Posts Tagged ‘ethics’

How does your state score for insurance, ethics, accountability, corruption?

Tuesday, March 27th, 2012

Here’s a quick summary. In a 50 state overview, there were no “A” students.
The State Integrity Investigation is a $1.5 million public collaborative project designed to expose practices that undermine trust in state capitols — and spotlight the states that are doing things right. It describes itself as “an unprecedented, data-driven analysis of each state’s laws and practices that deter corruption and promote accountability and openness. Experienced journalists graded each state government on its corruption risk using 330 specific measures. The Investigation ranked every state from one to 50. Each state received a report card with letter grades in 14 categories, including campaign finance, ethics laws, lobbying regulations, and management of state pension funds.”
Click on the U.S. map to see your state’s corruption risk report card. No states scored an “A.” New Jersey, Connecticut, Washington, California, and Nebraska scored in the “B” range. Eight states flunked, scoring 60% or less: Michigan, North Dakota, South Carolina, Maine, Virginia, Wyoming, South Dakota, and Georgia. All the remaining states were “C” and “D” students, with our home state of Massachusetts scoring a lackluster 74%, coming in at 10th “best” overall.
How did the insurance departments score?
As citizens, both corporate and private, we find the whole report fairly intriguing, but for the purposes of this blog, we were particularly interested in the ratings for State Insurance Commissions. PropertyCasualty360’s Mark Ruquet did a good analysis of this in his article 16 State Insurance Commissions Fail Integrity Evaluation.
The state Insurance Commissions were evaluated on these questions:

  • Is the state insurance commission protected from political and special interest influence?
  • Does the state insurance commission have sufficient capacity to carry out its mandate?
  • Are there conflicts of interest regulations covering members of the board and senior staff of the state insurance commission?
  • Are the conflicts of interest regulations covering members of the board and senior staff of the state insurance commission effective?
  • Can citizens access the asset disclosure records of the state insurance commission?
  • Does the state insurance commission publicly disclose documents filed by insurance companies?

One of the things we like about the map and the site is that you can keep drilling down. Click your state, then click a specific category – such as “State Insurance Commissions,” “Ethics Enforcement Agencies” or “Public Access to Information” and then click again to see the specific areas that were evaluated. Click any one of those criteria to see how the score was derived, and click again for further detail. You can also read or submit comments. On each individual state page, there is also a narrative story behind the score and a running list of related news articles.
We’ll be spending some time exploring the site further, but our first reaction is positive and we applaud the effort: we love sunlight when it comes to the public good and think it benefits everyone. We’d love to hear reactions about how accurate or inaccurate readers think reports are relative to their own state scores.

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Big Pharma’s Charity: It’s Better to Give and Receive

Thursday, June 29th, 2006

Let’s say someone offers to pay you to do some research about their product. You set up a non-profit research entity and deposit their hefty check. What would your goal be: to prove the product ineffective? to discourage people from using it? Not likely. But how would you determine the extent to which the source of your funds contaminates the research? Would it help clarify matters if the donor gave you some stock in the company and paid you to educate other doctors about their product?
If you like murky waters, you’ll love big pharma’s contributions to the charitable trusts set up by docs around the country. In a fascinating article by New York Times reporter Reed Abelson (registration required), we read that charities established by doctors are the recipients of money to fund research: not research in the abstract, but research pertaining to the use of products manufactured by the donors themselves. This arrangement, while not inherently illegal, is loaded with potential conflicts of interest. Call it business as usual in the world of medicine.
When Charity and Profits Intersect
Abelson writes about Dr. Maria Rosa Costanzo, who made a presentation to cardiologists at a conference in March. She touted a $14,000 blood filtering device, which her research demonstrated was more effective (albeit more expensive) than intravenous diuretic drugs at removing excess fluid from patients with heart failure.
Although outside researchers raised questions about the study’s conclusions, the doctor was convinced. “We believe these results challenge current medical practice and recommendations.” She predicted many patients might benefit. Dr. Costanzo did disclose to the audience that she was a paid consultant with stock in the device’s maker, a Minnesota company called CHF Solutions. But she omitted another potentially important detail: CHF Solutions was also one of the largest donors to the nonprofit research foundation that had overseen the study. The company contributed about $180,000 in 2004.
In addition, Dr. Costanzo did not bother informing her listeners that the nonprofit entity conducting the research, the Midwest Heart Foundation, was in turn an arm of the for-profit medical group outside of Chicago where Dr. Costanzo and more than 50 of her fellow doctors treat heart patients — in many cases using products and drugs made by CHF Solutions and other big donors to their charity. Although the CHF Solutions filter has not yet won wide acceptance across the country, for physicians at Dr. Costanzo’s medical group, it is the device of choice.
If you check out the foundation’s website, you’ll see that they promote their ability to “offer our patients access to the most progressive cardiovascular treatments and preventative strategies, giving them the same opportunities as patients at university hospitals.” In other words, patients can access the latest technologies, even before they have been formally approved by the FDA. As good as this sounds, I would be surprised if the doctors disclose their financial interests to their patients. These patients might have second thoughts if they knew that the research is potentially biased from the outset.
Contaminated Thinking?
The more the Insider probes the decision-making process in medicine, the more questions we have. Why do doctors prescribe some drugs more than others? Why has oxycontin proved so popular among doctors treating workplace injuries? Why do drug companies hire ex-cheerleaders (with no background in science) to sell drugs to doctors? Do doctors think about the potential conflict between their own financial interests and the products they recommend to their patients? The ultimate question, of course, is whether patients are getting the best possible treatment, with the most effective medications, or whether the interests of the patients are subordinated to the financial interests of the doctors.
There are no easy answers. We like to think of charity and good medicine as matters of the heart. But in the world of American medical care, when you scan the doctor’s chest, you just might see something that looks less like a heart and more like a wallet.

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Insurance industry scandal watch

Tuesday, August 9th, 2005

Joe Paduda has been doing so much heavy lifting in his diligent tracking of the many investigations into insurance wrongdoing that we are thinking he may need to change his blog name to “Scandal Central.” It’s almost like one of those whack-a-mole carnival games – new developments seem to keep popping to the surface daily.
Today, Joe reports on a guilty plea filed by an underwriter from a Liberty Mutual subsidiary who was submitting unattractive bids to Marsh McLennan. This enabled the broker to steer clients to insurers with the best commissions.
Yesterday, Joe reported on similar charges being levied against Arthur Gallagher & Co, the offshoot of a probe into practices involving several large public entities, an investigation that Florida’s Attorney General says may involve bid rigging. This follows on the heels of other Florida problems that surfaced in Broward County involving Gallagher Bassett and Corvel.*
Last Friday, Joe blogged about 14 insurance execs from Marsh, AIG, and Zurich who pled guilty to various charges in the Spitzer investigations.
He’s also recently updated the Ohio coingate developments, a many-headed hydra of scandal that is now ensnaring Governor Taft. Some other problems have been bubbling to the surface with the Ohio Bureau of Workers Compensation, too, in the form of unusual markups paid to servicing hospitals.
A collective black eye
Whether we want to or not, all of us who work in the industry have front row seats to these sorry spectacles since they involve some of the industry “leaders.” As an industry, we will be years restoring good faith with clients. And though I have no sympathy for the malefactors, I do feel badly for some of the decent, conscientious workers in the scandal-riddled firms. If things follow the patterns of other recent corporate scandals, a few bigwigs may or may not be called to account, but the real price may well be paid by the hundreds, if not thousands, of honest workers when the inevitable job reductions and reorganizations ensue.
Many of these firms were the trusted vendors that employers turned to as stewards of their loss experience and as watchdogs for fraud. Ironically, while the back door was being guarded by pit-bulls to prevent a few wayward employees from making off with the piggy bank, the front door was wide open so the serious thieves could saunter off with the safe.
The bottom line: caveat emptor
We’ve long been proponents of the idea that employers need to be active, savvy buyers and managers of their workers comp programs, but never more so than now. For most employers, workers comp is not simply a matter of dollars and cents (although that is reason enough to pay attention), it is also a matter of employee relations and reputation management. When hiring vendors to assist in these matters, we’ve always encouraged employers to buy for quality, not for price, but the fact that these scandals are tarnishing some of the “quality” names in our industry says that employer scrutiny doesn’t reach deep enough. And, for the most part, we aren’t talking about the mom and pop employer here – many of the employers who were gouged are large corporations with legions of lawyers and accountants. It sure looks like it’s time for buyers to step up due diligence in the “trusted vendor” selection process.
*edited on 8/10. The second news item dealt with Gallagher Bassett, not Arthur Gallager & Co.

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States ask drug firms to report gifts to individual physicians

Sunday, February 29th, 2004

In an attempt to control rising drug costs, four states – Maine, Nevada, New Mexico, Vermont – have legislation requiring pharmaceutical representatives to report on marketing expenditures to physicians. Ten other states are currently considering such legislation, while six other states have rejected similar legislation.

“The first step state lawmakers are taking is requiring companies to report how much sales representatives are spending and what they’re spending it on. Sponsors of these bills acknowledge that they may not immediately lower costs, but new laws could cause a budget shift with less spent on marketing and more spent on samples, medical education support and research and development.”

While both the AMA and the pharmaceutical industry have had ethical guidelines in place since 1990, some don’t think that these guidelines go far enough when considering the expenditures involved. In 2003, drug companies spent $21 billion on marketing versus $32 billion on research and development.

The Center for Policy Alternatives reports that:

“Drug manufacturers spent more than $16 billion on direct marketing to doctors in the United States during 2001. That amounts to more than $19,000 per physician per year. This money is largely spent on visits to doctors by drug manufacturer sales representatives, called “detailers.” The job of a detailer is to promote the latest, most expensive brand name drugs.”

“Drug companies increased spending on marketing to doctors by 74 percent between 1997 and 2001, according to the U.S. General Accounting Office. The drug industry employed 87,892 detailers in 2001, an increase of 110 percent from the 41,855 employed in 1996. During that period, the drug industry sales force grew from one detailer for every 19 doctors to one detailer for every nine physicians in America.”

More on state efforts to control prescription drug costs and the impact of prescription drug costs on workers compensation.

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