated Anti-Coronary Club trial). The prudent diet was designed to reduce the risk of heart attack, and suggests reducing total fat, saturated fat and cholesterol intake, while increasing consumption of vegetables, whole grains, fruit and fiber. Some versions of the diet replace saturated fat with polyunsaturated vegetable oils.

MRFIT involved 12,866 men at high risk of heart attack, making it one of the largest controlled trials of all time. Half of the group were told to keep doing what they were doing, under medical supervision, and the other half were given intense diet and lifestyle counseling. The intervention group was counseled to quit smoking and reduce their consumption of saturated fat and cholesterol, and increase polyunsaturated vegetable oil consumption.

After 6 years, 46% of the intervention group had quit smoking, compared to 29% in the control group. The intervention group reduced their cholesterol intake by 40% and their saturated fat intake by more than one-fourth, and increased their consumption of polyunsaturated fat (omega-6) by one third relative to the control group (source).

The results? After seven years, total mortality was 41.2 per 1,000 in the intervention group and 40.4 in the control group, a difference that was not even close to statistically significant. There were also no significant differences in heart attack rate or heart attack death rate. The authors and their apologists tried to wiggle out of the obvious conclusion through an avalanche of slippery math and editorials.

The results were mirrored by a later intervention trial published in 2006, the Women's Health Initiative dietary modification trial. This one was even larger, involving 48,835 postmenopausal women! This was another test of the prudent diet, in which participants were intensively counseled to

reduce total fat intake to 20% of calories and increase intakes of vegetables/fruits to 5 servings/d and grains to at least 6 servings/d.

After 6 years, the intervention group was eating 22% less fat, 23% less saturated fat, 20% less cholesterol, 15% more carbohydrate, 22% more fruits and vegetables, and slightly more fiber and whole grains than the control group. LDL dropped a bit in the intervention group.

I think you know what's coming...

Over a mean of 8.1 years, a dietary intervention that reduced total fat intake and increased intakes of vegetables, fruits, and grains did not significantly reduce the risk of CHD, stroke, or CVD in postmenopausal women...

Oh and you forgot to mention, 4.9% of women died in the intervention group as opposed to 5.0% in the control group. A "minor detail" that I couldn't find in the paper so I had to look up elsewhere. The study also showed that the diet modifications didn't reduce the incidence of breast or colorectal cancer, two of the most common cancers. RIP, prudent diet. Although it still seems to be struggling along, despite the beating. Another set of editorials appeared claiming that the diet didn't work because it wasn't extreme enough. How far do we have to move the goalposts before we give up?

There was one interesting finding that came out of MRFIT, which foreshadowed the result of the Lyon trial. MRFIT participants eating the most omega-3 from fish were at a 40% lower risk of coronary heart disease and a 22% lower risk of dying of any cause. This was not part of the intervention, so it doesn't necessarily reflect cause and effect. For that, we'll have to look at the Lyon trial.

The Lyon Diet-Heart Study: Background

To appreciate the full significance of the Lyon diet-heart study, we have to go back in time a bit. We're off to 1982, the year the U.S. National Heart, Lung and Blood Institute published the results of their massive study, the Multiple Risk Factor Intervention Trail (MRFIT).

By 1982, the idea of the "prudent diet" was well ingrained in American medicine, despite a lack of direct evidence to support it, and even a certain amount of evidence at odds with it (such as the ill-fated Anti-Coronary Club trial). The prudent diet was designed to reduce the risk of heart attack, and suggests reducing total fat, saturated fat and cholesterol intake, while increasing consumption of vegetables, whole grains, fruit and fiber. Some versions of the diet replace saturated fat with polyunsaturated vegetable oils.

MRFIT involved 12,866 men at high risk of heart attack, making it one of the largest controlled trials of all time. Half of the group were told to keep doing what they were doing, under medical supervision, and the other half were given intense diet and lifestyle counseling. The intervention group was counseled to quit smoking and reduce their consumption of saturated fat and cholesterol, and increase polyunsaturated vegetable oil consumption.

After 6 years, 46% of the intervention group had quit smoking, compared to 29% in the control group. The intervention group reduced their cholesterol intake by 40% and their saturated fat intake by more than one-fourth, and increased their consumption of polyunsaturated fat (omega-6) by one third relative to the control group (source).

The results? After seven years, total mortality was 41.2 per 1,000 in the intervention group and 40.4 in the control group, a difference that was not even close to statistically significant. There were also no significant differences in heart attack rate or heart attack death rate. The authors and their apologists tried to wiggle out of the obvious conclusion through an avalanche of slippery math and editorials.

The results were mirrored by a later intervention trial published in 2006, the Women's Health Initiative dietary modification trial. This one was even larger, involving 48,835 postmenopausal women! This was another test of the prudent diet, in which participants were intensively counseled to

reduce total fat intake to 20% of calories and increase intakes of vegetables/fruits to 5 servings/d and grains to at least 6 servings/d.

After 6 years, the intervention group was eating 22% less fat, 23% less saturated fat, 20% less cholesterol, 15% more carbohydrate, 22% more fruits and vegetables, and slightly more fiber and whole grains than the control group. LDL dropped a bit in the intervention group.

I think you know what's coming...

Over a mean of 8.1 years, a dietary intervention that reduced total fat intake and increased intakes of vegetables, fruits, and grains did not significantly reduce the risk of CHD, stroke, or CVD in postmenopausal women...

Oh and you forgot to mention, 4.9% of women died in the intervention group as opposed to 5.0% in the control group. A "minor detail" that I couldn't find in the paper so I had to look up elsewhere. The study also showed that the diet modifications didn't reduce the incidence of breast or colorectal cancer, two of the most common cancers. RIP, prudent diet. Although it still seems to be struggling along, despite the beating. Another set of editorials appeared claiming that the diet didn't work because it wasn't extreme enough. How far do we have to move the goalposts before we give up?

There was one interesting finding that came out of MRFIT, which foreshadowed the result of the Lyon trial. MRFIT participants eating the most omega-3 from fish were at a 40% lower risk of coronary heart disease and a 22% lower risk of dying of any cause. This was not part of the intervention, so it doesn't necessarily reflect cause and effect. For that, we'll have to look at the Lyon trial.

If The Military Can't Get Electronic Health Records Right, Why Would We Think Conflicted EHR Companies And IT-Backwater Hospitals Can?

The publication "The Machinery Behind Healthcare Reform: How an Industry Lobby Scored a Swift, Unexpected Victory by Channeling Billions to Electronic Records" on May 16 2009 in the Washington Post (my comments here) exposes a massive lobby that has grossly over-represented the benefits of healthcare IT, committed a cross-disciplinary invasion of medicine, and created a myth about HIT's supposed transformative powers in curing healthcare's ills.

Since its publication in the Post I have become concerned that the research literature that exists extolling healthcare IT may be tainted by corporate influence. The phenomenon of tainted biomedical literature is certainly familiar to readers of Healthcare Renewal and other medical blogs regarding pharmaceuticals and medical devices.

Electronic health records systems can facilitate, not revolutionize, medicine when led by competent experts cross-trained to a meaningful extent (i.e., graduate level or beyond) in both clinical medicine and information science and technology, e.g., biomedical informatics professionals. Even these professionals must often expend much effort in "managing the mismanagement" by incompetent and/or conflicted IT and hospital leadership. (An example of a tightly run and highly specialized project in a high risk medical subspecialty that did have tangible clinical and some financial returns, via identification of poorly performing medical devices -- not something the medical device industry cares for -- is here. This type of project is not easily portable.)

Making yet another case for how the concept of national electronic health records is probably a bad idea at this point in time with respect to our understanding of health IT and its social-technical interactions and challenges, it appears the military's EHR system AHLTA is simply a disaster. [Note: this is not to denigrate the military, and I am very thankful to all who serve and defend our country and freedoms. HIT problems seem unfortunately universal - ed.] All of the preventable elements I've written about are present: unreliability to due inadequate attention to resilience engineering, a mission hostile user experience, time-wasting, demoralization of clinicians, and a cornucopia of other predictable (to informatics experts) consequences when health IT is managed by anyone other than experts.

Just as our economy and culture are now falling apart at the seams as a result of decades of mismanagement and corruption, from micro to macro levels, in most domains (borrowing a phrase from Rev. Jeremiah Wright, "the chickens are coming home to roost"), so the wages of incompetence and corruption in healthcare and healthcare IT are rearing their ugly head. This is the situation in the setting of a relatively constrained patient population (primarily active military personnel and families):

U.S. Medicine - the Voice of Federal Medicine

May 2009

Electronic Records System Unreliable, Difficult to Use, Service Officials Tell Congress - By Sandra Basu

WASHINGTON—AHLTA, the Department of Defense’s $4 million [sic - that should be $4 billion - ed.] electronic medical record system, continues to be difficult for military physicians to use, according to top military health leaders who spoke at a House Armed Services subcommittee hearing at the end of March.

At a Congressional hearing titled “AHLTA is ‘Intolerable,’ Where do we go from here?” top Department of Defense and service leaders told members that medical personnel are hampered by an electronic medical record system that, among other issues, is slow, difficult to use, unreliable and frequently crashes.“Being the first service to vigorously support the fielding of AHLTA five years ago, we faced a near mutiny of our healthcare providers, our doctors, our nurse practitioners, physician assistants and others last summer,” Army Surgeon General Lt. Gen. Eric Schoomaker, MC, USA, told committee members at a joint hearing held by the Military Personnel Subcommittee and the Terrorism, Unconventional Threats and Capabilities Subcommittee.

Committee members also voiced concern about how the system was impacting provider morale and patient care. “The committee has heard from military doctors and nurses who use AHLTA that it is unreliable, difficult to use and has decreased the number of patients they can see each day. We have also heard that medical professionals leave the military because of their frustration with AHLTA,” said Rep. Joe Wilson, R.-S.C., ranking member of the Military Personnel Subcommittee of the House Armed Services Committee.

Difficult for physicians to use. Intolerable. Slow. Unreliable. Frequently crashes. Near mutiny. Morale. Affecting patient care, decreasing patient load. Can it get worse?

Yes:

A Troubled System

AHLTA is currently deployed worldwide to 70 hospitals, 410 clinics and 6 dental clinics. In addition, the system is used in 14 theater hospitals and 208 forward resuscitative sites.

While Army, Navy and Air Forcer medical leaders who testified all stressed the importance of an electronic medical record [perhaps due to lobby influence and myth-making? - ed.], they all expressed frustrations with AHLTA. Dr. Schoomaker told committee members that medical personnel, particularly specialists, often “spend as much or more time working around the system as they do with the system.” He said that the services are still not effectively able to seamlessly access complete data of patients from the battlefield between the military treatment facilities and the Department of Defense and the Veteran’s Administration.

Last year he said he knew he had a problem when he asked a physician who is a self-described “super user” of the system whether she was a “super fan” of the system and she responded that she was not. “When our best and most faithful users of AHLTA could not admit to being fans of the system, I knew we were really having serious problems,” Dr. Schoomaker said.

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. Who said it's a powerful tool to improve healthcare and reduce costs? Who said it's ready for national dissemination? What conflicts do such individuals have with the health IT industry?

He blamed the system’s failures on a lack of a clear-cut strategy for implementing AHLTA—a problem he believes still exists. “In my opinion, the failures of AHLTA can be attributed to the overall lack of a clear, actionable strategy and poor execution from its genesis. As a result of the MHS’s lack of an information management/information technology strategy up to this point, theArmy Medical Department has been largely frustrated by a number of obstacles that continue to impede the system’s capabilities and functionality,” he said.

He also said that the services should have a greater input in decision making regarding AHLTA. “Military health system information technology investments and solutions should be transparent to the services sitting here at the table and should be jointly governed, meaning that we with service input are treated as principal customer clients of the system and that we are heard and acted upon promptly,” he said.

As a faculty member in a College of Information Science and Technology where undergraduates and graduate students are taught the importance of information science and consideration of the needs of end users as a primary enabler of IT success, how can there be a "lack of an information management/information technology" strategy in this national health IT project? How can there have been a lack of input into decision making by the services in the development and deployment of AHLTA?

Leaders from the Navy and Air Force detailed the challenges that their personnel face in using AHLTA. “Almost all of the providers I spoke to relate to the system going down unexpectedly, recently at least once a week,” Navy Deputy Surgeon General Rear. Adm. Thomas R. Cullison, MC, USN, told committee members. He added that while no one would like to return to paper records, providers are “largely dissatisfied” with the system and that the system slows down their clinic time. “Most of our providers say they have to stay later in the afternoon to finish up notes simply because it slows down clinic time,” he said.

Air Force Deputy Surgeon General Maj. Gen. Charles Bruce Green, USAF, MC, told the committee that Air Force primary care physicians spend about 40 percent of their time working with AHLTA versus 60 percent of their time with patients. On the other hand, specialists are “working around the system trying to find new solutions,” since the system does not address the needs unique to their practices. In his written testimony, Dr. Green said that the problems associated with AHLTA have resulted in “low productivity and provider morale.”

Forty percent of clinician time spent tinkering with balky computers? This should be astonishing to any reader unfamiliar with these issues, and an eye opener to our governmental representatives not just regarding the military, but regarding the entire lobby-promoted scheme to force clinicians to adopt HIT by 2014 or suffer financial penalties.

Specialists "working around" the system (thus risking the dangers of workarounds of HIT deficiencies observed by Koppel and others) because it does not meet the needs of their subspecialties? No surprises here. After reading about issues in development of domain specific healthcare information systems for high risk subspecialties (such as here), it should be obvious that the business IT-dominated health IT industry as it currently exists cannot fill such needs.

More importantly, I feel the AHLTA project is an illustration of what will be reproduced, thousands or tens of thousands of times over, in hospitals and physician practices all over this country as we proceed in a national EHR initiative based on false premises borne of the health IT lobby.

The Problem

Then-Assistant Secretary of Defense for Health Affairs S. Ward Casscells, M.D., told committee members that many of the problems that AHLTA has suffered have been “self-inflicted wounds,” due to software contracts with vendors that were “poorly written.” “We have had, over the past decade, contracts that were poorly written from the standpoint of performance, they have loopholes in them that permitted delays. We have, in some instances, lax oversight of some of these contracts,” he said.

Unbelievable. Hospitals sign HIT contracts putting all liability for system defects on clinicians, and that gag them from disclosing defects outside their organizations. The military's HIT contracts apparently had additional flaws that are probably pervasive in the commercial sector as well.

... In moving forward to rectify AHLTA problems, DoD has adopted a Unified Strategy Regional Distribtion Approach, a three-phased plan for reshaping the electronic health system. In written testimony, Dr. Casscells explained this strategy seeks to “improve provider satisfaction, improve reliability and strengthen data sharing throughout DoD and Department of Veterans Affairs healthcare delivery continuum and with private healthcare providers.” The first phase of the approach will focus on “stabilizing performance, reliability and the core infrastructure,” of the system according to Casscell’s written testimony.

"I want to be wary of overpromising. We have done that in the past [indeed, the entire HIT industry has massively overpromised for decades - ed.], but I am excited about this. I think there is a chance here that we can once again be leaders for the nation in electronic health records, as was the case several decades ago. I would like to think that a year or two from now, you will agree with me that AHLTA has gone from intolerable to indispensible,” Dr. Casscells told committee members.

Tommy J. Morris, acting director in DoD’s office of the Deputy Assistant Secretary of Defense for Force Health Protection and Readiness Programs, said that the only service that nonconcurred with their proposed blueprint to overhaul AHLTA was the Army [not exactly an unimportant stakeholder - ed.]

Dr. Schoomaker, on his part, challenged the notion that there was actually a “strategy” in place for rectifying AHLTA. “Mr. Morris has got a plan, he does not have a strategy. We asked for a strategy. A plan is just one element of a larger strategy. We asked for a strategy and our involvement in that strategy, so with respect, that is what we in a sense partially nonconcurred with,” Dr. Schoomaker said.

"I've got a plan." How familiar a refrain that is in a time of mass societal mismanagement.

If I were a politician examining health IT, I'd really start looking into how our government became convinced health IT was not only a worthwhile investment, but an "economic stimulus." As with our friends up north, it seems to be primarily a stimulus for poseurs and dyscompetents to come out of the woodwork, disrupt healthcare providers, and then collect massive fees for the "favor."

In consideration of the above, I ask:

If the military, with its internal discipline and ability to take over entire modern countries with just a few thousand soldiers lost, and its constrained patient population (active military personnel and families generally free of complex and chronic illnesses) can't get electronic health records right, why would anyone think inept and sometimes corrupt EHR companies, dyscompetent hospital IT departments, and reckless and cavalier hospital executives can?

I reiterate my concerns that the "AHLTA experience" will become all too familiar to hospitals and physician practices throughout this country, unless sanity and rationality is restored to our thinking about health IT.

-- SS

"Man's Best Hospital," Run by the Boss of a MECC (Medical Education and Communications Company)?

In January, 2009 we posted about how the CEO of Blue Cross Blue Shield (BCBS) of Massachusetts and of Partners HealthCare, made a secret oral agreement that BCBS would pay Partners at a higher rate than that given to other hospitals.

Why BCBS would want to pay so much to this one hospital system was never clear. Partners does include some extremely prestigious hospitals, including the Brigham and Womens Hospital, and the Massachusetts General Hospital, ("Man's Best Hospital" in the House of God), but there are some other very prestigious teaching hospitals in Boston that were not blessed by BCBS' largess.

We speculated about one possible cause: the leadership of the two organizations may have felt they had more in common with each other than with the constituencies of their own organizations. A few leaders of each organization had direct ties to the other. Many leaders of both organizations were simultaneously leaders of finance, the same sector that has brought us what is now called the Great Recession. Leadership of both organizations had conflicted loyalties. The organizations' CEOs at the time, and many members of their boards had divided loyalties and apparent conflicts of interest. For example, Jack Connors, the chair of the Partners HealthCare board, is also the Chairman Emeritus of marketing communications company Hill, Holliday, Connors, Cosmopoulos Inc, whose clients include pharmaceutical and pharmacy benefits manager CVS / Caremark, and is also a member of the board of directors of Covidien, a medical device company.

The Boston Globe just published a report that Mr Connors had even more intense conflicts that had not heretofore been made public.

He's chairman of New England's largest healthcare company, and that position atop Partners HealthCare has tested the limits of Jack Connors's considerable corporate dexterity.

Though he has no background in medicine, Connors has been Partners' chief overseer, champion, and its most public face for 13 years.

[One board member] is the cofounder and chairman emeritus of Partners' advertising firm. That would be Jack Connors. And that potential point of conflict has been disclosed....

But to the chagrin of some former board members, never brought up for board review was Connors's stake in a leading medical education firm whose sale in 2004 made Connors a very wealthy man.

Nor has the board notified public officials of Connors's ownership of a fledgling home healthcare firm that has directly solicited Partners' hospitals for business.

Connors and top Partners officials defended the decision not to publicly disclose Connors's potential conflicts, saying that because Partners did not directly contract with either of Connors's firms there were no conflicts to report. Connors also defended his right to be an entrepreneur in the healthcare business while also chairing Partners' board, and strongly denied ever using his position for personal or financial advantage.

The larger company, M/C Communications, grew to become the biggest commercial provider of continuing education to physicians in the decade between its inception in 1994 and when Connors sold it in 2004. It profited hugely from an exclusive commercial relationship it maintained with Harvard Medical School, whose faculty teach at seminars the company holds. Partners' signature institutions, Massachusetts General Hospital and Brigham and Women's Hospital, are major teaching affiliates of Harvard Medical School.

In addition, M/C Communications benefited financially from millions of dollars in sponsorship revenue paid it from major pharmaceutical firms eager to play to this professional audience.

Connors said he was under no obligation to disclose his ownership of M/C Communications to the Partners board. He said that while there is an 'affiliation' between Harvard Medical School and the two Partners hospitals, there is no formal contract between them.

Connors said he informed Partners executives of his ownership of M/C Communications, and that they determined it did not warrant disclosure to the full Partners board.

'There is no contract between Partners and Harvard,' Partners said in a statement to the Globe.

Connors made a name for himself as an executive with Hill, Holliday, Connors, Cosmopulos, the Boston advertising company that he helped found and guided throughout a long career. Less well known is that he made most of his fortune from M/C Communications, which he sold to Bain Capital for $450 million in 2004.

The sale was the largest of a private healthcare-related company in Massachusetts that year, according to TM Capital Corp., an investment banking company. Connors, who led an investor group that bought the firm outright for $13 million in 2000, made about $250 million from its sale.

After his 2004 windfall, he founded a company that helps elderly patients readjust to life at home after a hospitalization.

That company, Dovetail Health, has - Connors acknowledged - solicited business from hospitals owned by Partners. And Connors confirmed that after Dovetail executives failed to convince Blue Cross Blue Shield of Massachusetts to contract with the firm, he personally spoke to the giant insurer's president, Cleve L. Killingsworth, on Dovetail's behalf. Partners and Blue Cross Blue Shield regularly negotiate over $2.5 billion worth of medical business a year.

Connors acknowledged in an interview that it might have appeared 'inappropriate' to some for him to pitch Killingsworth. But he said the conversation stemmed from a shared belief that new ways must be found to reduce frequent return trips of elderly patients to the hospital. More recently, however, he said he does not believe his approach to Killingsworth was inappropriate.

So let's try to recap this.

While Jack Connors has been chairman of the board of Partners HealthCare, the largest and most prestigious hospital system in Massachusetts, he also ran an advertising agency that did business with Partners, and has been on the board of Covidien, a medical device company. Both of these relationships he disclosed to his fellow board members, although no one seemed troubled by them.

However, while a Partners board member, Connors was also the founder, and ultimately profited very handsomely from the sale of M/C Communications. M/C Communications apparently begat M/C Holding Corporation, which in turn owns M/C Communications and Pri-Med Institute LLC. M/C Communications now describes itself as " established in 1994 and has become a leading provider of medical education event management solutions for health care professionals and others around the globe." M/C Communications runs Pri-Med, which is described thus: "Pri-Med is a platform for science and medicine that includes meetings, resources, online, and new media tools designed to meet the information and education needs of today’s practicing physician." Pri-Med markets itself to industry, presumably the pharmaceutical, biotechnology, and device industry, "Sixty percent of doctors’ offices restrict rep access, making it more challenging than ever to get in front of your customers. But with Pri-Med, you get to meet clinicians in a professional environment where they seek you out. More than 66% of attendees say they come to Pri-Med events to meet you, industry representatives." So Connors' company was a medical education and communication company (MECC), which provided what appeared to be educational programs to physicians that in fact were also sold to the health care industry as marketing opportunities.

So Partners HealthCare, which includes two of the world's most prestigious teaching hospitals, has been run by the boss of a MECC? Say it ain't so.

Not only did Connors own a company that had an exclusive contractual relationship (as described above) with the Harvard faculty who staff the main Partners HealthCare hospitals, that company was engaged in marketing the products of sponsoring drug and device companies disguised as education. Finally, Connors denied that this presented any kind of conflict of interest, because Partners HealthCare has no explicit contract, just an "affiliation" with Harvard Medical School.

Finally, just to ice the cake, Connors' latest venture is a home health care company that did business with Partners, and tried to do business with BCBS, spearheaded by Connors' direct conversations with the BCBS CEO.

Jack Connors thus seems to have just become the latest poster boy for leaders of health care organizations who put their personal financial interests ahead of their responsibilities to those organizations, and function as a power elite whose collective interests trump those of the constituents of the organizations they run.

Quoting from BoardSource, the main duties of the leader of any US not-for-profit are:

Duty of Care

The duty of care describes the level of competence that is expected of a board member, and is commonly expressed as the duty of 'care that an ordinarily prudent person would exercise in a like position and under similar circumstances.' This means that a board member owes the duty to exercise reasonable care when he or she makes a decision as a steward of the organization.

Duty of Loyalty

The duty of loyalty is a standard of faithfulness; a board member must give undivided allegiance when making decisions affecting the organization. This means that a board member can never use information obtained as a member for personal gain, but must act in the best interests of the organization.

Duty of Obedience

The duty of obedience requires board members to be faithful to the organization's mission. They are not permitted to act in a way that is inconsistent with the central goals of the organization. A basis for this rule lies in the public's trust that the organization will manage donated funds to fulfill the organization's mission.

By leading companies that did direct business with Partners and its staff, and failing to disclose that he was doing so to his fellow Partners board members, Connors appeared to have violated the Duty of Loyalty.

By running a MECC that helps drug and device companies market to physicians in the guise of education, using faculty from the academic teaching hospitals that he lead, Connors seems to have mocked the mission of the academic hospitals within Partners, and thus appeared to violate the Duty of Obedience.

This episode certainly does suggest that health care, and the organizations involved in this case, are lead by an "old-boy network," as one person interviewed for the Globe article suggested. More than just an old-boy network, they seem to be lead by chummy members of the power elite whose collective personal interests supersede the missions of the organizations they are supposed to steward. When this happens, is it any surprise that health care becomes less accessible, more expensive, and of lower quality?

Yet challenging the power elite that are increasingly revealed as controlling much of health care seems to be something that one cannot talk about when discussing health care reform. However, failing to address this problem will likely doom any effort, no matter how well intentioned, to improve health care.

Hat tip to and see comments by Alison Bass on the Alison Bass Blog.

ADDENDUM (3 June, 2009) - See also comments by Dr Daniel Carlat on the Carlat Psychiatry Blog.