Commercial Fund-Raises May Keep More Than Half the Money They Collect Ostensibly for Health-Related Charities

An article in the Los Angeles Times analyzed how much money a variety of charities, including some well-known health related charities, spend on commercial fund raising. In summary,

A Times investigation found hundreds of other examples of charities that pocketed just a sliver of what commercial fundraisers collected in their names. Some didn't get a dime or even lost money.

According to a comprehensive review of state records filed over a decade, the problem of paltry returns extends well beyond what has been reported in recent years among benevolent societies for police, firefighters and veterans. It affects charities large and small, well-known and obscure. It spans a range of causes, including child and animal welfare, health research and opposition to drunk driving.

In more than 5,800 campaigns on behalf of charities that were registered with the state attorney general from 1997 to 2006, the fundraisers reported taking in $2.6 billion. They kept nearly $1.4 billion -- about 54 cents of every dollar raised.

For-profit campaigns, which often employ telemarketing, mass mailings or one-time events, account for a small fraction of $223 billion in charitable giving each year in the United States. But they collect significant sums and help shape public perceptions of charities. Pairing computer-controlled dialing systems with low-wage workers, such firms can reach a large number of people in a short time.

The Times included a data-base which listed for each charity "all commercial fundraising campaigns reported to the state from 1997 through 2006, excluding those involving thrift store sales or vehicle donations. The data cover both California-specific efforts and national campaigns that included solicitations within California."

A few well-known national health care charities on the list received less than half the money their commercial fund-raising campaigns collected:

• American Diabetes Association 35.1%
• American Lung Association 31.8%
• Susan G Komen Breast Cancer Foundation 37.6%
• Arthritis Foundation (San Diego Area Chapter) 37.4%

Note that many more received barely more than half. Many more obscure health related charities also received less, sometimes much less than half.

So, if you get annoyed by those telemarketers who call you to raise money for a health care charity (despite your listing on the national "do not call list"), you have reason to be. Donations to some health care not-for-profits mainly benefit the fund-raisers they hire, rather than the causes the ostensibly support.

Once again, this demonstrates that some health care organizations seem to do a better job enriching the well-connected than fulfilling their missions.

WellPoint Settles, But Has It Become "Too Powerful to Take on?"

We just posted about the latest travails of the UnitedHealth Group, a for-profit managed care organization founded by one of the early advocates of managed care as the cure for health care problems. Lately, the company has been better known for the lavish compensation it gave its former CEO.

Another large, for-profit managed care organization/ health insurer has also lately been in the news, and not in favorable terms. We have previously discussed how Wellpoint Inc and/or its subsidiaries:

• misplaced a computer disc containing confidential information on 75,000 policy-holders (see post here)
• settled a RICO (racketeer influenced corrupt organization) law-suit in California over its alleged systematic attempts to withhold payments from physicians (see post here)
• was fined for cancelling individual insurance policies (again in California) after their holders filed claims (see post here)
• was found to have mis-handled at least half of its revocations of individual policies (see post here)
• was accused of asking physicians to tattle on patients' problems that could be grounds for post-hoc revocation of their insurance policies (see post here).
  

Last week, the Associated Press (via the San Francisco Chonicle) reported that Wellpoint is so well known for its fierce legal tactics that the California agency which was supposed to fine it for its practices of cancelling individual health policies post-hoc never collected the fine.

California regulators admitted Thursday that for more than a year they didn't even try to enforce a million-dollar fine against health insurer Anthem Blue Cross because they knew they would be outgunned in court.

In early 2007, the Department of Managed Health Care pledged to fine the state's largest insurer for 'routinely rescinding health insurance policies in violation of state law.'

But it never did.

The department's director, Cindy Ehnes, said Thursday that, when it comes to rescissions, the agency has succeeded in forcing smaller insurers to reinstate illegally canceled policies and pay fines, but Blue Cross is too powerful to take on.

'In each and every one of those rescissions, (Blue Cross has) the right to contest each, and that could tie us up in court forever,' Ehnes said of about 1,770 Blue Cross rescissions since Jan. 1, 2004.

'They have the largest number of rescissions, so as a practical matter for the department it does present some practical challenges that are different from a Health Net (of California) or a PacifiCare,' referring to providers who, along with Kaiser Permanente, have made settlements with the state to reinstate health care coverage.
That means that although Anthem Blue Cross has the highest number of alleged illegal rescissions, it may face the least regulatory consequence simply because of its sheer size and its skill in legal intimidation.

Note that Anthem Blue Cross is now a Wellpoint Inc subsidiary.

Once this story came to light, the Associated Press again reported (per the San Francisco Chronicle),

California health insurance regulators are scrutinizing 1,770 patient policies canceled by Anthem Blue Cross to see if they can impose a penalty stiffer than a $1 million fine they announced but never enforced last year.

Each case of a canceled policy carries the possibility of a $200,000 maximum fine against the state's largest insurer, which could dwarf the now-abandoned 2007 fine.

Meanwhile, the company agreed to settle a set of lawsuits related to its policy cancellations (per the Los Angeles Times),

Anthem Blue Cross parent WellPoint Inc. agreed Monday to pay $11.8 million to settle claims from about 480 California hospitals that it failed to cover the bills of patients it dropped after they were treated -- a controversial practice known as rescission.

The hospitals, including most private and public facilities in California, say they provided emergency and authorized care to patients who were, at the time of treatment, Blue Cross members in good standing. Only later, they contended, did Blue Cross drop the patients and renege on its obligation to pay their bills.

So once again, we note a big health care organization whose actions seem to directly contradict its ostensible mission. The Wellpoint Inc statement of "Our Commitments" includes,

At WellPoint, we are dedicated to improving the lives of the people we serve and the health of our communities. From the boardroom to the mailroom, every associate is expected to honor the company's commitments to our diverse customers, fellow associates, shareholders and the communities we serve - helping us become the most trusted choice among consumers.

Our business strategies mirror our commitment to providing affordable quality care to our members and the public. In line with our vision to become the most valued company in our industry, we must:

* Bring affordable quality health care and coverage to medically underserved communities
* Educate people to take an active role in their own health
* Work with our health care partners to improve quality of care
* Help shape public policy that makes health care more affordable and more accessible

Say what? How in the world does this company expect to be "the most trusted choice" given its track record above? How does cancelling policies post-hoc after their holders get sick "make health care more affordable and accessible?"

Note that WellPoint seems to rival its main competitor, UnitedHealth Group, in the extent its actions contradict its ostensibly lofty ideals.

This sorry tale suggests another point. As health care organizations grow ever bigger and more powerful, they effectively become less accountable. Effectively, might makes right. Note that the initial response of state regulators to just one set of Wellpoint's problems was that the company has just too big, powerful and aggressive to take on.

This has become the story of our health care system. Increasing concentration of power leading to ever stronger and less responsible and accountable vested interests. It will take united action by health care professionals and the public to fix this mess.

UnitedHealth Settles

We had posted often (see these posts here, here, and here from 2006 with links backward) about the hugely lavish compensation afforded to the Dr William McGuire, former CEO of UnitedHealth Group, one of the largest US insurers/ managed care organizations, and how this remuneration stood in stark contrast to the (older version of the) stated mission of UnitedHealth Group:

UnitedHealth Group is a diversified health and well-being company dedicated to making the health care system work better. The company directs its resources into designing products, providing services and applying technologies that:
- Improve access to health and well-being services;
- Simplify the health care experience;
- Promote quality; and,
- Make health care more affordable.

Most recently, controversy has swirled over the timing of huge stock option grants given to Dr McGuire (see post here), leading to his resignation in October, 2006 (see post here). More recently, McGuire agreed to pay back some of those options, although that settlement would reportedly leave him with more than $800 million worth of options at the time (see post here).

Once again, it seems that in retrospect, Dr McGuire's conduct stood in sharp contrast to the lofty sentiments expressed in UnitedHealth's mission statement. It also stood in stark contrast to the lavish praise once heaped upon him. A 2006 Pulitzer Prize winning article in the Wall Street Journal quoted UnitedHealth director and Dean of the Columbia University School of Nursing Mary Mundinger, "We're so lucky to have Bill. He's brilliant."

The latest consequence of how UnitedHealth was lead appeared last week. As reported by Bloomberg News,

UnitedHealth Group Inc. agreed to the biggest settlement of lawsuits involving backdated stock options and said the company would trim 4,000 jobs after its membership fell and expenses for providing medical coverage rose.

UnitedHealth, the largest U.S. health insurer, said today it would pay $912 million to end two class-action cases over grants of stock options to executives.

The proposed legal settlements announced today consist of $895 million to the plaintiffs in a group led by the California Public Employee's Retirement System, and $17 million to a group of plaintiffs led by Matthew Zilhaver and Sascha Lynn.

The UnitedHealth settlements, if approved by all parties and the courts, would end these two lawsuits with no admission of wrongdoing by past or current company officials, said UnitedHealth Chief Executive Officer Stephen Hemsley today on a conference call with analysts.

In December, McGuire agreed to increase to more than $600 million his repayment of benefits after an investigation of stock options that investors claimed in another lawsuit were illegally backdated. That settlement hasn't been approved by the court. Federal securities and criminal investigators are still probing the matter.

Another day, another settlement (by a big health care organization accused of unethical practices.)

At one time, managed care was touted as the cure for the US chronic health care problems of increasing costs, declining access, and stagnant quality. UnitedHealth, in fact, can trace its roots to Dr Paul Ellwood, one of the leaders of the Jackson Hole Group and a leading proponent of managed care. The transformation of a company with "innovation ... in [its] DNA" to a company that seemed to spend a lot of its resources enriching its then CEO suggests a common theme in what has gone wrong with US (and global) health care. Organizations hyped as solutions to the problems turn into vehicles for enriching their insiders.

Maybe the current woes of UnitedHealth will lead to health care organizations with more accountable, representative, transparent and consciously ethical governance, given incentives to actually provide good health care rather than perform clever financial manipulations that benefit the well-connected.

More Watchdogs Who Did Not Bark: the UCU Ignores Dr Blumsohn

We posted first here in 2005, then here, here, here, here, here, here, here and here about the story of Dr Aubrey Blumsohn's dispute with Procter and Gamble (P&G) and the University of Sheffield in the UK. In summary, Blumsohn and Professor Richard Eastell had done clinical research on the risedronate (Actonel), sponsored by P&G, the drug's manufacturer. P&G refused Blumsohn access to the original data from the study he was ostensibly running, and hired a ghost-writer to write abstracts in his name. Some of the analyses done by P&G seemed biased in favor of the drug. Despite repeated attempts, P&G would not give Blumsohn access to the raw data of the project. Blumsohn protested to Eastell, who advised him not to make waves because P&G "is a good source of income" for the university. When protests to other university officials produced no results, Blumsohn told the story to the press, whereupon the university suspended him. As far as I can tell, he eventually lost his academic position at the university, and has not been rehired. Also as far as I can tell, these events have never been the subject of open hearings at the university, or of investigations by any outside body.

This week, Dr Blumsohn, who now has quite a following (currently #53 on the Healthcare100 hit parade) for his Scientific Misconduct Blog, posted about the lack of response to a letter he wrote in 2005 to the UK Association of University Teachers (AUT), which later merged with another organization to form the University and Colleges Union (UCU). He also noted that the UCU has failed to respond for an even longer time to the case of a faculty member at another university who was dismissed apparently after her research (about the politically controversial topic of the characteristics of people seeking asylum in the UK) was found to be "incompatible" with that university. It is unclear why the UCU has ignored two cases in which universities sacrificed their faculty members' academic freedom to avoid offending the powerful. It is disgraceful that the case of Dr Blumsohn has never been publicly revisited at the University of Sheffield, and never been investigated by any academic or medical organization.

What befell Dr Blumsohn has been a continuing motivation for us to at Health Care Renewal. Sadly, it is hardly the only case of medical and health care academics who suffered because because what they said or wrote, no matter how true, offended those in power. Credible medical and clinical science will not long survive when scientists cannot draw conclusions that threaten vested interests. Academic medicine's credibility will not long survive in the absence of academic freedom.

Key Opinion Leaders, Drugs for Smoking Cessation, and Transparency as a Cause of "Confusion"

A perspectives article from the April 1 issue of the Annals of Internal Medicine has provoked a slowly growing controversy. (1) Let me summarize the main points of the article before getting to the controversy.

As the title, "the case for treating tobacco dependence as a chronic disease," suggests, the authors argue "for some smokers, long-term pharmacotherapy [which] is the difference between tobacco abstinence and lifelong smoking," based on the argument that smoking is like a chronic disease.

They called for long-term use of pharmacologic treatments for tobacco addiction, including nicotine replacement therapy (NRT), buproprion, and verenicline, asserting that these drugs are safe and effective, and have "proven benefits." Such proven treatments, therefore, ought to be used long term.

Although long-term use is considered off-label, patients should be encouraged to remain smoke-free, and if extended courses of pharmacotherapy will assist them, treatment should be continued, encouraged, and reimbursed.

Rather than considering cessation medications as a short-term aid in smoking cessation, these medications should be covered in the same manner as the treatment of other long-term illnesses and conditions, such as asthma, depression, and diabetes....

However, their enthusiasm for pharmacologic treatment for smoking cessation, even in the short-term, seems to go beyond the evidence. That evidence shows that the "proven benefits" of these treatments do not accrue to the majority of patients receiving them. For example, in one widely disseminated study comparing verenicline, buproprion and placebo, the proportions of patients who were abstinent for one year (the duration of follow-up) were 21.9% for verenicline, 16.1% for bupropion, and 8.4% for placebo. Although the most effective drug, verenicline, more than doubled the continuous abstinence rate compared to placebo, the large majority of patients treated with that drug, 78.1%, did not achieve continuous abstinence, even for one year.(2) In another recent study, patients given verenicline were somewhat more likely to be abstinent at the end of a year (26.1%) than those treated with nicotine patches (20.3%), although the difference did not reach statistical significance.(3) However, again the great majority of patients treated with either medicine were not continuously abstinent, even for one year.

Thus, most smokers treated with drugs will not remain abstinent from smoking, even for one year. Furthermore, I am aware of, and Steinberg et al did not cite any data from controlled trials about the safety or effectiveness of any pharmacologic treatments of tobacco addiction for patients followed for more than one year. There is no reason to suspect that these drugs' effectiveness over the long-term would be any better than their rather marginal effectiveness when when used short-term.

In my humble opinion, Steinberg et al might have been able to make a case for controlled trials of these drugs' use that would follow patients for more than one year. But they presented no evidence to support the clinical use of these drugs, much less insurance company reimbursement for them, for time periods longer than those found in the published trials.

So why did these authors make arguments that went beyond the evidence?

Soon after the article came out, Adriane Fugh-Berman and Douglas Melnick, writing in the Bioethics Forum, noted:

The most important section of this article is the conflict of interest statement. The two authors who have advanced degrees are on the speaker’s bureau of Pfizer and are consultants to Pfizer, Novartis, GlaxoSmithKline, and Celtic Pharma. Pfizer makes varenecline (marketed under the brand name Chantix) and Nicotrol, a nicotine nasal spray. GSK makes Nicorette gum, Commit nicotine lozenges, Nicoderm nicotine patches, and Zyban (buproprion, which GSK also sells as an antidepressant under the name Wellbutrin). Novartis makes Thrive, a nicotine chewing gum ('thrive,' which means to prosper or flourish, seems a rather peculiar association for a delivery system for an addictive drug.) And Celtic Pharma is developing TA-NIC, a nicotine vaccine.

Furthermore, last week, an article in BusinessWeek provided more information about the financial ties of two authors of the Steinberg et al paper.

In 2006, Pfizer recruited Foulds to serve on its paid national advisory board for Chantix. The company also selected Foulds and Steinberg to be 'key opinion leaders,' sending them to talk to doctors about Chantix over fancy dinners and paying them each $900 per presentation. Foulds and Steinberg say that between them they have made a total of about a dozen appearances.

Steinberg received a $30,000 grant from Pfizer in April 2007 to study the effect of Chantix on patients forced to forgo cigarettes while hospitalized for other illnesses. He says this was his first research grant from a drug company. (The Robert Wood Johnson Foundation separately provided $300,000 for the hospital study.)

Steinberg, according to BusinessWeek, denied that he is influenced by his ties to Pfizer:

Adamant that his work for Pfizer and other drug companies poses no problem, he adds: 'We look at the data, and we look at our own clinical experience.'

While the authors disclosed the nature but not the effect size of their financial relationships in the Annals of Internal Medicine article, they were not so forthcoming to their patients. Per BusinessWeek,

Both doctors stress that it's not standard practice to tell patients about potential conflicts.

On the Web site for UMDNJ's smoking clinic, it's not easy for a layman to find disclosures. There is no clearly labeled list of companies that pay Foulds and Steinberg that is directly accessible from the home page. There are links to journal articles, some of which reveal industry ties. But getting the information takes effort. The online version of the Annals article requires a viewer to have a paid subscription for full access. Their twice-a-year newsletter, The Nicotine Challenger, doesn't disclose their work for Pfizer, even in articles that speak highly of Chantix.

Foulds includes a broadly worded disclosure on his blog, but doesn't name companies for which he consults.

Finally, neither author saw the need to provide more disclosures to patients.

Telling patients more about industry ties 'would just puzzle them,' Foulds says.

Steinberg sees no need to be more forthcoming. His passion for helping people quit is fueled by treating numerous cases of high blood pressure and other problems precipitated by smoking.

To add a final touch, Cathryn M Clary, vice president for external medical affairs for Pfizer, "fears too much transparency will cause confusion,"

The more information that's out there, the more difficult it will be for patients to process

There has been a good deal of discussion about drug, biotechnology and device companies paying "key opinion leaders" to help market these products (for example, see these posts here and here). And there has been a good deal of indignation that it is an affront to physicians to judge the content of medical education they provide based on who paid for it (see this link.)

Although the case of the Annals article is essentially only an anecdote, it does suggest an association between payments to key opinion leaders, and opinions that are more enthusiastic about the payers' products than the evidence seems to warrant.

Furthermore, it suggests that key key opinion leaders and the companies who sponsor them may dismiss transparency about their financial relationships as a cause of "confusion." If patients really are too naive to understand the implications of payments by drug and other commercial firms to key opinion leaders, would the KOLs and their patrons prefer that government step in to protect these poor, naive patients from such relationships they cannot understand? That is what their attitude seems to invite.

References

1. Steinberg MG, Schmelzer AC, Richardson DL, and Foulds J. The case for treating tobacco dependence as a chronic disease. Ann Intern Med 2008; 148: 554-556. Link here.
2. Gonzales D, Rennard SI, Nides M, Oncken C, Azoulay S, Billing CB et al. Verenicline, and alpha-4-beta-2 nicotinic acetylcholine receptor partial agonist, vs sustained release bupropion and placebo for smoking cessation: a randomized controlled trial. JAMA 2006; 296: 47-55. Link here.
3. Aubin HJ, Bobak A, Britton JR, Oncken C et al. Verenicline versus transdermal nicotine patch for smoking cessation: results from a randomised open-label trial. Thorax 2008. Link here.

BLOGSCAN - Evidence? We Don't Need No Stinkin' Evidence

The New York Times recently reported on the rush to use advanced CT scans for cardiologic diagnosis, in the absence of much evidence that this expensive technology works. Merrill Goozner on GoozNews, and Matthew Holt on the Health Care Blog offered some pithy comments. My jaw dropped at this quote in the Times article:

It's incumbent on the community to dispense with the need for evidence-based medicine.

As Goozner wrote, when self proclaimed experts (perhaps key opinion leaders) are convinced they are right, they don't need no stinkin' evidence.

ADDENDUM (2 July, 2008): Dr Wes also weighed in, with considerable skepticism. His post is an excellent primer about how the test is actually done, its drawbacks, and the lack of evidence supporting its use except in special circumstances.

BLOGSCAN - Why Are Conflicts of Interest Important?

On the PharmaLot blog, Ed Silverman interviewed Eric Campbell about why conflicts of interest are important in clinical research and medical education:

It matters because patients rely on the advice and the wisdom of their doctors in making health care decisions. And they rely on the fact that their doctor has their best interests at heart and that academic science is true and unbiased and not influenced by commercial pressures. So when conflicts of interest exist, it brings into question the basic trust and value of these relationships. It’s important for Americans that institutions take these relationships very seriously, and that they’re disclosed and watched and monitored. Remember that not all academics, but many are opinion leaders in medicine - they lead a specialty, head a professional association and are well known. If one of them makes a presentation about a beneift of a drug, it can influence the reaction of doctors in the audience and the doctors they know. So it’s important to know the nature of these relationships. Disclosure becomes a necessary step but it’s not a sufficient step.