Conflicts of interest in health care journalism: VIDEO with our publisher about “an unhealthy state of things” (Part 3 of 3)

In the past two days, we’ve outlined a number of concerns about news organizations, professional journalism organizations and academic institutions that are involved in health care journalism reporting or training while accepting sponsorship or funding from health care industry entities that are often subjects of what the journalists or trainees do or will write about. (Part one of series. Part two.) These practices may be good for corporate, organizational or academic institution coffers, but the sponsorship comes at a price – of potential damage to journalism’s integrity and to the public trust in journalism, news reports and news organizations.

We have touched on examples of our concerns involving:

  • The World Conference of Science Journalists
  • The Association of Health Care Journalists
  • The University of Colorado
  • The University of Kansas
  • The National Press Foundation
  • NPR, STAT,

Ben Bagdikian, journalist/educator/media critic, wrote to and about journalists:

“Never forget that your obligation is to the people. It is not, at heart, to those who pay you, or to your editor, or to your sources, or to your friends, or to the advancement of your career. It is to the public.”

In this final part of our three-part series, I talk about some of these issues in more depth, and from the perspective of my growing concerns over a 44-year career in health care journalism.

Conflicts of interest: Time for world’s top health journalism organization to reconsider fundraising practices. Part 2 of 3

Perhaps few journalism organizations have tried harder to minimize conflicts of interest than the Association of Health Care Journalists (AHCJ), the leading professional organization for journalists who report on health care.

The two of us know AHCJ well, having been members almost since its launch 20 years ago. We’ve both served on AHCJ’s board, attended most of its 18 annual conferences, and served on many panels as speakers or moderators over the years. Gary wrote the AHCJ’s Statement of Principles, which was adopted by the Board in 2004.

AHCJ states that its educational arm, the Center for Excellence in Health Care Journalism, won’t take money from pharmaceutical companies, device makers, insurers or even most advocacy groups such as the American Cancer Society. That strict standard distinguishes AHCJ from some other journalism training organizations, which have no qualms about accepting money from companies that journalists routinely report on.

In fact, when AHCJ agreed to collaborate with the World Conference of Science Journalists (WCSJ), which meets in San Francisco this fall, it raised its own money for a health care track “because the broader funding of the conference includes funders that we would not take money from,” AHCJ Executive Director Len Bruzzese told us. As noted in part one of this series, WCSJ accepted $400,000 in support from drug company Johnson & Johnson and another $50,000 from drug company Bayer. Each of the funders that AHCJ lists for its track at WCSJ is a philanthropic foundation. Bruzzese added: “There is easier money out there if you’re willing to take it from other organizations that may want to have more influence than we believe they should have on journalists.”

Conflicts of interest in health care journalism. Who’s watching the watchdogs? We are. Part 1 of 3

Ben Harder, a journalist with US News & World Report, recently tweeted, “Pharma ads subsidize many health reporters’ salaries.”

Elisabeth Rosenthal, who now heads Kaiser Health News after a long career with the New York Times, tweeted in that same discussion, “Many of my articles in the NYT carried pop-up ads for pharma. Infuriating.”

Many journalists are aware of the drug industry’s attempts to gain positive attention by buying placement within the nation’s health care news.  A few occasionally write or talk about it, as Harder and Rosenthal did publicly.

But I don’t think we talk often enough about why it matters if health care industry entities are allowed to advertise within, or sponsor, health care journalism content.  Americans spend more than $3 trillion on health care. Conflicts of interest in health care and research are rampant. The Journal of the American Medical Association (JAMA) last month published a special edition all about health care conflicts of interest.  JAMA included a Viewpoint article entitled, “Conflict of Interest:  Why Does it Matter?”  The first line:  “Preservation of trust is the essential purpose of policies about conflict of interest.”

But who talks about conflicts of interest in health care journalism? In a Gallup poll, “Honesty/Ethics in Professions,” respondents rated journalists’ honesty and ethical standards below psychiatrists, chiropractors and bankers….and just above lawyers.

There is great potential harm in a further erosion of trust in journalism and in health care.  There is a great potential harm in journalists – and the audience they serve – becoming numb to the presence of and influence of drug companies and other industry entities in the news and information disseminated to the public.  There is, as we have begun to point out repeatedly in our review of news stories and PR news releases, advertising and marketing messages, often a polluted stream of contaminated information reaching the public.  Often vested interests pollute that stream.  (We will discuss these potential harms in more detail in part 3 of this series.)

That’s why I think that this issue demands and deserves a deeper dive. Why now?  Because, as outlined in this series, there are a growing number of questionable alliances between a growing number of news organizations and health care industry sponsors. Money is exchanging hands and I ask “Why? Why do news organizations enter into these arrangements?  Why do they feel they need to?  Have they exhausted all other options?”  I want to shine a light on a collection of news organization practices.  I’m raising the same types of questions that journalists often raise as they report on various issues.  But I’m asking them because I don’t see enough journalists talking about it when their own organizations accept industry money.

Economists propose paying physicians salary over fee-for-service method to avoid conflicts of interest

In a Journal of the American Medical Association Viewpoint article, a pair of behavioral economists contend that doctors should be paid by salary, rather than the fee-for-service arrangements under which most of them now operate.

While most conflict of interest research and debate in medicine tends to focus on physicians interacting with pharmaceutical and device companies, how doctors are paid is one important source of conflict that’s largely ignored in medical literature, they said.

Fee-for-service compensation arrangements, they propose, create incentives for physicians to order more, and different, services than are best for patients.

“Paying doctors to do more leads to over-provision of tests and procedures, which cause harms that go beyond the monetary and time costs of getting them,” said George Loewenstein, the Herbert A. Simon University professor of economics and psychology at Carnegie Mellon University, in a statement. “Many if not most tests and procedures cause pain and discomfort, especially when they go wrong.”

He and Ian Larkin, an assistant professor of strategy at UCLA’s Anderson School of Management, said that a commonly proposed solution to the problem involves requiring physicians to disclose their financial interest for a given procedure. But disclosure of conflicts has been found to have limited, or even negative, effects on patients.

Loewenstein and Larkin argue that the simplest and most effective way to deal with conflicts caused by fee-for-service arrangements is to pay physicians on a straight salary basis. Several health systems well-known for high quality of care, such as the Mayo Clinic, the Cleveland Clinic and the Kaiser group in California, pay physicians salaries without incentives for volume of services performed.

Moving more physicians to straight salary-based compensation might have benefits not only for patients, but also for physicians themselves, they said.

“The high levels of job dissatisfaction reported by many physicians may result, in part, from the need to navigate the complexities of the fee-for-service arrangements,” said Larkin. “Instead of focusing on providing patients with the best possible medical care, physicians are forced to consider the ramifications of their decisions for their own paychecks.”

Counsel’s Corner: President Trump, Potential Conflicts and Health System Boards

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Political biases aside, the transition process for the new administration—both as to President Donald Trump and his Cabinet nominees and White House advisers—does a great service for nonprofit health systems by highlighting critical conflict-of-interest concerns. The last several weeks’ headlines provide health system general counsel with a rare opportunity to offer practical board education based on current events.

The president’s personal asset divestiture plan, announced on Jan. 11, along with the broader public scrutiny of key administration members’ business interests, present an important teaching moment on identifying, resolving and managing conflict-of-interest issues. And that’s a subject on which many health system boards could use continuing guidance, given the strictures of the duty of loyalty.

Neither the particulars of the administration’s potential conflict issues nor the details or adequacy of the president’s divestiture plan needs to be addressed here. Instead, the issues themselves provide something of a checklist that can help health system boards ensure their internal conflict-of-interest policies and processes are as fulsome as possible. Strong conflict-of-interest inquiries are critical to protect the reputation of the organization and its board members, and to sustain key business arrangements.

It is important to note that the rapid growth of health systems, the equally rapid diversification of their businesses and investment portfolios, and the expanding diversity of board members’ backgrounds in board membership significantly complicate the conflict-of-interest review process.

The “Trump Transition” conflicts checklist logically could include the following:


The landscape that encompasses the totality of the president’s family business interests and those of his Cabinet appointees—and their relationship to the ethics of government—is many layered. It nevertheless offers certain valuable analogies for the health system board—for which the duty of loyalty is sacrosanct. It isn’t all that great a leap to go from Trump’s transition issues to the conflict-of-interest policies of a nonprofit health system board. And it should be noted that the breadth of scrutiny of transition-related conflicts of interest likely hasn’t gone unnoticed by health-care industry regulators, including but not limited to state charity officials. Regulators may be far more likely than before to apply greater sensitivity to issues and relationships that may present conflict issues and their broader legal implications.

Feds Allege Mass Forest Park Medical Center Kickback Scheme; 21 Indicted

Feds Allege Mass Forest Park Medical Center Kickback Scheme; 21 Indicted

(Credit: Justin Clemons)

A federal grand jury has returned indictments on 21 individuals allegedly involved in a massive kickback scheme through the defunct Forest Park Medical Center chain of luxury hospitals, which resulted in “well over half a billion dollars” in billed claims due to illegal bribes.

The 44-page indictment, unsealed Thursday, describes a vast, four-year conspiracy, fueled by $40 million in kickbacks funneled through a number of shell companies—consulting firms, commercial real estate firms, business services organizations—into the pockets of high-powered surgeons, some of whom have their faces on billboards throughout Dallas-Fort Worth.

The 21 suspects include two of the four physician founders of the hospital chain, including Dr. Richard Toussaint, the anesthesiologist who is awaiting sentencing on a separate fraud conviction; and Wade Barker, the bariatric surgeon who helped develop the idea for Forest Park. Other early adopters indicted in the scheme include Wilton ‘Mac’ Burt, a consultant who helped run the chain’s affiliated management company until he and his colleague, Alan Beauchamp, were bought out in 2015. Beauchamp was also indicted.

But the bribery scheme sailed far outside the doors of Forest Park’s grey and blue flagship at the corner of U.S. 75 and Interstate 635. Also indicted were prominent bariatric surgeons Drs. David Kim and William Nicholson as well as the minimally invasive spine surgeons Drs. Michael Rimlawi, Douglas Won, and Shawn Henry. Won, the DOJ alleges, was paid $7 million for his referrals. Rimlawi is accused of accepting $3.8 million. The feds argue that Kim and Nicholson, both of whom were investors in Forest Park, were paid $4.595 million and $3.8 million respectively. Reads the indictment: “The surgeons spent the vast majority of the bribe payments marketing their personal medical practices—which benefitted them financially—or on personal expenses such as cars, diamonds, and payments to family members.”

In all, the feds say Forest Park collected “in excess of two hundred million dollars in tainted and unlawful claims.” None of those named in the indictment have returned requests for comment. Sheryl Zapata, the chief development officer for the Texas Back Institute where Nicholson currently practices, said “TBI is not a part of this and we will not be commenting.”

“Medical providers who enrich themselves through bribes and kickbacks are not only perverting our critical health care system, but they are committing a serious crime,” read a statement from U.S. Attorney John Parker. “Massive, multi-faceted schemes such as this one, built on illegal financial relationships, drive up the cost of healthcare for everyone and must be stopped.”

Forest Park Medical Center was a chain of luxury hospitals that sprouted in Dallas, Fort Worth, Southlake, Frisco, and San Antonio. One in Austin was built but never opened, kneecapped due to nearly two dozen construction liens.

The model collapsed in on itself due to its reliance on high out-of-network charges that it would bill to insurance companies. The payers eventually balked, and the patient volumes dried up. The hospitals died one by one, each eventually entering bankruptcy and sold off to a health system. Because they were physician owned, they were barred by the Affordable Care Act from billing any public health insurance plan, such as Medicare, for fear of conflicts of interest regarding referrals. And despite this, it twice had to settle claims with the DOJ for paying kickbacks for Tricare patients and Department of Labor employees. The indictment alleges that this is exactly what happened: Beauchamp, Barker, and Kim, among others, “also attempted to refer patients with lower-reimbursing insurance coverage, namely Medicare and Medicaid beneficiaries, to other facilities in exchange for cash.”