"Toxic and Dangerous?" - The Watchdog vs Medtronic's Man at the VA

An odd story that appeared earlier this month linked several people we have discussed on Health Care Renewal.

On one hand, we posted about how Dr David Polly, a spine surgeon at the University of Minnesota, testified before the US Congress in support of research on treatments of bone injuries afflicting US soldiers.  He did not then reveal that he had been paid more than one million dollars for consulting by Medtronic, the manufacturer of a bone growth product used to treat such injuries, also the source of payments of his expenses for the trip to Washington.  At the time, we suggested this case was a reminder to be skeptical about academics who are really stealth health policy advocates for industry.

On the other hand, in a post about renewed payments by makers of artificial joints to orthopedic surgeons after the US government advocated a series of deferred prosecution agreements as a cure for such apparent conflicts of interest, we quoted Dr Charles Rosen, "Nothing will change until someone goes to jail. It’s a big game."

The link between them appeared in two related articles.  First, the Minneapolis Star-Tribune reported on the appointment of another Medtronic consultant to a top leadership post in the US Department of Veterans Affairs:

In a Sept. 28 letter to Veterans Affairs Secretary Eric Shinseki, Sen. Charles Grassley asks whether Dr. Stephen Ondra's 'policy advice and decisions at the VA are vulnerable to potential conflicts of financial interest' given his prior relationship with the Fridley-based medical technology giant.

Ondra and Medtronic mutually severed their financial relationship in July 2008. But just prior to that, Medtronic paid him $3.6 million in royalties related to spine-surgery instruments, according to financial disclosure forms he submitted to the VA.

It appears that Medtronic lobbied hard for the appointment of its former consultant:

While noting that Ondra is not a Medtronic employee, Grassley characterized the surgeon's relationship with the company as 'unambiguous and substantial.' Further, Grassley notes that Ondra 'was able to penetrate the political establishment at its highest level to obtain a senior position at the VA' because of his previous ties to the company.

The details are:

Ondra's candidacy for his current post was supported by Medtronic Chief Executive William Hawkins III, who wrote a letter of recommendation to Secretary of Defense Robert Gates on his behalf. This was at the suggestion of Dr. S. Ward Casscells III, who was then assistant secretary of defense for health affairs, according to a series of internal e-mails obtained by the Star Tribune.

'I have known Dr. Casscells for many years and was comfortable in approaching him on this topic,' Hawkins wrote in a Jan. 16, 2009 e-mail to the then-head of Medtronic's $3.5 billion spine device business, Steve La Neve. (La Neve left that position earlier this year in a corporate reorganization.)

La Neve replied a day later that Ondra wanted to meet with him or with Hawkins before a reference letter was sent, 'so that it can capture his work on appropriate industry-physician relationships and transparency.'

(It is not clear whether the last sentence above is meant to be an ironic pun about regulatory capture.)

A post on Pharmalot explains what Dr Ondra's first priority was once he got his government job:

Within a few days, however, Ondra objected to the proposed nomination of another spine surgeon, Charles Rosen, as US Surgeon General. Why? As founder of the Association of Medical Ethics, Rosen publicly questioned consulting ties between doctors and device makers and, for his trouble, allegedly suffered retaliation by members of the American Academy of Orthopaedic Surgeons (see this). In a January 21, 2009 email exchange with Davd Polly, a University of Minnesota professor who was another Medtronic consultant, Ondra acknowledged never having heard of Rosen, but reacts viscerally to a recent story in The Orange County Register that details Rosen’s self-appointed role as a watchdog.

'Since this individual is toxic and dangerous I would leave nothing to chance,' he responds to Polly, who had forwarded the newspaper story to Ondra. Polly, by the way, is a nationally known spine surgeon who came under congressional scrutiny for his work several years ago for the device maker, something that Rosen had criticized (look here). 'This moment in history is too important to our country to let such a disreputable and dangerous person continue his self-promotion crusade,' Ondra continues. 'I would encourage you and any other physicians and citizens to weigh in on this to HHS and public health.'

Got that?  Medtronic pays Dr Ondra millions.  Medtronic pushes for Dr Ondra's appointment to a top VA leadership position.  Once in that position, Dr Ondra confers with another million dollar Medtronic consultant, and then works to block the appointment as Surgeon General of a known foe of the cozy web of conflicts of interest that afflicts medicine.  Thus do conflicts of interest work to promote the capture of government by special interests. 

The Pharmalot post concluded with this opinion:

'It’s obvious that Dr. Ondra benefited from his relationship with Medtronic. And since he worked to kill off the nomination of Chuck Rosen, Medtronic’s main critic, I can see how Medtronic benefited from Dr. Ondra,' says Paul Thacker, a former Grassley staff investigator and US Army specialist. 'What I don’t understand is how I and other veterans have benefited from all this back-door dealing. What’s in it for us?'

That is a good question. It appears that nothing was in it for veterans, or the US public. But everything was in it for Medtronic and the doctors it pays so well.  I would submit that it is the readiness of big health care corporations to create conflicts of interest that seduce physicians to put their loyalties to their corporate sponsors ahead of the public interest that is toxic and dangerous.

This convoluted story suggests the urgent need for full disclosure of all relationships between physicians and others who make decisions and wield influence in health care on one hand, and health care organizations on the other hand.  If physicians want their health policy efforts to be met with anything other than guffaws and cynical eye rolls, they need to seriously consider swearing off the sorts of cushy corporate relationships that Dr Ondra and Dr Polly embraced.

RUC Off - the New England Journal Once Again Fails to Mention the Unmentionable

Last week, the influential New England Journal of Medicine published an article by Bruce Vladek entitled "Fixing Medicare's Physician Payment System."(1)  Although only identified as working for Nexara, a health consulting business, Mr Vladek was a former administrator of what was then called the Health Care Financing Administration (HCFA) of the US Department of Health and Human Services (DHHS), the part of the department that then ran the US Medicare program.  Vladek thus can reasonably be viewed as an expert on Medicare. 

Vladek identified two main problems with the current way physicians are paid by Medicare.  First,

Medicare is captive to an arbitrary, if elegantly conceived, formula for total payments to physicians — the sustainable growth rate (SGR). In the alternate reality of the Congressional budget process, the SGR will reduce Medicare's physician payments, which already trail those from private insurers, as far into the future as the eye can see.

Second,

there is widespread consensus that the relative fees in the current system are a significant cause of the growing imbalance in supply and utilization between primary care and specialty services in the U.S. health care system. That imbalance, in turn, is widely perceived as a major cause of both excessive costs and inadequate quality of care. This is not just a Medicare problem: the Medicare Resource-Based Relative Value Scale is used by most private insurers to set relative prices for physicians.

Vladek expanded on the second point as follows

the basic mechanics of the Medicare Physician Fee Schedule, which was supposed to change physician payment to increase rewards for primary care services at the expense of procedural and interventional services, appears to have gone totally off track. For various reasons, the fee schedule, which originally did increase the prices of evaluation and management services relative to those of surgery or invasive procedures, turned in the other direction through the process of annual updating of relative value units. Surgeons, radiologists, and some medical specialists are now paid two to three times as much per hour as providers of cognitive services, which is about where we began 20 years ago; this was the situation that the fee schedule was supposed to fix.

The question of the relative virtues of primary versus specialty care can be debated ad nauseam, but in other wealthy countries that serve their populations at least as well as we do, the ratio of primary care physicians to specialists is much higher than in the United States, and the gap in compensation is much smaller or the poles even reversed. Young physicians, burdened by increasing educational debts, may well choose a career path on the basis of a major difference in compensation, especially when the better-compensated positions require less ongoing responsibility for patients and offer better working hours.

This is about all that Vladek wrote about how the imbalance between how Medicare pays for primary care and other "cognitive services," and for procedures came about. Vladek, and many others have argued that this imbalance has lead to strong financial incentives that have been slowly destroying primary care, and strong incentives that have lead to the use of too many procedures, both strong drivers of rising costs in the most expensive health care system in the world.

Vladek noted vaguely that "through various reasons," the incentives were imbalanced by "the process of annual updating of relative value units."

However, as we have discussed in several blog posts, a lot more is known about how this process got "totally off track."

In fact, in 2007, an article by Bodenheimer et al in the Annals of Internal Medicine explained the problems in considerably more detail.(2)  As we wrote then, Its main points included

• Proceduralists are often able to learn how to do their procedures more quickly, and thus increase the volume of procedures done, while office and hospital visits can only be sped up so much.
• The process used to update the RBRVS system is biased towards procedures for three main reasons: 1. "specialty society influence in proposing RVU [relative value unit] increases," 2. the specialist-heavy RUC [Relative Value Scale Update Committee] membership," and 3. "the desire of RUC specialists to avoid increases in evaluation and management [that is, cognitive, or non-procedural] RVUs."
• Medicare now uses a formula to limit increases in overall spending. The use of this formula leads to across the board cuts in all reimbursements. Since cognitive services reimbursements were never high to begin with, and have rarely been individually increased, these cuts tend to have disproportionate decreases.
• Private insurers and managed care organizations tend to follow Medicare's lead in their reimbursement procedures, but tend to tilt the playing field even more in favor of procedures versus cognitive services. Several studies showed that such payers paid more for procedures than did Medicare, but about the same for office and hospital visits.

The role of the RBRVS Update Committee (RUC) is complex and in many ways mysterious.  As we wrote before, to update the system, the Center for Medicare and Medicaid Services (CMS) relies almost exclusively on the advice of the RBRVS Update Committee. The RUC is a private committee of the AMA, touted as an "expert panel" that takes advantage of the organization's First Amendment rights to petition the government. Membership on the RUC is allotted to represent specialty societies, so that the vast majority of the members represent specialties that do procedures and focus on expensive, high-technology tests and treatments. However, the identities of RUC members are opaque, and the proceedings of the group are secret.

To expand on the penultimate point, the current page on the AMA web-site that describes the RUC only lists its members in terms of their specialties and organizational affiliation.  Their names do not appear.  A response to a previous post by me on the subject by the then Chair and Chair-Elect of the RUC suggested that the RUC membership is not quite secret. They stated that "a list of the individual members of the RUC is published in the AMA publication, Medicare RBRVS 2009: The Physicians Guide." This publication is available from the AMA here for a mere $71.95. However, the book is not on the web, or in my local or university library, and I have no other way to easily access it.  Thus, the RUC membership as at best relatively opaque.

To expand on the ultimate point, as Goodson(3) noted, RUC "meetings are closed to outside observers except by invitation of the chair." Furthermore, he stated, "proceedings are proprietary and therefore not publicly available for review."

The fog surrounding the operations of the RUC seems to have affected many who write about.  We have posted (here, here, and here) about how previous publications about problems with incentives provided to physicians seemed to have avoided even mentioning the RUC.  In 2010, post the US recent attempt at health care reform, the RUC seems to remain the great unmentionable.  Even the leading US medical journal seems reluctant to even print its name. 

Thus, as we noted before, however, the mysteries about it remain:

• How did the government come to fix the payments physicians receive? Government price-fixing has not been popular in the US, yet this has caused no outcry.
• Why is the process by which they are fixed allowed to be so opaque and unaccountable? Why are there no public hearings on the updates, and why is there no input from practicing physicians or organizations other than those related to the RUC?
• How did the RUC become de facto in charge of this process?
• Why does the AMA keep the membership on the RUC so opaque, and give no input into the RUC process to its general membership?
• Why is the RUC membership so dominated by procedural specialists? Why were primary care physicians, who made up at least a sizable minority of physicians when the update process was started, not represented according to their numbers?
• Why has there been so little discussion of the RUC and its responsibility for an extremely expensive health care system dominated by high-technology, expensive, risky and invasive procedures?

Without discussing how the incentives for physicians became so unbalanced, do we really expect we can fix them?  In this case, the persistence of the anechoic effect seems to be doing real damage to the discussion of the critical issues we in the US face today.
References


1. Vladek B. Fixing Medicare's physician payment system. N Engl J Med 2010; 362:1955-1957. (Link here.)
2. Bodenheimer T, Berenson RA, Rudolf P. The primary care-specialty income gap: why it matters. Ann Intern Med 2007; 146: 301-306. (Link here.)
3. Goodson JD. Unintended consequences of Resource-Based Relative Value Scale reimbursement. JAMA 2007; 298(19):2308-2310.  (Link here.)

Corporate Proxies Suggest CEOs Rewarded for Influencing Health Care Reform

We have frequently discussed the often outsized, if not outrageous compensation awarded to top leaders of health care organizations.  Such compensation may seem disproportionate to the leaders' real-world achievements, and may contrast with organizational actions that seem inept, mission-hostile, or unethical.

In perusing this year's crop of proxy statements from some of the biggest US health care corporations, I noted that some provide some narrative, qualitative justification for their top leaders pay.  I was struck by three similar statements:

Johnson and Johnson

We recently discussed the contrast between Johnson and Johnson CEO William Weldon's gargantuan compensation and his detached response to the findings of an inspection of one of his company's factories that lead to its shutdown and the recall of its products.   According to the company's 2010 proxy statement, Mr Weldon's total compensation approved  in 2010 was $19,847,026.   The proxy statement included this overview of his performance:

The Board believes that Mr. Weldon generally exceeded expectations despite substantial economic, political, regulatory and competitive challenges as well as significant patent expirations. As referenced in the table above, the Company delivered solid financial results and positioned itself for future growth.

Under "strategic results" was this statement:

Mr. Weldon played an effective role in helping shape health care policy around the world and has been very involved with efforts on U.S. Health Care Reform. Mr. Weldon’s personal involvement with key leaders and organizations has ensured the interests of the Company are well represented.

Pfizer

We recently discussed the contrast between Pfizer Inc CEO Jeffrey Kindler's sizable compensation and the number and size of lawsuits alleging unethical conduct that the organization has settled, and its criminal conviction as a "racketeering influenced and corrupt organization" (RICO). According to the company's 2010 proxy statement, Mr Kindler's total compensation in 2009 was $14,898,038. The proxy statement included an Executive Compensation Discussion and Analysis. Its summary of Mr Kindler's performance was:

The committee believes that Mr Kindler's leadership was a significant factor in the continued progress made by Pfizer in 2009 in strengthening the foundation for future growth and long-term success.

It also specifically addressed Mr Kindler's "industry leadership":

During 2009, Mr Kindler was actively involved, through both Pfizer and external organizations, in developing and advancing US and global public policies that serve the overall interest of our Company and our shareholders, as well as doctors and patients. These efforts included constructive participation in the US legislative process to advance Pfizer's goals of achieving a more rational operating environment....

UnitedHealth Group

We recently discussed the contrast between UnitedHealth Group CEO Stephen J Helmsley's large total compensation and the profit he recently made from the sale of stock options and various questions raised about his company's ethical performance.  According to the company's 2010 proxy statement, his 2009 total compensation was $8,901,916. The company's 2010 proxy statement stated his compensation was based upon a variety of factors, including:

Positive participation and leadership of the Company in the health care reform and modernization debate

Summary

We have noted how health care organization may be gripped by "compensation madness," caused by "insiders hijacking established organizations for their personal benefit."  One could view the statements above as just one form of post-hoc justification for compensation madness.  It is possible that timid, if not crony boards are simply getting more inventive in their rationalizing CEOs' imperial pay scales.  On the other hand, those justifying the compensation of three extremely well-compensated health care corporate CEOs may really believe what they wrote about their CEOs roles in health care reform. 

We have posted little about the US health care reform effort because so much of it seemed irrelevant to the concerns mentioned on Health Care Renewal.  Health care reform legislation did little to address problems with health care leadership, governance and ethics, and how they challenge health care professionals' values and lead to higher costs, declining access, poor health care quality and disgruntled health care professionals (see this summary).  Maybe one reason this was so was that the top leaders of health care organizations did a good job pushing their personal and organizational priorities into the reform legislation, meanwhile discouraging any provisions that might threaten the way they were leading their organizations, and how much they were making while doing so. 

There a many reasons for the popular dissatisfaction with the recently enacted US health care reform legislation.  The influence of the leadership of top health care corporations in promoting their, rather than the populace's goals, ought to be a topic of further inquiry.  Meanwhile, it may be that the "superclass" has struck again. 

No Free Speech for Comparative Effectiveness Researchers?

We have repeatedly argued why comparative effectiveness research, under ideal circumstances, would be a good idea.  As I said before:

Physicians spend a lot of time trying to figure out the best treatments for particular patients' problems. Doing so is often hard. In many situations, there are many plausible treatments, but the trick is picking the one most likely to do the most good and least harm for a particular patient. Ideally, this is where evidence based medicine comes in. But the biggest problem with using the EBM approach is that often the best available evidence does not help much. In particular, for many clinical problems, and for many sorts of patients, no one has ever done a good quality study that compares the plausible treatments for those problems and those patients. When the only studies done compared individual treatments to placebos, and when even those were restricted to narrow patient populations unlike those patient usually seen in daily practice, physicians are left juggling oranges, tomatoes, and carburetors.

Comparative effectiveness studies are simply studies that compare plausible treatments that could be used for patients with particular problems, and which are designed to be generalizable to the sorts of patients usually seen in practice. As a physician, I welcome such studies, because they may provide very useful information that could help me select the optimal treatments for individual patients.

Because I believe that comparative effectiveness studies could be very useful to improve patient care, it upsets me to see this particular kind of clinical study get caught in political, ideological, and economic battles.

However, when comparative effectiveness research was proposed as an element of US health care reform, it was attacked as a vehicle for the dreaded rationing of health care (even though in the US health care is already rationed, especially to those without generous insurance or the means to pay for expensive tests and treatments), using arguments based more on emotions, or outright fallacies than on logic and evidence. For example, see our blog posts here, here, here, and here.

Those opposed to the sort of comparative effectiveness research I described above then seemingly decided, "if you can't beat 'em, join 'em."  Thus, a provision appeared in a recent version of health care reform legislation proposed in the US Senate for comparative effectiveness research to be sponsored by an "independent" institute whose board of directors would have to include a substantial minority of representatives of industry (that is, drug, biotechnology, device, health insurance corporations, and other corporations as "payers.")  This would seems to be a fairly shameless form of "regulatory capture," that is, an instance in which a government agency whose mission seems to be to improve health care is "captured" by those with vested interests in promoting certain health care products and services.  (See post here.)

My concern has now seemingly gone mainstream, in that it was addressed in a commentary published on-line in the prestigious New England Journal of Medicine.  [Selker HP, Wood AJJ.  Industry influence on comparative-effectiveness research funded through health care reform.  N Engl J Med 2009.  Link here.]

Selker and Wood addressed the issue of regulatory capture thus.

Although most observers agree on the value of funding CER, many are unaware that embedded in the legislation are provisions ceding substantial influence to the medical products industries that have a major interest in the outcomes of such research.

The Senate Finance Committee bill mandates the creation of an entirely new private–public research entity and, owing to industry lobbying, guarantees industry three seats on this entity’s 15-member governing board, as well as representation on its methodology committee

Note that the situation is worse considering that the insurance industry and other "payers" also have seats on the board.

However, Selker and Wood discovered an even more outrageous provision:

The Finance Committee bill also includes language requested by industry lobbyists (pages 1138–1139) that threatens to withdraw federal funding for 5 years from any investigator who publishes a report on research funded by the proposed institute that is not within the bounds of and entirely consistent with the evidence.' Determinations regarding such consistency would be made by the newly created research entity, which would have industry involvement both in its governance and in study design. To allow scientists — and their institutions, which receive the support for the conduct of research — to be punished for the publication of work that is not approved by this entity is essentially to cede authority over the dissemination of government-funded research to a body that is at least partially controlled by persons with a potential commercial interest in its outcome.

As Selker and Wood noted, it is unprecedented for a US government agency that is meant to sponsor science to be empowered to punish researchers for conclusions or opinions with which the agency disagrees. This suggests that the new agency would be meant to produce only results that support the vested interests of its leadership, that is, that favor the latest, and most expensive drugs and devices. The research sponsored by such an agency would not only be biased, it would likely be of poor quality, because researchers of integrity would likely avoid sponsorship by an agency that would be so threatening to their scientific independence.

This part of the bill does not promote health reform, but blatantly attempts to serve health care corporations while sacrificing the interests of patients and doctors.

As Selker and Wood politely put it:

If health care reform legislation does not promote CER that is free of the potential taint of commercial and political meddling, the public will have little confidence in the results of such research. This outcome would be extremely unfortunate, since such research has the potential to improve patients’ lives by leading to more effective medical care. The U.S. biomedical research enterprise has a long and storied history that has made it a model for other countries. It would be a tragedy if we were to squander its achievements for political expediency, in the service of short-term commercial interests. The current proposals for controlling CER in a manner unlike anything we have seen in federally sponsored biomedical research therefore should be rejected.

It seems to be almost gilding the lilly to note that the provision cited above seems to violate the free speech and free press provisions of the 1st amendment of the US Constitution, since they threaten government punishment of private citizens (e.g., by withdrawal of existing funding) purely for speech that the government does not like.

So I ask the anonymous Senate aide who drafted this provision, and the anonymous lobbyist(s) who influenced him or her, have they no shame? 

Finally, I have yet to see coverage of the Selker and Wood article in the mainstream media.  I hope they will eventually conclude that this attempt to co-opt clinical science and mock the 1st amendment is actually news and comment worthy. 

FDA Evaded Bidding Process to Hire Public Relations Firm Which Also Works for PhRMA

Last week, the Washington Post reported the unusual - shall we say - way that the US Food and Drug Administration went about setting up a public relations campaign to respond to some negative criticism it has been getting. Here is the background.

The U.S. Food and Drug Administration had an image problem. For months last year the agency had been pummeled by Congress for poor inspections of tainted vegetables, drugs and other products.

FDA leaders decided to hire a contractor for a public relations campaign that would 'create and foster a lasting positive public image of the agency for the American public,' according to agency documents.

How they went about doing this was out of the ordinary.

Tasked with the public relations job was Mildred Cooper, a temporary FDA consultant hired on a two-year contract to advise FDA Commissioner Andrew C. von Eschenbach and other officials. Hired in March, Cooper became an FDA civil servant.

Cooper, who had worked on Capitol Hill and in public affairs for the Federal Emergency Management Agency and Defense Department, called a friend at Qorvis [Communications Inc], which specializes in corporate communications.

Before she joined the FDA, Cooper had worked with Qorvis as a public affairs executive at Luna Innovations, a company that sells medical devices and other products and whose clients include the Defense Department.

'I had experience with Qorvis,' she said in an interview. 'We thought they could help with our communications effort. . . . It was a matter of efficiency.'

She was referred to Don Goldberg, who helps lead Qorvis's crisis communications practice and had once served as part of President Clinton's crisis management team.

Qorvis also represents PhRMA, the drugmakers trade group.

The people involved seemed to have formulated a way to get around the usual government bidding process.

Goldberg discussed the project with [James] Dunn, a business consultant working with Qorvis, e-mails show. They decided to arrange for Qorvis to come into the project through ANI, the Alaska newspaper company, which runs several weeklies and a small public relations office.

Dunn, who works for a firm called Red Team Consulting, told The Post he had experience with the set-aside rules for Alaska Native corporations because he had worked for one as chief operating officer.

ANI, it turns out, is

a firm owned by an Alaska Native corporation that does not have to compete for federal work because it qualifies for special set-asides.

Then,

Other e-mails show that Cooper apparently allowed Qorvis to tailor terms of the contract known as the scope of work.

During most of these discussions, ANI itself was out of the loop.

no one from ANI appeared to be a part of the contract discussions, according to the e-mails. On Feb. 13, Goldberg forwarded a note to Cooper from 'the ANI team contact.' That day, the contact, Washington public relations veteran Aaron Guiterman, wrote to Goldberg, Qorvis and ANI that 'the most likely next step with the FDA is for ANI to submit a proposal.'

In a brief interview, Guiterman said he was not permitted to speak about the contract.

The final result was

On July 23, after more deliberation, the FDA issued a $300,000 purchase order for the public awareness campaign, with ANI listed as the contractor. An FDA official said ANI had pledged in writing to do more than half the work.

Two parts of this are remarkable, of course. One is how a government contract to a big Washington PR firm was arranged without any public bidding or scrutiny. The second was that the company chosen for this contract to improve the image of the FDA, the agency responsible for regulating pharmaceutical companies, went to a firm which also worked for PhRMA, the pharmaceutical industry trade organization. Could this excess coziness of some FDA officials with the pharmaceutical industry, which the agency is supposed to regulate, be evidence of "regulatory capture?" On a policy level, it seems that the US needs to have a much clearer separation between the FDA and the targets of its regulation.

Hat tip to the WSJ Health Blog.