Turn, Turn, Turn - Another Health Care Revolving Door Update

It has been a while since our last revolving door update, so it's time to take another spin.


Summary of the Revolving Door Phenomenon

Before we get to some cases, though, let me summarize an important article on the revolving door that came out since.  This was published by U4, the "anti-corruption resource center" NGO based in lovely Bergen, Norway.  The title was "The Revolving Door Indicator: Estimating the distortionary power of the revolving door."  Although it's main point was to summarize a new measure the importance of the revolving door in a particular economic sector, it started with a very useful summary of the revolving door phenomenon.  It included a useful definition

According to Transparency International UK, the term 'revolving door' refers to 'the movement of   individuals between positions of public office and jobs in the private sector, in either direction.'

To expand,

The revolving door involves two distinct types of movement.  The first is from the public to the private sector, as regulators (ministers, cabinet secretaries, legislators, high-level officials, advisers) leave the public sector to enter the private sector they have regulated. The second is from the private to the public sector, as high-level executives of regulated companies enter the executive branch, the legislature, or key regulatory agencies.

It also included some idea of prevalence

The revolving door is particularly common in countries where explicit bribes cannot be paid safely, and thus regulators look forward to future employment with the regulated firms

We will discuss what the U4 report said about the implications of the revolving door after a quick review of the cases we have run across since May, 2014, involving the US government.  They will be listed in order of their appearance in the news.

Former National Coordinator for Health Information Technology and Colleague at ONC to Aledade (Company Supporting Accountable Care Organizations)

In June, 2014, various versions of this story appeared.  The Modern Healthcare version stated,

Dr. Farzad Mostashari, former head of the Office of the National Coordinator for Health Information Technology, is starting a new firm, Aledade, to help independent primary-care physicians form accountable care organizations. The startup has $4.5 million in seed funding from venture capital firm Venrock.

Independent practices looking to form ACOs have to expend money 'to hire the people, to get the agreements, to get the licenses, to do the legal work, to hire the executive director, and a medical director, practice transformation, the analytics software, the data warehousing, the EHR interfaces,' he said. 'All of that takes money,' often $1 million to $2 million.

Note that the current concept of the "accountable care organization" [ACO] includes heavy dependence on the electronic health records (EHRs) and other health information technology that Dr Mostashari had been so vigorously promoting as head of the ONC, so this transition seems to fit the revolving door rubric.

It also turns out that one of Dr Mostashari's former ONC colleagues was already at Aledade  

Mostashari will be joined by Mat Kendall, a former leader with the regional extension center program at ONC, who will be executive vice president

Former US Senators to Lobby for Medtronic and Covidien

In August, 2014, per Bloomberg,

Former U.S. Senators Trent Lott and John Breaux are part of a lobbying effort by companies that want to preserve the option of reducing their corporate taxes by moving their legal addresses overseas.

Nine U.S. companies that have sought cross-border mergers for tax reasons, are considering doing so or are targets of such deals have been pressuring lawmakers since April on legislation to stop the practice, federal disclosure reports show.

They include Medtronic Inc., the Minneapolis-based company that is seeking to acquire Dublin-based Covidien Plc. Medtronic paid Breaux-Lott Leadership Group $200,000 in June to block legislation from moving forward. Breaux, a Democrat, was once a member of the Senate Finance Committee. Lott, a Republican, is a former Senate majority leader.

Note that as Senator, Breaux had an important role in health policy, particularly the passage of the Affordable Care Act (ACA).

Former Assistant Secretary of Health and Human Services to Drinker Biddle & Reath (Lobbying Firm)

In August, 2014, per the Washington Post,

District Policy Group, the lobbying unit of law firm Drinker Biddle & Reath, is experimenting with a new model of using outside consultants to capture new business in the health-care field.

The group, which lobbies primarily on health-care policy, has taken the unusual step of forming an advisory board that includes external consultants. The outside advisers are not employees of the firm and instead receive a consultant’s fee, which means the firm does not have to pay their salary or benefits, but can still tout their services to clients.

The board was formed in July and is made up of four Drinker Biddle attorneys and two outside consultants, Tracy Sefl, a Democratic communications strategist, and Michael O’Grady, a health economics specialist and former Health and Human Services assistant secretary under President George W. Bush. Both Sefl and O’Grady have day jobs running their own consulting shops.

This seems to require no further comment.

Former Federal Trade Commissioner to Herbalife

In October, 2014, per the Hill,

Herbalife has hired a former federal regulator to run its compliance program as it deals with allegations of running a pyramid scheme.

Pamela Jones Harbour, who served at the Federal Trade Commission (FTC) from 2003 to 2010, has been named the company’s senior vice president of global member compliance and privacy, according to media reports.

The FTC opened a probe into Herbalife’s business practices earlier this year after lobbyists, interest groups and policymakers asked for a review.

Shortly after the FTC announced its investigation, the FBI began looking into how the direct-selling company recruits new distributors.

Herbalife is best known for its meal-replacement shakes and dietary supplement products. Harbour says she has been a Herbalife customer since 2004, according to Reuters, favoring the company’s Formula 1 shake mix.

Note that the FTC devotes considerable energy to health care issues, and Herbalife styles itself a "a global nutrition company" which makes "weight management" and "energy and fitness" products.

Director of US Centers for Disease Control and Prevention (CDC) to Merck as President of Merck Vaccines, then Executive Vice President for Strategic Communications, Global Public Policy and Population Health

In December, 2014, per a news release on BusinessWire,

Merck (NYSE:MRK), known as MSD outside the United States and Canada, today announced the appointment of Dr. Julie Gerberding, 59, as executive vice president for strategic communications, global public policy and population health, effective Dec. 15. In this newly created Executive Committee position, Gerberding, who most recently served as president of Merck Vaccines, will be responsible for Merck’s global public policy, corporate responsibility and communications functions, as well as the Merck Foundation and the Merck for Mothers program.

Note that

Prior to joining Merck, Gerberding served as director of the U.S. Centers for Disease Control and Prevention (CDC) from 2002-2009 and before that served as director of the Division of Healthcare Quality Promotion.

From UnitedHealth (Optum Subsidiary) Executive to Administrator of the Center for Medicare and Medicaid Services (CMS) of the Department of Health and Human Services

In January, 2015, per the Business Journals,

Marilyn Tavenner's replacement at the Center for Medicare and Medicaid Services is a former executive at one of the contractors for the initially botched HealthCare.gov insurance exchange.

Andy Slavitt, former group executive vice president of United Health Group's Optum unit, joined CMS last June to help fix HealthCare.gov. Now he'll be acting administrator of CMS.

An Optum subsidiary, Quality Software Services Inc., was one of the original contractors for HealthCare.gov. QSSI developed the exchange's data services hub and a registration tool that allows users to create secure accounts.

Apparently nothing succeeds like failure.


Discussion

I apologize for the somewhat desultory way I have been summarizing health care revolving door cases.  My excuse is that such cases are almost never publicized as such.  Most of the stories above were found when looking for something else.  Despite its potential importance, the revolving door phenomenon gets little consistent coverage in the news media, and the particular issue of the revolving door affecting health care is particularly anechoic.  (If one searches for "'health care revolving door," one finds discussion of patients who are frequently re-admitted to the hospital.)  There is one website devoted to the revolving door affecting the US government, (OpenSecrets.org has a database here.)   However, it is not searchable by sector, and seems not to be complete (that is, for example, it fails to contain most of the cases I listed above). 

None of the cases above got more than minimal media coverage, yet they all involved people who at one time held high government positions, including US Senators, director of the Centers for Disease Control and Prevention (CDC), a Federal Trade Commission (FTC) commissioner, the director of Center for Medicare and Medicaid Services (CMS) within the US Department of Health and Human Services (DHHS), an Assistant Secretary of DHHS, and the National Coordinator for Healthcare Information Technology. So the anechoic effect persists regarding this issue.

Yet the revolving door is a significant issue.  As discussed in the U4 article, 

The literature makes clear that the revolving door process is a source of valuable political connections for private firms. But it generates corruption risks and has strong distortionary effects on the economy, especially when this power is concentrated within a few firms.

Also, the principal way the revolving door can benefit a company is...

The rent-seeking channel: The revolving door is used to capture public resources, through legal and illegal means, rather than to increase production or efficiency.  Transparency International UK (2011) and the OECD (2009) point out that the revolving door may lead to various schemes involving conflicts of interest, both during and after a regulator’s term in public office. This in turn generates undue bureaucratic and political power for firms using such schemes

Furthermore,

The revolving door is also related to lawful behaviours (Brezis 2013), termed 'legal corruption' by Kaufmann and Vicente (2011). This phrase refers to 'efforts by companies and individuals to shape law or policies to their advantage, often done quasi-legally, via campaign finance, lobbying or exchange of favors to politicians, regulators and other government officials. […] In its more extreme form, legal corruption can lead to control of entire states, through the phenomenon dubbed ‘state capture,’ and result in enormous losses for societies'

So,

Firms connected through the revolving door may therefore derive undue advantages by legally and illegally influencing the formulation, adoption, and implementation of laws, regulations, and public policies. For example, when firms are connected to (former) members of Parliament [or the legislature], they may influence the enactment of laws and regulations in their favour. When firms are connected to (former) ministers [or in the US, cabinet secretaries] and their advisers, they may influence the upstream formulation and implementation of policies and regulations in their favour. When firms are connected to (former) high-level officials, they may influence the downstream implementation of regulations in their favour.

Finally,

Empirical studies suggest that the revolving door gives firms political and bureaucratic power that enables them to divert state resources by biasing public procurement processes (Goldman, Rocholl, and So 2013; Cingano and Pinotti 2013), obtaining preferential access to public finance (Faccio, Masulis, and McConnell 2006; Boubakri et al. 2012), and unduly benefiting from tax exemption, arrears, and subsidies (Faccio 2010; Slinko, Yakovlev, and Zhuravskaya 2005; Johnson and Mitton 2003).

Therefore, firms politically connected through the revolving door tend to shape laws and regulations in their favour and to divert state resources to their own benefit. They are unlikely to gain a productivity advantage, and indeed may reduce productivity in the private and the public sectors. The literature on state capture and political influence (Hellman and Kaufmann 2004; Hellman, Jones, and Kaufmann 2003; Slinko, Yakovlev, and Zhuravskaya 2005) supports the thesis that such distortions result from the high concentration of political and bureaucratic power among a few powerful firms.

That all suggests that the revolving door in health care ought to get attention beyond posts in Health Care Renewal, but so far there has been precious little of that.  The continuing egregiousness of the revolving door in health care shows how health care leadership can play mutually beneficial games, regardless of the their effects on patients' and the public's health.  Once again, true health care reform would cut the ties between government and corporate leaders that have lead to government of, for and by corporate executives rather than the people at large

ONC on healthcare IT and patient rights: These systems "have to be rolled out to know where the problems lie"

An anonymous commenter to my blog post about the USA Today article on bad health IT (http://hcrenewal.blogspot.com/2015/02/former-onc-director-david-blumenthal.html) noted this, that I myself missed:

Anonymous said...

Gettinger's comment is stunning, especially coming from a director of safety and quality for HHS' Office of the National Commissioner for Health Information Technology:

 "You don't just plunk down EHRs and everyone's happy. You use an incremental kind of approach (and) that takes time, that takes energy and that takes effort," he says, adding that they have to be rolled out to know where the problems lie.

February 1, 2015 at 9:17:00 PM EST

(Writing of ONC's Acting Director Andrew Gettinger MD, Office of Clinical Quality and Safety, http://www.healthit.gov/newsroom/andrew-gettinger-md.)

If quoted accurately, that's likely the end of the line for me regarding ONC and any concerns about patients' rights.  Patients are to be used as live subjects to debug software.

That is advocating human subjects experimentation without informed consent with a technology known to cause increased risk, harm and death, and there's nothing to debate there.  This statement would be perhaps appropriate for someone writing about animal experimentation. 

My own mother's dead, in fact, from that type of attitude.

Gettinger's statement will serve as the cover slide to my upcoming legal presentations to American Association for Justice state chapters and at the AAJ national meeting later this year, as well as to the Association of Health Care Journalists (AHCJ), to which I've been invited to speak.

-- SS

New ONC Director Karen De Salvo seems no better than her predecessors - risk, harms and deaths due to health IT apparently OK for now, and all we need is a "Safety Center"

Karen De Salvo has assumed the role of Director of ONC, the office of the National Coordinator for Health IT at HHS (http://www.healthit.gov/newsroom/dr-karen-desalvo-md).

A pretty face, but here's evidence of the same old tired political hucksterism and spin concerning healthcare information technology. 

In response to perhaps the most candid exposé in the public media to date of the risks and defects of current commercial health IT, industry conflicts of interest, and injuries and deaths, that appeared on July 20, 2014 in the Boston Globe under the title "Hazards tied to medical records rush" (http://tinyurl.com/lm7x34h) by the Globe's Washington bureau chief Christopher Rowland, Ms. De Salvo authored a letter to the editor.

DeSalvo is new to the job, but not to the political message of unbridled health IT hyper-enthusiasm and pointless "Safety Centers", instead of formal regulation as in other mission critical industries using IT (including pharma, for one).

Her letter to the Boston Globe attempts to put lipstick on a pig regarding a technology largely reviled by physicians and nurses due to its poor user experience and defects (rampant due to the free-for-all of this healthcare sector's unprecedented regulatory accommodation, that is, no regulation) that cause patient endangerment.  See http://hcrenewal.blogspot.com/2010/01/honest-physician-survey-on-ehrs.html, http://hcrenewal.blogspot.com/2014/02/ehrs-real-story-sobering-assessment.html and http://hcrenewal.blogspot.com/2013/11/another-survey-on-ehrs-affinity-medical.html as just a few examples.

What politicians do:  they spin like neutron stars

Her letter, with my comments:

http://www.bostonglobe.com/opinion/editorials/2014/07/26/many-health-success-stories-note/MyyGM3uq2LU0GqGLLqYJ7M/story.html

Letters | CHALLENGES IN THE MOVE TO ELECTRONIC MEDICAL RECORDS

July 27, 2014

Many health-IT success stories to note

I was disappointed to read “Risks, some dire, tied to medical records rush” (Page A1, July 20), as it failed to mention any examples of patients and their health care providers benefiting from the use of health information technology, including electronic health records. 

As to "disappointment", nearly the entire healthcare and lay press is filled with "success stories" and other propaganda.  There is, in fact, no need for artificial and industry-favoring "balance" in the rare article about the downsides. The industry has its own very large mouthpiece.  (This is the response we at HC Renewal give to critique that we're not "balanced" in every post.  It would be as if every article on defective avionics and pilot training issues that cause hundreds to die (e.g, Air France Flight 447, http://en.wikipedia.org/wiki/Air_France_Flight_447) should be accompanied by articles on just how many non-fatal flights there are, too; or as if every article about criminals has to mention there are good people, too.)

Such success stories are playing out across the country daily, including in Boston, and their omission from the article incompletely portrays the important role of electronic health records in improving patient safety and outcomes.

Is this and example of a far-left "you have to break an egg to make an omelette" (even if the 'egg' is a human being) thinking?   This statement, attempting redirection from the downsides, in effect says: "It's OK to sacrifice 100 in experimentation to (potentially) 'save' 10,000 - or 1,000 to 'save' 100,000."

Problem is, this is not how Western medicine is supposed to work - by HHS's own policies on research ethics, and international agreements and treaties based on work that arose after WW2's medical abuses, no less, e.g., the Nuremberg laws.

In medicine, legal and ethical standards such as the NIH Guidelines for Conduct of Research Involving Human Subjects (http://grants.nih.gov/grants/policy/hs/regulations.htm), the World Medical Association Declaration Of Helsinki (http://www.wma.net/en/30publications/10policies/b3/) and others restrict introduction of new drugs and medical devices without informed consent, and without extensive preclinical and clinical testing and post-marketing surveillance, especially when risks of the technology are unknown.  

And health IT is decidedly experimental, considering we don't even know the true extent of harms, by multiple admissions (by FDA, IOM, ECRI etc., see http://hcrenewal.blogspot.com/2014/04/fda-on-health-it-risk-reckless-or.html).

Also see my post Mar. 12, 2012 post "Human Subjects Experimentation Directives Ignored in the Grand Health IT Experiment?" at http://hcrenewal.blogspot.com/2012/03/human-subjects-experimentation.html.  The highlights, emphases mine:

Directives for Human Experimentation
NUREMBERG CODE

1. The voluntary consent of the human subject is absolutely essential. This means that the person involved should have legal capacity to give consent; should be so situated as to be able to exercise free power of choice [that is, to opt-out - ed.], without the intervention of any element of force, fraud, deceit, duress, over-reaching, or other ulterior form of constraint or coercion; and should have sufficient knowledge and comprehension of the elements of the subject matter involved as to enable him to make an understanding and enlightened decision. This latter element requires that before the acceptance of an affirmative decision by the experimental subject there should be made known to him the nature, duration, and purpose of the experiment; the method and means by which it is to be conducted; all inconveniences and hazards reasonable to be expected; and the effects upon his health or person [information on HIT risk exists, such as on this blog - ed.] which may possibly come from his participation in the experiment. The duty and responsibility for ascertaining the quality of the consent rests upon each individual who initiates, directs or engages in the experiment. It is a personal duty and responsibility which may not be delegated to another with impunity.
2. The experiment should be so conducted as to avoid all unnecessary physical and mental suffering and injury.
3. No experiment should be conducted where there is an a priori reason to believe that death or disabling injury will occur; except, perhaps, in those experiments where the experimental physicians also serve as subjects.
4. During the course of the experiment the human subject should be at liberty to bring the experiment to an end [go back to paper - ed.] if he has reached the physical or mental state where continuation of the experiment seems to him to be impossible.
5. During the course of the experiment the scientist in charge must be prepared to terminate the experiment at any stage [go back to paper - ed.], if he has probable cause to believe, in the exercise of the good faith, superior skill and careful judgment required of him that a continuation of the experiment is likely to result in injury, disability, or death to the experimental subject.

Perhaps they don't teach these things at Harvard?

Back to De Salvo's letter:

A fully electronic health system can help identify and prevent potential medical errors. The Office of the National Coordinator for Health IT has taken steps to address the safe use and implementation of electronic health records, including sponsoring the Institute of Medicine report referenced in the story.

And since that 2012 report, which acknowledges that bad health IT causes risks, errors and harms to a definite but unknown magnitude (see bottom section of my post at http://hcrenewal.blogspot.com/2012/03/doctors-and-ehrs-reframing-modernists-v.html), ONC has done next to nothing. People are exposed to risk, harms and deaths and that seems just fine to ONC, for if it were not, they would have acted aggressively - say, as if a type of jet plane, or nuclear power plant had been revealed to pose risks and dangers to the community.

As Mr. Rowland himself pointed out in the Boston Globe article:

... In 2011, the Institute of Medicine said the lack of a central repository for reporting error-prone software, patient injuries, and deaths, combined with nondiclosure and confidentiality clauses in vendor contracts, “pose unacceptable risks to safety.”

It strongly recommended that the Obama administration mandate that vendors report “deaths, serious injuries, and unsafe conditions” to a centralized, government-designated entity. Such reports should be made available to the public, it said, without information that would identify individual patients and providers.

Three years later, no such reporting system exists.

Instead, ONC takes the GM ignition switch approach (http://en.wikipedia.org/wiki/2014_General_Motors_recall):

... On February 7, 2014, GM recalled about 800,000 of its small cars due to faulty ignition switches, which could shut off the engine during driving and thereby prevent the airbags from inflating ... GM says it expects to charge $1.2 billion against its second quarter earnings as a result of its ongoing recalls, and the charge could get worse as lawsuits and investigations continue. 

The fault had been known to GM for at least a decade prior to the recall being declared.  Some have suggested that the company actually approved the switches in 2002 even though they knew they might not meet safety standards.

The company is facing multiple investigations into why it did not attempt to fix these faulty ignitions sooner, including a federal criminal probe, as well as a probe led by Anton Valukas, the latter of which produced a report which GM made public on June 5, 2014.

Instead of a serious approach to safety, ONC and De Salvo champion window dressing:

Most recently, the Office of the National Coordinator, the Food and Drug Administration, and the Federal Communications Commission issued a proposed plan that would include the creation of a health IT safety center, which would assist in the voluntary reporting of health IT-related medical errors. Many patient advocates, medical professionals, and other stakeholders have expressed support for this approach.

"Many?" - The consensus views, often dominated by industry insiders and others with conflicts of interest, is how ONC and De Salvo apparently think safeguarding the public is to be done.  Those who veer from this "consensus" with facts of risk and harms are to be ignored.

As to the hypocrisy and absurdity of a toothless "health IT safety center", see my April 9, 2014 post "FDA on health IT risk: reckless, or another GM-like political coverup?" at http://hcrenewal.blogspot.com/2014/04/fda-on-health-it-risk-reckless-or.html.

The hundreds of thousands of providers successfully and safely using electronic health records today show that health IT can, and does, improve health and health care.

Dr. Karen DeSalvo
National coordinator for health information technology
Department of Health and Human Services
Washington

Ms. De Salvo apparently never got this Mar. 14, 2014 CMS memo that was sent in response to a query by the American Association  of Physicians and Surgeons:

CMS: "we do not have any information that supports or refutes claims that a broader adoption of EHRs can save lives."  [But let's spend hundreds of billions of dollars anyway.]  Click to enlarge.

However, in politics, such issues do not seem to matter as compared to passing along the party line. 

In medicine, they do matter.  Very much so (see http://hcrenewal.blogspot.com/2011/06/my-mother-passed-away.html).

-- SS