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April 3, 2024
David Burda
Outcomes Policy System Dynamics

The Healthcare Industrial Complex® Does Not Fear Disclosure and Transparency

As a naïve young healthcare business journalist, I believed in disclosure and transparency as tools to change the healthcare system for the better, to make it serve patients, not incumbent stakeholders.

As a reporter, I was one of the first to disclose the high compensation packages enjoyed by executives of not-for-profit hospitals and healthcare trade associations. That’s at a time when 501(c)(3) and 501(c)(6) organizations only had to show you their Form 990s if you showed up in person at their headquarters.

As an editor, I was one of the first to assign stories to reporters on potential conflicts of interest by not-for-profit health system executives who accepted paid board seats at vendors they did business with. I also assigned stories on secretive member-only organizations through which vendors indirectly passed money to prominent health system CEOs at retreats at luxurious locations around the country.

What was a bit shocking then is a big yawn now. Those stories didn’t change the trajectory of executive compensation, conflicts of interests or thinly veiled bribes to use specific medical products and services with consumers ultimately suffering the consequences of high costs, limited access and poor quality.

Why? Because the Healthcare Industrial Complex® has become immune to disclosure and transparency.

Here’s a recent example that I didn’t notice until I put a few things together.

On March 29, the New York Times reported that the Food and Drug Administration (FDA) issued an alert about a heart pump that’s linked to 49 patient deaths. The FDA issued the alert March 21, or more than a week before the Times reported on it.

The alert said the heart pump’s manufacturer, Abiomed, is recalling its Impella Left Sided Blood Pump because “the pump catheter may perforate (cut) the wall of the left ventricle in the heart.” Ouch.

“During operations, the Impella device could cut through the wall of the left ventricle,” the FDA said. “The use of the affected Impella pumps may cause serious adverse health consequences, including left ventricle perforation or free wall rupture, hypertension, lack of blood flow and death.”

I checked the newsrooms on the sites of both the FDA and Abiomed, and I couldn’t find any press release about the recall.

On March 28, a day before the Times story, I downloaded a copy of a new research letter in the Journal of the American Medical Association (JAMA) on industry payments to doctors. The Physician Payments Sunshine Act requires drug and medical device manufacturers to report payments to doctors and other licensed healthcare professionals. The law led to the creation of the Open Payments database, which collects data on all those reported payments.

Five researchers, all from different universities and academic medical centers, crunched the numbers in the database to determine how much manufacturers paid to doctors, which medical specialties got the most money and what products were most associated with the payments.

Here’s the interesting connection to the heart pump recall from Abiomed and the recall alert from the FDA. More than 33,000 cardiologists, or about 72% of all practicing cardiologists, received almost $1.3 billion in industry payments from August 2013 through December 2022, according to the study. The fifth most-associated medical device with payments? Impella.

From the looks of the bar chart in the JAMA study, the researchers found about $35 million in payments associated with an Impella heart pump. The study doesn’t name Abiomed nor does it name the specific Impella heart pump.

However, you could make the circumstantial case that Abiomed may have incentivized cardiologists to use a subsequently recalled heart pump that may have killed people, and that the FDA soft-pedaled the situation by not trumpeting its recall alert in a press release the same day. Or it could be a coincidence.

Either way, it doesn’t matter. Disclosure and transparency didn’t do anything to make any of the actors in the situation behave differently or in a way that would have protected patients or the public at large from harm. Everything I described above is publicly disclosed and transparent. But it still happened.

The Healthcare Industry Complex® — the Iron Triangle of Congress, federal health agencies and industry and special-interest groups — does not fear disclosure and transparency. It just goes about its business.

That’s why we need a customer revolution in healthcare now. It’s the only thing that can overthrow the Healthcare Industrial Complex®.

Thanks for reading.

To learn more on this topic, please read, “Eisenhower’s Prophesy: The Healthcare Industrial Complex.”

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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