More Revelations About How Top Managers Prosper While Care-Giving Employees are Laid Off This Time Leads to Labor Strife

Last month, we discussed the contrast between executive compensation at Salinas Valley Memorial Healthcare System (SVMH), a small California public hospital system, and the treatment of employees in the trenches. While the hospital had laid off workers ostensibly because of the poor economic climate, the local newspaper revealed that its CEO was leaving with a multi-million dollar retirement package, and that some of his supposed severance pay had been given him before he was severed.

This month, amidst growing labor unrest partially driven by the disparate treatment of the hired top manager and the more lowly employees who actually take care of patients, a new report revealed further contrasts between how hired executives and "regular" employees are treated.

Let me give a blow by blow summary in chronological order.

The Employees Strike

This month, the hospital system suffered its first strike ever, partially in response to the discrepancy between executive compensation and how lesser employees were treated.  According to the Los Angeles Times:

About 850 workers at a Salinas public hospital went on strike Tuesday, about two months after revelations of a multimillion-dollar pension awarded to the hospital's CEO.

Caregivers at Salinas Valley Memorial Hospital walked off their jobs at 6 a.m., according to representatives of the National Union of Healthcare Workers. The workers are protesting proposed layoffs and cuts to their retirement benefits as well as pay given to hospital executives and consultants.

The Times reported in April on the retirement package granted the hospital's outgoing chief executive, Samuel Downing, which included about $5 million in supplemental payments along with a $150,000 annual benefit. Hospital officials and board members have defended the package, saying that Downing was a successful leader throughout his 27 years as CEO.

The hospital workers' union has been negotiating with administrators since January and indicated its plan to strike earlier this month, according to union vice president John Borsos.

'There's a sense of disbelief here that the hospital can come up with millions of dollars for Downing's retirement and millions for their consultants, but when it comes to caregivers by the bedside, they say they can't find the money,' he said.

The Management's Lock-Out

Then, hospital managers' responses to the strike provoked more anger from union members, and one state agency affirmed their complaints, according to The Californian:

The California Public Employment Relations Board issued a five-page complaint against Salinas Valley Memorial Healthcare Systems, alleging that the public hospital district violated several sections of state labor law when it barred striking workers from returning to their posts Wednesday.

Prompted by charges brought by the National Union of Healthcare Workers, PERB Regional Attorney Katharine Nyman charged SVMH with committing unfair labor practices and with violating PERB regulations in the way it blocked workers from going back to work after Tuesday's one-day labor walk-out.

Strikers Picket a Board Member

Then, the union escalated its protest by picketing the house of the hospital board treasurer, according to television station KION:

Thursday morning, some union members took their demonstration from the front entrance of SVMH directly to the home of Harry Wardwell, Treasurer of the SVMH Board of Directors and President of Rabobank. 129 employees were still unable to go back on the job, replaced by temporary workers for one more day.

Wardwell is one of five publicly elected members of Salinas Valley Memorial Healthcare System's Board of Directors.

'We have to draw the Salinas community and everybody in the hospital district. Every resident in this neighborhood votes and they need to know that Harry Wardwell is making these cuts,' said Marilyn Benson, an NUHW member.

How Executive Pay Rose Faster than Inflation While Employees Were Laid Off

Just after that protest ended, The California published a new article about executive compensation:

At the same time it laid off hundreds of rank and file employees, the Salinas Valley Memorial Healthcare System steadily provided generous increases to the salary and benefits packages of its senior executive team, records show.

SVMH vice presidents Bev Ranzenberger, John Fletcher, Dr. David Perrott, Elizabeth Lorenzi, Irene Neumeister and James Griffith all received double-digit increases in their total compensation packages during the years of 2005 through 2010 according to an SVMH document obtained by The Californian on Thursday.

And while not all of the vice presidents received salary increases every year during that time period, they all received percentageincreases in total salary and benefits of 29.4 percent to 153.8 percent, which translates to annual average increases of between 5.9 percent and 30.8 percent. By comparison, for the12 months that ended in May, the national rate of inflation rose just 3.6 percent, based on the Consumer Price Index.

News of the increases incensed National Union of Healthcare Workers leaders whose members went on a one-day strike Tuesday after declaring an impasse with health care district management over wage and benefit issues and over how many more employees will be laid off as SVMH continues to struggle with reducing costs.

'How could a majority of the board approve of the outrageous salary increases while claiming that the hospital had to lay off hundreds of caregivers out of financial necessity?' asked union vice president John Borsos. 'It's not just hypocritical, but it demonstrates that the hospital has more than enough money to keep caregivers at the bedside.'

Note that the SVMH leadership's defense of the pay given top executives was typical of explanations of outsize pay given to other health care leaders:

But according to SVMH spokeswoman Adrienne Laurent, the executives' salaries are in keeping with industry standards and have been reviewed by an outside consulting agency for appropriateness.

"Compensation for our hospital executives is not taken lightly, and that's why our [Board of Directors] engaged an outside, third party to assist us in this process. An important goal set forth by our board is that all of our employees, including our executives, receive compensation that is comparable to our competitors. In order for us to successfully recruit and retain the best people, it is critical that we remain competitive with not only other public district hospitals, but also private companies," Laurent wrote in an email to The Californian.

In her email, however, Laurent did not address the seeming disparity of the institution increasing executive salaries while at the same laying-off employees.

Laurent also added that the six SVMH vice presidents do not enjoy some of the standard perquisites offered to executives at other health care institutions such as bonuses and car and cellphone allowances.

It must be tough having to pay for a cell-phone package when one's salary is only somewhat in excess of a quarter-million dollars a year.

Note that the irony of defending high pay to recruit "the best people" to executive positions while health care professionals are being laid off seemed to escape Ms Laurent.
Summary

Once again we see how the notion that "top management are different from you and me" plays out throughout the health care system. Even at a small public community hospital system, the top hired managers seem to feel entitled to be treated differently, and much better than other employees, even those who directly care for patients.  Top hired managers do not flinch at the doublethink necessary to use poor financial results as a rationale for laying-off line employees, but simultaneously for hiking the pay of top hired managers.

Again, we see how top hired managers of all sorts of health care organizations, big and small, for-profit, not-for-profit and government, delivering direct care, and manufacturing products used in care, have become accountable only to themselves. This situation, of course, produces health care done first for the benefit of its new overlords.

The case of Salinas Valley Memorial Healthcare, however, also now demonstrates that this situation is starting to produce reactions.  It now seems that the ordinary employees of health care organizations are not continuing to welcome their new overlords. SVMH endured its first strike ever mainly in response to the disparity between how top hired managers treated other employees and treated themselves. Angry employees publicly identified the board of trustees that seemed to exert no functional oversight over top management as part of the problem. I suspect that if current trends continue, we will see more labor unrest, and that unrest will be directed at hired managers and those who are supposed to oversee them.

This may eventually yield major changes in how health care is lead, but if the confrontations continue, these changes may be very messy, and continued strife may end up being bad for everyone.

Instead, we should consider real, peaceful health care reform. As I have repeated endlessly,... health care organizations need leaders that uphold the core values of health care, and focus on and are accountable for the mission, not on secondary responsibilities that conflict with these values and their mission, and not on self-enrichment. Leaders ought to be rewarded reasonably, but not lavishly, for doing what ultimately improves patient care, or when applicable, good education and good research. On the other hand, those who authorize, direct and implement bad behavior ought to suffer negative consequences sufficient to deter future bad behavior.


If we do not fix the severe problems affecting the leadership and governance of health care, and do not increase accountability, integrity and transparency of health care leadership and governance, we will be as much to blame as the leaders when the system collapses.

CEO Compensation: Nothing to See Here, Just Move Along

An article in the Washington Post showed how uncomfortable executives of big corporations, including health corporations, are about making their outsize compensation transparent. 

Here’s one financial figure some big U.S. companies would rather keep secret: how much more their chief executive makes than the typical worker.

Now a group backed by 81 major companies — including McDonald’s, Lowe’s, General Dynamics, American Airlines, IBM and General Mills — is lobbying against new rules that would force disclosure of that comparison.

The lobbying effort began more than a year ago. It involved some of the biggest names in corporate America and meetings with members of both parties on the House Financial Services Committee and Senate banking committee.

The companies and their Republican allies in Congress call comparisons between the chief and everyone else in the company 'useless.'

It's not just useless, they also claimed:

Disclosing such comparisons 'can mislead or confuse investors,' said Rep. Nan A.S. Hayworth (R-N.Y.), who filed the bill to repeal the disclosure. 'It creates heat but sheds no light.'

She also said the calculation of the ratio would be a burden for companies, especially those with global operations.

One apparent reason for their discomfort is that the pay of top hired executives has been skyrocketing while the pay of most other employees stagnates:

'The real reason House Republicans want to keep the typical worker’s pay secret is that it may embarrass some companies to reveal that they pay their CEO in the range of 400 times what they pay their typical worker,' said Sen. Robert Menendez (D-N.J.), who added the requirement to the financial regulatory overhaul bill that passed last year.

Executive compensation at the nation’s largest firms has more than quadrupled in real terms since the 1970s, according to research by Carola Frydman of MIT’s Sloan School of Management and Raven E. Molloy of the Federal Reserve, even as pay for 90 percent of American earners has stalled.

In 1970, average executive pay at the nation’s top companies was 28 times the average worker income, according to the Frydman-Molloy data and numbers provided by Emmanuel Saez at the University of California at Berkeley. By 2005, executive pay had jumped to 158 times that of the average worker.

Behind the repeal effort are some of the largest US companies:

The Center on Executive Compensation has led the criticism of the provision. The group is part of the HR Policy Association, which represents the human resources executives at 325 large companies.

The thrust of the group’s criticism is that the information would have little value for investors comparing firms, because companies have workforces that differ in skills and expected pay. Wages also vary across regions and industries.

Current rules already require disclosure of executive compensation; the new requirement calls for the additional disclosure of median worker pay. Critics say that would add little to what is already known.

'You can already tell where a CEO falls relative to his peers,' said Tim Bartl, senior vice president and general counsel for the Center on Executive Compensation. 'You can already tell where he falls relative to the average worker in the industry. What is this number going to tell us?'

Last year, the HR Policy Association paid Bartl’s law firm, McGuiness & Yager, more than $1.5 million for lobbying, according to OpenSecrets.org.

The HR Policy Association's board of directors includes executives from some of the biggest health care corporations, including pharmaceutical and device firms (Amgen, Johnson and Johnson, and Merck), commercial health insurance companies and managed care organizations (Aetna, CIGNA, and Humana), and other firms with major health care interests (General Electric, Procter and Gamble).

Note that Mr Bartl's concession that calculation of the ratio would be simple seemed to contradict Rep Hayworth's claim that the calculation would be burdensome.

Summary

It certainly appears that top hired managers of big corporations are not happy about the common people seeing how huge their pay is compared to that of other workers. They seem particularly unhappy to have their own stockholders, the common people who actually own their companies and to whom they theoretically report see how much they are making. Perhaps they fear the realization that they may be running their companies more for their personal advantage than in the interests of their supposed owners, much less the other, lesser employees, much less their customers, clients and patients, much less the public at large.

The ability of small cabals of top executives at big corporations to set their own pay independent of the wishes and interests of the corporations' owners would seem to be the fundamental threat to the capitalistic and free market ideal. After all, in my humble and perhaps naive opinion, private ownership is central to capitalism, and the apparent managers' coup d'etat seems to be a existential challenge to private ownership. (For much more informed commentary on how executives have wrested control from owners, see the blog Naked Capitalism and Robert A G Monks' website.) One wonders why so few of the many vocal supposed supporters of capitalism and free markets fail to see this as a problem.

Even though it is increasingly informative to see what has happened to health care within the context of the larger political economy, Health Care Renewal, however, is about health care issues first. So to put this in health care terms....

First, we see again how top leaders of health care organizations prefer opacity to transparency, especially when that opacity increases their ability to put self-enrichment ahead of their organizations' missions and ultimately individuals' and the public's health. They embrace opacity when it protects the perverse incentives that likely are the major cause of increasing health care costs, declining access, and worsening quality.

To repeat, and repeat, and repeat.... to reform health care, we must reverse the managers' coup d'etat, and restore leadership of health care organizations that puts the mission, and the health of patients and the population first, and is accountable to corporate owners (when applicable) and to patients and the public.  But that will mean now going up against those who have made themselves the richest and most powerful people in the country and the world, who will not lightly give up their oligarchy.

Google is shutting down its cloud-based Google Health, a Personal Health Record service

Google is shutting down its cloud-based Google Health, a Personal Health Record service, by the end of the year.

I wrote:

"Who'da thunk it? -- Personal Health Record project with big corporate sponsors not working out so well ..."

and

"Label me skeptical: Personal Health Records as healthcare panacea?"

both in 2007.

Considering the education and expertise one needs to really manage (and comprehend) health records robustly, let me state that I consider the entire concept of the "personal heath record" inane.

You heard it here first.

-- SS

Babies' deaths spotlight safety risks linked to computerized systems

Two new tragic cases. (A third, earlier case of infant death was posted in March 2011 here).

Case #1. See Baby's death spotlights safety risks linked to computerized systems by Judith Graham and Cynthia Dizikes in the Chicago Tribune.

A baby died at Advocate Lutheran General Hospital due to an intravenous solution containing a massive overdose of sodium chloride — more than 60 times the amount ordered by the physician. The authors write:

Although a series of other errors contributed to the tragedy, its origin — a piece of data entered inaccurately into a computer program — throws a spotlight on safety risks associated with medicine's advance into the information age, a trend being pushed aggressively under health reform.

One wonders - what happened to the alerting features, for the tens or hundreds of millions of dollars the hospital spent on health IT?

I've also left a number of comments to the Chicago Tribune story in its comments section, in response to the usual pro-health IT-at-all-costs posts.

Case #2. There's also been a baby death locally to me that is allegedly due to HIT (PACS) interference in otherwise simple care processes.

See "Blake vs. Abington Memorial Hospital" at this link. The Complaint in the latter case, a public document, is available as a .tif image at this link (1 MB; you may need to use IE to download beyond the first page).

(July 8 addendum: since this blog post was published, I've noted multiple "hits" on it from the IP of the hospital involved, 65.216.195.x , at different times of the day, as well as on my Drexel website on HIT failure. Clearly they are aware of the issues noted herein.)

(Sept. 2011 addendum: the hospital has now filed a Motion to Compel Settlement that can be seen as item #67 and downloaded from the aforementioned courts dockets page here.)

A critical x-ray of a PICC (peripherally inserted central catheter) line placement allegedly was never read due to misdating. See for example counts 17 - 25, and 39 - 45. It was dated several days earlier than it was taken.

Counts 39-49 (emphases mine):

39. Defendants also described that the February 27, 2010, x-ray was digitally transmitted to radiology, and the technician attempted to match the image to doctors’ orders, and then put all the identifying information on the film, including the patient’s name, date of birth and date of study.

40. Defendants told Plaintiffs that the radiology technician picked the wrong name and put it on the x-ray, and then later realized it was the wrong name and then somehow changed the information on the image.

41. Defendants told Plaintiffs when the technician changed the information on the image, she typed the date of birth where she should have typed the date of study. [Puzzling; my $99 Canon camera embeds date information in the image itself, as do PACS systems - ed.]

42. Defendants told Plaintiffs that the incorrect date on the image caused the x-ray not to be read by a radiologist in the night the image was taken, and that if the image had been correctly dated February 27, 2010, it would have been reviewed by a radiologist immediately, who would have alerted Defendants that the PICC line was improperly positioned and had to be moved back to a safe position. However, since the film was incorrectly dated February 23, 2010, the film was classified as “old” and was not put in line for immediate review, and was not reviewed in time to prevent injury to Plaintiffs Decedent.

43. The Defendants told Plaintiffs that an older x-ray has less significance than a newer image and is, therefore, not as critical to review. [This is exactly the reverse of good radiological practice. 'Old' - but never officially read - means 'potential danger' such as missed findings of importance, subtle or gross findings that could alter the interpretation of later films, etc. - ed.]

44. The Defendants told Plaintiffs that the x-ray was reviewed by Dr. Griffith on the morning of February 28, 2010. At that time, Dr. Griffith, thinking that the image was from the 23rd, compared it to the next most recent image, which was from the 25th In reviewing these x-rays, Dr. Griffith reportedly concluded that the PICC line shown in the image she believed was from the 23rd had been removed by the 25th. [Gevalt - what a tragic error. In healthcare, critical attention to detail at all times is required, or your patient's dead. There is no room for computer fritter. - ed.]

45. Defendants told Plaintiff that the x-ray from the 27th, which was mislabeled as being from the 23rd, would have been reviewed by the neonatologist on duty on the morning of the 28th, but this did not happen because the computer which places films in line to be reviewed would have ignored such an “old” film.

[Note the accusation of the computer making a decision on what clinicians should and should not look at, thereby acting as cybernetic 'governor' or 'conductor' of care. The machine or, more properly, the algorithms created by its programmers, decided what the humans should or should not look at. This is not uncommon in HIT. Yet, who qualified these machines and their code to play this role? More on this critical issue at this link. - ed.]

46. The Defendants told Plaintiffs that the next 24 hours were uneventful, but late in the day on Monday May 1, 2010, Destinee’s condition began to deteriorate rapidly.

47. The Defendants told the Plaintiffs that the during the efforts to reverse Destinee’s deterioration, they discovered that the PICC line was in the wrong position, and that they confirmed this by sampling the fluid from around the heart, which was found to be full of hyperalimentation fluid, and then pulled the line back from its incorrect and dangerous position in the heart.

48. The Defendants told Plaintiffs that they did not know if the PICC line caused a hole in the heart, but that just having the line in the heart was enough for it to push the hyperalimentation fluid into the pericardium.

49. As a direct and proximate result of Defendants’ negligence, Plaintiff’s Decedent’s suffered injuries, including but not limited to: [numerous catastrophic complications followed by death - ed.]

If these counts are accurate, I ask the same question as in case #1: if an x-ray was accidentally dated five days or so before it was taken (how can that even happen?), why was an alert not triggered that an "old" (and unread) x-ray needed an official radiologist reading ASAP?

What are hospitals getting for their tens to hundreds of millions of dollars they are throwing at clinical IT?

This latter story really disappoints me if true. I was a Resident in Internal Medicine in this hospital in the mid 1980's and used my knowledge of radiology, in which I spent a year of formal postdoctoral education, and of computing to fix a CT scanner in the middle of the night and save a young man's life (as documented in a letter from my former Residency Director, now the Chief of Staff here and here , pgs. 1 and 2 respectively).

Ironically, even after all these years, I probably could have read that PICC line placement x-ray.

Technology can be a great blessing in medicine. I am alive and healthy in 2011 thanks to it. The medical condition referred to in the aforementioned letter was in fact cured as a result of advances in cardiac electrophysiology science, as here and here, pgs. 1 and 2).

However, technology cannot be applied cavalierly, lawlessly (per Sharona Hoffman), experimentally, without regulation, and without informed patient consent as is often done in the world of HIT.

-- SS

June 27, 2011 addendum:

In further review of the dockets in case #2, I find there seems to be a wee problem getting the hospital's Chief of Staff Jack Kelly to a deposition.

In a motion filed June 10, 2011 by the plaintiffs, "BY ADMINISTRATOR ERICA L ALLEN-BLAKE; RICARDO BLAKE; ESTATE OF DESTINEE LOTOYA BLAKE DECEASED MOTION TO COMPEL DEPOSITION OF DR. JACK KELLY" (.tif file at this link), in Exhibit "J" the plaintiff's attorney writes to the defendants' attorney (emphases mine):

I received your faxed letter of May 2, 2011. I don’t agree with any of your sophistry, and want to depose [Chief of Staff] Dr. Kelly. I remind you that you objected to the Complaint, claiming the meeting with the Plaintiffs had a specific purpose under MCARE (which never made any sense, but you wrote it, not me). Your objection raised issues of fact. If you don’t want to back them up, or can’t, then withdraw the objections.

If you’d like to ask the Plaintiffs one question at a deposition taken pursuant to your pending objections - i.e., whether they were told by your clients that MCARE written notice was purpose of the meeting or not - I’d agree to let you do that. I can represent to you that their answer will be "no.”

Be advised that I am tired of Abington’s dilatory tactics in this clear liability case in which an infant was killed by, among other things, some of the most egregious professional malpractice imaginable. On top of that, Abington refused to provide the name of the radiology technician until suit was filed. Now, you’re playing ticky-tack games about depositions, and my clients are understandably not impressed.

Under cover of separate letter you will find a Notice of Deposition for Dr. Kelly for this Friday, May 6, at 2 pm in my offices.

Wow.

A motion to compel was filed on 6/22/2011 so apparently the May 6 deposition did not take place.

I add the the MCARE Act of 2002 ("MEDICAL CARE AVAILABILITY AND REDUCTION OF ERROR ACT") in Pennsylvania (PDF at this link) states:

MCARE Section 308. Reporting and notification.

... B. Duty to notify patient.--A medical facility through an appropriate designee shall provide written notification ['written' - this word would appear to mean "in writing" - ed.] to a patient affected by a serious event or, with the consent of the patient, to an available family member or designee within seven days of the occurrence or discovery of a serious event. If the patient is unable to give consent, the notification shall be given to an adult member of the immediate family. If an adult member of the immediate family cannot be identified or located, notification shall be given to the closest adult family member.

Allegedly from the June 10 Plaintiff's Motion, as it appears to me, the hospital seems to be trying to claim a verbal meeting with the family satisfied the MCARE Act's notification requirements even though nothing in writing was apparently given, but that the information exchanged in that family meeting is not admissible in court.

It seems hospitals (perhaps pushed by their insurers) attempt to play legal games to try to avoid culpability for their "computer-anecdote" patients, some who end up as roadkill on the experimental racetrack of health IT.

Again, this is doubly disappointing if accurate, as I knew some of the principals on the defendants' side two and a half decades ago.

Also see a third case at my aforementioned March 2011 post "Thanks to the wonders of EHR, this premature baby went to the grave, prematurely" at this link, from an Oct. 2010 story in Virginia Lawyers Weekly ("Failures in care alleged after premature birth - $1,000,000 Settlement"). A PICC line was also involved.

-- SS

Embedded Networks of Influence in Health Care: An Illustrative Case

At the 12th International Anti-Corruption Conference (IACC), sponsored by Transparency International, one of the plenary sessions was devoted to the topic of "embedded networks of influence."  The session description included this description of the topic as:

the major stumbling block in the fight against corruption, namely, the power of 'embedded networks' in advancing personal or group interests through state institutions. The extent of their power can create what is known as “state capture” meaning democratic governance failure. It will take a close look at the influential role of private sector, especially of the multinational private sector.

A recent investigative report in the Chronicle of Higher Education illustrated a striking case of how one key individual has affected health care through multiple connections to what can be regarded as embedded networks of influence, thus tying in to many of the topics we have discussed on Health Care Renewal.

The article focused on the University of Miami and its current President, Donna Shalala. Let me summarize the set of relevant topics in roughly chronological order and note how the article links them to President Shalala.

Speech Codes and Restrictions on Free Speech within Academia

As I wrote in my 2003 article, (Poses RM. A cautionary tale: the dysfunction of the American health care system.  Eur J Int Med 2003; 14: 123-130.  Link here), speech codes and other restrictions on free speech within academia created the framework for the suppression of clinical research that may offend those with vested interests:

Failure of universities to champion the academic freedom of their clinical researchers may stem from their abandonment of their own academic core value of free enquiry. There is abundant evidence that universities may restrict expression and limit academic freedom. In The Shadow University, Kors and Silverglate charged that 'universities have become the enemy of a free society.' Universities have punished faculty and students who raised unpopular viewpoints.

In the Chronicle,

Ms. Shalala, ... was previously president of Hunter College of the City University of New York and chancellor of the University of Wisconsin at Madison....

The Shadow University, the pioneering work on challenges to individual rights by leaders at academic institutions, dealt with Ms Shalala's role as a leading early proponent of silencing speech that offended academic leaders.

Wisconsin chose to enact a speech code. On March 29, 1990, the Wisconsin ACLU joined a suit against the university, announcing that the important moral goals of toleration and equal opportunity 'can be accomplished through means other than the creation of rules which infringe upon the fundamental freedom to express ideas.'

The speech code was drafted with the help of UW-Madison Law School professors Richard Delgado, Gordon Baldwin, and Ted Finman.... On June 9, 1989, upon recommendation by Chancellor Shalala, it was adopted by the Board of Regents...."

The speech code was soon declared unconstitutional by a federal court, which held:

the policy was unconstitutional precisely because 'the UW rule regulates its speech upon its content.'

Ms Shalala then:

recommended a new code to the regents in the spring of 1992, which they adopted in March.

However,

Faced with another lawsuit, the regents reversed themselves

For these and similar efforts, as discussed by Evans and Novak in 1993, Ms Shalala was dubbed "the Queen of PC" [political correctness].

Speech codes and other restrictions on free speech in the academic setting seem mainly to be used to target speech that administrators find offensive, including speech critical of management practices. This is echoed in the Chronicle story, which suggested how fearful University of Miami faculty now are of criticizing Ms Shalala:

Others, including several current and former faculty members, outline their complaints in far more detail. But they do so anonymously, saying they don't want to tangle head-on with such a politically powerful president.

Ms Shalala's prominence in academics, probably more due to rather that in spite of her hostility to free speech and free enquiry, may have enabled her to join another and even more powerful network of influence, this one at the center of the US political world.
 
The Rise of Commercial Health Insurance 

In Deadly Spin, former CIGNA executive Wendell Potter documented how clever and unscrupulous use of public relations and marketing techniques enabled commercial health care insurance and managed care companies to increase dominance of US health care, while allowing health care costs to soar, and denying access to larger numbers of patients. 

The Chronicle article briefly alluded to Ms Shalala's role in the rise of for-profit health insurance.  Despite being labelled "farthest to the left and most controversial of all President-elect Clinton's Cabinet appointments," again per Evans and Novak, Ms Shalala departed the University of Wisconsin in 1993 to become US Secretary of Health and Human Services. In that role, she presided over the administration's failed attempt at health care reform, as Potter wrote,

When President Bill Clinton was forced to give up on comprehensive health care reform in 1994, the damage was far more extensive than anyone could have imagined - the administration's defeat emboldened health insurance companies to totally redefine the mission and methods of an industry that now strands nearly fifty million people without insurance.

As I outlined..., insurers knew after the Clinton disaster that the coast was clear for them to abandon nonprofit practices, long-standing commitments to public service, and traditional insurance models and turn instead to satisfying Wall Street investors' desire to make money, by limiting spending on health care.

Note that my only quibble with what Wendell Potter wrote is that it may be that the insurance companies' top executives, rather than their stockholders who benefited the most from these changes, as we will address below.

Ms Shalala remained Secretary of HHS until 2001, but after the failure of the health care reform proposal in 1994, her department apparently did nothing to try to ameliorate the changes to health care that Potter described above.

Bloated Executive Compensation Disproportionate to Any Measure of Organizational Performance

We have frequently discussed how health care leaders now seem entitled to get huge amounts of compensation disproportionate to their organizations' performance and their responsibility for it. 

Despite Ms Shalala's reputation in the 1990s as an extreme leftist, upon leaving her role in the Clinton administration, she almost immediately embraced the for-profit corporate model of health insurance. In a notable example of what now is called the "revolving door" that went unnoticed at the time,  Ms Shalala went from would be regulator of commercial managed care to leader of commercial managed care.  As noted by the Chronicle:

Debates over ethical boundaries are not new to those involved in the university's growth surge. Ms. Shalala was on the compensation committee of the board of the health insurer UnitedHealth Group when it was caught in one of the nation's largest-ever stock-options scandals. She also received low-cost loans in 2002 as part of a favors-for-politicians scandal at Countrywide Financial Corporation.

Both Ms. Shalala and [University of Miami medical school dean] Dr. Goldschmidt have served on the boards of companies directly or indirectly affected by the university's business decisions. The university had $30-million in annual business with UnitedHealth Group when Ms. Shalala was on its board.

Note that Ms Shalala served as Secretary of Health and Human Services from 1993 to 2001, (see this list), then joined the board of UnitedHealth Group within months (see this article.)

We discussed in considerable detail the ethical failings of UnitedHealth Group while Ms Shalala had fiduciary responsibility as a board member for its conduct. A particularly striking failing was how the board of directors granted sufficient back-dated stock options to the company's former CEO to make him a billionaire on paper.  The resulting scandal was followed by his resignation.  Later, Dr McGuire was forced to give back some the options.  The final settlement of the fiasco cost UnitedHealth $895 million, and Dr McGuire $30 million and the cancellation of 3.6 million stock options.  As we most recently summarized here, former CEO William McGuire was one of the top 10 best compensated CEOs of the first decade of the 21st century, despite the company's multiple ethical failings. 

Conflicts of Interest, Especially Involving Key Opinion Leaders who Promote Marketing Objectives Cloaked in Academic Respectability

We have extensively discussed the web of conflicts of interest that now pervades health care. For academic health care leaders, the most intense kind of conflict of interest may be created by service on the board of directors of a for-profit health care corporation.  Note that corporate directors, as we have discussed previously, have a fiduciary duty to exhibit "unyielding loyalty" to the stockholders of the company and their interests  [Per Monks RAG, Minow N. Corporate Governance, 3rd edition. Malden, MA: Blackwell Publishing, 2004. P.200.].  We first started to discuss the intense conflicts of interest generated when leaders of academic medicine are also members of boards of directors of for-profit health care corporations in 2006.  The issue really made the big time in 2010 when the New York Times published a front page article in its Sunday Business section about whether university presidents who also were corporate directors were part of an "academic-industrial complex."  As we noted above, Ms Shalala's service on the board of UnitedHealth Group created such a conflict, and she apparently presided a similar board level conflict of interest affecting her medical school dean. 

A particularly pernicious kind of conflict of interest may be created when a company selling health care goods or services pays an academic to become a "key opinion leader."  Industry spokespeople and key opinion leaders themselves tout KOLs as clinical, educational, and/or scientific experts chosen for their expertise to advance medicine, science and public health.  There are documented instances (e.g., see posts here and here) in which defectors from marketing departments of commercial health care corporations described KOLs as salespeople who could be more influential hidden within their professional or academic cloaks.  Even some physicians paid to be speakers on behalf of pharmaceutical corporations have acknowledged their role as salespeople in fancy dress (see post here).  There are cases of documents revealed by discovery in legal actions that show how companies planned organized stealth marketing efforts for drugs that included activities by KOLs (e.g., see post here about marketing of Lexapro, and here about Neurontin).

The Chronicle recounted how Ms Shalala also was linked to one of the better known examples of industry paid KOLs:

Dr. Goldschmidt did not fully report the income from such corporate associations on the medical school's financial-disclosure Web site, even while promoting the site as evidence of his faculty's commitment to openness. He also brought to Miami a repeat violator of financial-conflict-of-interest standards, Charles B. Nemeroff, to serve as a professor and chairman of the department of psychiatry and behavioral sciences.

In a companion article, the Chronicle summarized Dr Nemeroff's career thus:

Dr. Nemeroff had quit as chairman of Emory University's psychiatry department in December 2008 after the university received complaints about his secretly receiving money from GlaxoSmithKline and other pharmaceutical companies while helping promote their products.

We (Dr Bernard Carroll more than yours truly)  have posted previously about Dr Nemeroff's exploits, including those at the University of Miami, numerous times. 

The Fall of Municipal Hospitals, the Rise of For-Profit Hospitals

We have frequently discussed how the leaders have undermined health care organizations' core missions, and particularly how hospitals and hospital systems have strayed from their patient care mission to make more money. The Chronicle suggested how Ms Shalala's leadership of the University of Miami has enriched the institution's teaching hospital at the apparent expense of the local municipal hospital system:

Another set of problems, cited by current and former university faculty and Jackson staff members, stems from the 2007 takeover of a facility that became the University of Miami Hospital, across the street from Jackson. The purchase has greatly expanded the university's ability to direct many of the area's most profitable patients and procedures to the new facility and to other university-owned hospitals, further worsening Jackson's own considerable budget woes.

In addition,

The university's patient-enrollment practices were part of the problem. The inspector general of the U.S. Department of Health and Human Services and the U.S. Attorney's Office for the Southern District of Florida are looking into the question of whether university doctors routinely enrolled Jackson patients in research projects without telling the hospital.

In a 2008 letter from Jackson officials to university leaders, Nathan Anspach, who was vice president for physician services at the hospital, described a series of failed efforts 'to stop new clandestine research' at Jackson by university doctors.

Meetings with university officials aimed at stopping the practice 'went badly,' Mr. Anspach wrote, and Dr. Goldschmidt, the medical-school dean, was 'outwardly annoyed' by Jackson's requests for information that would help it identify research patients in the building.

Ms. Shalala was copied on at least some of the correspondence, including a 2006 letter in which Marvin O'Quinn, then-president and chief executive of the Jackson Health System, which runs Jackson Memorial, warned Dr. Goldschmidt about the legal risks of submitting claims for patient care that should be covered by a medical study.

The current director of compliance at Jackson Health System, Diana Salinas, said the allegations are a matter of investigation by the two federal agencies. Ms. Shalala and Dr. Goldschmidt told The Chronicle that they were unfamiliar with the matter. 'This must not be a very big issue,' Ms. Shalala said, 'because none of the Jackson senior leadership has ever brought it up with me.'

Finally,

And the departing chief executive of the Jackson Health System, Eneida O. Roldan, whose appointment two years ago was supported by the university, said medical-school officials made clear from the start 'that they were going to take cardiology across the street.'

Ms. Dixon-Shim, of the support-workers' union, is among those who say they've seen it happen. 'Most of the indigent patients, they're staying at Jackson,' she says. 'But most of the private patients, the physicians are taking them over to their area' at the university-owned hospitals.

Note that we previously discussed how Jackson's financial troubles lead to a bid by for-profit Steward Health Care to take it over.

Summary

So, through her mutiple roles that allowed her to serve at several key nodes of networks of influence in health care, one person has been linked to multiple dysfunctional aspects of US health care that arguably have been responsible for our increasing costs, declining access, and poor quality.  Note that these multiple roles seem to have been logically and even ideologically inconsistent, suggesting that multiplying her roles within the  networks may have been more compelling to her than logical or ideological rationales for particular actions.

We have discussed before, the leadership of health care organizations has become incredibly interrelated, interlocked, and incestuous. It appears that top leaders of various health care organizations may be more familiar with and identify more with each other, and with other hired executives and managers, than with their organizations, their organizations' missions, and their organizations' professionals, staff, students, clients, and patients.  It now appears reasonable to characterize the relationships among health care leaders as embedded networks of influence. 


So to repeat- I strongly believe that there needs to be much more investigation, academic, journalistic, and perhaps legal, of the identity, nature, and culture of the leaders of health care, and their relationships. A few bloggers cannot do it all. Obviously, the anechoic effect mitigates against medical and health care academics looking into their own leaders. However, failing to understand who is leading our march to the brink of health care failure ought not to be something such academics would want on their conscience.

Finally, and obviously, health care organizations need leaders that uphold the core values of health care, and focus on and are accountable for the mission, not on secondary responsibilities that conflict with these values and their mission, and not on self-enrichment. Leaders ought to be rewarded reasonably, but not lavishly, for doing what ultimately improves patient care, or when applicable, good education and good research.

If we do not fix the severe problems affecting the leadership and governance of health care, and do not increase accountability, integrity and transparency of health care leadership and governance, we will be as much to blame as the leaders when the system collapses.