We have posted about cases in which hospitals or academic medical centers hired legislators to promote their political agendas. In one case in 2006, a former Rhode Island state legislator pleaded guilty to selling his influence to a local medical center, which submitted to a deferred prosecution agreement, and whose CEO was later convicted of conspiracy and fraud. (This conviction has been appealed.) In another case in 2008, a former New Jersey state legislator was convicted of fraud for selling his influence to a state health care university and academic medical center, which also had been operating under a deferred prosecution agreement.

The latest version of this type of scandal appeared towards the end of last month in the New York Times:

Saying that he knew his 'conduct was illegal and wrong,' a longtime Democratic member of the New York State Assembly, Anthony Seminerio, pleaded guilty on Wednesday to abusing his position by soliciting for himself an amount prosecutors estimated at $500,000.

Federal prosecutors said that for the last decade he traded upon his office, receiving 'corrupt payments' from people or organizations that had business before the state and sometimes threatening those who resisted his requests for money.

The payments were funneled into a company called Marc Consultants that Mr. Seminerio created to hide the income, prosecutors said.

Mr. Seminerio told Judge Naomi Reice Buchwald in Federal District Court in Manhattan that one of the organizations that paid him for wielding his political influence was Jamaica Hospital Medical Center, in Queens. It was the first public mention of Jamaica Hospital, which before the hearing had been referred to in court papers merely as 'a hospital in New York City.'

Appearing before the judge around noon on Wednesday, Mr. Seminerio, unshaven but wearing a blazer and a tie, declared in a firm voice that he was guilty of the charge of honest services fraud. In a brief statement he acknowledged that on July 10, 2008, he 'promoted the interests' of Jamaica Hospital in connection with state business and did not divulge that he had received payments from the hospital.

'My conduct had the effect of depriving others of honest services,' he said. Prosecutors stated that the hospital had paid Marc Consultants about $310,000 and that 'a separate, Medicaid-managed health care plan' affiliated with the hospital paid another $80,000. At the request of hospital officers, prosecutors said, Mr. Seminerio acted as an advocate with legislators and lobbied on their behalf with executive branch officials.

A criminal complaint states that on numerous occasions Mr. Seminerio 'took action in his capacity as a member of the Assembly to benefit the hospital at the same time that he was receiving payments from the hospital.'

The complaint also details recorded conversations in which hospital officials asked Mr. Seminerio to intervene in state budget decisions and in which Mr. Seminerio urged a Health Department official to help Jamaica Hospital take over another hospital.

There once was a time when health care was a calling, and when hospitals were considered charitable organizations which served the sick, and often the poor. Health care professionals and institutions were once held to a higher standard than, say, those who collected the garbage.

Jamaica Hospital Medical Center still proclaims its mission to be:

To serve our patients and the community in a way that is second to none

It is not clear how that squares with "corrupt payments" to a state legislator.

In my humble opinion, for health care to resolve its current crises, it will have to again be held to a higher standard. If we do not challenge the pervasive conflicts of interest within and across health care, and the outright corruption that has infected many health care institutions, none of the proposed manipulations of health care financing will make much of a dent in ever rising costs, declining access, or degrading quality.

But for this to happen, health care professionals and policy leaders will have to acknowledge how low the current standards are. As long as cases like those noted above are mentioned only in the local news media, but are not subjects for polite conversation in professional and policy venues, many will be able to cling to the illusion that things are not so bad.

We have posted on a variety of settlements of cases alleging health care fraud, but this one has a new twist, as reported by the NY Times,

New York State and New York City officials agreed this week to repay the federal government for more than half a billion dollars in improper Medicaid claims, averting a potential court battle but adding more red ink to the state’s and city’s finances.

The settlement, which federal officials said was the largest recovery of Medicaid funds in history, ends a lengthy dispute with the federal government over whether school districts around the state improperly sought Medicaid payments for speech therapy and other services dating to the early 1990s.

Under the agreement, which was announced Tuesday, the city will repay about $100 million. The state will pay about $332 million in 10 installments over the next five and a half years and will also give up $107.9 million worth of Medicaid claims now owed by the federal government.

Though neither city nor state officials are required to admit wrongdoing under the agreement, it does require the state’s Department of Education to submit to independent monitoring of its Medicaid-financed programs.

Since the 1980s, Medicaid has helped school districts pay for the cost of services like speech therapy and psychological counseling for schoolchildren, including the cost of transportation to therapists’ offices. School districts in New York have been among the most aggressive in the country in seeking such aid: one federal study found that New York accounted for 44 percent of all student health services.

Those lawsuits, filed under the federal False Claims Act, spurred several audits by the Department of Health and Human Services of city and state programs that finance speech therapy and other programs for disabled children. Those audits found substantial potential for fraud, reporting that a vast majority of the claims submitted did not meet federal requirements, and that in many cases there was no evidence that the services had actually been provided.

This may be the first settlement of health care fraud allegations we have discussed in which all the involved parties were government agencies.

The current fervent debate in the US about health care reform has focused on ever rising health care costs. However, this debate has largely ignored the ethics of health care, and the sorts of leadership of health care organizations that has lead to rampant and costly mischief, of which this case is just the latest example. How can we control costs while so many health care leaders are seeking every angle to make more money, whatever the consequences?

On July 7, President Obama appointed Dr. Donald Berwick as Administrator of the Centers for Medicare and Medicaid Services (CMS). Dr. Berwick, a pediatrician, is well known as the CEO of the non-profit Institute for Healthcare Improvement (IHI), which "exists to close the enormous gap between the health care we have and the health care we should have — a gap so large in the US that the Institute of Medicine (IOM) in 2001 called it a 'quality chasm'.” Dr. Berwick was one of the authors of that IOM report. His IHI has been a major player in the patient safety movement, most notably with its "100,000 Lives Campaign" and, more recently, its "5 Million Lives Campaign."

Berwick's CMS gig is a "recess appointment": it was made during the Senate's July 4th recess period, without a formal confirmation hearing---although such a hearing must take place before the end of this Senate term, if he is to remain in the position. A recent story suggested that Obama made the recess appointment in order to avoid a reprise of "last year's divisive health care debate." The president had originally nominated Berwick for the position in April, and Republicans have opposed "Berwick's views on rationing of care," claiming that he "would deny needed care based on cost."

A "Patient-Centered Extremist"

If there is a problem with the appointment, it is likely to be roughly the opposite of what Republicans might suppose: Dr. Berwick is a self-described "Patient-Centered Extremist." He favors letting patients have the last word in decisions about their care even if that means, for example, choosing to have unnecessary and expensive hi-tech studies. In an article for Health Affairs published about a year ago, he explicitly argued against the "professionally dominant view of quality of health care":

I think it wrong for the profession of medicine—or any other health care profession, for that matter—to “reserve to itself the authority to judge the quality of its work.” I eschew compromise words like “partnership.” For better or worse, I have come to believe that we—patients, families, clinicians, and the health care system as a whole—would all be far better off if we professionals recalibrated our work such that we behaved with patients and families not as hosts in the care system, but as guests in their lives. I suggest that we should without equivocation make patient-centeredness a primary quality dimension all its own, even when it does not contribute to the technical safety and effectiveness of care.

A new definition. My proposed definition of “patient-centered care” is this: The experience (to the extent the informed, individual patient desires it) of transparency, individualization, recognition, respect, dignity, and choice in all matters, without exception, related to one’s person, circumstances, and relationships in health care.

Does this mean that Dr. Berwick would also eschew professional, i.e., expert, judgment in favor of patients' wishes? In a word, yes:

Evidence-based medicine sometimes must take a back seat. First, leaving choice ultimately up to the patient and family means that evidence-based medicine may sometimes take a back seat. One e-mail correspondent asked me, “Should patient ‘wants’ override professional judgment about whether an MRI is needed?” My answer is, basically, “Yes.” On the whole, I prefer that we take the risk of overuse along with the burden of giving real meaning to the phrase “a fully informed patient.”

Dr. Berwick is not so naive as this opinion might suggest. He envisions a "mature dialogue" in such a case, and argues that "if, over time, a pattern emerges of scientifically unwise or unsubstantiated choices...then we should seek to improve our messages..." He also admits that there might be an occasional patient whose demands are so unreasonable that "it is time to say, 'No'." That exception, he argues, should not dictate the rule.

There are situations in which most civilized people would agree with Dr. Berwick's view of 'patient-centeredness'. In both the Health Affairs article and in his recent address to the 2010 graduating class of the Yale School of Medicine, he offered real examples of petty, arbitrary hospital rules causing unnecessary sorrow for patients and their loved ones. It is in such contexts that he makes a convincing case that health professionals ought to behave "as guests in their lives." In an interview for the New York Times, he argued:

We don’t have a standard of services or processes that are comfortable for patients. We have built a technocratic castle, and when people come into it, they are intimidated.

Nothing to disagree with there. To create that standard, moreover, would not undermine settled medical practice ethics---it would celebrate them, even as it rightly embarrasses the profession for having taken so long to do so.


Enter the Woo

Eschewing the scientific basis for modern medical practice, however, is another matter. In February of 2009, Dr. Berwick gave a 'keynote' address at the IOM and Bravewell Collaborative-sponsored Summit on Integrative Medicine and the Health of the Public. He shared the podium with Mehmet Oz, Dean Ornish, Senator Tom Harkin, and other advocates of pseudoscientific health claims. I wrote about the conference at the time, mainly to call attention to its misleading use of the term "integrative medicine": literature emanating from the Summit characterized it as "preventive" and "patient-centered," whereas the only characteristic that distinguishes it from modern medicine is an inclusion of various forms of pseudomedicine.


I noticed that Dr. Berwick was on the speaker roster, which I found disappointing: I imagined that he had either gone over to the Dark Side or, perhaps, was sufficiently naive about the topic to have been duped; or, more likely, that he had cynically accepted the offer to further his ambitions. I didn't bother to listen to his speech until the CMS appointment was announced a few days ago.

It is troubling, to say the least. Dr. Berwick did not argue, as he had in the NYT piece, that "If we doctors feel a person is going to make unwise choices, we have to take on the responsibility of being teachers, educators and informers." Rather, he praised his fellow speakers, most of whom were spouting nonsense, for their "reach" and "eloquence." He praised the IOM for its "glorious record...in pursuit of better designs in health care...traditional, allopathic curative care and now migrating into this distinguished and important new arena." He mentioned homeopathy and acupuncture, not to wonder why they should be promoted as effective, but merely to warn that they will fail---presumably in some economic sense---if they try to compete with each other for reimbursement.

Such language, and Dr. Berwick's very presence at the Summit, were a far cry from advocating "patient-centeredness." What they amounted to was a generous endorsement of pseudoscientific practices and of the socio-political movement that promotes them. Even granting some naivete on his part (he called himself "an amateur at this topic"), he must have known this. Such an endorsement, unlike tearing down the "technocratic castle," has ethical implications at least as profound as those that Dr. Berwick tacitly or explicitly relies upon to support his arguments for patient-centeredness.

"Physicians have no Immunity to Moral or Ethical Constraints"

The relevant medical ethics treatises (reviewed here) are in substantial agreement that it is unethical for physicians to prescribe scientifically implausible methods or to refer patients to other practitioners for the same purpose. They are also in agreement that it is unethical to prescribe a placebo to a patient while claiming that the treatment has specific biologic activity---a point that has been vigorously argued in the UK this year, with regard to homeopathy. These ethical tenets are not mere odes to nerdy, sciency thinking; they are matters of honesty and integrity---fundamental bases for ethical interactions between physicians and patients.

In 1983, philosophers Clark Glymour and Douglas Stalker published an article in the New England Journal of Medicine titled “Engineers, cranks, physicians, magicians.” They framed modern medicine as follows, comparing it to what was then called "holistic medicine" (the article is quoted extensively here):

Medicine in industrialized nations is scientific medicine. The claim tacitly made by American or European physicians, and tacitly relied on by their patients, is that their palliatives and procedures have been shown by science to be effective. Although the physician’s medical practice is not itself science, it is based on science and on training that is supposed to teach physicians to apply scientific knowledge to people in a rational way.

The practice of medicine in the United States and in other industrialized nations is a form of consultant engineering...

That statement is just as accurate now---even more so, in this era of Evidence-Based Medicine---as it was nearly 30 years ago, even if some might find the likening of medicine to engineering displeasing. Nor is it at odds with almost any definition of "patient-centeredness," other than one that presumes that the patient's desires trump the physician's ethics:

A physician engineer can act as consoler; nothing in either logic or social psychology forbids it. But certain combinations are impossible or extraordinarily unlikely. A physician engineer cannot honestly claim powers of magic or occult knowledge. The principles governing scientific reasoning and belief are negative as well as positive, and they imply that occult doctrines are not worthy of belief. Moreover, physician engineers have no immunity to moral or ethical constraints. On the contrary, they are by training and by culture enmeshed in a tradition of rational thought about
the obligations and responsibilities of their profession.

Dr. Berwick---if he really believes what his presence and words at the "Integrative Medicine" Summit imply---is playing with ethical fire. (If, as I hope, he doesn't really believe those things, he's playing with ethics of another kind). Will we begin to see pseudomedicine "integrated" into Medicare and Medicaid? That is certainly the expectation of those who observed Dr. Berwick's performance at the Summit, and who appear intent to hold him to his word.

KA

Two other blogs that have addressed this issue are:

Dr. RW: Not only evidence based medicine but science based medicine may take a back seat in Donald Berwick's vision for patient centered care

Dr. David Gorski: Dr. Donald Berwick and “patient-centered” medicine: Letting the woo into the new health care law?

We recently commented on the conviction of a state legislator charged with selling his influence to a powerful local medical center. NorthJersey.com has a follow-up on this story which shows how health care leaders are often members of the power elite, if not quite of the superclass, and how their machinations put this group's interests ahead of the mission of their health care organizations.


The General Overview

The trial of former state Sen. Joseph Coniglio, convicted in a bribery scandal involving Hackensack University Medical Center [affiliated with UDMNJ, which has had its own issues, e.g., here], exposed the hospital’s reach into the State House — and put a spotlight on the wealthy, influential men who serve as the hospital’s power brokers.

Hackensack’s board members have connections and political muscle that extend far beyond the hospital. At black-tie fund-raisers and dinners at board member Joseph Sanzari’s Stony Hill Inn, business — hospital and otherwise — is on the agenda.

Various board members help to underwrite Bergen County’s Democratic machine and powerful lawmakers in Trenton. They’re awarded many of the region’s public construction contracts. They have the network — and the money — to smooth over zoning issues for the hospital. Testimony at the trial this month showed they supported the hiring of Coniglio, who was convicted of steering millions in grants to Hackensack while on the hospital’s payroll.

'A political machine' is how Assistant U.S. Attorney Thomas R. Calcagni described the hospital as he told jurors about Hackensack’s relationships with former acting governor and Senate President Richard Codey, state Sen. Paul Sarlo, Coniglio and others during the trial.

Board Members' Self-Dealing

There are several results. One is that "some [board members] are also making money off the hospital." The article gave several examples of such conflicts of interest.

A few examples from the hospital’s federal tax filings for 2007, the latest available:

* Companies owned by Sanzari and Creamer are building a 975-car garage as part of the $135 million cancer center now under construction. Creamer was paid more than $475,000 by the hospital for construction services.

* The hospital paid more than $2 million to Progenitor Cell Therapy, a private stem cell research company owned in part by Ferguson; Dr. Andrew Pecora, director of the cancer center; board members Peter C. Gerhard, George T. Croonquist and Samuel Toscano Jr.; and the hospital’s chief operating officer, Robert C. Garrett.

* The hospital paid $2.5 million to lease space from Sanzari 2001, where board member David Sanzari — Joseph’s cousin — is a managing member with an ownership stake. It also spent $68,000 at the Marriott at Glenpointe hotel, which is owned by David Sanzari’s family.

* The DeCotiis law firm, one of the most influential in the state, made more than $1 million from the hospital. It is representing the hospital in the Coniglio case and guiding its campaign to reopen Pascack Valley Hospital in Westwood. During that time, Frank Huttle III, a partner, served on the board. He said Friday that he resigned recently.

* Universal Health, which operates a retail pharmacy at the hospital, received $200,000. At the time, Toscano was the company’s chief executive officer.

Political Influence Disadvantages the Competition

The membership of the hospital's leaders in the power elite could be used to advance the hospital against less-connected competitors.

The Coniglio trial served as a primer on the backroom politics of New Jersey, where certain grants, known as 'Christmas tree items,' were doled out based on who has 'the juice.' By all accounts, Hackensack mastered the game and loomed large in Trenton. From 2004 to 2006, the hospital received $17.4 million for its cancer center, an extra $9 million in charity care above the millions it was already getting and $250,000 for the Joseph M. Sanzari Children’s Hospital. A $900,000 research grant was awarded to the private stem cell firm at the hospital and $70,000 went for a seat belt study.

Those awards dwarf the grants given to Hackensack’s competitors.

Connectedness of the Hospital's Board Members

The article gave further examples of how connected were the board members, and how they used their connections.

At Hackensack, a few names — Simunovich, Ferguson, Sanzari, Creamer — keep showing up in influential roles on key boards. They serve as trustees of the Hackensack University Medical Center Foundation, the hospital’s fund-raising arm, as well as the hospital’s board of governors and Hillcrest Health Service System, the hospital’s parent corporation. Leading contractors and developers — Sanzari, Creamer and John C. Fowler — are on the building committee.

Simunovich is the former chairman of the board of governors and current chairman of the board of trustees for the Hackensack University Medical Center Foundation, the hospital’s fund-raising arm.

Governor Corzine did not reappoint Simunovich to the Turnpike Authority in 2007 after he was investigated by the State Ethics Commission; as chairman, he had voted on millions in public contracts that were awarded to Sanzari while he accepted free rides on the contractor’s private jet. Simunovich paid a $50,000 fine, which was not an admission of guilt.

'Mr. Simunovich’s actions do not reflect the standards demanded by the governor for those who serve in his administration,' Corzine’s then-spokesman Anthony Coley said.

Joseph Sanzari serves as first vice chairman, the No. 2 position on the hospital’s board of governors.

Sanzari is part owner of both the Stony Hill Inn in Hackensack and the New Bridge Inn in New Milford, popular hangouts for Bergen County’s political elite. Sanzari, his companies and employees have contributed more than $100,000 to political campaigns and political action committees in the past three years, according to data the company provided to state elections regulators.

Among his top employees is state Sen. Paul Sarlo, also the mayor of Wood-Ridge. Sarlo oversees billions in public spending as a lead member of the Senate Budget and Appropriations Committee. As chairman of the Senate Judiciary Committee, he also controls key appointments to state agencies that have awarded millions in contracts to Sanzari’s firms.

Sarlo, chief operating officer for Sanzari’s construction company, testified at the trial that he was largely responsible for getting the $900,000 grant for the hospital’s cancer center. He said he also lobbied Codey for the $9 million cancer center grant and played a role in the $900,000 grant for stem cell research at the hospital.

Conclusions

Hospitals often have sterling reputations within their communities as selfless organizations devoted to improving the health of the people. As we have noted, hospitals and other health care organizations have come to be run more often by people with managerial background than those with health care experience. Not-for-profit hospitals have boards of trustees who are supposed to exercise stewardship, making sure the organization upholds its mission. But as we have noted before, e.g., here, boards of health care and related organizations may put their own agendas ahead of the mission. Furthermore, boards of big hospitals and other health care organizations seem to be increasingly composed of the well-connected, often to the point that they can be regarded as members of the power elite, if not the superclass. There may be some short term benefits to having such people on the boards. In the long run, however, is it any surprise that their missions may give way to other interests?

Hat tip to University Diaries.

ADDENDUM (4 May, 2009) - Hackensack University Medical Center's response to the news story discussed above was apparently first to stop advertising in the offending newspaper, and ban its sales in the hospital. Another example, almost laughable, of a health care organization's leadership trying to shoot the messenger, and of how the anechoic effect may be generated. Hat tip to the Schwitzer Health News Blog.

Here is the latest story of health care corruption, this one involving a state legislator and a big hospital, as reported by the Newark Star-Ledger,

Former state senator Joseph Coniglio, who funneled more than $1 million in public funding to Hackensack University Medical Center after it gave him a high-paying consulting job, was convicted yesterday on six counts of fraud and extortion.

The jury of seven men and five women, who issued a split decision and were deadlocked on one of the nine counts, found Coniglio guilty on nearly all the charges involving the exchange of money.

The verdict, coming after four days of deliberations, found Coniglio guilty on five counts of defrauding the public and one count of extortion. He was acquitted on two mail fraud counts; the jury said it was unable to reach a verdict on a third mail fraud charge.

Coniglio, a retired union plumber elected to the Senate in 2001, first met in early 2004 with Hackensack University Medical Center's chief executive, John P. Ferguson -- about the time he was appointed to a seat on the influential Budget and Appropriations Committee -- and began negotiating for a $5,000-a-month consulting contract to do work that was never clearly defined. The consulting agreement was signed in May 2004 and Coniglio subsequently began lobbying to help secure a series of grants for the medical center's programs for abused children, its cancer center and children's hospital.

Prosecutors argued the consulting work was simply a guise to pay off Coniglio in exchange for his support for funding millions in special earmarks.

Assistant U.S. Attorney Rachael Honig, who agreed the case was circumstantial, told jurors corruption is secret and there is never a roadmap to detail it. 'People don't get paid to do nothing,' she said.

No hospital officials were charged, but one medical center executive had negotiated a non-prosecution agreement in exchange for testimony.

Note that this case is very similar to one in my state of Rhode Island. In that case, both a state legislator and a hospital CEO have been found guilty. (The CEO was just sentenced, as reported here in the Providence Journal.)

These cases are a reminder of the prevalence of out and out corruption in US health care. Indeed, Transparency International's 2006 Global Corruption Report argued that health care corruption is common throughout the world, in nearly all countries, regardless of their wealth, or the organization of their health care systems. Corruption misdirects health care resources, raising costs for all, and indirectly leads to restricted access to care. I submit that the corruption of people with decision making power in health care likely taints all their decisions, often to the detriment of patients and health care professionals.

Although not all health care corruption is discovered and successfully prosecuted, even those cases that result in convictions are often anechoic. If we cannot even talk about health care corruption, how are we ever going to do anything about it? But if we are not resolved to at least confront corruption, should we be whining about increasing costs, and declining access and quality?