NYU Faculty Vote No Confidence in their President

Faculty at large American universities, in which most of the country's medical schools and teaching hospitals are embedded, are becoming increasingly concerned about the leadership and governance of their organizations, and whether the universities are putting their academic (and clinical) missions ahead of other concerns, like making money and rewarding top executives.

In January, 2013, we discussed a an informal, anonymous vote faculty at the University of Miami medical school expressing no confidence in their dean and his chief lieutenant.

The NYU No Confidence Vote

The faculty of a major component of another big US university have just openly voted no confidence in their president, and are raising questions about their board of trustees.  The setting was New York University.  Some background comes from a New York Times article this month:

 Embarking on an ambitious expansion at home, constructing a network of new campuses around the globe, wooing intellectual superstars and raising vast amounts of money, John Sexton of New York University is the very model of a modern university president — the leader of a large corporation, pushing for growth on every front.
 

To some within N.Y.U., Dr. Sexton is a hero who has transformed the university. The trustees have thanked him by elevating his salary to nearly $1.5 million from $773,000 and guaranteeing him retirement benefits of $800,000 a year.

But to others, he is an autocrat who treats all but a few anointed professors as hired help, ignoring their concerns, informing them of policies after the fact and otherwise running roughshod over American academic tradition, in which faculty members are partners in charting a university’s course.

'He has a very evangelical sense of purpose,' said Andrew Ross, a professor of social and cultural analysis, 'that does not extend beyond the concept that the university should be an entity of his own making.' 

'I think,' he added, 'when other administrations see that they say, Well that’s what leadership should be. And when faculty see that they say, That is not what university leadership should be. It’s the style of a maverick C.E.O.'

The debate over Dr. Sexton’s presidency will come to a head this week. The faculty of the university’s largest school, Arts and Science, has scheduled a five-day vote of no confidence. Given Dr. Sexton’s international stature, the vote may serve as the most important referendum yet on the direction of American higher education. 

President Sexton lost the no-confidence vote, as noted in another NY Times article a week later:

The vote, 298 to 224 (with 47 abstaining), took place via electronic balloting from Monday through Friday. Full-time tenured and tenure-track professors were asked to respond to the statement: 'The faculty of Arts and Science has no confidence in John Sexton’s leadership.' Voter participation was 83 percent.

Top Executives Usurp Power from Faculty

An op-ed in the NY Times by a leading dissenting faculty member further explained the issues.  He charged that the President ignored faculty concerns about an ambitious plan to expand the physical plant of the university:

How did Dr. Sexton lose the confidence of so many faculty members? By ignoring us. Of course, many professors everywhere feel overlooked by today’s generation of jet-setting university presidents. But we have very specific complaints: above all, Dr. Sexton has consistently refused to address concerns about plans to expand N.Y.U. offices and dorms into the part of Greenwich Village south of Manhattan’s Washington Square Park, where many of us live. 

This expansion plan is known as N.Y.U. 2031, indicating the year in which all the building will be complete. The very name told us that we’d be living on a construction site for a couple of decades.

Not surprisingly, this did not go over very well with many faculty members. We were also concerned about where the money would come from to pay for this expansion, as no business plan for the project has been made public.

Thirty-nine departments and schools passed resolutions last year against the 2031 plan. These resolutions were typically passed unanimously or nearly unanimously. And yet Dr. Sexton’s response was a deafening silence.

Academic Values, Particularly Academic Freedom and Free Speech Ignored

Furthermore, the faculty were concerned about plans to expand the university overseas to nations not known for their vigorous support of academic freedom and free speech:

 Many of us are also concerned with Dr. Sexton’s plans to expand N.Y.U. overseas, including branch campuses in Abu Dhabi and Shanghai, with inadequate faculty involvement or oversight. It is doubtful that faculty members would have chosen to build campuses in countries where academic freedom, and free speech generally, are so parlous. 

Executives Enriching Themselves at University Expense

Finally, the faculty were concerned about top university executives immodestly enriching themselves from the coffers of a non-profit university:

As the faculty vote approached, more trouble arose for Dr. Sexton in the form of news reports about lavish compensation for NY administrators.  The central but by no means sole figure in this scandal is Jacob J Lew, the Obama administration’s new Treasury secretary, who worked at N.Y.U. in the early 2000s for a salary that eventually reached $900,000, larger even than Dr. Sexton’s at the time. 

Mr. Lew received loans to buy a nice home, which apparently were largely forgiven. He also received a severance of some $700,000 when he left for a well-paid position at Citigroup. Severance? For someone who leaves voluntarily?

 Dr. Sexton himself is to receive a salary of more than $1.4 million this year, and a 'length of service' bonus of $2.5 million in 2015. (Full disclosure: the university gave me a set of mugs when I completed 25 years of teaching.) And he will receive $800,000 a year after he retires. 

Other top administrators make similarly extravagant salaries. Some experts believe there may even be something illegal in the way Dr. Sexton has rewarded them; N.Y.U.’s chapter of the American Association of University Professors has asked New York States’s attorney general to investigate. 

All of which raises a question for many N.Y.U. faculty members: Should administrators be able to enrich themselves like this at educational institutions? N.Y.U. is not a Wall Street firm, but a tax-exempt university that gets millions in taxpayer dollars, not least from student loans. In fact, our students have the highest total debt load of any university in the country. Rather than expanding, or paying huge salaries to top administrators, why doesn’t N.Y.U. do more to help its alumni pay off their debts?

Forsaking the Academic Mission

An article in Inside Higher Education underlined how the dispute is really about the mission of the university in this brave new corporate era:

As Rebecca Karl, an associate professor of East Asian studies and history recently told Inside Higher Ed, 'We’ve become very critical of the whole idea of ‘expand or die,’ which of course is a corporate maxim, but we don’t understand why it needs to become our maxim.'

Also,

 Mark Crispin Miller, a professor of media, culture and communication in NYU's Steinhardt School of Culture, Education and Human Development, who has been an outspoken critic of the Greenwich Village plan [said]. 'The fact is we see NYU as a school, we see our mission as educational. Sexton and the trustees who support him view NYU as a bundle of assets whole value they will apparently do anything to maximize on paper. We believe that this approach is destroying this university.'

By the way, maybe in retrospect the trustees' role should not be so surprising.  Back in 2011 we posted about a group of extremely rich corporate and finance leaders who attacked critics of their growing power as "imbeciles," among other terms.  Several of the individuals featured in the news article which inspired this post were trustees of New York University.  These included   Kenneth Langone and John Paulson.  A quick look at the list of current trustees shows that it includes  many top leaders of finance firms, including firms whose actions were alleged to have helped cause the great recession/ global financial collapse or have been subsequently accused of other financial shenanigans, e.g., Steven S Miller, a Vice President of JP Morgan Chase, and Maurice Greenberg (a life trustee), former leader of AIG, E John Rosenwald Jr (a life trustee), Vice Chairman Emeritus of JP Morgan Chase, and William R Salomon (a life trustee), honorary chairman of Citigroup.

Summary

In summary, the issues that inspired the no-confidence vote against the President of New York University appeared to be allegations that university:
-  administration usurped power, particularly from the faculty
-  administration used this power to put corporate priorities, like expansion for its own sake, and increasing short-term revenue ahead of the academic mission
-  administration took advantage of their power to enrich themselves
-  trustees, who are supposed to exert stewardship that ensures the university upholds its mission, instead aided and abetted all this

All of these should be very familiar issues to Health Care Renewal readers.  We have discussed the rise of generic managers of health care organizations, trained supposedly in general management skills, but not in health care, and indifferent at best to the values of health care professionals.  At times their power has gotten so great as to constitute a manager's coup d'etat.   We have discussed how managers of health care organizations often put short-term revenue ahead of all other concerns, sometimes called financialization.  In doing so, they may end up perpetrating mission hostile- management.  We have discussed how managers are able to command often outrageous levels of  executive compensation.   Boards of trustees, who are supposed to exert stewardship over the organization, and see that its leadership upholds its values, often come from management backgrounds themselves, and are at best clueless about, if not hostile to the mission. 

It is time for university faculty to defend their institutions' mission.  Students, alumni, and patients at academic medical centers, medical school clinics, and of academic health professionals ought to be equally fervent in support of the academic and academic health care missions.  Academic medicine needs to be lead and stewarded by people who understand that mission, value it, uphold it, and are accountable for that.  These leaders and stewards should eschew management fads, cronyism, and excess personal enrichment.

Maybe the vote of no confidence at NYU is a small step on the path back to the academic and academic medical missions.  But do not expect those who are enriching themselves in the current system to go quietly.

ADDENDUM - see also this post by Prof Margaret Soltan on the University Diary blog.

A Condemnation of Suppression of Medical Research... by Ben Goldacre in the New York Times

Amazingly, this topic now seems to be in the mainstream.

The Goldacre Version in the New York Times in 2013

In his op-ed, Ben Goldacre introduced it thus:

the entire evidence base for medicine has been undermined by a casual lack of transparency. Sometimes this is through a failure to report concerns raised by doctors and internal analyses, as was the case with Johnson & Johnson. More commonly, it involves the suppression of clinical trial results, especially when they show a drug is no good.

He noted that this problems was supposed to be fixed by the registration of clinical trials, and by changes in editorial policies at medical journals:

many in the industry now claim it has been fixed. But every intervention has been full of loopholes, none has been competently implemented and, lastly, with no routine public audit, flaws have taken years to emerge.

 The Food and Drug Administration Amendments Act of 2007 is the most widely cited fix. It required that new clinical trials conducted in the United States post summaries of their results at clinicaltrials.gov within a year of completion, or face a fine of $10,000 a day.  But in 2012, the British Medical Journal published the first open audit of the process, which found that four out of five trials covered by the legislation had ignored the reporting requirements. Amazingly, no fine has yet been levied. 

An earlier fake fix dates from 2005, when the International Committee of Medical Journal Editors made an announcement: their members would never again publish any clinical trial unless its existence had been declared on a publicly accessible registry before the trial began. The reasoning was simple: if everyone registered their trials at the beginning, we could easily spot which results were withheld; and since everyone wants to publish in prominent academic journals, these editors had the perfect carrot. Once again, everyone assumed the problem had been fixed. 

But four years later we discovered, in a paper from The Journal of the American Medical Association, that the editors had broken their promise: more than half of all trials published in leading journals still weren’t properly registered, and a quarter weren’t registered at all. 

Goldacre's conclusions were:

Withholding data not only misleads doctors and patients; it’s an insult to the patients who have participated in clinical trials, believing that they were helping to improve medical knowledge. 

Medicine routinely overcomes enormous technical challenges, and there is nothing complicated about the changes needed to prevent Johnson & Johnson, or Roche — or anybody — from withholding information.

Hear, hear!

Our Version, Starting in 2003

Note that 10 years ago, in 2003, in my article on American health care dysfunction that could have been only published in Europe, (Poses RM. A cautionary tale: the dysfunction of American health care. Eur J Intern Med 2003 Mar;14(2):123-130.  Link here)  I noted that an important cause of this dysfunction is that:

the scientific basis of medicine is increasingly under attack.

The integrity of medical research has been violated by the deliberate suppression of its results.

At that time, I suggested one solution would be:

Medical schools and universities must re-affirm their support of scholarly work in the spirit of free enquiry,...

Furthermore, in one of our first posts on Health Care Renewal in December, 2004, in the context of the discovery of internal company documents (in this case, from Eli Lilly) that showed that information about the adverse effects of a drug (in this case, increased aggression associated with fluoxetine, that is, Prozac), we wrote,

The increasingly complex story of suppression of SSRI research seems to be part of a growing epidemic of suppression of medical research.

Let's say it again. Withholding data from clinical research is unethical because:
1. it breaks the promise to research subjects that their voluntary participation has scientific or social value, but undisseminated research has no value; (See Emanuel EJ et al. What makes clinical research ethical? JAMA 2000; 283: 2701-2711.)
2. it impedes scientific progress;
3. it prevents patients from receiving the best possible medical care.

But until this unethical behavior starts having negative consequences for its perpetrators, the epidemic of research suppression is likely to continue. 

Note the similarity to what Goldacre published in the Times yesterday.  You heard it here first.

Summary

To date we have published 102 posts with the label "suppression of medical research."  Obviously, Ben Goldacre's NY Times op-ed shows that suppression of research still rarely leads to negative consequences for its perpetrators.  Obviously, by making drugs, devices, and other health care interventions appear safer and more effective than they really are, suppression of medical research has lead to huge revenues for health care corporations, and has made many health care executives exceedingly rich, and many of the health care professionals and academic leaders who have enabled or implemented research suppression somewhat rich.  In the face of such perverse incentives, until we end the impunity of those who suppress medical research (and by the way, those who authorize, direct, or implement all sorts of other unethical, criminal and corrupt behavior we discuss on Health Care Renewal) things will not get better.  I can only hope that having this subject appear in a New York Times op-ed may lead to some real progress.

ADDENDUM (2 February, 2013) - see also comments on 1BoringOldMan blog. 

What If the Institute of Medicine Wrote a Report and Nobody Followed it? - the Case of the Standards for Developing Trustworthy Guidelines

For over 20 years, clinical practice guidelines (CPGs) have been touted to improve health care quality and control costs.  Enormous numbers of guidelines have been developed, but with seemingly little impact on health outcomes.  While some of those leading health care organizations have predictably blamed individual practitioners for obstinately ignoring or challenging guidelines, there is increasing evidence that maybe the guidelines themselves are part of the problem.

 An Example of a Guideline that Apparently was Not Trusted

One example Dr Wally Smith and I have taught in our recurring mini-course on why physicians fail to follow guidelines (and otherwise appear not to practice in accord with others' wishes) is that of the guidelines on management of depression in primary care.  Most existing guidelines urge physicians to screen patients for (presumably mild-to-moderate) depression and treat them aggressively, with emphasis on the use of the newer anti-depressants.  These guidelines, in turn, were based on numerous published randomized clinical trials that showed that these drugs were safe and efficacious.  Yet multiple studies showed that physicians failed to follow these guidelines, and various attempts to improve their adherence did little.  So for years the assumption was that physicians at best experienced practical and system barriers to follow these guidelines, and at worst were ill-informed or irrational. 


However, information that came out gradually during the early part of the 21st century suggested that perhaps the problem was within the guidelines, not the health care professionals.  First, documents produced during New York Attorney General Eliot Spitzer's lawsuit against GlaxoSmithKline about the marketing of one of these drugs (Paxil, paroxetine) suggested that the company had suppressed clinical trial data that reflected poorly on the drug (See Kondro W.  Drug company experts advised staff to withold data about SSRI use in children.  Can Med Assoc J 2004; 170: 783.  Link here.)    These suspicions were later fleshed out  by consideration of documents further disclosed in litigation (e.g., see this post and its links).  Then several studies, most particularly that by Erick Turner and colleagues, showed that numerous trials of new anti-depressants had been suppressed, that is, never published (Turner et al. Selective publication of antidepressant trials and its influence on apparent efficacy. N Engl J Med 2008; 358:252-260.  Link here).  When the results of these trials were added to those that were published, the efficacy of anti-depressants was no longer so clear.  So maybe the guidelines that physicians did not follow were not trustworthy, and should not have been followed in the first place.

Would IOM Standards to Improve Guideline Trustworthiness Help?

So in 2011, the prestigious Institute of Medicine released a report on the development of  better standards to produce more trustworthy guidelines (Clinical Practice Guidelines We Can Trust.  Link here.)  We posted about that report here, but noted that it was receiving little other attention, an example of the anechoic effect. 

A few weeks ago, an article appeared documenting a study meant to assess the the trustworthiness of clinical practice guidelines published soon after the IOM report.  Its title telegraphs the results. ( Kung J, Miller RR, Mackowiak PA. Failure of clinical practice guidelines to meet Institute of Medicine standards: two more decades of little, if any progress.  Arch Intern Med 2012.  Link here.)

Methods and Results

The investigators selected a random sample of 114 individual guidelines available during June, 2011 stratified by 26 clinical topics. The versions of the guidelines used were those archived in the National Guideline Clearinghouse (NGC) maintained by the Agency for Healthcare Research and Quality (AHRQ).


The goal of the study was to "examine adherence to the IOM standards" by guidelines published after the standards were published.  Actually, the study only assessed adherence to 18 of the 25 standards espoused by the IOM (because the remaining seven were "too vague and subjective to be analyzed.")

Furthermore, the criteria used to determine if a specific guideline met each of the three items above were rather lax:

In evaluating each guideline summary, care was taken to be as liberal as possible in considering that a standard was met when the individual guideline summary provided any information pertaining to that particular standard.

Nevertheless, using these lax standards to only evaluate adherence to 18/25 guidelines, the authors found that "the overall median number of IOM standards satisfied (out of 18) was 8 (44.4%) ....  Fewer than half of the guidelines surveyed met more than 50% of the IOM standards."

An examination of the details of the study's methods reveals things are even worse than that.

Analyzing the Study's Methods to Find that Things Are Worse Than They Seem

Review of the study's methods show that they provided a very optimistic view of adherence to the IOM standards.  As noted above, the study did not look for adherence to all of the IOM standards.  Moreover, those they did consider were simplified and made less rigorous.  For example, Standard 2 from the IOM on management of conflict of interest (COI) was:

  STANDARD 2
Management of conflict of interest (COI)

2.1
Prior to selection of the Guideline Development Group (GDG), individuals being considered for membership should declare all interests and activities potentially resulting in COI with development group activity, by written disclosure to those convening the GDG.
- Disclosure should reflect all current and planned commercial (including services from which a clinician derives a substantial proportion of income), non-commercial, intellectual, institutional, and patient/public activities pertinent to the potential scope of the CPG.

2.2
Disclosure of COIs within GDG
- All COI of each GDG member should be reported and discussed by the prospective development group prior to the onset of their work.
- Each panel member should explain how their • COI could influence the CPG development process or specific recommendations.

2.3
Divestment
- Members of the GDG should divest themselves of financial investments they or their family members have in, and not participate in marketing activities or advisory boards of, entities whose interests could be affected by CPG recommendations.

2.4
Exclusions
- Whenever possible GDG members should not have COI.
- In some circumstances, a GDG may not be able to perform its work without members who have COIs, such as relevant clinical specialists who receive a substantial portion of their incomes from services pertinent to the CPG.
- Members with COIs should represent not more than a minority of the GDG.
- The chair or co-chairs should not be a person(s) with COI.
- Funders should have no role in CPG development.

However, the study boiled all this down to three items:
-  COIs stated
-  Chair has COI
-  Co-chairperson has COI

Thus the study did not address standards requiring full and complete disclosure (not just some disclosure) of all COIs; consideration of how the COIs might influence the particular guideline; divestment of specific types of conflicts of interest, that is, financial investments, and cessation of participation in marketing activities or advisor boards; minimization of conflicts of all members of the committee; and barring of participation of funders in guideline development.

Even so, the guidelines assessed did a very poor job upholding even these few liberalized standards regarding conflicts of interest.  Of the guidelines assessed, less than half, 46.8% provided ANY disclosure of conflicts of interest.  Those written by sub-specialty societies were particularly opaque in this regard.  Less than one-third, 29.3%, provided any disclosure.  Thus the majority of guidelines assessed were not at all transparent about conflicts of interest affecting the guideline development process.

Furthermore, of the 46.8% of all the guidelines which made any disclosures of conflicts of interest, 71.4% admitted their chair people HAD a conflict of interest.  Thus, only (0.468 * [1 - .714]) = 13.3% provided assurance that they fulfilled the single requirement (from standard 2.4 above) that the chair person did not have a COI.  For the guidelines written by sub-specialty societies, by a similar calculation, only 12.2% provided an assurance that the chair had no COI.  (The proportions providing assurance that the co-chair people had no COI were even lower.)  Thus the vast majority of guidelines did not clearly follow two straight-forward standards for minimizing the effects of conflict of interest, that the guideline committee chair and co-chair should not have any relevant conflicts. 

Given the miserable results concerning even minimal adherence to some of the IOM report's conflict of interest standards, it is likely that almost no published guidelines from 2011 came close to fulfilling the full set of IOM standards.  Despite the best efforts of the IOM, it appears that guideline developers have not progressed at all towards providing trustworthy guidelines. 

Summary

An editorial (Shaneyfelt T. In guidelines we cannot trust.  Arch Intern Med 2012) accompanying the article by Kung and colleagues summarized its results thus:

The same problems that have plagued guideline development continue to plague guideline development; namely, their variable and opaque development methods, their often conflicted and limited panel composition, and their lack of significant external review by stakeholders throughout the development process.   As a result, the trustworthiness of guidelines is limited.

While guidelines may have seemed to be a promising method to improve health care in the early 1990s, they have failed to live up to that promise.  Shaneyfelt was not optimistic they would improve in the future:

I am not optimistic that much will improve.  No one seems interested in curtailing the out-of-control guideline industry.

On the other hand, in my humble opinion, it is not that on one is interested in better guidelines.  It would clearly be in the best interests of patients and the public, and of health care professionals who care about the quality of their practice and the outcomes of their patients to curtail that industry.  The issue is why patients', the public's, and professional's interests were ignored.

Neither Shaneyfelt nor Kung et al discussed why there has been so little attention to patients' and the public's health, and to health care professionalism in all this.  For a quick answer, we do not have to look far on Health Care Renewal. 


In fact, the IOM report on guideline development from 2011 was a serious challenge to the powers that be in health care.  In particular, it challenged the cozy relationships that had grown up among the organizations that undertook guideline development and the health care professionals on guideline panels on one hand and organizations that stand to gain were specific guidelines to favor their products, services, and agendas on the other.  The standards mandated transparency and honesty about conflicts of interest affecting guideline committees and the organizations which assembled them, and if upheld would have greatly reduced these relationships.

Now it turns out that the guideline standards have been honored mainly in the breach.  Of course, these standards, while increasing trustworthiness, would have cost a lot of medical societies considerable commercial funding, and would have cost a lot of health care professionals on guideline panels considerable personal wealth.  These standards would probably also have cost a lot of companies whose products and services were addressed by guidelines to lose revenue.  So it is not surprising that the IOM standards were ignored.  Their implementation would have cost too many people who are financially benefiting from the status quo too much money.  And these people, that is, leaders of professional societies dependent on commercial outside funding, health care professionals and academic used to financial support from commercial interests, and health care corporations are good at making sure their interests are not ignored, even if their interests conflict with those of patients, the public, and well-intentioned health care professionals.  

So, the flouting of the well reasoned IOM guideline standards adds one more reason for patients and the general public to distrust modern health care and all those who "deliver" it, even to distrust well-intentioned health care professionals who have not been able to distinguish themselves from their colleagues who are too happy to help commercial interests while taking commercial money.  If health care professionals want to regain the public's trust, they could do worse than publicly declaring their intention to show that their practice in the future will be guided by trustworthy guidelines based on clinical research evidence and knowledge of biomedical science, drawn up by health care professionals independent of commercial interests.

Why Did the Global Fund Fire its Inspector General?

The Global Fund to Fight AIDS, Tuberculosis, and Malaria continues to struggle with the issue of health care corruption, an issue we noted here and here in 2011. 

Now as a news story in Nature put it,

It has been a rough couple of years for the Global Fund to Fight AIDS, Tuberculosis and Malaria, the world’s largest funder of international health programmes. Since its creation in 2002, the organization, based in Geneva, Switzerland, has channelled US$24.7 billion to delivering disease-control measures such as drugs, diagnostics and bed nets, saving millions of lives. But the global financial crisis has hit the fund hard, and its troubles mounted in 2011 when allegations of corruption among its grant recipients tarnished its reputation and alarmed donors.

Last week, the Global Fund tried to move on, announcing a new leader and unveiling major changes to its funding programme.

The Nature news story suggested that the troubles of the Fund all seemed so unfair.  After all,

the fraud allegations, ... [were] largely rehashed audits already made public by the fund itself. A retrospective audit published in July this year suggests that the allegations may have been overblown. It found that, in a sample of grants worth $3.8 billion that were awarded from 2005 to 2012 in 27 countries, just 0.5% of grant funding was lost to outright fraud. Experts say that figure is not exceptional for funding programmes in poor nations that often struggle with corruption.

Yet the Nature story suggested that the Fund's intrepid new later "could signal a fresh start, and has been broadly welcomed," leaving the impression that all things may turn out well.

Firing the Inspector General

However, the Nature story left out one nagging detail.  At the same time the Fund board announced the appointment of Dr Mark Dybul as its new director, it also announced that it had fired the Fund's Inspector General.  A report in the Financial Times only included,

It also dismissed John Parsons, its inspector general. Some directors believed Mr Parsons had been too outspoken in conducting public audits that sparked criticism of relatively small amounts of mismanagement and corruption.

The impression left was that Mr Parson was mainly guilty of rocking the boat.

The New York Times version, which started by recounting the hiring of Dr Dybul, also made it sound that Mr Parsons was generating too much bad publicity,

The fund also dismissed its inspector general, John Parsons, on Thursday, citing unsatisfactory work.


Mr. Parsons and Dr. Kazatchkine had privately clashed. Mr. Parsons’s teams aggressively pursued theft and fraud, and found it in Mali, Mauritania and elsewhere. But the total amount stolen — $10 million to $20 million — was relatively small, and aides to Dr. Kazatchkine said the fund cut off those countries and sought to retrieve the money. The aides claimed that Mr. Parsons, who reported only to the board, went to news outlets and left the impression that the fund was covering up rampant theft.

The fuss scared off some donor countries....

The AP version also cited the Board's accusation that Mr Parson's performance was "unsatisfactory," but included,

The inspector general's office is supposed to function independently. It was created in 2005 at the urging of the fund's biggest donor, the United States, which has contributed $7.3 billion to date.


The board held a contentious closed-door session with Parsons on Wednesday then deliberated into the night after he stormed out.

The board chairman, Simon Bland, and the head of its audit committee, Graham Joscelyne, each said they were unconcerned whether U.S. lawmakers might perceive the firing as an infringement on the office. Joscelyne would not elaborate on what Parsons did wrong but cited several reviews of him that were not disclosed.

In its latest 6-month progress report, Parsons' office said it had a growing caseload of 142 active investigations, up more than 70 percent from just two years ago.

Summary and Comment

We posted about the allegations of corruption at the Global Fund here and here in 2011.  At that time the scope of the problem was  unclear.  Now, at least according to the latest news report, it still is not clear.  On one hand, maybe no more than 0.5% of the budget was compromised.  On the other hand, would that caseload of 142 active investigations reveal more? 

Even less clear is the reason that Investigator General Parsons was fired.  The Board did not clarify what about his performance was unsatisfactory.  The AP report implies that doing too little was not the issue.  Most disturbing is lack of any mention of a possible replacement.

As we mentioned previously, the authoritative 2006 Global Corruption Report from Transparency International stated that corruption is a major global health problem.  Furthermore, Transparency International's IACC (International Anti-Corruption Conference) in Brasilia just wrapped up.  It's final declaration included,

We call on leaders everywhere to embrace not only transparency in public life but a culture of transparency leading to a participatory society in which leaders are accountable.


We call on the anti-corruption movement to support and protect the activists, whistleblowers and journalists who speak out against corruption, often at great risk.

It is up to all of us in government, business and society to embrace transparency so that it ensures full participation of all people, bringing us together to send a clear message: We are watching those who act with impunity and we will not let them get away with it.

Yet, corruption as a global health problem is still mostly ignored. In particular, global health aid programs almost never include pro-active measures to address corruption. In this case, the Global Fund, the world's largest source of such aid, was initially pushed into defensively addressing corruption, but now seems not to be so transparent about the problem. In my humble opinion, unless more transparency soon becomes evident, donors may continue to find reasons not to support the fund.


So the leaders of the Global Fund might want to consider becoming more transparent, and making some assurances that they are not out to get whistleblowers, including their own internal watchdogs.  At this point a more pro-active approach might be too much to ask for. 

Traits that "Define a Great Hospital CFO" - Honesty, Integrity, Accountability not Included

A recent article in Becker's Hospital Review entitled, "6 Traits That Define a Great Hospital CFO" [Chief Financial Officer] was most remarkable for what traits were not included.

The Six Traits

Based on interviews with a managing director of health care recruiting for a large executive search firm, and an experienced CFO of large hospital system, the included traits were:
- "Conviction," including "some type of conviction and confidence that their decision-making abilities will lead the hospital to great healthcare outcomes, a healthy population and — as a result — a more financially stable organization."
- "Nimbleness and flexibility"
- "Calm demeanor"
- "Willingness to understand the clinical aspects," in particular, the ability to "at least understand the [clinical] processes from a layperson's point of view, and the most effective CFOs have great working relationships with physicians, nurses, technicians and others."
- "Ability to think long term"
- "Sense of humor"

To be fair, I am glad to see expectations that hospital leaders, even chief financial officers, know something about clinical care, and that they have some sort of commitment to it. This seems to be in contrast to our frequent posts about how the leadership of health care organizations often seems ignorant and uncaring about the health care context and health care values. (However, the phrase above about conviction was not clearly worded. In particular, it did not explicitly suggest quality clinical care ought to be a higher priority than revenue, and could have been read to mean that good care is just a means to increase revenue.)

I am also glad that the article promoted long-term thinking. It also seems to contrast with concerns (e.g., here) about how health care leadership may put short-term revenue ahead of all other goals, also called "financialization." However, again, the article did not explicitly give long-term goals a higher priority than short-term ones.

What was Missing

However, what was more striking were the dogs that did not bark. In particular, transparency, honesty and integrity or even being law-abiding were not on the list of key traits for a CFO. This is particularly noteworthy given how often we have discussed bad behavior by large health care organizations, including various kinds of deception and dishonest behavior, as well as outright crime, such as fraud, bribery or kickbacks, etc.

Also, the list of important traits did not include responsibility or accountability.   This is also noteworthy given that rarely if ever have the leaders of these organizations taken any responsibility or paid any penalty for bad behavior occurring on their watches. Although may large health care organizations have made numerous legal settlements of accusations that include fraud, kickbacks, etc, the leadership almost never admitted wrongdoing in any of them, and almost never had to accept any financial penalty form the organization. This parallels how the US legal system has rarely sought to punish any leader of a large health care organization in such cases, suggesting that health care leaders now have developed impunity.

Given that the article appeared in Becker's Hospital Review, a leading publication for hospital leaders, its apparent cynicism about what once were considered indispensable characteristics of good leadership was disturbing.  It is also disturbing that at the time this was written, the only comment on the on-line version of the article, also the only comment to note this lack, was written by your this humble scribbler.

Summary

This may test some CFOs' sense of humor, but instead let me propose my hopes for better health care leadership. To truly reform health care we should seek reasonable leadership that draws on the collective knowledge and values of health care professionals, and that shows accountability, integrity, transparency, honesty, and ethics.  Not asking our leaders to be honest, ethical and accountable just enables the current dysfunction. 

The Case of the Vanishing Graduate Medical Education Funds

While primary care falters in the US, those who teach it seem to feel increasingly poverty stricken.  Now it appears that one reason for this is an amazing example of multiple failures of transparency and accountability.  Let me work through it, begging your pardon for a little bit of "inside baseball," medical education style.  The results suggest how we desperately need some medical disciples of Sherlock Holmes.

Background

My personal experience and increasing data suggests that most medical school faculty believe that their teaching is not valued by their institutions because teaching brings in no external funds.  In 2004, Dr Catherine DeAngelis, then the editor of JAMA, wrote "few medical schools provide adequate, if any, reimbursement for teaching time."(1)  (See this 2005 post.)   This seems absurd on its face, since what are medical schools for if it is not to provide teaching. 

However, there is evidence of this mission-hostile behavior.  In 2007, we quoted from a revealing interview with Dr Lee Goldman, Executive Vice President for Health and Biomedical Sciences at Columbia University,(2) who stated that "taxpayers," faculty who "generate more [money] than they cost," are valued most, and implied that faculty who focus on teaching are regarded as "welfare recipients," who bring in less external funding, and are valued least.  In 2010, we noted the results of a large-scale survey presented by Dr Linda Pololi in which 51% of faculty felt that the administration only valued them for the money that they brought in, and half felt that their institutions did not value teaching.(3)

Yet while faculty seem to believe that educational institutions receive little if any money to pay for teaching, it is not clear why the believe something so counter intuitive, and it is less clear what money actually goes to pay for medical education.

US Government Funding for Graduate Medical Education

However, several recent publications affirm that actually a lot of money goes towards one important form of medical education, yet the specifics of the money flows are shrouded in secrecy.  In the May, 2012, SGIM Forum, Dr Mark Liebow and colleagues summarized some of what is known about federal support of graduate medical education, that is, education of interns, residents, and other house officers.(4)  There are two streams of money that flow from Medicare to US hospitals:

Direct GME (DGME) payments help hospitals pay the salaries of residents, teaching faculty, and support staff. DGME is the product of three numbers: a per resident amount that varies by hospital, adjusted annually for inflation; the number of residents in the hospital (capped for each hospital at 1997 levels); and the fraction of discharges from the hospital that are Medicare beneficiaries. The Indirect Medical Education (IME) payment is a percentage amount added on to each DRG payment. The percentage is calculated via a complex formula (the only US statute containing an exponent!), where the key factor is the ratio of interns/residents to beds (IRB ratio).

These two streams are of considerable size:

Of the $9.2 billion Medicare paid for GME in 2010, $3 billion was for DGME and $6.2 billion for IME. The money is paid to hospitals sponsoring training programs rather than to the training programs or other hospitals where training occurs. While about 1,100 hospitals receive GME payments, 66% goes to the 200 hospitals that have the largest numbers of residents.

So, the 200 largest hospitals get about $2 billion in direct GME money (and presumably about another $4 billion in indirect money). This averages then to about $10 million DGME and $20 million indirect GME per hospital.

Thus, teaching, at least the teaching of interns, residents, and other house-staff does pay, and much more than trivial amounts. (Note that these amounts are not for teaching of medical students, which ought to be supported by other funding streams.)

Why then do faculty think that teaching does not bring in any money?

The GME Money Vanishes

An article by Dr Saima I Chaudhry and colleagues in the American Journal of Medicine begins to explain, although the explanations are found between the lines.(5)

First of all, while the graduate medical education money is paid by the government to the hospitals, the government does not publish what it pays to individual hospitals:

It has been previously reported that the amount of GME funding individual hospitals receive is not publicly reported by the Centers for Medicare and Medicaid Services,....

The government also does not hold the hospitals accountable for how they spend this money, nor for the quantity or quality of education they supply in exchange for it.

Remarkably, Chaudhry et al imply that that the people who run graduate medical education teaching programs also may not know how much money their hospitals receive from the government to fund their programs. The introduction to their article noted:

It is unclear how much program directors know about the amount and flow of DME funds to their programs. Program directors' beliefs about the transparency of funding to their programs, or their desire to influence how funds are distributed to them, also are unknown.

The article reported on a survey of internal medicine residency program directors which asked about "their knowledge of D[G]ME funding for their programs, the transparency with which funds are distributed to them, and their desire to influence this disbursement." The researchers sent surveys to 372 member programs, representing 97.1% of all US internal medicine residencies. They got 268 responses, a 72.0% response rate.

The main results were that only 159/268 (59.3%) of program directors had tried to find out how much DGME money their programs received, and of those, only 84 (52.8% of those enquiring, but only 31.3% of all respondents) actually knew how much money their programs got.

Of the 92 program directors who did not even try to discover how much money their programs received, approximately 21% said that "no one would tell me," 21% said that the "information would be inaccurate," 14% said they "don't know who to ask," and 2% were "afraid to ask."

Summary

US medical school faculty, especially those in primary care, increasingly feel pressured to perform activities that they perceive brings in money from external sources. They tend to believe that their own teaching somehow does not bring in any money, and that their careers will fail if they do not put more emphasis on other activities that the institution views as more profitable.

However, literally billions of US government dollars go to support the education of house staff, including the salaries of faculty who teach interns and residents, who probably are the majority of physician faculty. Faculty probably do not know this, because the government does not publish the amounts given to individual hospitals, nor demand of the hospitals any accountability for how they spend the money they receive.

Presumably, the top executives of each hospital know how much money the government gives them. Nonetheless, the majority of physician leaders of residency programs are never told these amounts, apparently because their hospital executives kept the amounts secret. Many of those educators who have tried to find out the figures were unsuccessful. Some did not even try to find out based on beliefs that their attempts would be unsuccessful, any amounts they discovered would be inaccurate, the people who knew the amounts were hidden, or that it would be dangerous to their careers to even try.

Thus billions of dollars of money flowing from the government to fund graduate medical education seems to have vanished in an amazing example of widespread deficiencies in accountability and transparency.

There are many people who blame government for many social ills. In this case, one can blame the US Congress for not writing a law that makes the money flows transparent and hospitals accountable for providing good educational value for the money provided. One can also blame the executive branch, particularly the Center for Medicare and Medicaid Services (CMS) of the US Department of Health and Human Services (DHHS) for not making the money flows and the values received for them transparent.

There are a few people, including this author, who also blame the leadership of health care organizations for many of the problems besetting health care. In this case, one can blame top leadership, presumably CEOs and chief financial officers (CFOs) of hospitals for hiding the amounts of money they receive from Medicare to finance graduate medical education. One can also blame the physician leaders of residency programs for not insisting that they know the true sources of financial support for their programs, obtain budgets that reflect this support, and recognition that their faculty really do bring in external funds for their teaching of house staff (and are thus valuable "taxpayers" in Dr Goldman's parlance.)

It is amazing that such amounts of money have been flowing for years mostly in secret. The secrecy has fueled incorrect, and in retrospect, bizarre ideas about the funding of medical education, and the value of medical educators to their institutions. This secrecy, in turn, has helped suppress the morale of medical educators, support the control of managers of health care professionals, and distort the flow of money within academic institutions and to compensation for certain favored individuals.

Would our dysfunctional health care system not be better off if we demanded transparency and accountability from its leaders?  In particular, the US government should make payments to hospitals for graduate medical education completely transparent, and develop a system to hold these hospitals accountable for how they spend the money.  Meanwhile, top leaders of hospitals receiving this money should make the amounts transparent, first to the people who are supposed to be doing the education that the money pays for, and to the public at large.  This would allow those running the relevant educational programs to develop reasonable and realistic budgets, to treat their faculty with respect, and to demonstrate what value they provide for the money received. 
The ongoing anechoic effect, and related deception and secrecy fostered by leaders in health care are major reasons our health care system is so dysfunctional, that costs are so high, and access and quality so poor.  True health care reform would ensure health care leaders put the mission before their personal enrichment, and act ethically with accountability, transparency, and honesty. 
References
1.   DeAngelis CD. Professors not professing. JAMA 2004; 292: 1060-1.  Link here.
2.  Goldman L, Halm EA.  A view from the top: general internal medicine from the perspective of a chair and dean.  SGIM Forum, April, 2007.  Link here.
3.  Pololi L, Ash A, Krupat E.  Faculty Values in the Culture of Academic Medicine: Findings of a National Faculty Survey. Link here.
4.  Liebow M, Jaeger J, Schwartz MD. How does Medicare pay for graduate medical education? SGIM Forum, May, 2012.  Link here.
5. Chaudhry SI, Khanijo S, Halvorsen AJ, McDonald FS,Patel K. Accountability and transparency in graduate medical education expenditures. Am J Med 2012; 125: 517-522. Link here.

A Case Demonstrating Links Between Poor Governance, Conflicts of Interest, and Excess Executive Compensation at a Hospital System

The Salinas Valley Memorial Healthcare System in California first appeared on our radar in 2011 for not only giving an improbably large severance package to its CEO, but doing so two years before he actually retired.   At the time, hospital "officials" gave the usual sorts of justifications we see for huge executive compensation packages.  They suggested the CEO is brilliant, in particular, "gifted and experienced," and that to retain him they needed to pay "private sector-level benefits."  Then it turned out the system was rapidly raising the compensation of other executives while laying off employees who actually took care of patients. 

A Government Audit

Because the system, despite its title, is actually a local government agency, these controversies triggered not only outrage, but also a state audit.  The Los Angeles Times described its results. 

The audit found that the Salinas Valley Memorial Healthcare System regularly did business with firms that the board and top officials had financial stakes in — in some cases in apparent violation of state conflict-of-interest laws.

The report stated that Salinas Valley lacks sufficient safeguards against making decisions that violate conflict-of-interest laws, and that the district therefore can't guarantee 'that it's board members and executives do not experience personal financial gain from its transactions with businesses.'

The audit found 11 instances between 2006 and 2010 in which board members had reported economic ties — including stocks, salaries and other types of payments — to vendors with which the district did business.

Not all the cases represented violations of conflict-of-interest rules, state auditors said, but in two cases they found that officials may have broken the law.

One case involved former Chief Executive Samuel Downing, who had $50,000 in investments with 1st Capital Bank, an institution Salinas Valley and the executive agreed to deposit $1 million into.

In another case, the hospital made $5.6 million in disbursements to Rabobank, where a board member, Harry Wardwell, serves as a regional president and receives a salary of more than $100,000, according to his most recent statement of economic interest.

A San Jose Mercury News article listed some other problems found by the audit:

· Absence of a formal executive compensation policy despite paying its top administrators at the upper end of the industry scale. Downing received a nearly $5 million retirement payout, and other executives received generous pay topping out at $341,000 per year. The reported also cited supplemental pensions, which have been discontinued.

· Violations of state open-meeting laws as the board approved executive pay.

· Failure to ensure all employees who are required to file statements of economic interest had done so.

· Absence of a duly approved, legally binding conflict of interest code, which must be approved by the county Board of Supervisors. The report noted the hospital board instituted a properly approved code in December.

· Lack of proper documentation on the selection process for no-bid contracts, necessary to ensure the hospital gets the best value for its money. The report found only one of eight contracts reviewed during the audit included such documentation.

· Need for better oversight of hospital funding of community events, including the rationale for why and how they benefit Salinas Valley Memorial, to adhere to the ban on making gifts of public money. The report found the board delivered $54,000 to California Rodeo Salinas without any evidence it had considered how it furthered its public purposes.

Conclusions

First, this case should not be viewed as an indictment of hospitals run by local governments.  Rather than indicating that bad behavior is particularly likely at such hospitals, the fact that questionable behavior came to light at such a hospital is more likely due to better regulation of such hospitals leading to more transparency about them compared to other hospitals.  The regulations and laws governing the operations of non-profit hospitals not run by government agencies, or for-profit hospitals vary from US state to state.  To my knowledge, rarely do states strictly regulate conflicts of interest affecting, or require much transparency about governance at hospitals that are not government run.  There is a similar lack of state regulation of for-profit hospitals, and federal regulation of either non-profit or for-profit in these areas.  Thus it is extremely rare to see an audit or report about any non-governmental hospital like the one about Salinas Valley Memorial Healthcare.  Without the greater transparency produced by such investigations, there is little data about whether the practices seen at Salinas Valley are common at other hospitals, be they government run, non-profit and private, or for-profit.   

However, while this is just one case, it does allow an interesting comparison.  We have discussed the usual "talking points" proffered by management and boards to explain outsized compensation packages in health care.  They often include statements about the brilliance of the executives in question, almost never with any supporting evidence, and the need to pay "market" rates.  Although these, and other talking points may seem implausible, they are hard to challenge, because hospital and other health care organizations are usually able to conceal the processes which actually lead to compensation decisions. 

However, in this case there is documentation of problems with governance processes which may have plausibly enabled unjustified levels of compensation.  Failure to maintain processes to disclose and deal with conflicts of interest could increase the likelihood that conflicts would occur.  A board that included individuals who may have been personally profiting from their board membership might be inclined to go along to get along with the CEO.  Meeting in secret despite an open meeting law would prevent discovery of cronyism.

This case therefore suggests that governance that lacks transparency, accountability and integrity may lead to self-interested, conflicted leadership that responds to perverse incentives.  Such leadership is likely to pay more attention to its own interests than the health care mission, short-changing patients' and the public's health.

So once more with feeling.... health care organizations need leaders that uphold the core values of health care, and focus on and are accountable for the mission, not on secondary responsibilities that conflict with these values and their mission, and not on self-enrichment. Leaders ought to be rewarded reasonably, but not lavishly, for doing what ultimately improves patient care, or when applicable, good education and good research. On the other hand, those who authorize, direct and implement bad behavior ought to suffer negative consequences sufficient to deter future bad behavior.

If we do not fix the severe problems affecting the leadership and governance of health care, and do not increase accountability, integrity and transparency of health care leadership and governance, we will be as much to blame as the leaders when the system collapses.