MedWorm provides a medical RSS filtering service. Over 6000 RSS medical sources are combined and output via different filters. This feed contains the latest medical blog items that have been tagged with 'executive compensation'. Sat, 03 Sep 2011 02:32:08 +0100 http://www.medworm.com/index.php?rid=5158873&cid=t_178584_87_f&fid=34765&url=http%3A%2F%2Fhcrenewal.blogspot.com%2F2011%2F08%2Fmore-executives-prospering-despite.html Cases that demonstrate the contrast between compensation given to the hired executives of health care organizations and their or their organizations' performance continue to appear.  Last week we discussed how freely million dollar plus compensation is given to executives of nominally non-profit hospitals, and discussed how well some executives were paid just prior to charges of financial mismanagement, arrests or guilty pleas that drove them from their jobs.I have also found a series of cases of executives whose pay seemed disproportionate in the context of their institutions' financial difficulties.  Here they are, discussed in alphabetical order.Greenwich Hospital, ConnecticutAccording to GreenwichTime.com, here is the context:Greenwich Hospital went under the k... Health Care Renewal blogs http://www.medworm.com/rss/comments.php?id=5158873 Tue, 23 Aug 2011 16:26:00 +0100 5158873 http://www.medworm.com/index.php?rid=5158874&cid=t_178584_87_f&fid=34765&url=http%3A%2F%2Fhcrenewal.blogspot.com%2F2011%2F08%2Fwhat-goes-up-non-profit-hospital-ceo.html We have frequently discussed the disconnect between incentives, particularly total compensation, given to the leaders of health care organizations and their roles, or lack thereof, in improving the health care of their patients or the public. One measure of that disconnect is how leaders' pay continues to defy gravity while the economy continues to suffer, and health care dysfunction continues to fester.In particular, total compensation given to CEOs of ostensibly not-for-profit hospitals and hospital systems is increasingly passing the magic $1 million mark. A round up including two recent articles and others from the last four months that we have not discussed before revealed more "million dollar babies" amongst the ranks of these leaders.  (Note that most of the data... Health Care Renewal blogs http://www.medworm.com/rss/comments.php?id=5158874 Fri, 19 Aug 2011 18:37:00 +0100 5158874 http://www.medworm.com/index.php?rid=5139647&cid=t_178584_87_f&fid=34765&url=http%3A%2F%2Fhcrenewal.blogspot.com%2F2011%2F08%2Fbest-and-brightest-behaving-badly.html To err is human, and any group of humans can be expected to include those who stray.  However, the constant spin that surrounds most top leaders of health care organizations seems to suggest that these people are different.  In particular, the lavish compensation given leaders of health care organizations is often justified by claims that those in leadership positions are the best and the brightest.  Catching up after a vacation afforded me the opportunity to go through a large volume of news stories, leading to a collection of those from the last year that showed the contrast between such compensation and behavior that was far from the "best and the brightest. "North Memorial Health Care CEO Pleads Guilty to Engaging in ProstitutionAs reported by the Minneapo... Health Care Renewal blogs http://www.medworm.com/rss/comments.php?id=5139647 Thu, 18 Aug 2011 21:02:00 +0100 5139647 http://www.medworm.com/index.php?rid=5130672&cid=t_178584_87_f&fid=34765&url=http%3A%2F%2Fhcrenewal.blogspot.com%2F2011%2F08%2Fwhat-pfizer-iii-enormous-pay-for-poor.html The recent in-depth investigation by Fortune reporters of 10 years of dysfunctional leadership at Pfizer, the "world's largest research-based pharmaceutical company," raises many issues about leadership and governance in health care (see our post here).  To continue what is likely to become a lengthy series, let us now discuss the discrepancy between the markedly dysfunctional leadership performance documented in the Fortune article and the pay given to the leaders involved."Hank" McKinnell et al - 2003-2006 Mr McKinell was forced to retire in 2006. The Fortune article described Mr McKinnell as a "desperate CEO" by 2002 because he could find no way to replenish the company's fading drug pipeline; who then became an absent CEO who "left a power vacuum" and then triggered internal polit... Health Care Renewal blogs http://www.medworm.com/rss/comments.php?id=5130672 Mon, 15 Aug 2011 18:22:00 +0100 5130672 http://www.medworm.com/index.php?rid=5118573&cid=t_178584_87_f&fid=34765&url=http%3A%2F%2Fhcrenewal.blogspot.com%2F2011%2F08%2Fnow-mainstream-notion-profit-seeking.html We have been writing - some might say wailing Cassandra-like - about health care dysfunction since I published about it in the European Journal of Internal Medicine in 2003.(1) However, while our dismal warnings were inspired by fears of  health care professionals who saw bad things happening in their local health care environments, the notion that things were really bad in health care really did not get a lot of traction. After all, we were in the second decade of a prolonged economic "great moderation," the good times were rolling, so who was really worried by a few whiners and complainers in health care?However, after the fall of Lehman Brothers ushered in the global financial collapse, or great recession, this complacency was disturbed, and it began to appear that our pr... Health Care Renewal blogs http://www.medworm.com/rss/comments.php?id=5118573 Wed, 10 Aug 2011 00:17:00 +0100 5118573 http://www.medworm.com/index.php?rid=5096112&cid=t_178584_87_f&fid=34765&url=http%3A%2F%2Fhcrenewal.blogspot.com%2F2011%2F08%2Fwhat-pfizer-ii-lack-of-transparency.html The recent in-depth investigation by Fortune reporters of 10 years of dysfunctional leadership at Pfizer, the "world's largest research-based pharmaceutical company," raises many issues about leadership and governance in health care (see our post here).  To continue what is likely to become a lengthy series, let us discuss the most obvious one, is the discrepancy between what appeared in Fortune and what Pfizer chose to make public about its leadership.This discrepancy is most apparent when one compares official descriptions of executive performance with what the Fortune reporters found.  To illustrate, consider the official descriptions of the performance of former Pfizer CEOs Hank McKinnell and Jeffrey Kindler in the respective years in which they were forced out."Han... Health Care Renewal blogs http://www.medworm.com/rss/comments.php?id=5096112 Wed, 03 Aug 2011 18:53:00 +0100 5096112 http://www.medworm.com/index.php?rid=5077624&cid=t_178584_87_f&fid=34765&url=http%3A%2F%2Fhcrenewal.blogspot.com%2F2011%2F07%2Fexecutives-get-rich-despite-ethical-and.html We recently posted about some shocking allegations suggesting that the for-profit corporations that now dominate hospice care may prey on vulnerable patients to increase their revenues, and may specifically recruit patients who are not terminally ill for hospice, and then neglect to attend to their treatable medical problems.  The post was based on a Bloomberg investigative report.The Bloomberg report focused on two large for-profit hospice providers, Vitas, a subsidiary of Chemed, and VistaCare, a subsidiary of Gentiva. We have repeatedly seen a pattern in numerous other health care organizations, non-profit as well as for-profit: despite questionable corporate behavior that appears to violate the values of health care professionals, executives receive rich compen... Health Care Renewal blogs http://www.medworm.com/rss/comments.php?id=5077624 Thu, 28 Jul 2011 18:51:00 +0100 5077624 http://www.medworm.com/index.php?rid=5050459&cid=t_178584_87_f&fid=34765&url=http%3A%2F%2Fhcrenewal.blogspot.com%2F2011%2F07%2Fblood-money-at-border-red-cross-and.html Writing in our local Providence Journal, Felice Freyer reported on a story that becomes less bewildering when viewed in the context of how nominally not-for-profit health care organizations are now run.  The Border DisputeIt seems that two such non-profits are having a border dispute:Two local charities are fighting for your blood.The Rhode Island Blood Center, long the sole blood-collection agency in the state, is objecting to incursions by the American Red Cross of Eastern Massachusetts, which recently started holding blood drives here.A war of words has resulted, with the blood center accusing the Red Cross of a 'campaign of misinformation,' and the Red Cross calling the blood center 'hypocritical.' The Hospital Association of Rhode Island entered the fray with a letter to blood do... Health Care Renewal blogs http://www.medworm.com/rss/comments.php?id=5050459 Thu, 21 Jul 2011 17:58:00 +0100 5050459 http://www.medworm.com/index.php?rid=5050461&cid=t_178584_87_f&fid=34765&url=http%3A%2F%2Fhcrenewal.blogspot.com%2F2011%2F07%2Fhealth-care-for-very-rich-is-different.html Another glimpse of health care for the very rich comes by way of a BNet post by Jim Edwards about the beleaguered CEO of Forest Laboratories.The background is that:The CEO is fighting to retain his place atop the company against both investor Carl Icahn, who wants his own directors on Forest’s board, and the Department of Health & Human Services, which wants to exclude Solomon from the drug business as a punishment for the company settling a $313 million investigation by the Department of Justice over its illegal marketing of Levothroid and other drugs.We had posted about the government threat to disbar him from government business after his company here. Edwards noted that despite these setbacks, Solomon's total compensation actually increased:Forest Labs (FRX) reported that CEO How... Health Care Renewal blogs http://www.medworm.com/rss/comments.php?id=5050461 Tue, 19 Jul 2011 21:16:00 +0100 5050461 http://www.medworm.com/index.php?rid=5008077&cid=t_178584_87_f&fid=34765&url=http%3A%2F%2Fhcrenewal.blogspot.com%2F2011%2F07%2Fbeing-non-profit-hospital-ceo-means.html When my arm was twisted heartily to see the movie "Love Story" a very long time ago, I could never understand why so many audience members sighed upon hearing that immortal line, "love means never having to say you're sorry."  I could not understand it then, and still cannot.However, it seems that for reasons that are not any more clear, being the CEO of a not-for-profit hospital or hospital system also means never having to say you are sorry, as shown in some recent stories from the media. Not Sorry for LeavingOriginally published in the Fargo (ND) InForum:The merger 1½ years ago of Sanford Health and MeritCare created a new entity that doubled in size and covers a service area of more than 130,000 square miles.But the unified health care giant needed only one top executive, and the... Health Care Renewal blogs http://www.medworm.com/rss/comments.php?id=5008077 Thu, 07 Jul 2011 19:59:00 +0100 5008077 http://www.medworm.com/index.php?rid=4975790&cid=t_178584_87_f&fid=34765&url=http%3A%2F%2Fhcrenewal.blogspot.com%2F2011%2F06%2Fmore-revelations-about-how-top-managers.html Last month, we discussed the contrast between executive compensation at Salinas Valley Memorial Healthcare System (SVMH), a small California public hospital system, and the treatment of employees in the trenches. While the hospital had laid off workers ostensibly because of the poor economic climate, the local newspaper revealed that its CEO was leaving with a multi-million dollar retirement package, and that some of his supposed severance pay had been given him before he was severed.This month, amidst growing labor unrest partially driven by the disparate treatment of the hired top manager and the more lowly employees who actually take care of patients, a new report revealed further contrasts between how hired executives and "regular" employees are treated.Let me give a blow by ... Health Care Renewal blogs http://www.medworm.com/rss/comments.php?id=4975790 Tue, 28 Jun 2011 21:02:00 +0100 4975790 http://www.medworm.com/index.php?rid=4975791&cid=t_178584_87_f&fid=34765&url=http%3A%2F%2Fhcrenewal.blogspot.com%2F2011%2F06%2Fceo-compensation-nothing-to-see-here.html An article in the Washington Post showed how uncomfortable executives of big corporations, including health corporations, are about making their outsize compensation transparent.  Here’s one financial figure some big U.S. companies would rather keep secret: how much more their chief executive makes than the typical worker.Now a group backed by 81 major companies — including McDonald’s, Lowe’s, General Dynamics, American Airlines, IBM and General Mills — is lobbying against new rules that would force disclosure of that comparison.The lobbying effort began more than a year ago. It involved some of the biggest names in corporate America and meetings with members of both parties on the House Financial Services Committee and Senate banking committee.The companies and their R... Health Care Renewal blogs http://www.medworm.com/rss/comments.php?id=4975791 Mon, 27 Jun 2011 20:11:00 +0100 4975791 http://www.medworm.com/index.php?rid=4968427&cid=t_178584_87_f&fid=34765&url=http%3A%2F%2Fhcrenewal.blogspot.com%2F2011%2F06%2Fembedded-networks-of-influence-in.html At the 12th International Anti-Corruption Conference (IACC), sponsored by Transparency International, one of the plenary sessions was devoted to the topic of "embedded networks of influence."  The session description included this description of the topic as:the major stumbling block in the fight against corruption, namely, the power of 'embedded networks' in advancing personal or group interests through state institutions. The extent of their power can create what is known as “state capture” meaning democratic governance failure. It will take a close look at the influential role of private sector, especially of the multinational private sector.A recent investigative report in the Chronicle of Higher Education illustrated a striking case of how one key individual has affected... Health Care Renewal blogs http://www.medworm.com/rss/comments.php?id=4968427 Fri, 24 Jun 2011 19:11:00 +0100 4968427 http://www.medworm.com/index.php?rid=4952748&cid=t_178584_87_f&fid=34765&url=http%3A%2F%2Fhcrenewal.blogspot.com%2F2011%2F06%2Fmanagers-coup-how-hired-hands-got.html We have frequently discussed the perverse incentives provided to the leaders of health care organizations.  They almost never pay a penalty for presiding over organizational actions that are unethical, harmful to patients, or even criminal (e.g., see posts here and here for some very recent examples.)  However, they often collect outrageously huge compensation disproportionate to any reasonable measure of their organizations' performance.  (e.g., see posts here and here for relevant recent examples.)Now two news articles, based in turn on research studies, further illuminate how hired managers and executives have become so wealthy and unaccountable.The first news article was in the New York Times, and was in turn based on an accounting study.  In summary, a recent,... Health Care Renewal blogs http://www.medworm.com/rss/comments.php?id=4952748 Tue, 21 Jun 2011 00:47:00 +0100 4952748 http://www.medworm.com/index.php?rid=4911418&cid=t_178584_87_f&fid=34765&url=http%3A%2F%2Fhcrenewal.blogspot.com%2F2011%2F06%2Fcoverts-anechoic-misadventures.html We have frequently discussed how health care leaders' compensation seems to reflect the opposite of the pay for performance they often tout.  One example we discussed recently turns out to be even more vivid than we first discovered.Last week we discussed the case of Mr Michael Cover, the CEO of the small, public Palomar Pomerado Health system in southern California, whose total compensation increased to over $1 mllion a year, while his hospital system was cited for severe, life-threatening medical errors.  The current and previous system board chairmen called his work "excellent, and " phenomenal," and asserted Mr Covert was "one of the nation's leading health administrators."It turns out that a local weekly newspaper, the Community Paper, investigated Mr Covert's... Health Care Renewal blogs http://www.medworm.com/rss/comments.php?id=4911418 Wed, 08 Jun 2011 16:36:00 +0100 4911418 http://www.medworm.com/index.php?rid=4893342&cid=t_178584_87_f&fid=34765&url=http%3A%2F%2Fhcrenewal.blogspot.com%2F2011%2F06%2Fshould-phenomenal-1-million-ceo-be.html A recent story with some local color once again illustrates the cognitive dissonance evoked by current patterns of compensation of health care leaders.Let me start chronologically. The Stratospheric Compensation of the CEO, and Its JustificationIn 2009, the compensation given to the CEO of the Palomar Pomerado Health, a public health system in the vicinity of San Diego, California, provided some headlines. As reported then by the San Diego Times-Union,Palomar Pomerado Health CEO Michael Covert has received a 26 percent — or $154,000 — pay raise.The increase, approved by the hospital district’s board of directors last month, is retroactive to July 1, the beginning of the fiscal year, board Chairman Bruce Krider said.The increase brought Covert’s pay from $582,000 a year to $736,000 ... Health Care Renewal blogs http://www.medworm.com/rss/comments.php?id=4893342 Fri, 03 Jun 2011 21:40:00 +0100 4893342 http://www.medworm.com/index.php?rid=4862467&cid=t_178584_87_f&fid=34765&url=http%3A%2F%2Fhcrenewal.blogspot.com%2F2011%2F05%2Fmillion-dollar-plus-hospital-ceo.html Health care leaders' compensation has again been in the news. Below are highlights from stories about four medical centers, emphasizing the magnitude of executive compensation, how it is related, or not to hospital and executive performance, and whether and how the organizations' boards chose to justify it. The medical centers are in alphabetical order. University of Pittsburgh Medical CenterCompensationAccording to the Pittsburgh Post-Gazette:In tax documents released Friday, Jeffrey Romoff, president and CEO of the University of Pittsburgh Medical Center, received $4.01 million in salary, bonuses and benefits that year.Also,Other top earners at UPMC include neurosurgeons Ghassan Bejjani, $2.37 million in salary and benefits, and Richard Spiro, $2.23 million; cardiothoracic surgeon James ... Health Care Renewal blogs http://www.medworm.com/rss/comments.php?id=4862467 Wed, 25 May 2011 18:31:00 +0100 4862467 http://www.medworm.com/index.php?rid=4841388&cid=t_178584_87_f&fid=34765&url=http%3A%2F%2Fhcrenewal.blogspot.com%2F2011%2F05%2Fseverance-package-to-un-severed-ceo.html The latest jaw-dropping story about executive compensation in health care has been unfolding in California, but at least now I have a diagnosis for this syndrome.  A Generous Retirement Package, Paid Before RetirementIn April, the Los Angeles Times reported about the generous retirement package given to an outgoing public hospital district CEO in California:When he turned 65 two years ago, Samuel Downing received a $3-million retirement payment from a public hospital district in Salinas, Calif., where he serves as president and chief executive.But Downing continued working at his $668,000-a-year job for another two years, and after he retires this week, he will receive another payment of nearly $900,000. That comes on top of his regular pension of $150,000 a year.Note that not only wa... Health Care Renewal blogs http://www.medworm.com/rss/comments.php?id=4841388 Thu, 19 May 2011 21:11:00 +0100 4841388 http://www.medworm.com/index.php?rid=4709168&cid=t_178584_87_f&fid=34765&url=http%3A%2F%2Fhcrenewal.blogspot.com%2F2011%2F04%2Fjohnson-and-johnson-runs-afoul-of.html Johnson and Johnson, the once highly reputed international pharmaceutical and device company, cannot catch a break.  International Bribery ChargesAs reported by Bloomberg, the latest story is about bribery claims across multiple countries and two continents:Johnson & Johnson (JNJ), the world’s second-biggest seller of medical products, will pay $70 million after admitting that the company bribed doctors in Europe and paid kickbacks in Iraq to win contracts and sell drugs and artificial joints.Subsidiaries of J&J paid bribes to doctors and hospital administrators in Greece, Poland and Romania, the Securities and Exchange Commission and Department of Justice said today in filings at U.S. District Court in Washington. The company also made illegal payments to Iraqi officials to... Health Care Renewal blogs http://www.medworm.com/rss/comments.php?id=4709168 Wed, 13 Apr 2011 21:47:00 +0100 4709168 http://www.medworm.com/index.php?rid=4626770&cid=t_178584_87_f&fid=34765&url=http%3A%2F%2Fhcrenewal.blogspot.com%2F2011%2F03%2Fdespite-poor-financial-results.html It is the season for share-holders' meetings of big US publicly held corporations, and as the proxy statements prepared for these meetings, prepare for more eye-popping, jaw-dropping examples of executive compensation.  Pfizer's 2010 CEO CompensationThe AP (via the Wall Street Journal) just noted the compensation given to Jeffrey Kindler, the outgoing (in 2010) CEO of Pfizer, Inc, the world's largest pharmaceutical company:Former Pfizer Inc. Chairman and CEO Jeffrey B. Kindler may have left the world's largest drugmaker abruptly last December, but he didn't leave empty-handed thanks to a compensation package valued almost $22 million.Kindler received a 60 percent increase last year over his 2009 compensation, according to an Associated Press analysis of a Pfizer regulatory filing Tues... Health Care Renewal blogs http://www.medworm.com/rss/comments.php?id=4626770 Wed, 23 Mar 2011 21:14:00 +0100 4626770 http://www.medworm.com/index.php?rid=4622205&cid=t_178584_87_f&fid=34765&url=http%3A%2F%2Fhcrenewal.blogspot.com%2F2011%2F03%2Fmillions-to-health-insurance-ceos-but.html The revelations about the huge golden parachute given the outgoing CEO of ostensibly non-profit Massachusetts Blue Cross Blue Shield induced some public discussion about the disconnect between executive compensation and the mission of health care organization (see most recent post here).  Several other recent stories should generate more discussion on these issues.  First, new proxy statements revealed the compensation of executives of two large for-profit health care insurers/ managed care companies.  In alphabetical order,CignaAs reported by the AP, via ABC news, the CEO got a big raise:Cigna Corp. CEO David M. Cordani's total compensation more than doubled in 2010, his first year as leader of the nation's fourth-largest health insurer, and a period in which the company's ... Health Care Renewal blogs http://www.medworm.com/rss/comments.php?id=4622205 Tue, 22 Mar 2011 16:32:00 +0100 4622205 http://www.medworm.com/index.php?rid=4605790&cid=t_178584_87_f&fid=34765&url=http%3A%2F%2Fhcrenewal.blogspot.com%2F2011%2F03%2Fhealth-care-executives-compensation.html This article made it seem that the substantial compensation received by these executives was related to the system's financial performance:[Senior Vice President of marketing and communication Jim] Tobalski said Novant will release its fiscal 2010 financial report in April. The system likely will report a better overall performance because of the stock market's surge in 2010.However, as reported eight days later again by the Winston-Salem (NC) Journal, there are other ways to look at these executives' compensation. First, their bonuses can be compared to those given less exalted employees:Novant Health Inc. has paid two separate bonuses, including a one-time 'thank you' offering, to its Forsyth Medical Center employees recently, but that has not dampened the complaints of some employees th... Health Care Renewal blogs http://www.medworm.com/rss/comments.php?id=4605790 Thu, 17 Mar 2011 21:35:00 +0100 4605790 http://www.medworm.com/index.php?rid=4600495&cid=t_178584_87_f&fid=34765&url=http%3A%2F%2Fhcrenewal.blogspot.com%2F2011%2F03%2Fdespite-recalls-legal-settlements.html For our latest story about the tremendous disconnect between the pay and performance of leaders of health care organizations, we turn to Reuters.  Astronomical PayDespite having a very bad 2010, Johnson and Johnson continued to reward its CEO royally:After a year in which Johnson & Johnson's product quality control was deemed such a shambles that the U.S. government will oversee some plants, the board had praise for Chief Executive William Weldon and awarded him almost $29 million in overall compensation.The once golden reputation of the diversified healthcare giant was severely tarnished by seemingly endless recalls of widely used consumer products as well as recalls of medical devices and products from other units in 2010.U.S. consumer product sales fell by more than 19 percent ... Health Care Renewal blogs http://www.medworm.com/rss/comments.php?id=4600495 Wed, 16 Mar 2011 21:00:00 +0100 4600495 http://www.medworm.com/index.php?rid=4592326&cid=t_178584_87_f&fid=34765&url=http%3A%2F%2Fhcrenewal.blogspot.com%2F2011%2F03%2Fsome-dare-call-it-corruption.html We have discussed many cases of health care organizations' leaders reaping rewards disproportionate to any concept of their performance, and especially to any concept of the effect of their conduct on patients' or the public's health.  Most of these cases have been pretty anechoic, but for some reason, the case of the huge golden parachute given to the outgoing CEO of Massachusetts Blue Cross Blue Shield despite a tenure  marked by financial losses and no particularly brilliant advances in patients' care or outcomes, (see this post) continues to generate responses.  One editorial suggested that should the non-profit health insurance company continue to pay so lavishly, it should lose its tax exemption.  Another noted that the company should start put... Health Care Renewal blogs http://www.medworm.com/rss/comments.php?id=4592326 Mon, 14 Mar 2011 21:50:00 +0100 4592326 http://www.medworm.com/index.php?rid=4575025&cid=t_178584_87_f&fid=34765&url=http%3A%2F%2Fhcrenewal.blogspot.com%2F2011%2F03%2Fmassachusetts-blue-cross-blue-shield.html We have frequently discussed the kind of compensation now frequently given to leaders of health care organizations.  Although often even the most disproportionately outrageous compensation only attracts transient interest, a recent regional story in this genre has really gotten legs.How Big the Golden Parachute?The story was about the severance package given to one Cleve L Killingsworth, the former CEO of not-for-profit health care insurance company Massachusetts Blue Cross Blue Shield.  While first reported as being worth $8.6 million,(1) the estimate of his total severance was soon raised to $11 million.(2)This is a Way to Control Costs?Immediately, that amount was contrasted with the supposed emphasis of the company on controlling costs, and its recent poor performance: K... Health Care Renewal blogs http://www.medworm.com/rss/comments.php?id=4575025 Fri, 11 Mar 2011 22:37:00 +0100 4575025 http://www.medworm.com/index.php?rid=4522285&cid=t_178584_150_f&fid=35777&url=http%3A%2F%2Ffeedproxy.google.com%2F%7Er%2FPharmalot%2F%7E3%2FqAmwBCrGDk4%2F Here’s a lesson for a board of directors: never let a few setbacks deter you from giving your chief executive a raise, however modest. Consider Johnson & Johnson ceo Bill Weldon. Despite a breathtaking number of recalls spanning nearly every corner of the health care behemoth - over-the-counter meds, contact lenses, syringes, hip replacement devices - he received a 3 percent pay hike. His new base salary is $1.92 million, up from $1.86 million, according to a filing with the US Securities and Exchange Commission. Some may argue that a 3 percent raise is not much. In real dollars, this amounts to roughly $60,000 (which can be used for many things, of course). And his 2010 bonus was cut 45 percent to $1.97 million, down from $3.6 million(the bonus, by the way, is 85 percent cash a... Pharmalot blogs http://www.medworm.com/rss/comments.php?id=4522285 Fri, 25 Feb 2011 19:01:36 +0100 4522285 http://www.medworm.com/index.php?rid=4512616&cid=t_178584_150_f&fid=35777&url=http%3A%2F%2Ffeedproxy.google.com%2F%7Er%2FPharmalot%2F%7E3%2FH-3P5Te9uPI%2F Once again, the pay package given Novartis chairman Dan Vasella is causing a ruckus. At the annual meeting yesterday in Basel, Switzerland, only 61 percent of shareholders backed the compensation plan, the first time remuneration was put to a vote. This is not considered a very good showing, however, and in fact, Dan and Novartis ceo Joe Jimenez were criticized for their salaries and because a chunk of their pay is not tied to long-term performance, The Wall Street Journal writes. So what did Dan receive? According to the Novartis annual report, he earned about $8.5 million last year, including cash and stock. Separately, Dan also received a one-time retirement benefit worth $12.8 million. But Ethos, a shareholder activist organization, calculates he earned around $27 million. And Rudolf ... Pharmalot blogs http://www.medworm.com/rss/comments.php?id=4512616 Wed, 23 Feb 2011 13:20:40 +0100 4512616 http://www.medworm.com/index.php?rid=4489608&cid=t_178584_87_f&fid=34765&url=http%3A%2F%2Fhcrenewal.blogspot.com%2F2011%2F02%2Fafter-manufacturing-problems-genzyme.html In late 2009, I posted about problems at a Genzyme plant that manufactured some fabulously expensive drugs, e.g. Cerezyme whose cost to patients approximated $160,000 a year. We thought then that for a drug costing that much, the company ought to have figured out a conservative process to provide pure and unadulterated product. In a later post I asked why a company that could afford to make its CEO very rich could not afford to adequately maintain its manufacturing facilities. In May, 2010, I posted about a legal settlement of charges related to its manufacturing problems requiring Genzyme to pay a $175 million fine and function under US government supervision.  And in August, 2010, I posted about how this series of management missteps could lead to the company's C... Health Care Renewal blogs http://www.medworm.com/rss/comments.php?id=4489608 Thu, 17 Feb 2011 22:16:00 +0100 4489608 http://www.medworm.com/index.php?rid=4477669&cid=t_178584_87_f&fid=34765&url=http%3A%2F%2Fhcrenewal.blogspot.com%2F2011%2F02%2Fyou-cant-say-that-non-disparagement.html Here is another example of why health care organizations' leaders are different from you and me, and why that may not be a good thing for health care.  A few days ago, the San Jose (California) Mercury News reported on the upcoming departure of a local hospital CEO:El Camino Hospital's handsomely-paid president and CEO Kenneth Graham is out of a job, the hospital announced Thursday afternoon.Graham's contract will end June 30 'without cause, at the request of the hospital's Board of Directors,' according to a statement released to the media.Until then, Graham will continue to fulfill his duties as the hospital's top administrator, according to the statement. Graham has been president and CEO of the hospital for 4½ years.The brief statement did not explain why Graham has been ousted, ... Health Care Renewal blogs http://www.medworm.com/rss/comments.php?id=4477669 Mon, 14 Feb 2011 17:21:00 +0100 4477669 http://www.medworm.com/index.php?rid=4464459&cid=t_178584_87_f&fid=34765&url=http%3A%2F%2Fhcrenewal.blogspot.com%2F2011%2F02%2Fwhy-werent-existing-laws-about-hospital.html Public radio station KUOW reported on the generous compensation given hospital CEOs in Washington:KUOW has learned that 15 hospital executives in Washington made $1 million or more in 2009. That elite group includes 14 nonprofit executives and one head of a government hospital. CEOs at Multicare, Providence, Virginia Mason and Valley Medical each made more than $2 million.Those numbers can be found in the hospitals' latest tax filings and other public records. The pattern was more lopsided in the two prior years. Nobody working at a public hospital cracked the top 10 list of the state's highest hospital paychecks in 2007 or 2008.But then the story takes an interesting twist:Most of Washington's largest hospitals are nonprofit organizations. The state gives the nonprofits a break on th... Health Care Renewal blogs http://www.medworm.com/rss/comments.php?id=4464459 Fri, 11 Feb 2011 21:19:00 +0100 4464459 http://www.medworm.com/index.php?rid=4459920&cid=t_178584_87_f&fid=34765&url=http%3A%2F%2Fhcrenewal.blogspot.com%2F2011%2F02%2Fpassport-to-fraud-amerihealth-mercy.html Back in November, 2010, we discussed the relatively opulent pay and perks given to and conflicts of interest affecting leaders of Passport Health Plan, a non-profit, state (Kentucky) supported Medicaid managed care organization/ health insurer.  This seemed to be another case of health care organizational insiders putting their personal gain ahead of their mission, which was particularly unseemly because their mission was serving the poor.  Now Passport Health is in the news again, and not in a favorable way, as per the Louisville (Kentucky) Courier-Journal:Passport Health Plan’s main contractor has agreed to pay more than $2 million in damages to the Kentucky Medicaid program to settle a fraud investigation, Attorney General Jack Conway announced Wednesday.The settlement with ... Health Care Renewal blogs http://www.medworm.com/rss/comments.php?id=4459920 Thu, 10 Feb 2011 22:45:00 +0100 4459920 http://www.medworm.com/index.php?rid=4419082&cid=t_178584_87_f&fid=34765&url=http%3A%2F%2Fhcrenewal.blogspot.com%2F2011%2F01%2Fmore-on-hospital-executives.html Local US news media brought some more striking examples of how health care organizational leaders, even leaders of non-profit hospitals seem paid out of proportion to any reasonable standards.Carolinas HealthCare System: Corporate-Style Compensation for a Public Hospital CEOCarolinas HealthCare System describes itself as "the largest health care system in the Carolinas and the third largest public system in the nation" in its membership blurb for the National Association of Public Hospitals and Health Systems.  That association describes its members thus, Since the establishment of the first public hospital in the United States in the early 1700s, safety net hospitals and health systems have been an essential part of our nation’s health care delivery system.In the 21st century, safe... Health Care Renewal blogs http://www.medworm.com/rss/comments.php?id=4419082 Mon, 31 Jan 2011 20:36:00 +0100 4419082 http://www.medworm.com/index.php?rid=4405727&cid=t_178584_87_f&fid=34765&url=http%3A%2F%2Fhcrenewal.blogspot.com%2F2011%2F01%2Fmaking-their-numbers-examples-of.html Last week, we discussed how the large incentives for pharmaceutical executives to meet short term financial targets (that is, "making their numbers") may be an important cause of their firms' decreasing capacity to fulfill their most basic mission, manufacturing pure, unadulterated medicines.  In the news recently were two examples of how other health care leaders are incentivized to meet short-term financial targets.University of CaliforniaThe first, and bigger example appeared in the San Francisco Chronicle. First, note that the University of California system is currently in dire shape:Finances are so dire at the University of California that it might have to turn away qualified students,....Also,UC President Mark Yudof told the regents that UC will need to close a $1 billion budge... Health Care Renewal blogs http://www.medworm.com/rss/comments.php?id=4405727 Thu, 27 Jan 2011 21:03:00 +0100 4405727 http://www.medworm.com/index.php?rid=4330969&cid=t_178584_87_f&fid=34765&url=http%3A%2F%2Fhcrenewal.blogspot.com%2F2011%2F01%2Fexecutive-compensation-at-non-profit.html We have often discussed executive compensation at US hospitals and academic medical centers, which seems to run from generous to outrageous.  The usual explanation by organizational spokespeople, and occasionally boards of trustees is that this is the sort of compensation needed to attract the best and the brightest, a variation of the "pay for performance" meme that resounds throughout business schools and executive suites.  However, almost never does anyone at any hospital or AMC acknowledge that their leaders are not the best and brightest, although outside of Lake Woebegone, all cannot be above average.Here are two recent stories about hospital executives whose compensation contrasted with their performance.Danbury HospitalWe previously posted about how the former c... Health Care Renewal blogs http://www.medworm.com/rss/comments.php?id=4330969 Mon, 10 Jan 2011 22:49:00 +0100 4330969 http://www.medworm.com/index.php?rid=4313968&cid=t_178584_87_f&fid=34765&url=http%3A%2F%2Fhcrenewal.blogspot.com%2F2011%2F01%2Fblast-from-anechoic-past-former-uci.html Soon after we started Health Care Renewal, we ran a series of posts about the University of California-Irvine (UCI) medical school and medical center, featuring stories of mismanagement of major programs, especially those involving organ transplantation (liver, kidney, and bone marrow) while the top executives who presided over the mess received generous compensation, sometimes in strikingly irregular ways, and while at least one whistle-blower alleged he lost his job for complaining about safety issues.  Some of the stories went back another 10 years, to 1995.  One particularly striking story involved the UCI infertility program.  Three physicians were accused of stealing ova from some women to implant in others.  One physician was convicted, and two fled the coun... Health Care Renewal blogs http://www.medworm.com/rss/comments.php?id=4313968 Wed, 05 Jan 2011 21:22:00 +0100 4313968 http://www.medworm.com/index.php?rid=4309562&cid=t_178584_87_f&fid=34765&url=http%3A%2F%2Fhcrenewal.blogspot.com%2F2011%2F01%2Fsome-call-it-tyranny-top-leaders-of.html The state of California, and its flagship university system, the University of California, have been under extreme financial pressure lately.  The 36 Executives' DemandsHowever, that apparently has not decreased the University's hired managers' and executives' sense of entitlement.  They are threatening to sue if their pensions are not increased.  As reported by the San Francisco Chronicle,Three dozen of the University of California's highest-paid executives are threatening to sue unless UC agrees to spend tens of millions of dollars to dramatically increase retirement benefits for employees earning more than $245,000.'We believe it is the University's legal, moral and ethical obligation' to increase the benefits, the executives wrote the Board of Regents in a Dec. 9 letter ... Health Care Renewal blogs http://www.medworm.com/rss/comments.php?id=4309562 Mon, 03 Jan 2011 20:58:00 +0100 4309562 http://www.medworm.com/index.php?rid=4294580&cid=t_178584_87_f&fid=34765&url=http%3A%2F%2Fhcrenewal.blogspot.com%2F2010%2F12%2Fhackensack-university-medical-center.html Last year was an embarassing one for Hackensack University Medical Center (HUMC), a large academic medical center affiliated with the University of Medicine and Dentistry of New Jersey.  In April, former state senator Joseph Coniglio was convicted of fraud (against the public) and extortion for a scheme that involved him being paid $5000 a month for undefined consulting work for HUMC while he promoted the hospital's interests in the state legislature (see post here).  A subsequent investigative report revealed widespread self-dealing on the part of the HUMC board (see post here).  Soon after, the HUMC CEO, John Ferguson, announced his retirement, per the Newark Star-Ledger.Scandal Leads to Apparent ReformsSo when I read an article from last week on NorthJersey.com entit... Health Care Renewal blogs http://www.medworm.com/rss/comments.php?id=4294580 Mon, 27 Dec 2010 22:47:00 +0100 4294580 http://www.medworm.com/index.php?rid=4205926&cid=t_178584_87_f&fid=34765&url=http%3A%2F%2Fhcrenewal.blogspot.com%2F2010%2F11%2Fprominent-health-care-policy-advice.html It is two days after the US Thanksgiving holiday, and one thing I am thankful for is the continued hilarity generated by health care corporate CEOs who pretend to be health care experts.  Of course this all really is not so funny, because the bogus expertise appears not in MAD Magazine, but in the most respected media outlets with the most influence over health care policy. This week's example comes from the Wall Street Journal's vaunted CEO Council.  A summary of its health care panel appeared early this week in that newspaper.The panel included Angela Braly President and CEO, Wellpoint Inc., William A. Hawkins Chairman and CEO, Medtronic Inc., and Klaus Kleinfeld Chairman and CEO, Alcoa.  Angela Braly, a lawyer with no obvious record of direct experienc... Health Care Renewal blogs http://www.medworm.com/rss/comments.php?id=4205926 Sat, 27 Nov 2010 19:30:00 +0100 4205926 http://www.medworm.com/index.php?rid=4203141&cid=t_178584_87_f&fid=34765&url=http%3A%2F%2Fhcrenewal.blogspot.com%2F2010%2F11%2Faco-arrogant-clinical-or-aggressive.html In the 1970s, it was managed care organizations.  In the 1990s, it was vertically integrated health care systems.  In the 2010s, the fashionable concept for improving health care, apparently beloved by left-wing policy wonks and right-wing health care executives is the "accountable care organization." (ACO).  Development of the ACO is funded by the recently passed US health care reform legislation.  The official definition of ACO from the US Center for Medicare and Medicaid Services is:  An Accountable Care Organization, also called an 'ACO' for short, is an organization of health care providers that agrees to be accountable for the quality, cost, and overall care of Medicare beneficiaries who are enrolled in the traditional fee-for-service program w... Health Care Renewal blogs http://www.medworm.com/rss/comments.php?id=4203141 Fri, 26 Nov 2010 17:51:00 +0100 4203141 http://www.medworm.com/index.php?rid=4167923&cid=t_178584_87_f&fid=34765&url=http%3A%2F%2Fhcrenewal.blogspot.com%2F2010%2F11%2Fliving-high-life-on-money-to-treat-poor.html Here is another story that has developed over the last week about questionable goings on at a not-for-profit health care organization.  The organization in question this time was the not-for-profit, but state government supported Medicaid managed care organization/ health insurer for the Louisville, Kentucky region.  The details came from a Louisville (Kentucky) Courier-Journal article about a state auditor's report on the Passport Health Plan:The organization providing Medicaid services in Jefferson and surrounding counties has spent lavishly on such things as travel, meals, salaries, bonuses and lobbying in recent years, the state auditor’s office said in a report released Tuesday.The scathing report, which Gov. Steve Beshear described as 'disheartening,' said two Passpo... Health Care Renewal blogs http://www.medworm.com/rss/comments.php?id=4167923 Mon, 15 Nov 2010 21:49:00 +0100 4167923 http://www.medworm.com/index.php?rid=4167924&cid=t_178584_87_f&fid=34765&url=http%3A%2F%2Fhcrenewal.blogspot.com%2F2010%2F11%2Fabout-to-be-bought-out-non-profit.html A report from FloridaToday (in Brevard County) about the sale of a not-for-profit Florida hospital system to a for-profit corporation raises some interesting questions. The background is that the non-profit Wuesthoff Health System was bought by for-profit Health Management Associates (HMA):HMA, a for-profit hospital management company in Naples, bought the not-for-profit Wuesthoff Oct. 1 for $145 million. Wuesthoff lawyer William Kopit has said it was forced to sell because the hospital system lacked the capital to compete.The question is about the conditions of the sale:A foundation formed to manage the proceeds of the sale and continue providing indigent health care has refused to disclose the executive packages to the state, claiming it constitutes a trade-secret exemption under Florida... Health Care Renewal blogs http://www.medworm.com/rss/comments.php?id=4167924 Mon, 15 Nov 2010 17:22:00 +0100 4167924 http://www.medworm.com/index.php?rid=4031185&cid=t_178584_87_f&fid=34765&url=http%3A%2F%2Fhcrenewal.blogspot.com%2F2010%2F10%2Fpay-for-what-redux-surrealistic-pay-for.html Pay-for-performance has been a persistently fashionable mantra for health care business leaders and policy advocates, particularly as applied to physicians to control costs and perhaps even improve quality.  We have been highly critical of current methods proposed to measure performance and tie pay to it (e.g., here), and other bloggers, notably Dr Robert Centor at DB's Medical Rants, have vigorously pursued this issue (e.g., here).It is beyond ironic that meanwhile, the pay of health care organizations' leaders seems less and less related to their performance.  For example, in a recent series on local executive pay in the Boston Globe there were these examples:HologicHologic Inc. gave its chief executive, John W. Cumming, a $1.5 million “retention payment’’ ... Health Care Renewal blogs http://www.medworm.com/rss/comments.php?id=4031185 Mon, 04 Oct 2010 20:51:00 +0100 4031185 http://www.medworm.com/index.php?rid=4013112&cid=t_178584_87_f&fid=34765&url=http%3A%2F%2Fhcrenewal.blogspot.com%2F2010%2F09%2Fmore-tales-of-hospital-executive.html I have collected another series of stories from the wild and wacky world of health care executive compensation.  These are from three different hospitals/ hospital systems, ordered from smallest to largest.Jefferson HealthcareThis story, from Jefferson County, Washington state, came from the Peninsula Daily News:When Mike Glenn takes over the Jefferson Healthcare CEO office Oct. 4, he will be receiving $225,000 annually to run the 25-bed publicly funded hospital.And he will become the highest-paid public official in Jefferson County.Jefferson Healthcare's budget is $65 million, and it employs 360 full-time workers and about 550 part-timers.Note that the amount above is apparently salary, not total compensation, which could well be higher.Lakeland Regional Medical CenterThis story, fro... Health Care Renewal blogs http://www.medworm.com/rss/comments.php?id=4013112 Tue, 28 Sep 2010 19:24:00 +0100 4013112 http://www.medworm.com/index.php?rid=3987013&cid=t_178584_87_f&fid=34765&url=http%3A%2F%2Fhcrenewal.blogspot.com%2F2010%2F09%2Fmore-than-1-million-to-run-public.html After a well-publicized story that managers of small town in California were paid in the high six-figures, reporters in California have gotten interested in the pay of public officials.Thus the San Diego Union-Tribune reported on the compensation received by CEOs of local public health agencies, called public health care districts, two of which run hospitals. One in particular received generous compensation:The top official at Palomar Pomerado Health, a public agency serving health-care needs in Poway and Escondido, receives in excess of $1 million in compensation per year.Michael Covert, who has run the North County hospital district since 2003, receives a base salary of $736,000 a year. Retirement, bonuses and other benefits push Covert’s total pay past $1.1 million.One other public he... Health Care Renewal blogs http://www.medworm.com/rss/comments.php?id=3987013 Mon, 20 Sep 2010 21:55:00 +0100 3987013 http://www.medworm.com/index.php?rid=3965366&cid=t_178584_87_f&fid=34765&url=http%3A%2F%2Fhcrenewal.blogspot.com%2F2010%2F09%2Fsmall-hospital-system-loses-61-million.html As we have quoted many times, sunlight is the best disinfectant.  New US Internal Revenue Service requirements for reporting by not-for-profit organizations has resulted in more transparency about the finances of many health care organizations, and this transparency has shown that the culture of perverse incentives and management privilege has spread far and wide.How far and wide?  Consider this story in the (Harford County, Maryland) Aegis:Harford County’s Upper Chesapeake Health lost $70 million because of bad bets in the derivatives markets two years ago, but still paid its chief executive more than $900,000 in annual salary and bonuses.According to figures from their latest tax returns and from the state agency that regulates hospital rates, Upper Chesapeake Medical Center ... Health Care Renewal blogs http://www.medworm.com/rss/comments.php?id=3965366 Mon, 13 Sep 2010 20:47:00 +0100 3965366 http://www.medworm.com/index.php?rid=3957869&cid=t_178584_87_f&fid=34765&url=http%3A%2F%2Fhcrenewal.blogspot.com%2F2010%2F09%2Fgolden-parachute-for-captain-outrageous.html A year ago, I posted about leadership and governance problems at Northeast Health Systems, a small hospital system located in neighboring Massachusetts.  The colorful story included leaders who solicited money from the community but concealed what they were doing from the same community, an adolescent pregnancy pact after the hospital system refused to provide confidential birth control information at the high school clinic it ran, a hospital vice-president accused of art theft, various cuts, some concealed, of medical services, accusations of conflicts of interest affecting the board of trustees, and no-confidence votes by nurses and physicians. Finally, Stephen Laverty, the CEO held responsible for much of the mess, resigned and things quieted down a bit.  H... Health Care Renewal blogs http://www.medworm.com/rss/comments.php?id=3957869 Fri, 10 Sep 2010 20:35:00 +0100 3957869 http://www.medworm.com/index.php?rid=3946400&cid=t_178584_87_f&fid=34765&url=http%3A%2F%2Fhcrenewal.blogspot.com%2F2010%2F09%2Flogical-fallacies-in-defense-of-million.html We recently posted about the latest example of generously paid health care leaders, million dollar plus hospital CEOs in the Baltimore area (here).  Such stories are appearing more often in the media, and increasingly generating skeptical, anguished, or angry responses.  Defending Millionaire Hospital CEOsSo it should be no surprise that the defenders of rich hospital CEOs are starting to rally.  The Baltimore Sun published two letters defending the million dollar plus compensation received by many local hospital CEOs.  But what arguments they made.First, let us examine in detail  the arguments made by Carmela Coyle, "president and CEO of the Maryland Hospital Association."  She opened with this description of hospitals as organizations:Famed management expert... Health Care Renewal blogs http://www.medworm.com/rss/comments.php?id=3946400 Wed, 08 Sep 2010 16:23:00 +0100 3946400 http://www.medworm.com/index.php?rid=3920789&cid=t_178584_87_f&fid=34765&url=http%3A%2F%2Fhcrenewal.blogspot.com%2F2010%2F08%2Fmore-hospital-ceos-join-millionaires.html As we predicted, more stringent requirements by the US Internal Revenue Service for financial reporting by not-for-profit organizations, including hospitals and hospital systems, have produced an enlarging parade of revelations of obese pay packages for hospital leaders.  The latest report came out courtesy the Baltimore Sun:Baltimore-area hospital CEOs and presidents boast seven-figure salaries, club and gym memberships, and paid financial planning and tax services as part of compensation packages from their nonprofit employers.According to a survey of Baltimore-area hospitals, the highest-ranking executives were often the recipients of financial payouts and perquisites that many private-sector companies have abandoned in the face of intense public debate about excessive CEO pay. The... Health Care Renewal blogs http://www.medworm.com/rss/comments.php?id=3920789 Tue, 31 Aug 2010 15:09:00 +0100 3920789 http://www.medworm.com/index.php?rid=3914933&cid=t_178584_87_f&fid=34765&url=http%3A%2F%2Fhcrenewal.blogspot.com%2F2010%2F08%2Fcan-1-billion-group-of-babies-provide.html The issue of executive compensation in health care seems to be attracting more media attention.A St Louis Post-Dispatch editorial noted how executive compensation for for-profit health insurance CEOs has grown. It started with a quote from Steven Hemsley, the CEO of UnitedHealth:Today the American people are questioning whether or not we receive fair value for the $2.6 trillion we, as a society, are expecting to spend this year on our health care system. The vast majority, including those of us at UnitedHealth Group, believe the answer is, 'No.'Here is a summary of the compensation information:Modern Healthcare, a leading health industry trade journal, published its annual executive compensation survey this week. Topping the list is Stephen Hemsley, quoted above, who gave a speech to the D... Health Care Renewal blogs http://www.medworm.com/rss/comments.php?id=3914933 Sun, 29 Aug 2010 23:49:00 +0100 3914933 http://www.medworm.com/index.php?rid=3889048&cid=t_178584_87_f&fid=34765&url=http%3A%2F%2Fhcrenewal.blogspot.com%2F2010%2F08%2Fhow-oligopolists-rationalize-their.html Advocates of laissez faire commercialized health care often trumpet the advantages of competitive markets as a rationale for deregulation.  While there are theoretic, and possibly empiric reasons to think that competitive markets are the optimal way to distribute goods and services, we recently discussed aspects of health care that make it extremely hard for health care markets to be ideally competitive.  Meanwhile, two news articles gave some case-based evidence about how current health care markets are hardly competitive.   Sutter HealthA Bloomberg article focused on Sutter Health in northern and central California. Sutter Health commands a substantial part of a very large market:Sutter Health Co., the nonprofit that owns Sutter Davis, has market power that commands p... Health Care Renewal blogs http://www.medworm.com/rss/comments.php?id=3889048 Fri, 20 Aug 2010 20:17:00 +0100 3889048 http://www.medworm.com/index.php?rid=3872508&cid=t_178584_87_f&fid=34765&url=http%3A%2F%2Fhcrenewal.blogspot.com%2F2010%2F08%2Fst-vincents-goes-bankrupt-executives.html St. Vincent's Hospital in the Greenwich Village section of New York City was a landmark institution which filed for bankruptcy in April, 2010, and then closed its doors.  BackgroundA New York Times article written earlier this year described an institution "threatened with extinction" because it stuck to its mission of "compassionate care" in a health care environment that values "fancy equipment and celebrity doctors."  Thus, "officials blamed a high rate of poor and uninsured patients as well as cuts in Medicare and Medicaid and the hospital's inability to negotiate favorable contracts with health insurance companies...."  Painting Another PictureHowever, a story this week in the grittier New York Post painted a different picture:St. Vincent's Hospital was looted by execs ... Health Care Renewal blogs http://www.medworm.com/rss/comments.php?id=3872508 Mon, 16 Aug 2010 20:49:00 +0100 3872508 http://www.medworm.com/index.php?rid=3865228&cid=t_178584_87_f&fid=34765&url=http%3A%2F%2Fhcrenewal.blogspot.com%2F2010%2F08%2Fgolden-parachute-for-making.html In late 2009, we posted about problems at a Genzyme plant that manufactured some fabulously expensive drugs, e.g. Cerezyme whose cost to patients approximated $160,000 a year. We thought then that for a drug costing that much, the company ought to have figured out a conservative process to provide pure and unadulterated product. In a later post we also why a company that could afford to make its CEO very rich could not afford to adequately maintain its manufacturing facilities.  In May, 2010, we posted about a legal settlement of charges related to its manufacturing problems requiring Genzyme to pay a $175 million fine and function under US government supervision.Recent news articles suggest that the fix of the company's inabilities to manufacture pure, unadulterated drug remained rem... Health Care Renewal blogs http://www.medworm.com/rss/comments.php?id=3865228 Fri, 13 Aug 2010 15:48:00 +0100 3865228 http://www.medworm.com/index.php?rid=3848841&cid=t_178584_87_f&fid=34765&url=http%3A%2F%2Fhcrenewal.blogspot.com%2F2010%2F08%2F2-legal-settlements-1-corporate.html Omnicare's Trail of Legal SettlementsLast year, we discussed a $98 million settlement made by Omnicare, US based corporation that manages pharmacy-benefits, of allegations that it received kickbacks from generic drug manufacturers for buying and recommending their drugs.  Omnicare had previously submitted to a corporate integrity agreement in 2006, and paid $102 million to settle allegations it defrauded Medicaid.  At the time, we noted that this was yet another of the many cases in which the organization alleged to be involved in wrong-doing paid a fine, but no one who authorized, directed, or implemented the bad behavior was subject to any negative consequences.So last week, Cincinnati.com ran a story on the retirement of the CEO who presided over Omnicare during the time of th... Health Care Renewal blogs http://www.medworm.com/rss/comments.php?id=3848841 Mon, 09 Aug 2010 21:47:00 +0100 3848841 http://www.medworm.com/index.php?rid=3831319&cid=t_178584_87_f&fid=34765&url=http%3A%2F%2Fhcrenewal.blogspot.com%2F2010%2F08%2Fdespite-scandal-former-unitedhealth-ceo.html A little while ago, the Wall Street Journal reported on the highest paid US corporate CEOs of the past decade.  One name stood out for those interested in  health care: Dr William W McGuire, the former CEO of giant health care insurance company/ managed care organization UnitedHealth Group.  Dr McGuire was number 9 on the list, with a total realized compensation of $469,300,000.  We started discussing the disconnect between Dr McGuire's corpulent pay and his company's failure to uphold its stated ideals back in 2005, when he was reported to have received more than $124 million to lead a company which championed "affordable" health care.  Later, it turned out that much of Dr McGuire's compensation came in the form of back-dated stock-options, and the resul... Health Care Renewal blogs http://www.medworm.com/rss/comments.php?id=3831319 Fri, 06 Aug 2010 20:55:00 +0100 3831319 http://www.medworm.com/index.php?rid=3805786&cid=t_178584_87_f&fid=34765&url=http%3A%2F%2Fhcrenewal.blogspot.com%2F2010%2F07%2Fwhere-no-hospital-ceos-are-below.html In Lake Woebegon, all children are above average.  Now it seems that hospital CEOs have moved there.  Ventura County, Where No CEO is Below AverageThe Ventura County (California) Star reported on the uniformly high remuneration of the CEOs of local, mostly small, not-for-profit hospitals and hospital systems.T. Michael Murray reaped $330,545 in 2008 as chief executive officer of St. John’s hospitals in Oxnard and Camarillo. He drew an additional $187,071 in bonuses with $73,113 more in benefits and other compensation.His total package, according to IRS records, reached $590,729.And he may have been underpaid, according to a statewide survey of 118 nonprofit hospitals. The report by the Payers & Providers healthcare business publication suggests the base salary for CEOs aver... Health Care Renewal blogs http://www.medworm.com/rss/comments.php?id=3805786 Fri, 30 Jul 2010 12:38:00 +0100 3805786 http://www.medworm.com/index.php?rid=3767033&cid=t_178584_87_f&fid=34765&url=http%3A%2F%2Fhcrenewal.blogspot.com%2F2010%2F07%2Fnot-your-average-joes-health-plan.html A Denver Post article offered a brief glimpse into the health benefits of corporate leaders, on the unusual occasion of a former CEO now in legal fight for the health benefits in the style to which he had become accustomed:Poor Joe. He's not getting the health-care benefits he was promised.His former employer merged with another company, and then another, and then another. And, you know how it goes after a slew of mergers. Suddenly the new, conglomerated monster just doesn't care about retirees any more.Joe isn't going to sit back and take it like an average Joe. He's suing his former employer in U.S. District Court in Manhattan for breach of contract, breach of faith, breach of fiduciary duty and even promissory estoppel.The Joe in question was really:Lord & Taylor's CEO.Joseph E. Bro... Health Care Renewal blogs http://www.medworm.com/rss/comments.php?id=3767033 Mon, 19 Jul 2010 20:37:00 +0100 3767033 http://www.medworm.com/index.php?rid=3714128&cid=t_178584_87_f&fid=34765&url=http%3A%2F%2Fhcrenewal.blogspot.com%2F2010%2F06%2Fhow-can-101-million-year-ceo-help.html In 2005, we entitled a post, "How Can a $124.8 Million a Year CEO Make Health Care More Affordable?"  At that time, we contrasted the enormous compensation given to the then CEO of UnitedHealth, Dr William McGuire, with the stated mission of his corporation.  Since then, we have traced the travails of UnitedHealth and its leadership.  Dr McGuire was eventually accused of receiving backdated stock options (which at one time raised his personal fortune to over $1 billion), and was pushed into retirement.  UnitedHealth was accused of a variety of management and ethical lapses.  The rather sorry story as of April, 2010 was summarized here.The more things change, the more they stay the same.  The Minneapolis Star-Tribune just reported:Stephen Hemsley, a serious and... Health Care Renewal blogs http://www.medworm.com/rss/comments.php?id=3714128 Wed, 30 Jun 2010 21:20:00 +0100 3714128 http://www.medworm.com/index.php?rid=3710519&cid=t_178584_87_f&fid=34765&url=http%3A%2F%2Fhcrenewal.blogspot.com%2F2010%2F06%2Fwellpoint-dont-know-much-about-computer.html Big US based health care insurance companies have not been covering themselves in glory in the last week.Aetna's Math ErrorsFirst, there was the case of Aetna's mathematical prowess, e.g., as reported by the Los Angeles Times:A second insurance company in California has killed plans for double-digit rate hikes for individual policyholders because of errors in its filing that would have inflated premiums, state regulators said Thursday.Connecticut-based Aetna Inc. had sought an average 19% increase in rates for its 65,000 individual customers, but pulled back after multiple math errors in its paperwork were found by its own staff and by an independent consultant working for the state.Aetna's decision follows a similar move by Anthem Blue Cross, which canceled a rate increase of as much as 3... Health Care Renewal blogs http://www.medworm.com/rss/comments.php?id=3710519 Tue, 29 Jun 2010 21:49:00 +0100 3710519 http://www.medworm.com/index.php?rid=3644726&cid=t_178584_87_f&fid=34765&url=http%3A%2F%2Fhcrenewal.blogspot.com%2F2010%2F06%2Fkind-of-blackmail-not-for-profit-health.html Here is another case in the annals of over-paid executives of not-for-profit health care organizations, this time from the Burlington (VT) Free-Press,Blue Cross and Blue Shield of Vermont overpaid its former chief executive officer by $3 million over an eight-year period and has been ordered to pay the money back to its subscribers by 2012 in the form of reduced premiums, a top state regulator said Wednesday.The action by the state Banking, Insurance, Securities and Health Care Administration Department follows last year’s disclosure that William Milnes, the nonprofit firm’s former CEO, received a $7.2 million payout when he stepped down in 2008.Furthermore, note that [Commissioner of the Banking, Insurance, Securities and Health Care Administration Department Paulette] Thabault said h... Health Care Renewal blogs http://www.medworm.com/rss/comments.php?id=3644726 Tue, 08 Jun 2010 21:49:00 +0100 3644726 http://www.medworm.com/index.php?rid=3588840&cid=t_178584_87_f&fid=34765&url=http%3A%2F%2Fhcrenewal.blogspot.com%2F2010%2F05%2Fat-upmc-dealings-with-board-members.html Last year we noted that the US Internal Revenue Service (IRS) required more detailed reporting starting in 2009 by US not-for-profit organizations.  Many US health insurance companies/ managed care organizations, most hospitals, nearly all medical associations, nearly all disease advocacy organizations, all health care charities, and nearly all medical schools are not-for-profit organizations.  We suggested then that this reporting might lead to more transparency about the leadership and governance of these organizations.  Some of these new 990 forms are now being publicly disclosed, with some interesting findings.  The Pittsburgh Tribune-Review just reported some interesting findings about financial ties between the University of Pittsburg... Health Care Renewal blogs http://www.medworm.com/rss/comments.php?id=3588840 Fri, 21 May 2010 21:12:00 +0100 3588840 http://www.medworm.com/index.php?rid=3585560&cid=t_178584_87_f&fid=34765&url=http%3A%2F%2Fhcrenewal.blogspot.com%2F2010%2F05%2F78-million-golden-parachute-for-not-for.html These sorts of hits just keep on coming.  This story comes from the Baltimore Sun. The Golden ParachuteFirst, let us just review the financial details,Former University of Maryland Medical System CEO Edmond F. Notebaert, who resigned two years ago during a tumultuous time that included infighting and a board shakeup, is again the subject of controversy over his $7.8 million pay package.The package included $2.4 million in severance, about $639,000 in salary for seven months, deferred bonuses and contributions to a retirement plan that instantly vested when he left. By the way, Mr Notebeart did not actually go into retirement after he received this largess,A spokeswoman for Temple University, where Notebaert now heads the health system, said he was not available for comment.The Justifi... Health Care Renewal blogs http://www.medworm.com/rss/comments.php?id=3585560 Thu, 20 May 2010 21:18:00 +0100 3585560 http://www.medworm.com/index.php?rid=3581571&cid=t_178584_87_f&fid=34765&url=http%3A%2F%2Fhcrenewal.blogspot.com%2F2010%2F05%2Fpaying-ceos-of-health-care-not-for.html Million dollar plus executives of not-for-profit health care insurance companies seem to be becoming a dime a dozen.  Late in April, Buffalo Business First reported the pay of executives of some western New York health insurance companies:The top local executives at the region’s three major nonprofit health plans received nearly $23 million in salaries and bonuses last year.More than 70 people received total compensation of $160,000 or more. That’s the level at which insurers are required to report in annual reports to the state Department of Insurance.When you include executives who work for those three health plans but are located outside Western New York, the total compensation for top-paid execs totaled $46.4 million last year.Among the local executives in the Western New York... Health Care Renewal blogs http://www.medworm.com/rss/comments.php?id=3581571 Wed, 19 May 2010 21:32:00 +0100 3581571 http://www.medworm.com/index.php?rid=3546833&cid=t_178584_87_f&fid=34765&url=http%3A%2F%2Fhcrenewal.blogspot.com%2F2010%2F05%2F19-million-means-never-having-to-say.html Johnson and Johnson, the giant diversified health care company, recently shut down a factory that manufactured non-prescription childrens' medication, and recalled its products.  The findings from a US Food and Drug Administration (FDA) inspection of the plant were striking.  As described by Reuters,The company recalled 40 widely used children's pain and allergy medications, saying some may have a higher concentration of their active ingredients, while others may be contaminated. J&J has had four recalls in the past year of over-the-counter medicines.In an FDA report issued on Tuesday, inspectors said they found thick dust, grime and contaminated ingredients at the J&J plant that produces Children's Tylenol and dozens of other products recalled last week.This infuriated t... Health Care Renewal blogs http://www.medworm.com/rss/comments.php?id=3546833 Sat, 08 May 2010 19:05:00 +0100 3546833 http://www.medworm.com/index.php?rid=3479638&cid=t_178584_87_f&fid=34765&url=http%3A%2F%2Fhcrenewal.blogspot.com%2F2010%2F04%2Fwhat-me-worry-redux-another-leader.html We have posted lately (here and here) about how leaders of health care organizations seem to be getting even richer despite questions about their organizations' ethics or performance.  Here we go again.  The news about UnitedHealth over the years has provided plenty of examples of organizational behavior that did not fit the company's stated lofty goals, per its "Social Responsibility" page:UnitedHealth Group's mission is to help people live healthier lives.Social responsibility begins with us–and how we do business. Every day, our 75,000 employees strive to find smart ways to promote healthier lives in our communities. On its "Mission and Values" page:Our mission is to help people live healthier lives.* We seek to enhance the performance of the health system and improve the ov... Health Care Renewal blogs http://www.medworm.com/rss/comments.php?id=3479638 Fri, 16 Apr 2010 19:49:00 +0100 3479638 http://www.medworm.com/index.php?rid=3463544&cid=t_178584_87_f&fid=34765&url=http%3A%2F%2Fhcrenewal.blogspot.com%2F2010%2F04%2Fpfizer-settles-one-lawsuit-loses.html It's deja vu all over again for Pfizer Inc, the world's largest pharmaceutical company.Settlement of Suit Alleging Neurontin Risks ConcealedPfizer has kept busy in court defending against charges that a company it acquired promoted Neurontin (gabapentin) for uses not approved by the US Food and Drug Administration (FDA), and not well supported by the evidence.  Most recently, it was convicted by a jury in California of being a racketeering influenced and corrupt organization (RICO) because of a long-term "racketeering conspiracy" involving Neurontin marketing (see post here). Now additionally, according to the Wall Street Journal, Pfizer Inc. said it reached a settlement agreement in a wrongful-death lawsuit brought by a woman who claimed her husband's use of the antiseizure drug Neur... Health Care Renewal blogs http://www.medworm.com/rss/comments.php?id=3463544 Mon, 12 Apr 2010 19:45:00 +0100 3463544 http://www.medworm.com/index.php?rid=3448806&cid=t_178584_87_f&fid=34765&url=http%3A%2F%2Fhcrenewal.blogspot.com%2F2010%2F04%2Fwhat-me-worry-leaders-prosper-despite.html There were two examples in the recent news about how the leaders of health care organizations seem to prosper no matter what questions are raised about their organizations' ethics or performance.WellPointIt seemed that anger over a rate increase by a subsidiary of the huge insurance company/ managed care organization WellPoint was one reason for the revival of efforts in the US to enact some sort of health care reform legislation.  In our comment on this controversy, we noted that questions about the ethics of WellPoint's actions have appeared again and again.  Wellpoint...settled a RICO (racketeer influenced corrupt organization) law-suit in California over its alleged systematic attempts to withhold payments from physicians (see post here).subsidiary New York Empire Blue Cross ... Health Care Renewal blogs http://www.medworm.com/rss/comments.php?id=3448806 Thu, 08 Apr 2010 16:19:00 +0100 3448806 http://www.medworm.com/index.php?rid=3429130&cid=t_178584_87_f&fid=34765&url=http%3A%2F%2Fhcrenewal.blogspot.com%2F2010%2F04%2Fmore-doubts-about-private-equity-taking.html Last week, we posted about how buy-outs of not-for-profit hospital systems by private equity firms seemed to be a new fashion in health care.  Since then, new doubts have been raised about whether this is a good idea.Detroit Medical Center, Vanguard Health, and the Blackstone GroupLetters to the Detroit Free Press raised concerns,As a nonprofit corporation, DMC's mission is to provide quality health care to the community. Management is accountable to Detroit area citizens and health care consumers, not to profit-motivated investors.As a private, for-profit corporation, its mission will be to provide profit for its shareholders. Management will be accountable to shareholders and will be rewarded in relation to the rate of return on their investments.Also, the Free Press reported that a... Health Care Renewal blogs http://www.medworm.com/rss/comments.php?id=3429130 Thu, 01 Apr 2010 15:14:00 +0100 3429130 http://www.medworm.com/index.php?rid=3429131&cid=t_178584_87_f&fid=34765&url=http%3A%2F%2Fhcrenewal.blogspot.com%2F2010%2F03%2Fnew-investigations-of-boston-scientific.html It appears that device-maker Boston Scientific has a new set of troubles.  The Boston Globe just reported:Stepped-up government scrutiny of Boston Scientific Corp. stems from heightened concern over medical safety and disappointment that the company made new missteps after resolving previous problems with the Food and Drug Administration, analysts said yesterday.The Natick medical-device maker, which has been working to settle patent suits and federal investigations dating back years, recently was notified of fresh investigations begun by the Department of Justice and the Securities Exchange Commission into problems that forced it to recall implantable heart defibrillators this month.Boston Scientific said March 15 that it had halted shipments and recalled unsold units of seven brands... Health Care Renewal blogs http://www.medworm.com/rss/comments.php?id=3429131 Wed, 31 Mar 2010 20:39:00 +0100 3429131 http://www.medworm.com/index.php?rid=3350568&cid=t_178584_150_f&fid=35777&url=http%3A%2F%2Ffeedproxy.google.com%2F%7Er%2FPharmalot%2F%7E3%2FWd4iws7642I%2F A pleasant morning here on the Pharmalot corporate campus. After a recent spell of snow, spring appears to have finally bloomed. And that makes it a bit easier to cope with those mid-week deadlines and meetings, yes? So grab a cup of something stimulating and dig in for another day. Here are a few interesting items to help you on your way. Cheers, everyone… Abbott Bests Biogen With Bid For Facet Biotech (Bloomberg) Bristol-Myers’ CEO 2009 Pay Was Down 22 Percent (Associated Press) Sandoz Names Don DeGolyer To Heads US Ops (Chain Drug Review) Novartis Takes Option On Transgene Cancer Vaccine (Reuters) Lilly, Amylin Diabetes Drug Await FDA OK (The Wall Street Journal) Teva Pharmaceuticals Names Phillip Frost As Chairman (Associated Press) Coffee pix thx to chichcacha flickr creat... Pharmalot blogs http://www.medworm.com/rss/comments.php?id=3350568 Wed, 10 Mar 2010 12:24:03 +0100 3350568 http://www.medworm.com/index.php?rid=3327294&cid=t_178584_150_f&fid=35777&url=http%3A%2F%2Ffeedproxy.google.com%2F%7Er%2FPharmalot%2F%7E3%2FGv0wI7j76mQ%2F Now that the Wyeth acquisition is complete and layoffs are under way, the raises can be given out. And so the Pfizer board has decided to give Jeff Kindler a 12.5 percent salary hike, to $1.8 million, as part of a $14.9 million pay package, which includes $5.5 million in stock awards, $2.6 million in options, a $3.5 million cash bonus, a pension boost and other perks, such as air travel, usage of a car and home security (at $1,217, this would appear to be for an alarm, so why can’t he pay that himself? He’d still get credit on homeowner’s insurance). In all, his compensation is actually down 4 percent, to $14.9 million, but that’s due to a drop in stock awards, Dow Jones notes. Among the reasons cited for Kindler’s raise: achieving financial goals; promoting a... Pharmalot blogs http://www.medworm.com/rss/comments.php?id=3327294 Wed, 03 Mar 2010 13:20:31 +0100 3327294 http://www.medworm.com/index.php?rid=3283492&cid=t_178584_87_f&fid=34765&url=http%3A%2F%2Fhcrenewal.blogspot.com%2F2010%2F02%2Funiversity-of-california-ceo-you-can.html The San Francisco Chronicle recently reported how students at the University of California have been providing a satirical approach to the problems of the university's leadership:It's been a seriously dramatic year at the University of California, where hundreds of students seized buildings, demonstrated and shut down regents meetings last fall to protest rising tuition and the perceived privatization of the public school.It's also been a satirically dramatic year, thanks to the UC Movement for Efficient Privatization, a fledgling group of mostly grad students in business attire that uses humor tinged with sarcasm to lampoon UC officials.Their own name is an example. Many UC students believe leaps in tuition and reduced state funding are turning the public university into a private institu... Health Care Renewal blogs http://www.medworm.com/rss/comments.php?id=3283492 Thu, 18 Feb 2010 16:22:00 +0100 3283492 http://www.medworm.com/index.php?rid=3254419&cid=t_178584_87_f&fid=34765&url=http%3A%2F%2Fhcrenewal.blogspot.com%2F2010%2F02%2Feverything-is-up-to-date-in-kansas-city.html They say everything is up to date in Kansas City, so maybe it should not be a surprise that it is the source of a new and colorful tale of how leaders of health care organizations are different from you and me.  The Kansas City Star reported about the professional life of the recently fired CEO of Kansas City University of Medicine and Biosciences:Hiring the CEOThere’s an often-told story about how Karen Pletz, the fired president of the Kansas City University of Medicine and Biosciences, got her job in the first place.On a flight from Phoenix to Kansas City in 1995, a stranger sat next to her: Jack Weaver, then chairman of the university’s board of trustees.Pletz, with a law degree and a career in banking, so impressed Weaver that he proposed she join the board. When the tru... Health Care Renewal blogs http://www.medworm.com/rss/comments.php?id=3254419 Mon, 08 Feb 2010 22:43:00 +0100 3254419 http://www.medworm.com/index.php?rid=3239816&cid=t_178584_150_f&fid=35777&url=http%3A%2F%2Ffeedproxy.google.com%2F%7Er%2FPharmalot%2F%7E3%2F7G2Na5ih3kI%2F Former Novartis ceo Dan Vasella’s 2009 bonus will be close to three times the amount he would be due based on relative earnings growth among large cap peers, according to a report compiled by UK proxy voting agency Manifest and Swiss consultancy Obermatt, Reuters writes. The estimated payout will total about $5.96 million. And that would be around $3.8 millionabove the maximum level calculated by Obermatt, which bases its bonus recommendation on the number of peers a company outperforms - the more peers are beaten, the higher the bonus. Novartis couldn’t confirm the estimated bonus level for 2009. “Dr. Vasella’s base as well as total compensation is in line with that of CEOs from other large healthcare companies,” a Novartis spokeswoman tells Reuters. Vasella ... Pharmalot blogs http://www.medworm.com/rss/comments.php?id=3239816 Wed, 03 Feb 2010 18:02:49 +0100 3239816 http://www.medworm.com/index.php?rid=3235796&cid=t_178584_87_f&fid=34765&url=http%3A%2F%2Fhcrenewal.blogspot.com%2F2010%2F02%2Fhospital-executive-pay-in-land-where.html In the US, it seems to be the season for news reports on the pay of hospital executives.  Here are reports from three states in the southeast, in alphabetical order.FloridaThe St Petersburg (FL) Times reported on the total compensation of local hospital executives:While many workers in the Tampa Bay area have had their wages frozen or reduced in the past few years, life has been kinder to chief executives at nonprofit hospitals in the Tampa Bay area.A bright light in a dim economy, most local tax-exempt hospitals have continued to post surpluses, despite losses on investments and the growing number of uninsured. And the executives at the helms of these organizations have been duly rewarded by their community-based boards, according to the federal tax filings required of such organizat... Health Care Renewal blogs http://www.medworm.com/rss/comments.php?id=3235796 Tue, 02 Feb 2010 22:48:00 +0100 3235796 http://www.medworm.com/index.php?rid=3220490&cid=t_178584_87_f&fid=34765&url=http%3A%2F%2Fhcrenewal.blogspot.com%2F2010%2F01%2Fmore-california-medical-centers-plagued.html Earlier this week, we noted that while executives at one University of California medical center were getting large bonuses supposedly for "improved patient health," the hospital was being cited for serious health care quality deficiencies.  Now, more stories have appeared that raise questions about the rationale for the generous bonuses handed out to multiple top hospital executives at University of California hospitals.  University of California - San DiegoFirst, in alphabetical order by city, the San Diego Union-Tribune reported on penalties for poor quality care announced by the California Department of Public Health: UCSD Medical Center in San Diego was fined $50,000.... The state said the hospital staff failed to follow its surgical policies and procedures, which resulted i... Health Care Renewal blogs http://www.medworm.com/rss/comments.php?id=3220490 Thu, 28 Jan 2010 20:16:00 +0100 3220490 http://www.medworm.com/index.php?rid=3208313&cid=t_178584_87_f&fid=34765&url=http%3A%2F%2Fhcrenewal.blogspot.com%2F2010%2F01%2Fuci-medical-center-fails-inspection-uci.html Back in the early days of Health Care Renewal, we had many occasions to write about problems with the leadership of the University of California - Irvine (UCI) medical school.  Starting in late 2005, we posted  about various management problems at the institution, involving its liver transplant service, cardiology division, and bone marrow transplant service, (see posts here and here) which lead the new chancellor of the campus to "acknowledge a failure of leadership and accountability" (see post here.) Slightly more recently, we noted the almost 20 year history of questionable financial relationships that involved one of UCI's "biggest stars" in clinical researach and several pharmaceutical companies (see post here).  Then, in 2007, we wrote about some strange contract... Health Care Renewal blogs http://www.medworm.com/rss/comments.php?id=3208313 Mon, 25 Jan 2010 19:11:00 +0100 3208313 http://www.medworm.com/index.php?rid=3163736&cid=t_178584_87_f&fid=34765&url=http%3A%2F%2Fhcrenewal.blogspot.com%2F2010%2F01%2Fnon-profit-health-care-organization.html ConclusionsLeaders of not-for-profit organizations, starting with their boards of trustees, are supposed to subscribe to the duty of  obedience, "to be faithful to the organization's mission,"  and the duty of loyalty, " give undivided allegiance when making decisions affecting the organization." Presumably, that can be extended to the requirement that the top hired executives of not-for-profit put the mission ahead of their own personal gain.  Thus, boards of trustees who feel that they can only retain hired CEOs by pay so high that they will not be tempted by offers from for-profit corporations have failed in their duty by hiring CEOs who put their personal financial interests ahead of the mission.  I believe that the compensation given to CareSource and Premier ... Health Care Renewal blogs http://www.medworm.com/rss/comments.php?id=3163736 Mon, 11 Jan 2010 21:42:00 +0100 3163736 http://www.medworm.com/index.php?rid=3089237&cid=t_178584_87_f&fid=34765&url=http%3A%2F%2Fhcrenewal.blogspot.com%2F2009%2F12%2F98-million-dollar-man.html We seem to have a new candidate for the award for best-paid CEO of a not-for-profit academic medical center, as reported in the New York Post,Wall Streeters aren't the only ones raking in big bonuses during tough economic times.Hospital presidents and CEOs also collect fat bonuses and 'incentive payments,' even as health-care systems cry poverty, claiming they struggle to break even against government cutbacks, tightwad insurers and skyrocketing costs.While warning of layoffs and slashed patient services, many hospitals shower their top execs and department heads with bonuses and perks. They include housing allowances, chauffeurs, first-class air travel, tuition for their kids and country-club memberships.Under new IRS rules, the extras are disclosed for the first time in recently filed 20... Health Care Renewal blogs http://www.medworm.com/rss/comments.php?id=3089237 Mon, 14 Dec 2009 21:29:00 +0100 3089237 http://www.medworm.com/index.php?rid=3075458&cid=t_178584_87_f&fid=34765&url=http%3A%2F%2Fhcrenewal.blogspot.com%2F2009%2F12%2Fmore-air-into-health-care-bubble-30000.html Over four years ago, we posted about the stratospheric prices of new drugs that seemed disproportionate to manufacturing and development costs on one hand, and the value of the drugs for patients on the other.  For example, back then we noted that thalidomide, a very old drug that notoriously was found to cause birth defects when it was given to preganant women, but that then showed promise as an anti-cancer drug, was being marketed in the US for $29 per capsule (approximately $25,000 a year), while a generic form sold in Brazil for $0.07 per capsule.That was then, and this is now.  This week, the New York Times reported on a $30,000+  per month cancer drug.  A newly approved chemotherapy drug will cost about $30,000 a month, a sign that the prices of cancer m... Health Care Renewal blogs http://www.medworm.com/rss/comments.php?id=3075458 Wed, 09 Dec 2009 21:56:00 +0100 3075458 http://www.medworm.com/index.php?rid=3026663&cid=t_178584_87_f&fid=36438&url=http%3A%2F%2Ffeedproxy.google.com%2F%7Er%2FCato-at-liberty%2F%7E3%2FQw7teQ5vDJ8%2F All too often policy debates regarding executive compensation appear driven more by populist politics than any real basis in fact.   In order to add some light to this debate, two professors at New York University’s Stern School of Business, Gian Luca Clementi and Thomas Cooley, recently released a working paper, offering their findings on trends in executive compensation, many of which I found surprising. First off, Professors Clementi and Cooley measure executive compensation more broadly than just salary, perks and bonuses.  They include annual change in value of own company stock and option holdings, as well as the value of own company stock sales and newly awarded securities.  This broader measure is intended to give a fuller picture of how closely an executive&#8217... Cato-at-liberty blogs http://www.medworm.com/rss/comments.php?id=3026663 Tue, 24 Nov 2009 18:44:48 +0100 3026663 http://www.medworm.com/index.php?rid=2923241&cid=t_178584_87_f&fid=36438&url=http%3A%2F%2Ffeedproxy.google.com%2F%7Er%2FCato-at-liberty%2F%7E3%2FWC6SQ9CskpI%2F The Obama administration’s announcement this week on cash compensation for those seven institutions receiving “extraordinary assistance” has generated the all-too-predictable responses. Either you think executives at the entities are bad and greedy and should be punished, or you believe this is just the first step in an all-out class war.  Sadly the real victim in all these efforts has been, and continues to be, the taxpayer. Now that the taxpayer is the most significant shareholder in these companies, the top priority for Washington, as representative of the taxpayer, should be to see these companies return to profitability.  Quite simply, if these companies are not profitable, that loss will fall on the taxpayer, as shareholder. And of course, without the ability to... Cato-at-liberty blogs http://www.medworm.com/rss/comments.php?id=2923241 Fri, 23 Oct 2009 16:19:32 +0100 2923241 http://www.medworm.com/index.php?rid=2865647&cid=t_178584_87_f&fid=36438&url=http%3A%2F%2Ffeedproxy.google.com%2F%7Er%2FCato-at-liberty%2F%7E3%2FBhg8YnbIfRQ%2F President Obama’s real czar, “pay czar” Ken Feinberg, who has real power, brushes aside such claims even as he prepares to issue his Gosplan-style edicts on future and even past pay agreements: The Obama administration’s pay czar says negotiations over executive compensation with the seven companies that received the biggest federal bailouts have been “a consensual process’’ – not a matter of forcing decisions on them. “I’m hoping I won’t be required to simply make a determination over company objections,’’ veteran Washington attorney Kenneth Feinberg told the Chicago Bar Association in a speech. But note: he’s “hoping” he won’t have to impose his own view. He’s hoping the companies will accede to his power without com... Cato-at-liberty blogs http://www.medworm.com/rss/comments.php?id=2865647 Mon, 05 Oct 2009 19:57:21 +0100 2865647 http://www.medworm.com/index.php?rid=2820174&cid=t_178584_87_f&fid=34765&url=http%3A%2F%2Fhcrenewal.blogspot.com%2F2009%2F09%2Fsafety-net-medical-center-ceo-gets.html From theBostonChannel.com comes this story on executive compensation in a not-for-profit health care organization,Boston Medical Center – a financially troubled hospital – gave its outgoing CEO a one-time, nearly $3.5 million payment, in addition to her $1.3 million annual salary, Team 5 Investigates reported Friday.Elaine Ullian, 61, has led the city’s major 'safety net' hospital for the last 15 years. She recently announced she will retire when her contract expires in January.The hospital's financial situation is such that hospital leaders say it could face closure in the years ahead. It is currently suing the Executive Office of Health and Human Services over how it gets paid for treating poor and uninsured patients.Team 5 Investigates discovered, in a review of the hospital’s f... Health Care Renewal blogs http://www.medworm.com/rss/comments.php?id=2820174 Mon, 21 Sep 2009 19:16:00 +0100 2820174 http://www.medworm.com/index.php?rid=2715924&cid=t_178584_87_f&fid=36438&url=http%3A%2F%2Ffeedproxy.google.com%2F%7Er%2FCato-at-liberty%2F%7E3%2FzuIp2BgI0Is%2F Mark Calabria notes how the form of salary scheme at financial institutions played no apparent role in sparking the financial crisis.  But that hasn’t stopped the federal pay czar from boasting about his power, even to regulate compensation set before he took office. Reports the Martha’s Vineyard Times: Speaking to a packed house in West Tisbury Sunday night, Kenneth Feinberg rejected the title of “compensation czar,” but he also said said his broad and “binding” authority over executive compensation includes not only the ability to trim 2009 compensation for some top executives but to change pay plans for second tier executives as well. In addition, Mr. Feinberg said he has the authority to “claw back” money already paid to executives ... Cato-at-liberty blogs http://www.medworm.com/rss/comments.php?id=2715924 Wed, 19 Aug 2009 15:08:56 +0100 2715924 http://www.medworm.com/index.php?rid=2570380&cid=t_178584_87_f&fid=36438&url=http%3A%2F%2Ffeedproxy.google.com%2F%7Er%2FCato-at-liberty%2F%7E3%2F1o0aH394hP4%2F Regulators at the SEC and politicians on Capitol Hill seem to have short memories when it comes to executive compensation.  When the SEC years ago decided to make the compensation of top executives public information, it had the all too predictable result of actually increasing average compensation levels.  Once a top CEO knew what other CEOs were making, he could argue for a pay hike based upon being “underpaid”.  Of course regulators were “shocked” by the resulting “race to the top.”  Similarly Congress was shocked when after deciding to heavily tax salaries over $1 million, that companies shifted away from direct cash pay and toward options and increased bonuses in the form of shares.  And soon Washington will also pretend to be shocked and outra... Cato-at-liberty blogs http://www.medworm.com/rss/comments.php?id=2570380 Thu, 02 Jul 2009 16:23:28 +0100 2570380 http://www.medworm.com/index.php?rid=2035942&cid=t_178584_150_f&fid=35777&url=http%3A%2F%2Ffeeds.feedburner.com%2F%7Er%2FPharmalot%2F%7E3%2F483174002%2F At the same time the drugmaker is in the midst of laying off 5,500 employees in order to save $1.5 billion by 2010 (back story), Schering-Plough has decided to reward general counsel Tom Sabatino with a big bag of cash. Specifically, Sabatino was just awarded a 7.4 percent pay hike that brings his salary to $857,100 from $798,000, and a special cash award of $500,000, according to a filing with the Securities and Exchange Commission. Why? The compensation committee recognized his “sustained strong performance as executive vice president of global law and public affairs and general counsel, and the increased responsibility he assumed for global administrative services in October of 2008.” This is the second time in recent months the drugmaker has made such a move, even as thousa... Pharmalot blogs http://www.medworm.com/rss/comments.php?id=2035942 Sat, 13 Dec 2008 04:12:06 +0100 2035942 http://www.medworm.com/index.php?rid=1380655&cid=t_178584_109_f&fid=36089&url=http%3A%2F%2Fthesituationist.wordpress.com%2F2008%2F04%2F18%2Fthe-rational-choice-myth-abstract%2F Michael Dorff recently posted his interesting paper, “The Rational Choice Myth: The Selection and Compensation of Critical Performers,” on SSRN. Here’s the abstract. * * * Some positions within an organization wield unusual impact over the entity’s success. The decision makers who hire these critical performers face a daunting task: to distinguish among closely comparable finalists in a context where small differences in talent can produce enormous outcome divergences. I apply research from psychology and behavioral law and economics to argue that decision makers demonstrate unwarranted confidence in their ability to distinguish among nearly identical candidates. The illusion of validity, representativeness bias, insensitivity to predictability, and the fundamenta... The Situationist blogs http://www.medworm.com/rss/comments.php?id=1380655 Fri, 18 Apr 2008 04:49:01 +0100 1380655