Over at Spot-on, I’m musing about whether or not I’m a Health Care Hitman. Peter Rost, late of Pfizer, is more or less singing the same tune.
Above the Fold
PBMs: More on the enigma of how PBMs make money
California Healthline had an article about PBMs role in Medicare Part D. (Hat tip Joe Paduda). Not entirely un-coincidentally, the report that I wrote with Jane Sarasohn Kahn on The Prescribing Infrastructure: Are we ready for eRx, which CHCF published last week also had a little section on PBMs. However, for space reasons much of the research that I did for that piece didn’t make the cut. So as promised last week, here’s a longer version of what I wrote about what’s going on behind the veil of the PBM.
Pharmacy benefit management companies have become the hidden giants behind the current prescribing infrastructure. After several mergers, three dominant companies have emerged; Medco, Caremark and Express Scripts. How these companies make money has been a major source of controversy, leading to the slow emergence of the “transparent PBM movement.” PBMs sell their services based on their ability to lower drug costs for their clients. Typically a PBM is not a risk bearing entity, but officially gets paid for providing three services to their clients, who are usually health plans or self-insured employers, and managing the pharmacy use of the “member” (the employee or insured).
The three main ways PBMs make money are via:
- Transaction processing,including managing the eligibility files, benefit information and payment transactions connected with an Rx.
- Network and formulary management, such as negotiating with both pharmaceutical companies and pharmacies over pricing, and ensuring that the most cost-effective drugs and most appropriate therapies are available to the member. This includes techniques such as generic substitution, pre-approval, step therapy and compliance programs–all of which tend to add administrative complexity to the current prescribing infrastructure.
- Mail-order pharmacies, which typically supply lower-cost 90 day supplies of chronic medications to the member
Controversy in PBMland — Channel-switching, the Spread & Rebates
There has been considerable controversy as to how effective PBMs actually are at lowering drug costs, and how they actually make their money. Some of these issues have been raised by their competitors: retail pharmacies are losing business to mail order PBMs, and are also being forced de facto to spend a lot of unpaid time on the phone with physicians’ offices sorting out formulary issues. Many protests are also being raised by their customers -– both employers and end-user consumers/enrollees.
One frequently heard complaint is that PBMs are restricting consumer choice by forcing members to receive their drugs only from their own mail order pharmacies. In fact, the creation of SureScripts by the largest pharmacy chains was in direct reaction to the initial creation of RxHub by the PBMs, which the pharmacies thought was an attempt to turbo-charge this channel switching by controlling access to online pharmacy channels. These fears were somewhat overblown, and the two networks are working in cooperation together. The truth is that this channel restriction is done with the approval of the benefit plan sponsor (usually the employer), and may actually be a rational method of controlling costs and increasing efficiency. Mail order drug operations are highly automated and require substantially fewer pharmacists per Rx than traditional retail pharmacy.
But the major accusations are that PBMs are withholding information from their clients about the “spread” and their “rebates.”
The spread is the difference between the price the PBM tells its client that it is paying for the drug (or in effect the price its client is charged) and what it actually is paying the pharmacy. Critics accuse PBMs of paying much lower actual prices to pharmacies than they reveal to their clients, and also of giving clients only a small fraction of the extra profit they make when they dispense a drug via mail order. For more on this see Robert Garis, et al Shining The Light On Non-Transparent PBM Cash Flows in America’s Pharmacist, November 2004
The rebate is a payment from a pharmaceutical company to a PBM for driving more volume to its branded product by putting it higher on formulary. There are two separate controversies about the rebates.
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First, while the revenue from the rebates are officially passed back to the end client, the accounting behind that process is extremely opaque and has been very difficult for customers to audit. PBMs have been commonly accused of either short-changing their clients, or colluding with health plans to keep rebates back from their customers. For instance, Medco paid Oxford Health Plans $87m allegedly for data, but this was widely presumed to be connected to hiding the rebates from its customers, including the government. (As reported in Barbara Martinez U.S. Maintains Medco Offered Insurer a Kickback Wall Street Journal December 3, 2004) –in effect keeping drug prices higher than they need to be. Michael J. Rudolph, Pharm.D., of the University of Southern California School of Pharmacy, noted that one of the three largest PBMs (Medco) admitted in its annual report that of about $3 billion in rebates garnered in 2004, it passed only $1.7 billion to health plan providers. "This is the story that is not being told, and I venture to say most of the plan sponsors do not understand this," he said’. (source is Frank Celia Chains ponder responses to mandatory mail order Drug Topics Apr 18, 2005)
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The second controversy is that the rebate agreements have been “bribes” that have resulted in the PBMs creating formulary incentives, or campaigns that in fact favor branded products over cheaper generic equivalents. For example, the Detroit Free Press reported that the University Michigan concluded that PBMs working with the university often steered customers towards more expensive brand name drugs and accepted payments from drug companies to promote their products. As a result, the University has moved to a single PBM and is tightly monitoring drug spending. The school has saved $8.6 million as a result. I found this info in Katie Merx U-M’s changes cut drug expense: Pharmacy benefit managers who drove up costs are replaced Detroit Free Press May 18, 2005 (Article is no longer online, although I have a copy if anyone is really interested)
When Sen. Maria Cantwell (D-Washington) suggested that, in order to participate in Medicare Part D, PBMs should be forced to reveal information about these contracting arrangements, their opposition was very vocal, and it was supported by a GAO report. While the PBMs said that this disclosure would prevent their ability to contract on behalf of their clients, cynics drew a different conclusion.
Some studies are now starting to support some of these accusations, and it may be that the tide is slowly turning against PBMs. One survey showed that over 47% of their customers thought that PBMs did not get them the best drug costs Hewitt Associates “Health Care Expectations: Future Strategy and Direction 2005” Executive Summary of Hewitt Teleconference November 17, 2004) but several interviewees we spoke to in the course of this report suggested that PBMs’ customers had in general been slow to try to do anything about these practices. There is though an ongoing legal suit in Illinois (Melissa David "Loyalty Strained at Caremark" The Street.com 2/1/2005), and the slow emergence of the “transparent” PBM movement, such as the breakaway group of employers lead by Hewitt Associates, (Melissa David "Medco and Its Peers Brace for a Flank Attack" The Street.com 8/16/2004).
Overall the trend towards transparency will will probably push PBMs away from looking to rebates and other games with pharma clients. Instead they will try to drive more revenue by switching fulfillment to their mail order businesses, and by more aggressively moving to generic substitution. But it’s still a business that requires more aggressive customers overseeing what’s going on behind the curtain.
PHARMA/TECH: Should big Pharma be blogging? by Shahid Shah
In the light of the recent tattle in the pharma blogosphere of the hijacking of Cialis’ brand identity and Lilly’s apparent inability to do squat about it, Shahid Shah, who besides being a healthcare IT expert is also becoming a corporate blogging evangelist, sent me this guest submission suggesting a little more specificity about blogging on pharmaceutical and regulated products. As many THCB readers know Shahid runs theHITSphere blog aggregator as well as his own Healthcare IT Guy blog. I also think many of his thoughts are applicable to other health care corporations concerned about blogging, such as providers and insurers. And of course I like his pitch to pharma companies to hire me to help them figure this out!
Corporate blogging is certainly not new but it hasn’t really taken off because executives are always nervous about public statements they make, especially if they run a public company. Until now only small firms, who have much to gain with direct 2-way contact with their customers, have really engaged their clients through blogs. Now, however, even the big companies as different as McDonalds and Microsoft have become corporate bloggers with different degrees of success.
The pharmaceutical industry is certainly one group of companies that could use increased goodwill that comes from direct contact with their customers. If anyone should be blogging from a corporate perspective it should be big pharma because what it does directly touches the lives of its customers in a way very few other industries do. The level of importance people give to their health and the way that they bond with their healthcare providers (and by extension the drugs they take) is very important. Most pharma companies are worried about the FDA and cite that as a big concern about why they don’t blog. But, I think that’s a mistake.
Pharma shouldn’t worry too much about what the FDA has to say specifically for blogs. Blogging does not impact anything that wouldn’t already be public anyway. For example, if a pharmaceutical firm has a call center where they answer questions about their drugs’ on-label use, a blog would be no different. In fact, drug firms can improve customer service by providing tips, tools, and guidance on how best to use their drugs. I would recommend that firms start to create blogs that start to tell stories of why scientists (in their own words) are focusing on certain diseases, how far technology has come along, how exactly drugs go from an idea to discovery to production. All these would bring customers closer to them, not alienate them. And, the FDA won’t complain about anything that doesn’t cause off-label use. I spoke with an FDA counsel this week and she basically said the same thing: anything that’s covered by existing guidance would apply to blogs, too (she didn’t provide official legal guidance, it was just a comment stating the obvious).
If a drug vendor starts a blog or discussion forum about its products and doesn’t mis-communicate about efficacy of its products or fitness for a particular purpose it shouldn’t get into trouble. Companies won’t have problems with regulators if they stick to the truth about their products and improve the way customers interact with them. That doesn’t mean they shouldn’t be careful about what they say — but that goes for anything a company says. It’s not something special to blogging but blogging does make it easy for people to say whatever they want (like folks do in an email).
So, if you’re not blogging today don’t blame the feds. If you’re not creating corporate blogs, it’s due to a lack of vision and innovation and perhaps a lack of respect of your customers, not the FDA. Guys like me and Matthew can help you devise an appropriate strategy to allow direct communication, improved customer service, and who knows in a few years people may stop thinking of big pharma in a poor light like they do now.
Oh, and by the way, don’t think that just because you’re not blogging about your own products that nobody else is. Nature abhors a vacuum and so does the blogging community. Third parties are already talking about your drugs and company in their own blogs and forums. Given the growing influence of blogs on consumers, pharmaceutical companies can not afford to dismiss comments made about their products by bloggers and must create their own presence within the blogosphere. Why not take the initiative and help navigate people to the “official” word about your drugs?
QUALITY: Sam Nussbaum saying the time is now for P4P
Sam Nussbaum is Wellpoint’s chief medical director (before that he was on the provider side). Improvement is too slow and variability is too great. Again it’s all been too slow. Cost and quality bear little relationship to each other. In fact it’s a negative correlation (Dartmouth)
We continually have a lack of excellence in quality but that there is employer and even consumer interest in improving it. He wants to promote the establishment of a national quality coordination board to turbo-charge P4P. He believes that P4P will incent investments in IT. But that we need to add clinical decision support into IT to reduce practice pattern variation (we need more than just EMRs)
So how to start? Start with a foundation of trust (can this really come from Wellpoint? he doesn’t address that) He thinks that they need to move from process measures to outcomes measures. He used the example of rich measures of quality process and outcomes in cardiology care, whereby they are rewarding for process and outcome. This is the Quality Insights Hospital Incentive Program (QHIP). In this program complications in PCI were 47% decreased in QHIP hosps vs 20% nationally. So how do they contract with hospitals to do that? They want to earmark a share of (increase in) payment to clinical quality measures. Similar success with OBGYNS in Ohio. They have lots and lots of programs in many states…and they want to move it to more places.
So how to translate that more generally. Within networks (and even within medical groups) there is practice variation, no correlation between cost and quality. Sam is true for hospitals And in the communities, the advertising billboards don’t reflect the real quality issue. But we need to raise the bar for everyone—can’t just send everyone to the top 30%.
And he wants to get consumers involved (so Wellpoint bought Lumenos and is using Subimo) to guide them to the best type of care. Plus roll that into many other programs, such as DM, specialty pharmacy, etc.
All good stuff but he never mentioned the dark side of HDHPs….and the avoidance of people at risk by insurance firms. Ian Morrison is coming up later, and I’m sure he’ll talk about this.
But how do we pay for those programs via PPO, or via ASO services? How does risk adjustment become very apparent? He believes that the key driver is CMS brining P4P to market. — but as anyone who reads the comments in THCB knows, that’ll still be a big fight. AND he admits that the unintended consequences of sharing information is that providers want more money, either to support improvement, or because they are already the best and want to be rewarded for it.
So we must close the quality chasm….P4P is one of the strategies. But there needs to be collaboration.
QUALITY: Milstein’s shark
Arnie Milstein from Mercer is probably the smartest “purchaser” in health care on quality. He’s also the only person explicitly linking the inefficiency in health care to the plight of the middle class un- and under insured….as in this story.
What do we know? 1) The low cost regions are 30% cheaper at no worse quality. 2) Within the low spending communities the lowest spending docs with high quality are still 15% below the average cost for the region — Boeing looked into this in Seattle. And medical errors are still a massive problem (Minnesota health policy adviser was going to have the wrong side of her brain operated on)
But we have the shark (Arnies turn at explaining the increase in spending over incomes) caused by the biomedical miracles. Arnie says that we shouldn’t shut off the shark (i.e. cut off new biomedical miracles). Cutler estimates that every year the shark adds 5 weeks to life expectancy
Answer is to a) rapidly adopt best known delivery methods — b) rapidly incubate cost efficient care delivery innovations so that improvement happens more quickly
So how to do this? a) improve performance measurement, b) increase performance sensitive payments c) faster vetting of cost saving innovations (e.g. no plan had done on ROI on their DM initiatives)
Have to speed up the process knowledge discovery-cycle, by i) expanding role of para-professionals, ii) using engineers to redesign engineer IT-enabled work flows, and then iii) source high end elective care globally. (He’s finding unbelievably cheap prices from JACHO certified hospitals in China)
This has worked elsewhere…on average since mid-90s retail has been gaining efficiency at 2.5% a years, finance at closer to 8%—but they’ve adopted scientific measures. Where this has happened in health care is worked well. Virginia mason is using engineering to reduce unit costs and volume of services, and has just written a letter saying the 50% of dollars are wasted and told its clients that.
He also believes that while not perfect salient public transparency is powerful (Julie Hibbard, Health Aff July 2005), but apparently employers and enrollees support tiering and provider selection preferred 2 to 1 over P4P. He thinks that overall P4P is “medically necessary reset” — but the middle class is not likely to be shielded in time. But it’s not enough to save them unless we really move quickly. I think he’s an optimist.
QUALITY/TECH: Brailer on IT in P4P
David “Stalin” Brailer likes being on the west coast, so is happy to come out here and give talks.
He says it’s obvious. Health care IT needs P4P. And you can’t recoup the benefits of an EMR unless it’s aligned with the direction that the health care market’s going. So the market has to change. But 1.5% of the revenue (a typical P4P bonus) is not enough, although it might be enough on the margins for a few.
Meanwhile, Brailer’s office is now certifying what is a “valid” certified health record (CCIT) and wants P4P programs to help encourage that. And he like everyone else thinks that P4P requires health care IT.
But as there is no agreement on what we’re measuring, none of this works. The industry (public and private) needs to come together to agree what the hell it is we’re measuring. Brailer thinks that American Health Information community (AHIC) is doing that.
But we also need to commit to changing the way we pay doctors and help them along. No one knows if it’s IT that helps or management or what.
BUT he notices that health IT works better among bigger practices. His mission is not to drive everyone into big groups. This has to be made bite size for smaller practices. As the tools are much further along for the bigger groups, which tracks with the ability to do pay-for-performance. So we have a big investment to make to bring along everyone. We have to bring along the little guys too.
(I’m hearing more about this from Brailer than I was year ago)
Both health IT and P4P favor standalone rather than integrated care. Normal course of health IT can’t be followed which is why interoperability is important, and they will guarantee that certified records will be backwards compatible and be interoperable. So he wants not to reward silos, but instead to reward “interoperability” for P4P — not to create optimal activity in a sub-optimal place.
Finally he wants P4P to be long term, not to die on the vine like capitation because it’s a new name for dumping the risk on someone else!
I asked Brailer about consumerism, HDHPs, and whether that is in conflict with integrated systems. He thinks that those integrated systems will find other solutions and they will integrate with other pieces of the system. Most other industries have moved away from “integration”… He believes IDS are closer to that end point in operation versus where they are psychologically. And closed systems are not totally closed. No one is an island. So they require interoperability, but he hopes those big systems can export their knowledge. So they need interoperability too. (he didn’t really touch on whether the HDHP will destroy the HMO movement before those consumer measures are created.
His final point? This is inevitable as doctors going into practice now will not tolerate paper in their practice. He wants the process of having this happen cleanly and not have it happen as islands.
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QUALITY: P4P Round table
So there was a round table. You can get the transcript much later, but here’s the shorter and more biased version:
Shorter Sam Nussbaum, Chief Med officer, Wellpoint — it’s 6 fold different in different places. We’ve got to measure it and tell people about it, and we can fund the good stuff by cutting out the bad. If you damn doctors would only let us….
Shorter Jack Lewin, Calif Med Association — need the information first, before you go to incentives, but the CMA is way out in front of those recalcitrant other doctors from those backwards states
Shorter Suzzane DelBanco, Leapfrog — get me more efficiency! but reward improvements, but not with any more money
Michael Cannon, thinking man’s libertarian, Cato — need to get consumers to buy with their own dollars and everyone else will change by magic
Bob Margolis, CEO Healthcare Partners — socialism is good for provider groups internally…but if we do it all according to guidelines we’ll spend more money not less
Adams Dudley, UCSF — It’s very very complex, and you have to be very smart to figure it out
Shorter John Nelson, ObGYN from Utah and the AMA — you can’t measure being a good doc, as the idiots doing the measurement don’t understand what they’re measuring. Anyway this trend is just another one like managed care and HMOs. People will game the reporting, so lets be translucent only. Anyway I’d rather reform malpractice and eliminate disease ….you fools can discuss this all you like, but lets stop Medicare cutting docs fees any more
QUALITY: Francois de Brantes from GE, runs Bridges to Excellence
He has three keys to make changes in the health care system
1) Accountability — Everyone needs to account for their performance, and feel that they’re accountable for where their dollars flow. And they find that 25% of their employees are going to the top performing systems. Think that they should put incentives into benefit design.
So you should a) share data in a public forum, which forces organization to improve. b) develop health information exchanges with clinical data in them (claims are not enough) which is why B2E does so much chart extract, and is encouraging IT adoption, and c) measuring how well internal medicine works.
2) Better payment models; need a better model—currently wasting a huge amount of resources and getting a mediocre results. They believe that bonuses through shared savings gives a counter incentive to FFS. He thinks docs should be paid with a bonus on top of salary. So B2E is experimenting with 5–10% physician revenue as an incentive (below 5% is not meaningful). Incentives need to be meaningful enough to drive the majority. Plus needs independent review — accountability starts with self-awareness.
The result is that physicians adopt the B2E program are inclined to join in if the incentives are bigger, and now BTE is showing that episode of care costs are lower with recognized docs in the program versus the others…because they have better processes.
Process is important, but you need clinical measures too. Just knowing that a lipid test was done is not enough. Need also to know what the result was! Because not everyone reacts to the test. So claims data isn’t enough.
Finally they are trying to develop a new payments system called PROMETHEUS, which is basically evidence based case rates (severity adjusted) with a withhold
3) Consumer activation—they must be incented too, to do the right thing and do self-care and DM, etc and take the right meds….must be told to do so. He wants to charge smokers more, and thinks health plans should all do that. Need to send the message that adding risks to your self will add financial consequences to themselves. Part of that activation is linking individual consumer level that’s relevant to them which he thinks is the physician. How does my guy do?
One last thought: Given that he’s trying to eventually drive costs out of the health care system, and that GE thinks it’s going to make even more money out of health care in the future, how long will it be until Jeff Immelt notices and has him fed to the sharks?
QUALITY: Brent James on Financial incentives for quality improvement
I’m at a pay for performance meeting in Los Angeles…but no wi-fi in the room so only occasional postings..
The best known name in clinical process improvement is Intermountain’s Brent James. He discovered Deming in 1986; ended up at a 4 day conference that Deming taught and had to translate the words out of manufacturing into health care. Deming said track cost outcomes as well as clinical ones. Luckily Intermountain had built-in activity based cost activity. And they used it for a study on post-operative infection. They measured using antibiotics pre-operative at optimal time, and found that they were there at 40% at right time,. with an infection rate way better than their peers. But they were only good copared to everyone else. By 2001 they were at 96% given at optimal time infection rates down from 1.6% to 0.4%, and they saved $714,000 per year in health care costs they never had.
The criticism of IHC is that for 10 years they knew about how to do it, but they didn’t implement it system wide till 2001. Quality improvement is just process management and improvement. A typical hospital has around 1,000 different processes. They all have physical (clinical), satisfaction and cost outcomes — all of which are a result of those processes. Analytically Brent can’t tell the three apart.
Currently reprising Anderson’s study on the % of “quality waste” in US healthcare — was thought to be 25–40%. Now they think may be 40%-50%. Then there’s “inefficiency waste” (the use of more resources to create the same outcome) which they think may be more like another 50%.
In 1995 he could identify more than 65 processes where they were saving money. He found $30m in savings. But how to spread that? Building on some work of family docs on pheumonia, implementing the correct compliance of anit-biotics for pneumonia. Again went from 22% to 90%. Complication rate down, mortality rates down 26% (around 100 deaths per year), and costs down about 10–12% (depending on how you measure it).
But the hospital adminstrators wanted to know where these showed up in their budgets. So he tracked the per-case revenues, and found that their costs had fallen, but their revenues had fallen more — because their DRG did not “creep”. And the more expensive DRGs were more profitable, and they were still losing money on the less complicated DRG. So there was actual incentive to do it wrong.
(For InterMountain about 85% was either FFS or DRG/per case based). So they were going to lose out every time they moved patients to better DRGs.
What do they do now? They use these in contract negotiations to try to keep more of the share by improvements and reduce costs too. Final strategy is to try to move everyone into shared risk. Brent’s reason that California groups got pounded because they didnt have the mechanism to measure it (no IT systems). Now they try to get their partners to split the savings three way (hosp, docs, insurers). Of course they can’t yet do this with the Federal government. He hopes for P4P from the Feds.
There are 2 main models A) paying bonus on ranking—bonus doesnt cover the added revenue drop, B) Use shared savings
BUT several issues — 1) P4P needs sophisticated data, 2) needs to look at all care (to avoid shifting from one category to another) 3) Lead time: major costsavings from many programs are 2–3 years down the track (example is mental health counselling)
Brent James says that P4P is here to stay and that we know how to close that gap. Getting 30% savings is realistic.
Jack Lewin asks if they are getting anywhere to get Medicare to pay on admission not discharge diagnosis.
He was asked if there is possible change without major changes to the payment system—the AMGA-outpatient payment demo is interesting because it’s a shared savings model. But the bigger issue is getting the information systems into the field to do this. Last year in InterMountain a $3m investment in management systems and data created a $15m variable cost on the bottom line.
PHARMA/POLICY: Suggestions for advancing beyond indignation & conventional wisdom, by The Industry Veteran
Today I’m off to a meeting on Pay for Performance, so I hope I’ll have something riveting for you all later. Meanwhile, as I’ve overblogged (and been over-exposed) in the past week or so, I thought that this morning I’d leave you all with the dulcet tones of The Industry Veteran. As the scandal of pharma and med device companies bribing doctors has got serious enough that even the New York Times has noticed, today the Veteran’s thoughts turn to the issue of how big Pharma might be made to keep to the letter and spirit of whatever new guidelines eventually get suggested to them regarding physician “incentives”—and not simply ignored as the previous many go-rounds have been. As you may have guessed, the Veteran’s suggestions are a little, shall we say, unusual:
I guess the symbiotic corruption of Big Pharma and physicians has become part of the conventional wisdom if the staid editorial column of the NYTimes issues an admonitory tsk-tsk. Well a dog does have four legs and the sun rises in the east, so in good Times-Democratic Party fashion, it’s worth deploring this state of affairs and mentioning that, together, we can do better. Meanwhile Billy Joe Tauzin and the AMA’s Babbitts will again confirm Lincoln Steffan’s opinion concerning muckraking’s futility by showing the crooks how to avoid getting caught next time.
Beyond exposing corruption and pointing out contradictions within the American system of political economy, Steffans, Ida Tarbell and their colleagues provided negligible help in showing a way out. Your note on HSAs in South Africa reminded me that it was Steffans who visited collective farms in the Soviet Union and returned to say, “I have seen the future and it works.” Upton Sinclair turned to health foods and crackpot schemes in California before running a feckless campaign for governor.
To avoid a perpetuation of same-old, same-old in health care, allow me to offer some guidelines for regulation and punishment meant to guide the life-diminishing hands of lawyers and legislators.
First, let’s deal with the manufacturers. Capitalism works by essentially outsourcing the regulatory oversight function to the same private concerns whose activity requires such monitoring. This is true even in a so-called “regulated” industry such as health care. That’s not necessarily bad because the latitude it permits businessmen and their hirelings in science, law and elsewhere facilitates innovation and attention to consumer demands. Unfortunately, since the pursuit of unconscionable profits also beats ethical constraint every time (and “twice on Sunday,” as my barber on Sixth Avenue used to say), this outsourcing usually becomes a license to steal, maim and kill.
Now despite the many shortcomings of the Sarbannes-Oxley law (it was, after all, intended to make up the revenue shortfalls of big accounting firms in the wake of the Enron/Arthur Andersen auditing scandal), I do admire the fact that it recognizes corporations are not shapeless forces of nature. To the contrary these institutions represent the lengthened shadows of a few greedy bastards at the top and, accordingly, the law requires that these officers sign to the veracity of Sarbannes-Oxley statements under liability for criminal penalties. It is thus in pharmaceuticals as well. The CEOs in that industry generally made their abbreviated, Bush-like journeys from birth on third base to home plate by functioning as the most effectively devious, unscrupulous, alpha-males within their various launching milieus. For that reason legislation prohibiting manufacturers from bribing, improperly inducing or influencing physicians should be directed principally toward the fiduciary officers rather than shareholders’ earnings. Any agreements between the companies and their officers related to indemnifying or otherwise reimbursing executives for these financial penalties should be construed as efforts to defeat the statutes and held for naught.
Legislation on this matter should also recognize that in cases of the culturally middle class, a little shame administered in front of the country club peers, the trophy wives and the compliant secretaries goes a long way. In other words degradation rituals should be made integral parts of regulatory penalties. We’re talking more than just mandatory perp walks here. The executives who derive enormous satisfaction from preening around as the dominant males within their respective companies should literally have their pants pulled down. This means mandatory Internet publication of their three-sided, nude photos: front view, side view (to show the paunch beneath the $2,000 suits) and rear bent-over view (to be advertised as previews for other inmates).
Legislation drafters must also deal with the greed and narcissistic egotism of physicians on this matter. I believe remediation here is a far more pedestrian matter. Physicians generally regard the advance of damnation as consisting of more work, less pay, less discretion in their professional decision making, more clerical duties and less deference from their support staffs. For this reason penalties should make even casual transgressors realize their Dantean fantasies. They must receive sentences that oblige them to practice medicine in circumstances that turn to ashes every reason that led them to medical school and their residencies.
Instead of providing scientific interest, the work of bribe-taking physicians must become mind-numbing drudgery. Their well-being must be placed into the hands of bulldog secretaries, each lacking the ability to add a column of four numbers. Far from receiving the fawning deference of women or the respect of men, they must be made to work in post office surroundings that all but brand large L’s on their foreheads.
Legislation can achieve a general deterrent effect from these punishments by requiring that once offenders are released, they must discuss their experiences with colleagues in detail after resuming private practice.
I offer the above suggestions in the interest of enlightened penology, which as it turns out, is equivalent in policy terms to better health care.
