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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Death of EHR "Meaningul Use" imminent. (Hopefully the death of the 'National Programme for Health IT in the HHS' is imminent, too.)

AMA Andy Slavitt CMS James Madara meaningful use NPfIT ONC

Death of EHR "Meaningul Use" imminent. (Hopefully the death of the 'National Programme for Health IT in the HHS' is imminent, too.)

Unknown 1/14/2016 Komentar

I've written a number of posts on the Orwellian-named "Meaningful Use" experiment with electronic health records systems, imposed upon United States physicians by the Department of Health and Human Services through its Office of the National Coordinator for Health Information Technology (ONC).

See these posts and others retrieved by query link http://hcrenewal.blogspot.com/search/label/meaningful%20use:

Meaningful Use Final Rule: Have the Administration and ONC Put the Cart Before the Horse on Health IT?

Meaningfully Experimental Protocols and Interfaces to Nowhere? Nagging Questions On Healthcare IT Remain

Science or Politics? The New England Journal and "The 'Meaningful Use' Regulation for Electronic Health Records"

"Meaningful Use" not so meaningul: Multiple medical specialty societies now go on record about hazards of EHR misdirection, mismanagement and sloppy hospital computing

EHRs and "Meaningful Use": Begging the Question in the New England Journal of Medicine

The Scientific Justification for Meaningul Use, Stage 2: The NWB Methodology

Meaningful Use and the Devil in the Details: A Reader's View

  
In these posts and others I expressed significant skepticism about the 'Meaningful Use' scheme.

But what did I know?  Our betters in government and academia knew far better how to seriously annoy physicians, make more burdensome (and hence more dangerous) the already onerous task of EHR use, and waste the tax money we hard-working Americans pay to an increasingly bloated bureaucracy that acts as if money grows on trees (the U.S. debt has doubled in recent years to almost $19 billion, see http://www.usdebtclock.org/).

From the horse's mouth (or perhaps the animal's other end) at https://www.healthit.gov/providers-professionals/meaningful-use-definition-objectives:

Meaningful Use Defined

Meaningful use is using certified electronic health record (EHR) technology to:

• Improve quality, safety, efficiency, and reduce health disparities
• Engage patients and family
• Improve care coordination, and population and public health
• Maintain privacy and security of patient health information

I note that none of this was backed by science at the time of its formulation.

The end result of the MU experiment is this:

CMS’s Slavitt: End of meaningful use imminent in 2016
Internal Medicine News
WHITNEY MCKNIGHT
January 12, 2016

http://www.internalmedicinenews.com/practice-economics/health-reform/single-article/cmss-slavitt-end-of-meaningful-use-imminent-in-2016/94653f2ba164a8131ca214d5325c0d74.html

Meaningful use is on its way out.

Andy Slavitt, acting administrator of the Centers for Medicare & Medicaid Services, told investors attending the annual J.P. Morgan Healthcare Conference that CMS is pulling back from the health care IT incentive program in the coming months.

“The meaningful use program as it has existed will now be effectively over and replaced with something better,” Mr. Slavitt said. Without providing full details, he said that March 25 would be an important date as concerns the rollout of the new health IT initiatives.

The waste of resources and time, and the alienation of physicians by this grand(-ly foolish) experiment is significant:

“We have to get the hearts and minds of physicians back. I think we’ve lost them,” Mr. Slavitt said.

No foolin'.  Ya think?

This was predictable by anyone with half a brain about healthcare information technology reality.  (It's a real loss that hyper-enthusiast health IT geniuses responsible can't be fired and banned from the domain of healthcare - for life.)

Perhaps the officials at HHS got their first clue about clinician unhappiness via a long January 2015 letter from about 40 medical societies, including the AMA, American College of Physicians, American College of Surgeons, and numerous others that they did not exactly love these systems and the MU experiment.  See my January 28, 2015 post "Meaningful Use not so meaningful: Multiple medical specialty societies now go on record about hazards of EHR misdirection, mismanagement and sloppy hospital computing" at http://hcrenewal.blogspot.com/2015/01/meaningful-use-not-so-meaningul.html and the letter itself at http://mb.cision.com/Public/373/9710840/9053557230dbb768.pdf.

He noted that, when the meaningful use incentive program began, few physicians and practices used electronic health records and concerns were that many would not willingly embrace information technology. Now that “virtually everywhere care is delivered has a computer,” it’s time to make health care technology serve beneficiaries and the physicians who serve them, Mr. Slavitt said.

The revealing nature of this candid statement is breathtaking.  He's admitting that 1) many physicians, rightfully reluctant to not "willingly embrace" IT, had the technology imposed upon them by government (due to its "concerns") via penalties for non-adopters and 2) with the systems in the physicians' faces at the cost of hundreds of billions of dollars that could have been better spent on healthcare itself (e.g., for those subject to 'disparities", i.e., the poor), now it's time to make the systems serve patients and physicians.

Brilliant.

The cost, however, was too high, Mr. Slavitt said. “As any physician will tell you, physician burden and frustration levels are real. Programs that are designed to improve often distract. Done poorly, measures are divorced from how physicians practice and add to the cynicism that the people who build these programs just don’t get it.”

The 'cynicism' (def: inclination to believe that people are motivated purely by self-interest; skepticism) that the builders of these programs don't "get it?"  It's not cynicism.  It's a rational conclusion arrived at via empirical observation.

I also recall in the not-so-distant past that physician complaints were dismissed as the complaints of "Luddites."  I've heard this at Informatics meetings, at medical meetings, at commercial health IT meetings (e.g., Microsoft's Health Users Group, and at HIMSS), at government meetings (e.g., GS1 healthcare), and others.

It's rewarding to finally have government officials admit those charges were, to be blunt about it, lies or delusions.

Soon, CMS will no longer reward health care providers for using technology, but will instead focus on patient outcomes through the merit-based incentive pay systems created by last year’s Medicare Access and CHIP Reauthorization Act (MACRA) legislation. 

Perhaps that's a move in the right direction; time will tell.  However, I'm sure physicians have GREAT confidence in how well that will work out, yet another government experimental project.

In addition to asking physicians to work with health care IT innovators to create systems that work best according to their practice’s respective needs, CMS is calling on the private sector to create apps and analytic tools that will keep data secure while fostering true and widespread interoperability.

This is in the realm of delusion.  Physicians "asked" to "work with" (for free?) the same "innovators" (i.e, health IT companies) whose "innovation" led to the massive disaffection for today's health IT, and the burdens that technology has placed on the medical profession, nurses and other clinicians as well?   Further, it's actually believed that the companies will listen, when they've failed to do so for several decades running?  My head spins.

Anyone seeking to block data transfer will find CMS is not their friend. Mr. Slavitt said. “We’re deadly serious about interoperability. Technology companies that look for ways to practice data blocking in opposition to new regulations will find that it will not be tolerated.”

And who, exactly, is going to enforce that edict on proprietary systems, which health IT companies view (correctly, from the business perspective) as giving them a competitive edge?  I'm sure the health IT companies, who now hold medicine captive, are shaking in their boots.

Dr. James L. Madara, CEO of the American Medical Association, echoed Mr. Slavitt’s comments on the current, negative impact of EHRs on physicians’ practices. He noted that many physicians are spending at least 2 hours each workday using their EHR and may click up to 4,000 times per 8-hour shift.

I should open a clinic for health IT-caused carpal tunnel syndrome and repetitive motion injuries.  Oh wait!  There's no ICD-10 code for that to bill (see http://hcrenewal.blogspot.com/2016/01/repeated-crushing-by-alligators-and.html).

Dr. Madara outlined three AMA goals to help restore the physician-patient relationship. The first is to restructure the medical school curriculum, which he said essentially is the same as it has been for 100 years. New generations of physicians should be taught how to deliver collaborative care that includes telemedicine, more ambulatory care, and home care. Community-based partnerships, he said, would become key to treating chronic diseases like diabetes and would have to be factored into reimbursement models. The AMA also seeks to improve health outcomes and ensure thriving physician practices.

Central to the AMA’s plan for the future: Helping physicians restructure practice via technology. He announced that the AMA is a founding partner in the Silicon Valley (Calif.) based Health2047, a company focused on supporting health IT and other entrepreneurs in their efforts to provide physicians with digital tools that improve patient outcomes, among other innovations.

As to "helping physicians restructure practice via [information] technology", this seems an example of what I termed "Heath IT hyper-enthusiasm" writ large.  See My March 11, 2012 post "Doctors and EHRs: Reframing the 'Modernists v. Luddites' Canard to The Accurate 'Ardent Technophiles vs. Pragmatists' Reality" at http://hcrenewal.blogspot.com/2012/03/doctors-and-ehrs-reframing-modernists-v.html.

What is needed, as I have repeatedly written, is not to have physicians "restructure" practice to adopt to IT, rather to restructure IT (the systems themselves, the developmental methodologies, the backgrounds of the industry leadership, the industry itself) to match the needs of physicians and patients.

The AMA holds a minority of the nation's physicians as members; a 2011 article "American Medical Association membership woes continue" (CMAJ. 2011 Aug 9; 183(11): E713–E714, http://www.ncbi.nlm.nih.gov/pmc/articles/PMC3153537/) indicated this:

In the early 1950s, about 75% of US physicians were AMA members. That percentage has steadily decreased over the years. In June, at the annual meeting of its policy-making body, the House of Delegates, the AMA announced that it lost another 12 000 members last year. That brings total membership below 216 000. Up to a third of those members don’t pay the full $420 annual dues, including medical students and residents. Not counting those members, somewhere in the neighbourhood of 15% of practising US doctors now belong to the AMA.

Hair-brained schemes to "restructure practice via technology" will likely drop those numbers further.

The National Programme for IT in the NHS (NPfIT) died several years ago (http://hcrenewal.blogspot.com/2011/09/npfit-programme-going-pffft.html).

It is my hope the death of "meaningful use" heralds the death of the equally wasteful and ill-thought-out National Program for health IT in the HHS, a.k.a. HITECH, and a return to recognition of the truth: that health IT is experimental, that it (and its subjects) must be treated with that in mind, that its progress cannot be mandated, and that the technology, as any other IT, needs to be approached with great skepticism e.g. per this article:

Pessimism, Computer Failure, and Information Systems Development in the Public Sector.  (Public Administration Review 67;5:917-929, Sept/Oct. 2007, Shaun Goldfinch, University of Otago, New Zealand).  Cautionary article on IT that should be read by every healthcare executive documenting the widespread nature of IT difficulties and failure, the lack of attention to the issues responsible, and recommending much more critical attitudes towards IT.  linkto pdf

-- SS

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Health Care Corruption Workshop Slides Now Online

health care corruption

Health Care Corruption Workshop Slides Now Online

Unknown 1/10/2016 Komentar

Slides from the workshop entitled Defense Against the Dark Arts - Understanding and Challenging Health Care Corruption given by Dr Roy Poses and Dr Wally Smith at the Physicians for a National Health Plan (PNHP) meeting, October, 2015, in Chicago, IL, US, are now online here. There also is a link to the slides on our Past Meetings and Events page.

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Yet another observation that known health IT-caused injuries and deaths are "the tip of the iceberg"

CRICO healthcare IT harms healthcare IT risk ICD-10 Journal of Patient Safety tip of the iceberg

Yet another observation that known health IT-caused injuries and deaths are "the tip of the iceberg"

Unknown 1/09/2016 Komentar

I've noted a new observation of the limited data available on health IT harms being the (quote) "tip of the iceberg."

This statement appears in "Electronic Health Record–Related Events in Medical Malpractice Claims", Gruber et al., J. Patient Saf 2015, http://journals.lww.com/journalpatientsafety/Abstract/publishahead/Electronic_Health_Record_Related_Events_in_Medical.99624.aspx (PDF available free from link on right side of page.)

From the abstract:

Background: There is widespread agreement that the full potential of health information technology (health IT) has not yet been realized and of particular concern are the examples of unintended consequences of health IT that detract from the safety of health care or from the use of health IT itself. The goal of this project was to obtain additional information on these health IT-related problems, using a mixed methods (qualitative and quantitative) analysis of electronic health record-related harm in cases submitted to a large database of malpractice suits and claims.

Methods: Cases submitted to the CRICO claims database and coded during 2012 and 2013 were analyzed. A total of 248 cases (less than 1%) involving health IT were identified and coded using a proprietary taxonomy that identifies user- and system-related sociotechnical factors. Ambulatory care accounted for most of the cases (146 cases). Cases were most typically filed as a result of an error involving medications (31%), diagnosis (28%), or a complication of treatment (31%). More than 80% of cases involved moderate or severe harm, although lethal cases were less likely in cases from ambulatory settings. Etiologic factors spanned all of the sociotechnical dimensions, and many recurring patterns of error were identified.

Conclusions: Adverse events associated with health IT vulnerabilities can cause extensive harm and are encountered across the continuum of health care settings and sociotechnical factors. The recurring patterns provide valuable lessons that both practicing clinicians and health IT developers could use to reduce the risk of harm in the future.

Note the statement at pg. 5:

... The actual incidence of harm cannot be reliably estimated from this data; nonetheless, it is generally agreed that safety events represented in malpractice claims are the ‘tip of the iceberg', insofar as the vast majority of cases, even cases that involve harm, do not result in suits.

I've heard claims that up to 95% of potential meritorious medical malpractice suits never make it to the lawsuit stage due to difficulties in, and costs of, prosecution.  Anecdotally, the latter observation corresponds to my own family's experience; several attorneys would not take my mother's EHR-related medical malpractice case initially, due to her age and concerns about expenses.

I note at my post today "Repeated crushing by alligators and crocodiles: ICD-10 has you covered. Harmed by bad health IT? No codes for that" at http://hcrenewal.blogspot.com/2016/01/repeated-crushing-by-alligators-and.html that repeated attacks and crushings by creatures of Order Crocodilia are well-covered by ICD-10, but health IT harms do not appear to be covered by the same mandatory coding system.  My view is that this is likely by design, not due to lack of knowledge of these events by ICD-10 experts involved in creating this coding system.

Below is a checklist of such failure modes causing patient harms from the May 2012 AHRQ Health IT Hazard Manager Report (http://healthit.ahrq.gov/sites/default/files/docs/citation/HealthITHazardManagerFinalReport.pdf).  These should be represented in ICD-10 so that the issues can be further known and studied:

 

AHRQ Health IT Hazard Manager Report - Hazard Modes of Health IT (click to enlarge)

Other taxonomies exist, such as in the 2010 FDA Internal Memo on Health IT harms, "not intended for public use" and unearthed by investigative reporter Fred Schulte.  See my post at http://hcrenewal.blogspot.com/2010/08/smoking-gun-internal-fda-memorandum-of.html and the memo itself at the link below.

Internal FDA Memo ("not intended for public use") on potential dangers of health IT.  Download the full PDF by clicking here.

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• Other use of that same "tip of the iceberg" phrase of which I have written:

FDA CDRH Director Jeff Shuren MD, JD's statement that the known risks are "the tip of an iceberg" was made at the HIT Policy Committee, Adoption/Certification Workgroup on February 25, 2010, where the topic was "HIT safety" (The text is available at http://web.archive.org/web/20120320111030/http://healthit.hhs.gov/portal/server.pt/gateway/PTARGS_0_11673_910717_0_0_18/3Shuren_Testimony022510.pdf):

... In the past two years, we [FDA] have received 260 reports of HIT-related malfunctions with the potential for patient harm – including 44 reported injuries and 6 reported deaths. Because these reports are purely voluntary, they may represent only the tip of the iceberg in terms of the HIT-related problems that exist.

For more on these issues, see my April 9, 2014 essay "FDA on health IT risk: "We don't know the magnitude of the risk, and what we do know is the tip of the iceberg, but health IT is of 'sufficiently low risk' that we don't need to regulate it" at http://hcrenewal.blogspot.com/2014/04/fda-on-health-it-risk-reckless-or.html.

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ECRI Institute:  http://www.healthleadersmedia.com/print/TEC-290834/HIT-Errors-Tip-of-the-Iceberg-Says-ECRI:

HIT Errors 'Tip of the Iceberg,' Says ECRI
Cheryl Clark, for HealthLeaders Media , April 5, 2013

Healthcare systems' transitions from paper records to electronic ones are causing harm and in so many serious ways, providers are only now beginning to understand the scope.

... Karen Zimmer, MD, medical director of the institute, says the reports of so many types of errors and harm got the staff's attention in part because the program captured so many serious errors within just a nine-week project last spring.  The volume of errors in the voluntary reports was she says, "an awareness raiser."

"If we're seeing this much under a voluntary reporting program, we know this is just the tip of the iceberg; we know these events are very much underreported."

On the ECRI Deep Dive study of health IT risk, see my Feb. 28, 2013 essay "Peering Underneath the Iceberg's Water Level: AMNews on the New ECRI 'Deep Dive' Study of Health IT Events" at http://hcrenewal.blogspot.com/2013/02/peering-underneath-icebergs-water-level.html.

Tip of the iceberg:  ignore it at your peril

 -- SS

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