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August 23, 2023
David Burda
Economics Policy System Dynamics

Are Patient Advocacy Groups Falling Victim to the Healthcare Industrial Complex®? Of Course They Are.

When we think about the revolving door between influential positions in the federal government and influential positions in the private sector, we typically think about the revolving door as an enabler of the military industrial complex. High-ranking members of the Defense Department or military become top executives at Defense Department contractors, and top execs of Defense Department contractors become high-ranking members of the Defense Department or military. Everyone is in on the conflicts of interest, and everyone gets rich at the expense of the taxpayer.

David Johnson, founder and CEO of 4sight Health, correctly points out that we should be more worried about the Healthcare Industrial Complex® in which executives of legacy healthcare industry sectors and incumbent healthcare organizations mingle with healthcare policymakers and regulators and executives of vendor and supplier companies to maintain a status quo that benefits everyone except consumers.

When I was the editor of Modern Healthcare, I routinely assigned, much to the publisher’s dismay, conflict-of-interest stories to reporters on high-profile hospital and health system executives taking paid board positions at vendor and supplier companies. You’d think running a hospital or health system — or business publication — would require all of your attention. But when you can make a little coin on the side (that’s what we used to call a side hustle), make it while you can, I guess.

A short but powerful research letter recently published in JAMA Internal Medicine illustrates Johnson’s warning about the Healthcare Industrial Complex.®

Three health services researchers from the Yale School of Medicine looked at the connection between life sciences companies and patient advocacy organizations, or PAOs. Specifically, the researchers, who would make excellent investigative reporters, wanted to know whether former life sciences execs were running the PAOs. If that were true, that revolving door could swing the PAOs’ priorities, advocacy and recommendations away from patients and toward the interests of life sciences companies, they said.

The researchers identified the top 50 PAOs, all 501(c)(3) tax-exempt public charities, by annual revenue. Twenty-eight PAOs focused on specific diseases. Nineteen focused on therapeutic areas. Three focused on general medical support services. They looked at the executive staff and board members of each of the 50 PAOs and identified whether they had current or prior ties to life sciences companies. The study defined “ties” as being currently or formerly employed by a pharmaceutical or medical device company.

Here’s what they found:

  • 37 of the 50 PAOs, or 74%, had board members with current or prior ties to life sciences companies.
  • 25 of the 50 PAOs, or 50%, had paid staff or executives with current or prior ties to life sciences companies.
  • Four of the five largest PAOs, or 80%, had executive directors or CEOs with current or prior ties to life sciences companies.
  • Four of the 11 PAOs with executive directors or CEOs with current or prior ties to life sciences companies, or 36%, currently serve on the boards of pharmaceutical companies.

“Close leadership ties of PAOs with industry raise questions about industry’s influence on these organizations’ patient education, policy recommendations, and treatment guidelines,” the researchers said politely. “In representing patients across health policy forums, PAOs should make their industry relationships transparent in terms of both finances and leadership to foster trust in their independence.”

Here’s what I say about the results. What the researchers found is the very definition of the Healthcare Industrial Complex.® No amount of transparency or disclosure is going to change that. It’s been going on for decades and will continue to go on for decades until someone decides to adopt hard-and-fast rules to prevent conflicts of interest by organizations that proclaim to advocate for patients with serious or life-threatening diseases.

That was always the excuse when we broke yet another conflict-of-interest story at Modern Healthcare. We’d hear, “It’s not a conflict of interest because we disclosed it to the board and issued a press release.” As if either of those means anything to a patient whose access, care or cost is being compromised.

The customer revolution in healthcare can’t come soon enough.

Thanks for reading.

About the Author

David Burda

David Burda began covering healthcare in 1983 and hasn’t stopped since. Dave writes this monthly column “Burda on Healthcare,” contributes weekly blog posts, manages our weekly newsletter 4sight Friday, and hosts our weekly Roundup podcast. Dave believes that healthcare is a business like any other business, and customers — patients — are king. If you do what’s right for patients, good business results will follow.

Dave’s personnel experiences with the healthcare system both as a patient and family caregiver have shaped his point of view. It’s also been shaped by covering the industry for 40 years as a reporter and editor. He worked at Modern Healthcare for 25 years, the last 11 as editor.

Prior to Modern Healthcare, he did stints at the American Medical Record Association (now AHIMA) and the American Hospital Association. After Modern Healthcare, he wrote a monthly column for Twin Cities Business explaining healthcare trends to a business audience, and he developed and executed content marketing plans for leading healthcare corporations as the editorial director for healthcare strategies at MSP Communications.

When he’s not reading and writing about healthcare, Dave spends his time riding the trails of DuPage County, IL, on his bike, tending his vegetable garden and daydreaming about being a lobster fisherman in Maine. He lives in Wheaton, IL, with his lovely wife of 40 years and his three children, none of whom want to be journalists or lobster fishermen.

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