John Stossel Discovers Health Care Dysfunction, Blames it on "Socialists" - Like Maurice Greenberg (AIG), John Thain (Merrill Lynch), Sanford Weill (Citigroup), and David H Koch?

boards of trustees bureaucracy finance generic managers managerialism New York - Presbyterian Hospital

John Stossel Discovers Health Care Dysfunction, Blames it on "Socialists" - Like Maurice Greenberg (AIG), John Thain (Merrill Lynch), Sanford Weill (Citigroup), and David H Koch?

Unknown 4/24/2016 Komentar

We have been ranting for a while about the dysfunctionality of the US health care system.  Unfortunately, many people only realize how bad things are when they become patients, when they have bigger things to worry about than complaining.   Furthermore, even if they complain, many patients may not feel they understand enough about what has gone wrong to suggest solutions.

Bad Customer Service at New York Presbyterian

This may not apply when media pundits, especially those with strong ideological views, become patients.  So this week Fox News commentator and well known libertarian John Stossel disclosed his new illness, and vented his opinions about his hospital stay.   Mr Stossel unfortunately developed lung cancer, although he was optimistic about his prognosis: "My doctors tell me my growth was caught early and I'll be fine. Soon I will barely notice that a fifth of my lung is gone."

However, he was not happy about his hospital's customer service:

But as a consumer reporter, I have to say, the hospital's customer service stinks. Doctors keep me waiting for hours, and no one bothers to call or email to say, 'I'm running late.' Few doctors give out their email address. Patients can't communicate using modern technology.

I get X-rays, EKG tests, echocardiograms, blood tests. Are all needed? I doubt it. But no one discusses that with me or mentions the cost.

Also,

I fill out long medical history forms by hand and, in the next office, do it again. Same wording: name, address, insurance, etc.

And,

In the intensive care unit, night after night, machines beep, but often no one responds. Nurses say things like 'old machines,' 'bad batteries,' 'we know it's not an emergency.'

Finally,

Some of my nurses were great -- concerned about my comfort and stress -- but other hospital workers were indifferent.

Unfortunately, long wait times, poor communications, excess paperwork, and misapplied technology are all too familiar problems to those in the health care system.

Moreover, this all was happening at one of the most highly rated US hospitals, 

After all, I'm at New York-Presbyterian Hospital. U.S. News & World Report ranked it No. 1 in New York.

Were "Socialist Bureaucracies" Responsible?


Mr Stossel had his own ideas about the causes of these problems. 

Customer service is sclerotic because hospitals are largely socialist bureaucracies. Instead of answering to consumers, which forces businesses to be nimble, hospitals report to government, lawyers and insurance companies.

Whenever there's a mistake, politicians impose new rules: the Health Insurance Portability and Accountability Act paperwork, patient rights regulations, new layers of bureaucracy...

Also,

Leftists say the solution to such problems is government health care. But did they not notice what happened at Veterans Affairs? Bureaucrats let veterans die, waiting for care. When the scandal was exposed, they didn't stop. USA Today reports that the abuse continues. Sometimes the VA's suicide hotline goes to voicemail.

Patients will have a better experience only when more of us spend our own money for care. That's what makes markets work.

A "Socialist Bureaucracy" with a VIP Penthouse?

I am sorry to hear Mr Stossel has lung cancer, and hope that his prognosis is indeed good.  I am a bit surprised that a media celebrity who became a patient found big issues with "customer service" at such a prestigious hospital.  After all, many big hospitals have programs to give special treatment to VIPs (for example, see these posts from 2007 and 2011).

In particular, back in 2012 we posted about the contrast between the VIP services specifically at New York - Presbyterian Hospital and how poor patients are treated there.  Then we quoted from a 21 January, 2012 article from the New York Times focused on the ritzy comforts now provided for wealthy (but perhaps not very sick) patients at the renowned New York Presbyterian/ Weill Cornell Hospital.  It opened,

The feverish patient had spent hours in a crowded emergency room. When she opened her eyes in her Manhattan hospital room last winter, she recalled later, she wondered if she could be hallucinating: 'This is like the Four Seasons — where am I?'

The bed linens were by Frette, Italian purveyors of high-thread-count sheets to popes and princes. The bathroom gleamed with polished marble. Huge windows displayed panoramic East River views. And in the hush of her $2,400 suite, a man in a black vest and tie proffered an elaborate menu and told her, 'I’ll be your butler.'

It was Greenberg 14 South, the elite wing on the new penthouse floor of NewYork-Presbyterian/Weill Cornell hospital. Pampering and décor to rival a grand hotel, if not a Downton Abbey, have long been the hallmark of such 'amenities units,' often hidden behind closed doors at New York’s premier hospitals. But the phenomenon is escalating here and around the country, health care design specialists say, part of an international competition for wealthy patients willing to pay extra, even as the federal government cuts back hospital reimbursement in pursuit of a more universal and affordable American medical system.

Additional amenities include:

A waterfall, a grand piano and the image of a giant orchid grace the soaring ninth floor atrium....

Also,

the visitors’ lounge seems to hang over the East River in a glass prow and Ciao Bella gelato is available on demand....

An architect who specializes in designing such luxury facilities for hospitals noted:

'These kinds of patients, they’re paying cash — they’re the best kind of patient to have,' she added. 'Theoretically, it trickles down.'

It appears that someone failed to book Mr Stossel into the penthouse.  Instead, he found out what service was like for the masses.

Perhaps this was why Mr Stossel railed at the "socialist bureaucracies" he perceived as running New York - Presbyterian Hospital.  However, calling the hospital management "socialist" seems - not to put too fine a point on it - wrong.

A "Socialist Bureaucracy" Paying Millions to its CEOs?


First of all, New York Presbyterian is hardly a government agency.  It is a private, non-profit corporation.  Every year as such it files a form 990 with the dread US Internal Revenue Service. (The latest publicly available version is from 2013, here.)  Obviously, US government agencies do not file with the IRS.


In fact, the New York Presbyterian system seems about as far from a federal government agency as one can imagine.

First, its top managers are paid like for-profit corporate executives.  In 2014, we posted about the humongous compensation given to its previous, long-serving CEO, Dr Herbert Pardes, who received multi-million dollar compensation every year through his 2011 retirement, and then continued to receive several million a year from the system in his retirement.  His successor, current CEO Dr Steven Corwin, received $3.6 million in 2012.  (More recent compensation figures are not yet available.)

A "Socialist Bureaucracy" Dominated by Managers, with Stewardship by Top Financial Executives, and one of the Koch Brothers?

The current leadership of New York Presbyterian is dominated by businesspeople, not physicians, nurses, or other health care professionals.  Only 10 of 33 listed senior leaders are health care professionals.  The rest have administrative/ management or legal backgrounds and training.  Many appear to be generic managers, that is, people with background and experience primarily in administration or management, but not in medicine, health care, public health, etc.


The hospital system's board of trustees was and is filled with some of the top business executives in the US, including some finance executives who have been cited as responsible for the global financial collapse/ great recession.

For example, we wrote about Mr Dick Fuld, a trustee until recently.  Mr Fuld was the CEO who presided over the bankruptcy of Lehman Brothers, which heralded the beginning of the great financial crisis/ great recession of 2008 onward.  Mr Fuld seemed to lack the sort of compassionate approach one might expect from someone charged with the stewardship of a big hospital system.  He had once publicly said about those who sold Lehman Brother stock short: "what I really want to do is I want to reach in, rip out their heart, and eat it before they die."



Another recently retired board member was Sanford I Weill, architect of the mergers that created the now federally bailed out Citigroup.  In 2014, we posted about how Mr Weill, contemplating retirement from the board of trustees of Weill Cornell Medical School, one of the two medical schools with primary affiliations with New York Presbyterian, managed to bequeath his board seat to his daughter, Ms Jessica Bibliowicz, also the CEO of a finance firm, National Financial Partners.  Ms Bibliowicz now also seems to have Mr Weill's seat on the New York Presbyterian board. 

Also, still on the board are two top finance CEOs who have been blamed for the global financial collapse.  These are  Maurice R Greenberg of the federally bailed out AIG, and John A Thain, CEO of the nearly collapsed Merrill Lynch (merged into Bank of America).  See this post for more information about their roles in the global financial collapse.

Finally, one other board member is David H Koch, described by Wikipedia

Koch is an influential libertarian. He was the 1980 candidate for Vice President of the United States from the United States Libertarian Party and helped finance the campaign. He founded Citizens for a Sound Economy. He and his brother Charles have donated to political advocacy groups and to political campaigns, almost entirely Republican

With socialists like these ...?   

Summary

I do not doubt that John Stossel found the customer service at New York Presbyterian not up to his expectations.  And I actually have no doubt that New York Presbyterian has to operate within a complex health care system in which government bureaucracy plays a large role, and sometimes a counter-productive one.  Furthermore, I have no doubt that the management of New York Presbyterian is very bureaucratic, and this may in part may be a reason for poor customer service, and other failings.

However, to say that the management and governance of the hospital system is "socialist" is dead wrong.  In fact, like many other large health care organizations, the New York Presbyterian system appears to be run largely by "managerialists," that is generic managers who have little experience or background in health care, may have little understanding or sympathy for its values, and approach health care with the same management techniques that might be applied to selling soap powder.  Furthermore, the stewardship of this particular hospital system seems to be largely up to some of the biggest, and loudest "capitalists," and one of the most prominent "libertarians" in the US.

But to someone with a hammer, most problems look like nails.

Maybe Mr Stossel needs to complain to Mr Koch.

In conclusion, I am glad that some of the problems in the dysfunctional US health care system are getting more public attention.  However, now we need to calmly and rationally consider what is causing them and what to do about them without the blinders of ideology or vested interests. 

IMHO, true US health care reform would put the operation of US health care organizations more in the hands of people who have knowledge and experience in health care, and are willing to be accountable to support health care professionals' values.  Furthermore, oversight and stewardship of these organizations should represent the patients and public which the organizations are supposed to serve. 

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"Immersion Day" to Expose Hospital Board Members to Real Health Care for a Day - A Great Idea, but Why Should It Be News?

boards of trustees generic managers hospital systems hospitals managerialism

"Immersion Day" to Expose Hospital Board Members to Real Health Care for a Day - A Great Idea, but Why Should It Be News?

Unknown 4/08/2016 Komentar

Last week, the New England Journal of Medicine published an article by Bock and Paulus describing an innovative program at Mission Health in Asheville, NC to expose health system board members to the real world of health care.(1)  The article was nice, but begged an important question: why was such a program news?

The Immersion Day Program

 The article asserted:

The U.S. health care industry has long been beset by seemingly intractable problems: incomplete and unequal access to care; perverse payment incentives; fragmented, uncoordinated care that threatens patient safety and wastes money; and much more.

So the hypothesis on which the program was based was:

These challenges are particularly vexing to the people who oversee or set policy for health care organizations. The disconnect between health care in its intimate, real-world setting and the distilled information delivered in the boardroom or policy discussions is a key barrier to responsive governance and policymaking. Sometimes seeing with new eyes can lead to transformational understanding

In particular, the two physician authors of the article noted

Yet until 2013, none of our lay board members had ever been afforded the opportunity to see the complexities of care delivery, except when they were patients, visited someone in the hospital, or watched a TV show like Grey’s Anatomy. Like most boards, we did our work in the boardroom. There, management and our four physician board members did our best to paint accurate pictures of our system’s complexity: the workflows and the choreography, the opportunities for error, the forces behind increasing costs, and the good derived from serving all patients regardless of ability to pay. We shared our struggles and successes using PowerPoint presentations, graphs, spreadsheets, and patient statements.

So Doctors Bock and Paulus came up with the idea of providing basically provided a one-day clinical immersion program to members of the hospital system's board of directors.

we created 'Immersion Day,' when board members and thought leaders could spend 9 to 12 hours in scrubs, behind the scenes, immersed in the nuances of care delivery.

Board members went from pre-operative care, to the operating room, to intesive care, to surgical wards to rounds with "nephrologists, pulmonologists, trauma surgeons, and hospitalists, finally to the emergency department.

The board members apparently greatly appreciated thr program:

Board members have called their Immersion Day 'eye-opening and endlessly fascinating,' 'unforgettable and humbling,' even 'the best-spent day of my life.' One said, 'I learned more about hospitals and health care from my 10 immersion hours than 6 years sitting on our board.' Our staff benefits, too: when a physician or nurse meets a board member in scrubs, the encounter builds trust and admiration in both directions. Word spreads. Caregivers express gratitude that the board is spending time seeing what they do; many had never previously met a board member. Physicians’ relationships with the board and management, though imperfect, are far better than they’ve been in years, despite ever-increasing challenges.

The authors are now trying to make the program available to journalists, and "state and federal policy makers."  Their conclusion was:

we’ve built a transformative experience that can guide our board. Deep immersion in the work of our health system has strengthened governance and engendered trust in our community, staff, and physicians, while elucidating health care for policymakers. After three years of Immersion Days, we cannot imagine being governed by a board that hasn’t seen so intimately how a health system works.

There are some obvious limitations to this article, which unfortunately were not addressed in the text.  The article was entirely impressionistic.  It presented no data about actual end results of immersion day, much less a comparison to any other kind of interevention.

Furthermore, the authors did not describe some important characteristics of their hospital system which may differentiate it from others.  In particular, the management of Mission Health is much less generic than that of other hospitals.  Half of the top hospital administrators have medical or nursing degrees.  The CEO of the hospital is a physician.  In fact, he was the second author of the article. Five of 21 directors (including the CEO) are physicians.   So it is not clear how this program would work in a hospital whose management is dominated by people with business backgrounds.

Why Is This News?

But the article begged the questions of why this is news? The article stated that there is a big "disconnect" between what is discussed in hospital board rooms, and the health care that goes on in hospitals day by day.  Furthermore, it stated that many hospital board members had no direct experience with health care.  Instead, the article described the non-physician board members, who were by far in the majority, as "educators, attorneys, manufacturers, investors, and bankers."  It did not say why the majority of people responsible for the governance of a health care organization had no direct familiarity with health care.  That does not seem to make sense.  So why did it take so long to try to give them such familiarity, and why would a program to do so be newsworthy? 

The article also failed to note that the hospital in which the immersion program was initiated actually had a board that was more familiar with health care that the typical hospital board.  Many hospital boards of trustees are completely dominated by "attorneys, manufacturers, investors, and bankers," that is, wealthy businesspeople without health care experience, and parenthetically probably without much familiarity with the context of the many less financially fortunate patients of their hospitals.  Mission Health at least had a few physicians on its board.

We have posted some vivid stories about the skewed natures of hospital boards before.  For example,
-  the board of IU Health (Indiana), dominated by top executives and board members of large for-profit corporations (look here).
-  the board of the Hospital for Special Surgery (New York), of whose 42 members, 23 had major relationships, often top executive positions or board memberships, just in large financial firms, including some which were responsible for the great recssion.
Other examples can be found here.

Hospital boards whose members are unfamiliar with health care may reflect hospital management that is similarly unfamiliar with health care. In fact, most hospitals and hospital systems, like most US health care organizations, are not led by health care professionals.  Instead, they are led by generic managers, following the dogmas of managerialism.

We have frequently posted about what we have called generic management, the manager's coup d'etat, and mission-hostile management. Managerialism wraps these concepts up into a single package.  The idea is that all organizations, including health care organizations, ought to be run people with generic management training and background, not necessarily by people with specific backgrounds or training in the organizations' areas of operation.  Thus, for example, hospitals ought to be run by MBAs, not doctors, nurses, or public health experts.  Furthermore, all organizations ought to be run according to the same basic principles of business management.  These principles in turn ought to be based on current neoliberal dogma, with the prime directive that short-term revenue is the primary goal.

Of course, if top hospital leaders do not perceive their own unfamiliarity with health care as a problem, they are unlikely to perceive their boards' unfamiliarity as a problem too.  So it really was news that at one hospital, the management thought it necessary to better educate their own board about what really goes on in hospitals outside board rooms and management suites.

At a really manageralist hospital, whose management is dominated by people with business backgrounds, which may lack any top managers who have any health care background, and whose board is dominated by wealthy businesspeople with backgrounds outside of health care, the management would likely not bother trying to improve their board members' or their own familiarity with health care.  Were they to do so for some reason, I hypothesize that an immersion day for board members would have little effect.  The apparent, but not clearly proven success of  "immersion day" at Mission Health may be due to the important presence of health care professionals in top management and on the board of trustees, but may not generalize to most other hospitals.

In fact, the current leadership of hospitals and other health care organizations almost entirely by generic managers, reporting to boards made up almost entirely of generic managers, defies common sense.  Although trying to give board members some rudimentary familiarity with the health care context, during one day of the year, is obviously better than nothing, it clearly is only a tiny bandage on a gaping wound.  When one hospital deploys such a bandage, it is news.  That most hospitals' managers and boards would not even think of deploying such measures is a scandal.

So as we have said endlessly,...  

We need far more light shined on who runs the health care system, using what practices, to what ends, for the benefits of whom.

True health care reform would enable transparent, honest, accountable governance and leadership that puts patients' and the public's health over ideology, self-interest, and self-enrichment.

Reference
1. Bock RW, Paulus RA. Immersion day - transforming governance and policy by putting on scrubs.  N Engl J Med 2016; 374: 1201-1203.  Link here. 

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"How Employed Physicians' Contracts May Threaten Their Patients and Professionalism" Authored by Health Care Renewal Bloggers Published in Annals of Internal Medicine

Annals of Internal Medicine contracts corporate physician generic managers hospital systems hospitals

"How Employed Physicians' Contracts May Threaten Their Patients and Professionalism" Authored by Health Care Renewal Bloggers Published in Annals of Internal Medicine

Unknown 3/10/2016 Komentar

We have noted that increasing numbers of physicians provide patient care as employees of large organizations, often hospital systems, sometimes for-profit.  Since in these settings physicians must answer to generic management which may be more concerned with short-term revenues than patient care, these new arrangements are frought with hazards for physicians and patients.

One set of hazards may be found in the contracts employed physicians must sign.  

My fellow blogger, Dr Wally Smith, and I authored an article just published online "How Employed Physicians' Contracts May Threaten Their Patients and Professionalism." Here is the link.

In it we listed multiple contractual provisions that may be found in employed physicians contracts  that may threaten professionalism and good patient care:

 Confidentiality clauses - which may hide quality and safety problems, medical errors, unethical conduct, other problematic contract clauses, and malfeasance
Productivity clauses - which may provide incentives for actions that primarily increase employers' revenues, and thus may encourage overtreatment
"Leakage control" clauses - which may discourage referrals outside of the employers' systems and thus discourage appropriate referrals for particular patients, potentially threatening quality
Clauses that allow termination without cause - which may reduce access for the terminated physicians' patients, and may discourage complaints by physicians about quality, safety, unethical behavior, or malfeasance
Noncompete clauses - which may reduce access and physicians' ability to leave unsatisfactory positions
Clauses that restrict outside activites - which may restrict teaching or research, or academic freedom or free speech

We also noted clauses in contracts that employers may sign with third parties that may also threaten professionalism and good patient care:

"Gag" clauses affecting employees - which may hide quality and safety problems, medical errors, unethical conduct and malfeasance
"Anti-poaching" clauses - which may reduce patients' access to care, and physicians' ability to leave unsatisfactory positions.

We were able to find cases illustrating all the clauses published in the news media, or publications such as Medscape or Medical Economics.  However, they have largely anechoic in the scholarly medical and health services literature, and largely unaddressed by the medical societies that ostensbibly protect physicians' professionalism and patients' and the public's health.   

We suggested that such contractual problems may be becoming more frequent in a health care system in which physicians more often are corporate. We suggested that all physicians confronted with new employment contracts should seek competent legal connsel and try to negotiate egregious provisions.  However, such actions may now be futile given the increasing market dominance of the hospital systems that are employing increasing numbers of physicians.

We urged medical societies to inform physicians about such employment issues, and better support physicians who struggle with them.  However, these contract problems may merely be a reflection of an increasingly commercialized, deregulated health care system run by generic managers who may put revenue generation ahead of supporting physicians' professionalism.  So, better enforcement of existing laws, and new laws including bans on the commercial practice of medicine may be the only solutions to this newly recognized plight of corporate physicians and their patients.   

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Health Care Managers as Ever More Effective Value Extractors - Following Up on Novant Health and Cape Cod Healthcare

Cape Cod Healthcare executive compensation generic management generic managers Novant Health

Health Care Managers as Ever More Effective Value Extractors - Following Up on Novant Health and Cape Cod Healthcare

Unknown 1/22/2016 Komentar

The ever increasing compensation of top managers of health care organizations provides incentives to continue business as usual.  We have frequently discussed executive compensation for top health care leaders that seems wildly disproportionate to their contribution to their organizations' health care mission.

Furthermore, not only does executive compensation seem to have anti-gravity properties, rising even at institutions facing financial challenges, or while other employees face salary cuts and job loss, but it continues even after the lack of justification for it has been called out.

Herein we discuss two examples of continuing anti-gravity compensation that occurred at institutions we have previously cited for similar problems.  These are discussed in the order of their appearance in the media.  


Novant Health
 
In 2011, we first noted that executives of Novant Health, headquarted in Winston-Salem, NC, were getting raises while they were laying off  more lowly employees.  Then in 2014, we posted about more raises going to Novant executives, again while more lowly employees had their pay cut.

Recently, in December, 2015, Richard Craver, writing for the Winston-Salem Journal, discussed the latest (2014) compensation figures from Novant Health.

Carl Armato, chief executive and president of Novant Health Inc., received a 14.4 percent jump in salary during fiscal 2014 to $1.19 million.

In addition,

Armato is in his fourth year as the system’s top executive. His salary has risen 70.9 percent since he took over as the top executive Jan. 1, 2012, following the retirement of Paul Wiles.

Armato’s incentive compensation increased less than 1 percent to $919,738. Altogether, Armato’s core compensation was $2.59 million.

Other top executives also did very well,

Jeff Lindsay, chief operating officer, received $709,856 in salary, $382,813 in bonus and incentive pay and overall core compensation of $1.23 million. Lindsay, former president of Forsyth Medical Center, was not listed among Novant’s top executives in fiscal 2013.

For the 27 listed current executives, as of Dec. 31, 2014, on Novant’s Form 990 filing with the Internal Revenue Service, the system spent $12.17 million on salaries and $8.73 million on bonuses and incentive pay.

Specifically,

Seven other listed Novant Health Inc. executives received at least $442,000 in salary and core compensation of at least $517,000 for fiscal 2014.

* Fred Hargett, chief financial officer, received a 15.9 percent raise in salary to $708,924, bonus and incentive pay of $565,120 and overall core compensation of $1.54 million.

* Jesse Cureton, chief consumer officer, received a 14.2 percent raise in salary to $573,683, bonus and incentive pay of $472,173 and overall core compensation of $1.07 million.

* Jacqueline Daniels, chief administrative officer, received a 3.9 percent raise in salary to $565,283, bonus and incentive pay of $518,631 and overall core compensation of $1.13 million.

* Sallye Liner, former chief clinical officer, received a 2.9 percent raise in salary to $516,171, bonus and incentive pay of $474,991 and overall core compensation of $1.05 million.

* Dr. Thomas Zweng, chief medical officer, received $470,217 in salary, bonus and incentive pay of $282,014 and overall core compensation of $790,191.

* John Phipps, president of Novant Medical Group, received $459,024 in salary, bonus and incentive pay of $377,219 and overall core compensation of $873,015.

* Peter Brunstetter, chief legal officer, received $442,116 in salary, bonus and incentive pay of $45,000 and overall core compensation of $517,765.

The hospital system trotted out some of the usual talking points used to justify very high pay for top executives.

Novant, like most health care systmes serving North Caroling, says high compensation levels are necessary to recruit and retain executives to run 'a very complex organization.'

That was nearly identical to what they said last year,

Novant, as do most not-for-profit health-care systems serving North Carolina, stresses high compensation levels are necessary to attract executives to run 'a very complex organization.'

Furthermore, the system's board of trustees say

bonuses and incentives are based on annual and three-year goals that 'focus on the quality and safety of health care, improving the patient experience, transforming to an electronic health record, financial stewardship and providing community benefit.'

To put that in perspective, the 27 top executives are about 0.1% of the system's total workforce of "about 25,000."  The $20.9 million used for their salaries, bonuses, and incentive pay (but apparently not retirement benefits and other perks) amounted to 0.55% of the system's total revenue (of about $3.79 billion) and approximately 1% of the approximately $2 billion the system spent on all employee salaries and benefits (according to the Novant 2014 financial statement).

However, just a month before, the Triad Business Journal and Mr Craver again in the Winston-Salem Journal covered a case that certainly questioned the "financial stewardship" of Novant top management, but did seem like some sort of parody of the "community benefit" they provided. Per the former,

Novant Health has reached a preliminary settlement with a group of current and former employees over handling of their retirement plans, with the health system agreeing to pay $32 million and make changes going forward.

The proposed settlement has been agreed to by Novant and the seven plaintiffs, which include a variety of doctors, nurses and other health care workers,...

The point of the litigation was

what plaintiffs claim are excessive fees associated with the system's retirement plan along with 'kick-backs' to a Triad businessman with a long-standing relationship with the health system.

The complaint alleged that during a three-year period starting in 2009, the plan paid excessive compensation of close to $18 million to Colorado-based Great-West Life & Annuity Insurance Co. and brokerage firm D.L. Davis & Co., based in Winston-Salem and operated by CEO and President Derrick Davis.

Along with the allegations of excessive fees, the plaintiffs claimed that entities owned or controlled by Davis benefited from real estate and development deals with Novant Health.

Also,

The agreement would also bar Davis and his companies from being involved in the management of Novant Health retirement plans and would prohibit Novant from entering into any new real estate deals or business relationships with Davis and his companies for at least four years.

As is customary in such cases, a Novant statement said its leadership "do not agree with the claims in the lawsuit," but agreed to the large settlement and other stipulations apparently to avoid "a long and costly legal battle."  But if the complaint was unfounded, how would it be good stewardship not to contest it?  Of course, were it to be true, then there would be even more evidence of poor stewardship.

In fact, for full disclosure, I got to add my skepticism about how Novant recompenses its managers in the text of Mr Craver's December, 2015, article,

'Each organization seems to have their own set of metrics, often frequently adjusted, and that somehow always make their own executives seem good,' Poses said.

'Every organization thinks their executives are above average,' Poses said. 'There are no overseers willing to question executive pay, since boards are mainly executives of other organizations; and executives are always compared only with other executives.' 

Somehow, I doubt that any Novant executives or board members would care about what I said, or that Novant executive pay will not continue to climb, unless push comes to shove.

Cape Cod Healthcare

In January, 2015, we blogged about how the former CEO of Cape Cod Healthcare had been collecting severance pay for 3 years, totaling more than $3 million, after he abruptly left his  and after being sanctioned by the state medical board for faulty prescribing abusable psychoactive drugs (which he allegedly took himself) ; and it was revealed that there were concerns about financial mismanagement at the health care system which he formerly ran.  While CEO of Cape Cod he also presided over multiple layoffs, some of which were of clinical personnel.  At that time, of course, the system board of trustees defended his leadership because they said it improving system finances.

No, on January 14, 2016 the Cape Cod Times reported,

For the fourth year since abruptly leaving Cape Cod Healthcare, former CEO Dr. Richard Salluzzo pulled in a hefty paycheck, according to new financial reports filed with the state attorney general’s office.

Since parting ways with the nonprofit corporation in November 2010, Salluzzo has taken in about $3.5 million, including $407,371 for the most recent year on file, fiscal 2014.

In many ways, this report doubled down on the previous 2015 version. Dr Salluzzo did not merely preside over layoffs, but

During his tenure Salluzzo presided over what he called the largest job cut in Cape Cod Healthcare’s history, a layoff of about 200 employees, in addition to bringing about improvements such as better billing.

The chairman of the system's board of trustees did not merely defend Salluzzo's financial results, but

'The actual performance was just phenomenal,' [Chairman William] Zammer said. 'We have a healthy, vibrant health care system.'

The Cape Cod Times suggested that observers outside the hospital system begged to differ,

But a professor of business ethics at Bentley University in Waltham questioned the extent of Salluzzo’s 'golden parachute,' while the spokesman for a nurses union called it 'outrageous.'

'These post-employment payouts must have been in his initial contract,' said W. Michael Hoffman, executive director of the center for business ethics at Bentley.

'It does sound crazy and wrong given the amount of his golden parachute,' Hoffman said in an email.

'It’s unconscionable we’re still paying someone who left under questionable circumstances,' said David Schildmeier, spokesman for the Massachusetts Nurses Association.

Schildmeier said the money would be better spent on patient care, especially since Cape Cod Healthcare draws a large percentage of its patient revenue from taxpayer-funded Medicare and MassHealth programs.

Dr Salluzzo is gone, but I doubt that the board of trustees is listening to these critics, and again unless push comes to shove, I suspect the new CEO will find his position to be very remunerative.

Summary

As I said in 2015,...

 As health care organizations have become increasingly big and influential, their leadership has been increasingly in the hands of generic professional managers, not health care professionals.  These hired managers have commanded generous and ever increasing pay, which has been justified by the common talking points: managers have extremely hard jobs and are brilliant, and high pay is necessary in a competitive market to attract and maintain top leaders.

Yet none of the boosters of high pay for health care managers, who mainly seem to consist of the legal, marketing, and public relations personnel who answer to them, and occasionally the board members who also are hired manager, answer the obvious questions:
What is the evidence that managers are brilliant and their jobs are so hard, especially when compared to the highly-trained health care professionals at their own institutions?
Is their really a free market in hired managers, and why is it so isolated from the market for health care professionals and other people employed by health care organizations?

These justifications seem particularly ridiculous when managers whose results are obviously not brilliant, e.g., marked by deficits, losses, and lay-offs, are getting huge and increasing pay.  They also seem ridiculous when the "market" apparently dictates salary cuts and lay-offs for all employees other than the managers of a particular organization.

 Instead, it seems likely that hired health care managers make more and more because of the influence they have on their own pay.  This influence is partially generated by their control over their institutions' marketers, public relations flacks, and lawyers.  It is partially generated by their control over the make up of the boards of trustees who are supposed to exert governance, especially when these boards are subject to conflicts of interest and  are stacked with hired managers of other organizations.  Furthermore, per the dogma of pay for performance, their pay may be heavily tied to short-term financial results, rather than fulfillment of the patient care or academic mission.

Thus, as in the larger economy, non-profit hospital managers have become "value extractors."  The opportunity to extract value has become a major driver of managerial decision making.  And this decision making is probably the major reason our health care system is so expensive and inaccessible, and why it provides such mediocre care for so much money.

So to repeat, true health care reform would put in place leadership that understands the health care context, upholds health care professionals' values, and puts patients' and the public's health ahead of extraneous, particularly short-term financial concerns. We need health care governance that holds health care leaders accountable, and ensures their transparency, integrity and honesty.


So push needs to come to shove.  I just posted that generic management/ "managerialism" just drove physicians who are corporate employees of one big health care system to unionize and contest their working conditions and other outcomes of generic management.  I submit that to get true health care reform, physicians, health care professionals, and members of the public concerned about our ever more expensive, yet constantly declining health care system need to do more than just read angry blog posts.

But until they do, I guess I will have an infinite number of follow-up posts, like this one, to write.  

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Not Going to Take it Anymore - Doctors in the Pacific Northwest Unionize, Begin Collective Bargaining with Hospital Systems

concentration of power corporate physician generic management generic managers labor unions managerialism PeaceHealth University of Washington

Not Going to Take it Anymore - Doctors in the Pacific Northwest Unionize, Begin Collective Bargaining with Hospital Systems

Unknown 1/18/2016 Komentar

We have posted about the plight of the corporate physician.  In the US, home of the most commercialized health care system among developed countries, physicians increasingly practice as employees of large organizations, usually hospitals and hospital systems, sometimes for-profit.  The leaders of such systems meanwhile are now often generic managers, people trained as managers without specific training or experience in medicine or health care, and "managerialists" who apply generic management theory and dogma to medicine and health care just as it might be applied to building widgets or selling soap.

We have also frequently posted about what we have called generic management, the manager's coup d'etat, and mission-hostile management.  Managerialism wraps these concepts up into a single package.  The idea is that all organizations, including health care organizations, ought to be run people with generic management training and background, not necessarily by people with specific backgrounds or training in the organizations' areas of operation.  Thus, for example, hospitals ought to be run by MBAs, not doctors, nurses, or public health experts.  Furthermore, all organizations ought to be run according to the same basic principles of business management.  These principles in turn ought to be based on current neoliberal dogma, with the prime directive that short-term revenue is the primary goal.

Now there are a few signs that the physicians are getting fed up with having to answer to generic management and managerialism.

I found two stories, perhaps somewhat related, about physicians unionizing to stand up to their new often managerialist overseers.  The most prominent was in the New York Times on January 9, 2016, provocatively titled "Doctors Unionize to Resist the Medical Machine."  It tells the story of how the hospitalists at PeaceHealth Sacred Heart Medical Center in Springfield, Oregon, formed a union de novo.  The second started with a brief article in the Seattle Times on December 27, 2015, about how housestaff at the University of Washington (UW) revived a housestaff association and turned it into a union.

Managerialism as the Stimulus at PeaceHealth

The long article about PeaceHealth showed that managerialist leadership of the hospital system was the chief stimulus for unionization. 

Managerialist Tactics: Outsourcing

The NYT article opened with

in the spring of 2014, when the administration announced it would seek bids to outsource its 36 hospitalists, the hospital doctors who supervise patients’ care, to a management company that would become their employer.

The outsourcing of hospitalists became relatively common in the last decade, driven by a combination of factors. There is the obvious hunger for efficiency gains. But there is also growing pressure on hospitals to measure quality and keep people healthy after they are discharged. This can be a complicated data collection and management challenge that many hospitals, especially smaller ones, are not set up for and that some outsourcing companies excel in.

Outsourcing is a now familiar entry in the managerialists' playbook.  It is seen more in manufacturing than in health care.  Although touted as improving economic "efficiency," it also may reduce the accountability of the managers of the organization that does the outsourcing.

Pursuit of Economic Efficiency

In this case,

Outsourced hospitalists tend to make as much or more money than those that hospitals employ directly, typically in excess of $200,000 a year. But the catch is that their compensation is often tied more directly to the number of patients they see in a day — which the hospitalists at Sacred Heart worried could be as many as 18 or 20, versus the 15 that they and many other hospitalists contend should be the maximum.

It was the idea that they could end up seeing more patients that prompted outrage among the hospitalists at Sacred Heart, which has two facilities in the area, with a total of nearly 450 beds. 'We’re doctors, we’re professionals,' Dr. [Rajeev] Alexander said. 'Giving me a bonus for seeing two more patients — I’m not sure I should be doing that. It’s not safe.' (A hospital representative said patient safety was 'inviolate.')

A constant theme of managerialism, and the neoliberalism that underlies it, is economic efficiency.  The usual narrative is that efficiency means providing better goods and services at lower costs. Instead, managerialism and neliberalism may mean decontenting goods and services so as to lower costs to the organizations providing them, but not necessarily providing more value to consumers.  In health care terms, managerialism and neliberalism may lead to less accessible, more mediocre health care that increase revenue to the organizations providing it, as implied by the physicians' comments above.  Making the US the most commercialized, managerialist run, and arguably neoliberal health care system among the developed countries has not led to lower costs, better access, or better health care quality.


The backstory for the outsourcing emphasizes that managerialism, and the resulting economic efficiency was indeed the goal of PeaceHealth...

In 2012, Sacred Heart’s parent, PeaceHealth, a nonprofit health care system, installed an executive named John Hill to adapt its Oregon hospitals to the latest trends in health care. Mr. Hill, in an effort to rein in the budget and improve the efficiency of a hospital that administrators said was lagging in key respects, including how long the typical patient stayed, eventually concluded that the hospitalists at Sacred Heart should be outsourced.

Centralization of Control

Furthermore,

The hospitalists also chafe at the way the administration has tried to centralize decisions they used to make for themselves. This might include hiring fellow doctors or the order in which they see patients on any day. They also complain of being loaded down with administrative tasks.

'We’re trained to be leaders, but they treat us like assembly line workers,' said Dr. Brittany Ellison, a hospitalist in the group. 'You need that time with the patient,...'

A major feature of managerialism is the concentration of power within (generic) management. To quote Komesaroff(1),

In the workplace, the authority of management is intensified, and behaviour that previously might have been regarded as bullying becomes accepted good practice. The autonomous discretion of the professional is undermined, and cuts in staff and increases in caseload occur without democratic consultation of staff.   Loyal long-term staff are dismissed and often humiliated, and rigorous monitoring of the performance of the remaining employees focuses on narrowly defined criteria relating to attainment of financial targets, efficiency and effectiveness.

We're Only In It for the Money

Also, the negotiations that started once the PeaceHealth physicians formed their union demonstrated a central tenet of managerialism

Even starker than the divide over these questions are the differences in worldview represented on opposite sides of the table. During a bargaining session last fall, the administration proposed increasing the number of shifts a year. Hospitalists now earn about $223,000 a year for 173 shifts and are paid extra for working more. The hospital offered $260,000 for a mandatory 182 shifts, and up to $20,000 in bonus pay for hitting certain medical performance targets. The hospitalists work seven days on and seven days off, so this would have effectively eliminated any time off for sick days or vacation.

When the doctors pointed this out, the administration responded that if they missed a few days, it would make sure they got extra days to hit the required number of shifts for full pay.

The hospitalists assured the administration negotiators that their concern had nothing to do with money — that none of this had ever been about money. They preferred to work less and make less to avoid burnout, which was bad for them and worse for patients. At which point the administration responded that money was always the issue, according to several people in the room. (The hospital declined to comment.)

Suddenly it dawned on the doctors why they had failed to break through, Dr. Alexander said. 'Imagine Mr. Burns,' the cartoonishly evil capitalist from 'The Simpsons,' 'sitting across the table,' he said. 'There’s no way we can say, 'This isn’t what we’re talking about. We’re not trying to get the bonus.''

Again, managerialism is based on neoliberalism, and neoliberal view is that the market rules.  The market is the arbiter of success, and money is the only outcome that matters.  As Komesaroff put it(1),

The particular system of beliefs and practices defining the roles and powers of managers in our present context is what is referred to as managerialism. This is defined by two basic tenets: (i) that all social organisations must conform to a single structure; and (ii) that the sole regulatory principle is the market.

Mission-Hostile Management

Never mind that the centrality of money seems entirely inconsistent with the stated mission of PeaceHealth,

We carry on the healing mission of Jesus Christ by promoting personal and community health, relieving pain and suffering, and treating each person in a loving and caring way.

Ostensibly, this is accompanied by core values, such as,

Stewardship We choose to serve the community and hold ourselves accountable to exercise ethical and responsible stewardship in the allocation and utilization of human, financial, and environmental resources. and,

Social Justice
We build and evaluate the structures of our organization and those of society to promote the just distribution of health care resources. 

We have frequently discussed how leadership of contemporary health care organizations often seem to act contrary to the organizations' stated mission, that is, mission-hostile management.

Value Extraction

Finally, while managerialism is ostensibly concerned with economic efficiency, whose efficiency matters.  When managers address physicians' efficiency, they seem to look at amount of work done divided by the cost to the hospital of paying physicians. However, they never seem to look at their own costs, the costs of management, as being a negative.

The PeaceHealth 2014 form 990, the latest available, states that the then CEO, Mr Alan Yordy (whose highest academic degree was an MBA, according to his LinkedIn page) had total compensation in 2013 of $1,366,742, and 11 other managers had total compensation greater than $250,000, with 9 having total compensation greater than $500,000. Those figures should be compared to the highest compensation offered the hospitalists, a maximum of $280,000 for 182 shifts a year, eliminating all vacation and sick leave. So if it is all about the money, the managers are making the most of it.

We have discussed ad nauseum the ridiculous compensation of the leaders of health care organization, even non-profit organizations.  Value extraction by top management has become a central feature of the US and global economy (look here).

The NYT article did not discuss whether the upset hospitalists knew about their bosses' compensation.  I suspect they did.  

Forming a Functioning Union at the University of Washington

The media coverage of the UW housestaff unionization was less detailed.  It does appear, though, that a stimulus was the pursuit of economic efficiency by UW management through squeezing the pay of housestaff, as described in the December article in the Seattle Times. In it the house staff said,

they account for about one-fifth of King County’s doctors and they want higher pay, new child-care benefits and free parking. Some UW residents and fellows earn so little that they qualify for welfare programs like Temporary Assistance for Needy Families and the Seattle City Light Utility Discount Program, according to the UWHA [University of Washington Housestaff Association.]

Another article in early January, 2016 in the Seattle Times added,

The association has proposed that residents and fellows earn at least the same salary as the UW’s lowest-paid physician assistants. Because the doctors in training work very long hours, they sometimes earn less than Seattle’s minimum hourly wage, the UWHA has said.

The council members, in their letter to Cauce, called the situation shocking. And based on information from the UWHA, they wrote that some residents and fellows qualify for welfare programs like Temporary Assistance for Needy Families (TANF).

The Seattle articles noted that the UW housestaff may earn from just over $53,000 to just under $70,000 a year.  Keep in mind, however, that under current rules, house staff may work up to 80 hours a week.  So $53,000 for someone working those hours translates into $13.25/ hour, under what many people now claim is the living wage.  That could be considered exploitation of  workers with doctoral degrees working in often highly stressful situations where lives may be on the line.  Whether there were issues other than money (and the respect it implies) involved at UW was not apparent based on the minimal press coverage.

So it appeared that the hospitalist physicians working for PeaceHealth, and most likely the housestaff of the University of Washington were pushed to unionize to counteract the managerialism of their hospital leaders.

The Results of Unionization So Far


In my humble opinion, similar stories to those at the PeaceHealth hospital about managers pushing physicians to increase productivity and efficiency, seemingly with little regard for the effect that might have on patient care and physicians' professionalism can be found at many hospitals and health systems.  Housestaff may be paid at little more than minimum wage rates at many training institutions.  However, employed physicians have rarely effectively resisted up to now. Perhaps one reason is that at many institutions, each employed physician has his or her own contract, and may feel little power to negotiate his or her working conditions independently.  Housestaff physicians obviously might feel they have even less leverage.  But at PeaceHealth Sacred Heart, the physicians had other ideas:

Amid the groaning, a relatively new member of the group named Dr. David Schwartz observed, 'They can’t fire all of us — there are unions.' This was a bit of a stretch: While there are hospitals around the country whose doctors are unionized, there did not appear to be a union anywhere composed of a single group of specialists. But Dr. Schwartz, a barrel-chested man with close-cropped hair and a bushy beard who would not look out of place at a graduate English seminar, thought unionizing might be worth a try.

At the time, it was only one of several options the doctors considered. They talked of forming an independent hospitalists group, of forming an alliance with an outsourcing firm of their choosing. But the alternatives gradually fell away for a variety of practical reasons, and the doctors were growing increasingly bitter.

Dr. Littell developed a riff, which the other hospitalists appropriated, about how the situation was like having your spouse of several decades announce he or she was going to play the field. 'You’ve been great, you’ve always been there,' he would joke. 'I just heard there could be better spouses out there.' The kicker: 'The good news is, you’re in the running, too!'

Amazingly, the unionization at PeaceHealth Sacred Heart was at least partially successful,

By March 2015, the PeaceHealth leadership, whatever its interest in efficiency gains, was apparently not pleased that one of its hospitals had a white-collar labor insurrection on its hands. The company announced that it would not outsource the hospitalists, a move it later said was always a possibility. Mr. Hill, who declined to comment, left in May.

The union did defeat the outsourcing tactic.  But otherwise results have not been so quick to appear, 

Noting that the negotiations with the hospital administration have dragged on for roughly a year, Dr. Schwartz said, 'It’s pretty obvious that they don’t want to get a contract done.' He says the administration worries that if it essentially rewards the hospitalists with a contract, it encourages other hospital workers to unionize too.

The housestaff at UW used a slightly different set of tactics, but still managed to form a real union.  Per the earlier Seattle Times article,

Established in 1964, the UWHA was mostly dormant during the 1980s and 1990s, according to the association’s website. It became active again starting in 1999. In 2013, members proposed making it a state-recognized collective-bargaining unit.

The UW petitioned the state Public Employment Relations Commissionto block the move, arguing that the residents and fellows were students paid stipends rather than employees paid salaries. But the commission sided with the residents and fellows, who last year voted to unionize.

The housestaff association has succeeded in negotiating. But as did the PeaceHealth doctors, they have not yet been able to secure their positions, per the later article.

University of Washington brass say they’re committed to providing the UW’s medical residents and fellows with decent compensation and benefits, but they insist the newly unionized doctors in training are asking too much in contract negotiations.

So,

Talks have been stalled for some time but are set to resume this month with a mediator assigned by the state Public Employment Relations Commission.

The two sides 'remain far apart in the area of compensation,' Joyner wrote in his letter.

Parenthetically, unexplored in any of the press coverage is whether the parallels between what is going on at PeaceHealth and the University of Washington have to do with explicit ties between the organizations. In 2013, per Beckers' Hospital Review, the news broke that the two institutions signed a letter of intent to create a "strategic alliance." In 2014, an article in the Seattle Times noted the ongoing concerns of housestaff and students at UW that the alliance could be diminishing their educational opportunities.

Summary

In one sense, it is amazing that physicians are now starting to unionize as a response to the managerialism of their leaders.  It was not all that long ago when the majority of physicians worked as solo practitioners or in small group practices, and fiercely defended their autonomy.  The last thing they would have thought about was unionization.  Since physicians were their own bosses, with whom could their unions have negotiated?  In addition, in the US, independent physicians and physician practices could not legally unionize.  Practices that discussed such issues as fees were liable to anti-trust prosecution.  And with what bosses could they have conceivably negotiated.

Yet now physicians are increasingly corporate employees, hence corporate physicians. At the moment, unionizing may be one of the few effective tactics health care professionals can use to halt the march of managerialism/ generic management and partially relieve the plight of the corporate physician (and health care professional.) However, in the long run, as long as people who care more about money than about patients' and the public's health run health care, even unions will not be able to make that much progress, and not without adverse effects.

It would take true health care reform to address the larger problems with health care and society that is now leading to physicians unionizing.  In  my humble opinion, hospitals, health care systems, and other "provider organizations" should seek better patient care, not growth.  Should they not voluntarily downsize (an almost comical idea in the current context), anti-trust enforcement, and probably new legislation would be needed to stop their pursuit of market dominance and return them to responsible community organizations.  The now much smaller hospitals, and provider organizations should not be run for profit, and the commercial practice of medicine should again be illegal.  Most physicians should go back to being private practitioners as individuals or within small groups.  Leaders of hospitals and provider organizations should be accountable for putting patients' and the public's health first, upholding professional values, and should not expect to get rich doing so.  But I dream on....

Musical Interlude

To lighten things up, if only a little, here is the YouTube video version of the full third album by the Mothers of Invention, led by the incomparable Frank Zappa, "We're Only In It for the Money."



ADDENDUM (21 January, 2016) - This post was republished on the Naked Capitalism blog.


Reference

1.  Komesaroff PA, Kerridge IH, Isaacs D, Brooks PM.  The scourge of managerialism and the Royal Australasian College of Physicians.  Med J Aust 2015; 202: 519- 521.  Link here.

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Generic Management of Health Care Non-Profits, Brought to You by Leaders of (Sometimes Failed, or Bailed Out) Finance on the Board?

boards of trustees finance generic management generic managers managerialism

Generic Management of Health Care Non-Profits, Brought to You by Leaders of (Sometimes Failed, or Bailed Out) Finance on the Board?

Unknown 1/08/2016 Komentar

Introduction - Managerialism

 We have frequently posted about what we have called generic management, the manager's coup d'etat, and mission-hostile management. Managerialism wraps these concepts up into a single package.  The idea is that all organizations, including health care organizations, ought to be run people with generic management training and background, not necessarily by people with specific backgrounds or training in the organizations' areas of operation.  Thus, for example, hospitals ought to be run by MBAs, not doctors, nurses, or public health experts.  Furthermore, all organizations ought to be run according to the same basic principles of business management.  These principles in turn ought to be based on current neoliberal dogma, with the prime directive that short-term revenue is the primary goal.

One Explanation - Finance Leaders Ascendant on the Boards of Health Care Non-Profits

I just found a useful article that provides one explanation for the rise of managerialism in health care non-profit organizations.  It postulated that the increasing prevalence of leaders of finance firms on the baords of trustees of such organizations led to increasingly managerialistic leadership.

Thanks to a link from Naked Capitalism to a post on ShadowProof that led to an article in the Stanford Social Innovation Review by Garry W Jenkins, entitled, "The Wall Street Takeover of Nonprofit Boards."  It described a study of the membership of the boards of 23 of "the nation's leading private research universities," most of which have medical schools and academic medical centers, and all of which have major biomedical and/ or health care research operations, as well as leading liberal arts colleges and large New York City non-profit organizations, including a few hospitals.  (We will restrict our discussion of the quantitative results to the former group of leading universities.)

The most important result was that 40% of trustees of the universities in 2014 "had a substantial professional career in finance," up from 19% in 1989.  Futhermore, in 2014, 56% of university board leadership positions were held by people from finance, up from 26% in 1989.   The author noted that the prevalence of people from the finance sector on university boards was far bigger than their prevalence in the population.  Only 6% of the private non-farm workforce in the US was in finance in 2012.

The author summarized his findings:

Over the past twenty-five years the compostion of the boards at some of America's most important nonprofit organizaI I has dramatically changed. Without much notice, a legion of Wall Street executives (investment bankers, hedge fund managers, and others) has taken a growing number of seats in nonprofit boardrooms. Not only that, they hold a disproportionate share of the leadership positions on these boards.

He then linked the increasing dominance of non-profit governance to the increasing tendency of these organizations to be run like for-profit businesses, that is, the rise of "managerialism."

Scholars and practitioners have documented various pressures placed on nonprofit organizations by donors and private foundations to adopt business approaches.

Although some of the pressure to adopt business approaches has come from external forces, it may also be true that the concepts and norms of philanthrocapitalism are also now carried into nonprofit organizations by the directors of public charities themselves.

He then provided a much more detailed discussion:

As financiers come to dominate the boards of leading nonprofits, it is not surprising that their approaches and priorities have made their way, very explicitly and fundamentally, into the governance of the nonprofit sector. Practices such as data-driven decision-making, an emphasis on metrics, prioritizing impact and competition, managing with three- to five-year horizons and plans, and advocating executive-style leadership and compensation have all become an essential part of the nonprofit lexicon.

Nonprofit leaders regularly hear about these finance practices from board members and donors whose native habitat is the financial services world. Moreover, nonprofit managers have come to accept them as reasonable principles upon which donors base their giving. More often than not, organizations are also expected to incorporate these principles in the management of the not-for-profit enterprises for which managers and boards share responsibility.

Although many of these business approaches may strengthen nonprofit capacity, we should also be mindful of the ways in which these same tools can morph into pathologies, ignore the costs or trade-offs associated with extending business thinking to the charitable sector, or distort organizational priorities. Numerous critics have written thoughtfully about the ways in which market-based thinking and approaches applied to the nonprofit sector provide false promise, with the potential to dilute charitable values, undermine long-term mission focus, incentivize small, incremental goals, and threaten shared governance and other forms of participatory problem-solving.

Beyond leading to the borrowing of financial concepts and tools in the boardroom, the rise in the number of nonprofit directors with ties to finance may also contribute to deeper changes in the underlying institutional values and motivations, a trend that economic sociologists refer to as the financialization of the nonprofit sector.

Financialization describes a spread of financial logics, influence, and strategies into new fields and organizations in ways that transform the culture, policies, and values of institutions.  Indeed, wealthy nonprofits-like colleges, universities, and museums-have long engaged with financial markets as endowment investors, but the scope and scale of today's nonprofit borrowing, aggressive debt financing, securitization transactions, and complex real estate transactions is unprecedented. Such shifts may affect the organization's strategic direction and orientation in a number of ways, including directing board and management attention to debt service, incentivizing organizations to invest resources on activities that return higher profit margins to cover debt service, elevating the centrality and importance of financial managers in strategic planning and decision-making, and increasing the need for and power of senior staff well versed in complex financial instruments.

The list of practices above and the description of financialization sound very much like standard operating procedures of generic management which we have previously described.  The discussion of pathologies above sounds similar to our discussions of how managerialism distracts from or undermines the mission.


The one quibble I have with Jenkins' discussion is that it puts almost the entire onus on the financial leaders on the boards of trustees, rather than the top managers of the organizations.  It may be that increasingly financialized boards hire increasingly generic managers, but there may be a symbiosis between the two groups.

So Jenkins' conclusion seems reasonable:

if boards are to operate as designed, and if they are to be maximally effective, then the composition of nonprofit boards must be more diverse and not dominated by financiers. 

But the problem of financial sector domination of health care non-profit boards may be even worse than that Jenkins describes.

The Dark Side of Finance

Even though Mr Jenkins is concerned about excess of influence of too many financially oriented people on the boards of non-profits, he is quite respectful of those in the finance field. "Individual finance professionals do bring skills, wisdom, and other positive attributes to nonprofit boards."  He also wrote, "This is not to say that finance professionals care less (or more) about a nonprofit organization or its mission.  Nor do I believe that all finance professionals think alike."  Many finance professionals may be very well-intentioned, of course.  But Jenkins seems to thus ignore the dark side of finance's recent history.

Finance firms are certainly known for the use of "financial logics, influence and strategies," and the employment of specific practices.  However, after 2008, they were also known for dangerously slipshod, if not unethical, sometimes corrupt management.  


In 2008, the global financial collapse/ great recession reshaped the global economy, and has been linked to the stagnation of the middle class and growth of plutocracy.  There have been numerous discussions of the role of the leadership of financial organizations in these events.  The blog Naked Capitalism has been covering these issues from the global financial collapse to the current day.  Some of the very many excellent sources on this era include the movie Inside Job,



and books such as Predator Nation by Charles Ferguson, 13 Bankers by Simon Johnson and James Kwak, and Bailout Nation by Barry Ritholtz.

A chapter in Predator Nation was entitled "Crime and Punishment: Banking and the Bubble as Criminal Enterprises.  In it, Mr Ferguson noted the following list of

prosecutable crimes committed during the bubble, the crisis, and the aftermath period by financial services firms ...

Securities fraud (many forms)
Accounting fraud (many forms)
Honest services violations (mail fraud statute)
Bribery
Perjury and making false statements to federal investigators
Sarbanes-Oxley violations (certifying false accounting statements)
RICO offences and criminal antitrust violations
Federal aid disclosure regulations (related to Federal Reserve loans)
Personal conduct offenses (many forms: drug use, tax evasion, etc)

Most of these never led to prosecution in an era of the revolving door and exceedingly lax law enforcement of actions by big corporations ("too big to jail")  Yet Ferguson argued for investigation of possible illegal acts by many large companies, and specifically named Citigroup, AIG, Lehman Brothers, Goldman Sachs, JP Morgan Chase as worthy of investigation.

Many of these organizations' leaders also were on the boards of health care organizations. Since 2008, we began noting that the governance of prominent health care non-profits was often dominated by finance firms, including those implicated in the 2008 collapse, although our observations were case-based, not quantitative.  The concern was not simply that health care organizations were being led into generic management and "managerialism," but that that the incompetence, unethical behavior, and corruption in the finance sector could cause equally bad problems in health care.  We have no systematic proof of that, but consider some of our more colorful cases, which include leaders of the financial firms named by Mr Ferguson...


2008

What Linked the Parallel Declines of Citigroup and the Harvard University Endowment? - In 2008, the collapse of the value of the Harvard endowment occurred on the watch of Harvard Corporation (board of trustees) members half of whom were leaders of big finance firms.

The Leadership of an Elite American University - Brought to You by the People Who Brought You the Global Financial Collapse - Six of the seven "charter trustee" members of the board of Dartmouth College who led a crusade, facilitated by packing the board with self-appointed as opposed to alumni elected members, to discredit elected board dissidents were leaders of big finance firms. Of the six new people whom they packed on as "charter trustees," half were also leaders of such firms.

2009

Hedge Fund U - Bernie Madoff, the supposed finance wizard who went to jail for a huge Ponzi scheme was on the board of Yeshiva University. The chairman of the board's finance committee was Ezra Merkin, a hedge fund operator who ran a "feeder" operation for Madoff's Ponzi scheme.

A Board of Trustees, or a Social Club for the Superclass? - Of the 29 non-physician board members of the Hospital for Special Surgery, 23 had major relationships with, and many of these had leadership roles in finance firms, including such bailed out, too big to fail firms as AIG, Bank of America, Citigroup, Goldman Sachs, JP Morgan Chase, and Wachovia.

2010

Members of the Board of Now Bankrupt Lehman Brothers as Leaders of Health Care? - Members of the board of Lehman Brothers, whose failure was related to the onset of the financial crisis, also served on the boards of Vanderbilt University, the American Red Cross (as CEO), New York - Presbyterian Hospital, New York University, and Tel Aviv University.

A "Very Well Paid Boob" on the Harvard Corporation? - the university's governing board included one of the architects of the overgrowth of Citigroup, which had to be bailed out, and also of the deregulation of finance which allowed the company to be too big to fail.

Failed Leaders of Citigroup as Leaders of Health Care - The bailed out Citigroup board of directors also served on the boards of trustees of Johns Hopkins Medicine, Health System and Hospital, Brown University, Tufts University, Columbia University, Howard University, the Rockefeller Foundation, Harvard (as mentioned above), and Cornell University. 

2012

New York - Presbyterian Hospital Trustee Advocated Novel Cardiac Procedure - "Reach In, Rip Out Their Heart, and Eat It Before They Die" - Richard Fuld, the former CEO of Lehman Brothers, whose failure was related to the onset of the crisis, and who once advocated, presumably only symbolically, eating the hearts of his financial competitors, was on the board of the prestigious hospital.

2014

The Medical School as Hereditary Plutocracy - Retiring Board Chair Sanford Weill of Cornell Weill Medical School Names His Own Daughter as New Chair - the board chairmanship of the medical school went from the former CEO and chairman of the bailed out, too big to fail Citigroup (see above) to his daughter, who runs her own finance firm.

Yet outside of a few grumpy bloggers, the continuing presence of leaders of too big to fail, too big to jail, often bailed out financial firms on the boards of some of our most notable health care organizations and universities has attracted almost no comment, and less concern.


Summary

The continuing dysfunction of US health care, with ever rising costs, stagnant quality, and still inadequate access, is well known.  There is constant loud argumentation over "Obamacare."  (Congress just passed a repeal of it, which the president has threatened to veto.)  Yet there is little in depth discussion or inquiry about what is really going wrong.  The really unpleasant issues rarely surface in polite discussion.  We have called this aversion to direct discussion of big problems the anechoic effect.

So I hope that there is more discusison of who gets to lead health care organizations, and who gets to sit on the boards that exercise stewarship over them.  We need far more light shined on who runs the health care system, using what practices, to what ends, for the benefits of whom.

True health care reform would enable transparent, honest, accountable governance and leadership that puts patients' and the public's health over ideology, self-interest, and self-enrichment.

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How Managerialists Turned Housestaff Training into a Zero-Sum Game: the Continuing Saga of the FIRST and iCompare Studies

academic medical centers amphetamines clinical trials generic managers managerialism medical ethics post-graduate medical education resident sleep deprivation

How Managerialists Turned Housestaff Training into a Zero-Sum Game: the Continuing Saga of the FIRST and iCompare Studies

Unknown 12/23/2015 Komentar

A ongoing controversy about two controlled trials (FIRST and iCompare) meant to test the bizarre hypothesis that sleep depriving medical housestaff (that is, physicians in training) would improve health care provided new evidence that academic medicine has been captured by managerialists.  

Background: the Controversy about the FIRST and iCompare Housestaff Sleep Deprivation Trials

In early December, 2015 we posted about two clinical trials, FIRST and iCompare, designed to test the hypothesis that  increasing housestaff sleep deprivation would improve care continuity, and thus somehow improve housestaff their performance and their patients' outcomes.  Not only did the studies' hypothesis seem strange, but the studies seemed to violate fundamental rules of research ethics.  Study investigators proceeded without obtaining formal informed consent from their house staff or patient research subjects, and did not allow any research subjects to opt out without penalty (e.g., house staff would have to quit their programs and find new ones to opt out).  Finally, after Public Citizen and the American Medical Student Association (AMSA) complained about the studies, study defenders based their arguments on logical fallacies.

Why would distinguished medical educators behave so strangely?  I hypothesized that medical educators could not imagine a way to improve care continuity without worsening trainees' sleep deprivation because all logical methods to do so would cost money.  However, the managerialist executives to whom medical educators are now beholden shrink from increasing costs, other than their and their cronies' own compensation.

Two Psychiatric Residents Write about the Zero-Sum Game of Housestaff Training

Of course, the controversy, and particularly the complaints from AMSA and Public Citizen have been largely anechoic.  But recently, the Washington Post published a commentary by two psychiatric residents on these issues.  The authors, Jeffrey Clark and David Harari, confirmed many of my concerns about the sleep deprivation trials.  They personally verified that the studies were done without informed consent from the research subjects.

The two of us and our patients were not provided informed consent before being enrolled in the iCompare trial.

The also confirmed that the trial investigators assumed they were working in a zero-sum framework.

We already know that extended shifts are dangerous. While many people rightfully suspect that current duty-hour limits aren’t improving outcomes, these studies err in assuming that the dangers of sleep deprivation must be traded for the dangers of shared patient care. Such a zero-sum framework won’t help us improve patient care or ensure the well-being of resident physicians.

To elaborate, the big problem with the duty hour restrictions is that while limiting the consecutive hours interns were supposed to work, this was not accompanied by any diminution of the total workload of housestaff at any one institution.

The standards published in 2011 by the Accreditation Council for Graduate Medical Education still allow hospitals to put residents through blistering 80-hour work weeks, while setting maximum shift lengths of only 16 hours for interns and 24 hours for more senior residents. Interns simply work shorter but more-frequent shifts. Doctors hand off patients to each other more regularly but without the training needed to manage these transitions effectively. And, by and large, hospitals have not responded to the changes with larger workforces, leaving residents no choice but to compress their daily work into shorter time periods.

It appears that housestaff were formerly sleep deprived not by their own choice, but because they were required to accomplish enormous amounts of work.  The new duty-hour limits rearrangde their work into shorter shifts, without diminishing their total responsibilities.  This does not seem like much of an improvement.  The FIRST and iCompare trials were designed to test whether removing the new duty-hour limits, and thus increase sleep deprivation, would somehow help, which ignores the reason  the new duty-hour restrictions were enacted.  But simply shortening shifts accomplishes little as long as total workload remains the same.

Stimulants, An Even Worse Solution

So Clark and Harari confirmed my concerns about the FIRST and iCompare trials.  But they added a new and in some ways even more dire concern.  They uncovered an even more troubling response by medical academics to the zero-sum game which the managerialists ensure they are playing.

Adequate sleep is a fundamental physiological need. No amount of caffeine, prescription stimulants (as some physician leaders have advocated for) or 'alertness management strategies' can adequately compensate for acute and chronic sleep deprivation.

In an aside, Clark and Harari suggested the medical educators were advocating that housestaff use prescription stimulants to counteract the effects of sleep deprivation.  This seems astonishing.

Yet a brief search revealed many informal accounts of medical students and housestaff using psychoactive prescription drugs to increase wakefulness.  For example, see an account of a medical student using Focalin (dexmethylphenidate) here.  Surveys, for example by Shy et al of emergency residents, suggest that use of stimulants by housetaff is rare,(1), but survey respondents may be unwilling to admit to such behavior, and emergency medicine residents may work shorter shifts than medicine and surgery residents.

Also, there is some other evidence that medical educators may encourage use of stimulants.  At least one 2014 guest poster on the KevinMD blog stated

at one medical university, it is common knowledge among the student body that struggling individuals are encouraged to see a physician about their 'possible ADD,' or attention deficit disorder.

Furthermore, in 2009, Rose and Curry writing in the Mayo Clinic Proceedings (2) noted that 

extending the use of drug therapy to include resident with no identified sleep disorder to improve concentration and learning, improve wakefulness, enhance performance, and promote high-quality patient care (especially at night) raises a variety of concerns

without explaining who came up with that idea in the first place.  However, in a response to a letter challenging their commentary, they denied (3) that they were advocating for such drug use, but never made clear who else was.

As we have noted, stimulants used for attention deficit and hyperactivity disorder (ADHD) are  amphetamines or relatives of amphetamines, and have dangerous adverse effects.  Encouraging, even subliminally, medical trainees to use such dangerous drugs to try to compensate for underfunding of training programs seems unethical, as the above letter writer pointed out.(3)  That medical educators would resort to such an extreme solution suggests how they are now boxed in. 

Conclusion: the Problem is Managerialism   

While the ongoing trials of housestaff sleep deprivation have been largely anechoic, the recent Washington Post commentary by Clark and Harari make questions about why in the world medical academics would have set up such trials and continue to defend them even more stark.

But it seems that medical academics are boxed in, playing a zero-sum game.  They may know that there housestaff are overworked and sleep deprived, a situation that endangers the housestaff and their patients.  Yet every reasonable way one could imagined improving the situation would require spending more money, most likely to hire more people to spread the workload.  Yet spending more money may be an anathema to the generic managers to whom medical academics report.  Spending more money would decrease revenue, and for many managerialist managers, increasing revenue, not patient outcomes or physician performance, is the prime directive.    


We have frequently posted about what we have called generic management, the manager's coup d'etat, and mission-hostile management. Managerialism wraps these concepts up into a single package.  The idea is that all organizations, including health care organizations, ought to be run people with generic management training and background, not necessarily by people with specific backgrounds or training in the organizations' areas of operation.  Thus, for example, hospitals ought to be run by MBAs, not doctors, nurses, or public health experts.  Furthermore, all organizations ought to be run according to the same basic principles of business management.  These principles in turn ought to be based on current neoliberal dogma, with the prime directive that short-term revenue is the primary goal.

To conclude, as I did on my first post on the sleep deprivation studies....  I hope that the two studies create the degree of controversy they deserve, and that the federal government promptly starts investigating honestly and thoroughly.  I further hope that this unseemly episode causes medical educators to rethink the cozy or at least conflict averse relationships they have with their managerialist leaders.

True health care reform would restore health care leadership that understands health care and medicine, upholds the health care mission, is accountable for its actions, and is transparent, ethical and honest.



References

1.  Shy BD, Portelli I, Nelson LS. Emergency medicine residents' use of psychostimulants and sedatives to aid in shift work. Am J Emerg Med 2011; 29: 1034-36. Link here.

2.  Rose SH, Curry TB.  Fatigue, countermeasures and performance enhancement in resident physicians.  Mayo Clin Proc 2009; 84:  955-57.  Link here.


3.  Paparodis R. Fatigue, countermeasures and performance enhancement in resident physicians.  Mayo Clin Proc 2010; 85: 300 - 303.  Link here.

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