Wednesday, April 21, 2010

Prosecutions Are Not A Strategy For Improving Health and Medicine

The New York Times’ Barry Meier raises many interesting--and disturbing--questions about the future of medical liability. That is to say, Meier, without saying it, Meier takes up the issue of medical progress, and whether or not we will have medical progress. The unspoken issue: While we should all oppose corporate malfeasance, we should also be fearful of the medical stasis that might result from a paralyzing of the system by which medical progress is made. To put it bluntly, medical stasis means that we die before our time. Medical stasis is a greater threat than corporate malfeasance.

The headline for the Times story reads, “When Heart Devices Fail, Who Should Be Blamed?” Focusing on a case in which the Guidant Corporation sold defective heart defibrillators, leading to at least six deaths, Meier details a debate in legal and governmental circles: Are fines--to say nothing of liability lawsuits, which can run into the billions--a sufficient punishment or deterrent for bad corporate behavior, or should authorities pursue criminal prosecutions as well?

In recent years, Meier notes, the Justice Department has imposed heavy fines on drug and device makers, and yet corporate executives have only rarely faced criminal charges. Yet this situation might change: “Officials of the Food and Drug Administration say that the Obama administration intends to push for more prosecutions of corporate officials, a move that is likely to please patient advocates but also to touch off intense debate.” In other words, criminal charges--and perhaps prison sentences--might in store.

Yet debates over civil vs. criminal liability aren't just legal and governmental issues. They are also medical issues. The legal and the governmental are connected to the medical. So those tinkering with the legal and the governmental need to be mindful of the medical, because the medical affects all of us.

Meanwhile, as the Times notes, Boston Scientific, which now owns Guidant, is looking at a $296 million fine, unless, of course, in the glare of publicity, such as this Times story, the legal rememdy is made harsher toward the company, and the Justice Department escalates to criminal charges.

But we might ask: Where's that $296 million going to go? The answer, of course, is that in federal cases, the money goes into the Treasury general fund. So what we are seeing, then, is the transfer of $296 million out of capital available for healthcare, over to the national fisc. That might be good news for bailout recipients, or other federal dependents; it might even be good news for budget balancers, those eternal optimists. But it is not good news for healthcare. Because not only is that $296 million gone out of the pocket of Boston Scientific, but the general signal has been sent--there are easier ways to make money than medical equipment. Allocation of risk-capital is always a pivotal issue in any industry. However, for obvious reasons, there’s a greater public interest in the allocation of capital to healthcare than to most other sectors.

And so, mindful of the year-long debate over Obamacare, we might pause to ask: Is it possible that the Obama administration is seeking to shrink the healthcare sector in the name of “bending the cost curve”? That is, by pushing capital out of the healthcare sector, is it trying to lower the share of our economy dedicated to healthcare? If the federal government says that spending 17 percent of GDP on healthcare is too much, then the reductions must start somewhere--and every $296 million helps.

So the average American, too, is a stakeholder in the discussion of medical priorities--or should be. After all, heart disease is the leading cause of death in the United States; nearly half a million Americans die every year.

The average American might therefore be justified in intervening in this legal-governmental debate, to ask a purely medical question: What's the best way, amidst this legal and political wrangling, to advance the science of medicine? More to the point, what’s the best way to advance the cause of helping people to live longer and better in the face of heart disease?

If the Obama administration decides to target medical executives for criminal prosecution, does that make it more likely, or less likely, that medical companies will stay in the field, to say nothing of going into the field? If, as they say, that things you tax you get less of--and what's the corollary for things you seek to imprison? Or does the Obama administration have some other plan for improving healthcare--that none of us know about?

Here at Serious Medicine Strategy, we hold no brief for Boston Scientific.

But lack of financial interest is not the same as policy disinterest. We are intensely interested in the process by which defibrillators and other devices are made, improved, and then further improved. And we feel the same way about drugs and other kinds of treatments.

We wonder, therefore, if we have lost sight of the real goal here, which is to make Americans healthier. If Americans are made healthier by piling on civil and criminal liabilities--chasing bad actors out of the system--then that's one thing. But if not, if we are simply shrinking the healthcare sector as punishment for bad decisions--that’s a much different thing. If Obama administration prosecutions are the beginning of something better, great. But if they are an end in themselves, then it’s not so clear that we, and our health, are better off.

Perhaps we should step back and take another look at how this system works. Right now, we have the equivalent of a machine for churning out legal and political judgments, not medical-scientific advances. We know how to make trial lawyers rich, and we know how to build big bureaucracies. But do we know how to move medical science forward?

What's the best strategic approach to advancing medical devices, and making them better? Maybe Boston Scientific is a part of the solution, maybe it isn't. But if Boston Scientific is not part of the solution, let's figure out, quick, what should be part of the solution. Let's not crush one company in the medical equipment space--and send a potentially scary signal to others in that space--and think that we have made any progress toward improving our prospects against heart disease. If not Boston Scientific, then who?

To answer these questions in a systematic way, we need a strategy--a Serious Medicine Strategy. Trial-lawyerism is not a strategy for improving healthcare. Neither is Naderism. Nor revenge. Even justice, desirable as that might be for other reasons, is not a strategy for improving healthcare. If somebody at Boston Scientific goes to jail, that jailing will not cure a single diseased heart.

What will cure a diseased heart is medical research. And medical research must be encouraged, not frightened away. If people need to go to jail, then they need to go to jail. But let’s not call that a healthcare policy. It’s no kind of strategy for improving the health of Americans.

1 comment:

  1. “Medical stasis is a greater threat than corporate malfeasance.”
    This is wide open for discussion Jim.
    Before they built the G. Washington Bridge, they knew a # of workers would fall off of it & the families would sue. But the bridge was built.

    “When Heart Devices Fail, Who Should Be Blamed? ....
    for the defective heart defibrillators.”
    I ask: When did they know? After how many failures did they have certitude that the devise was a lemon?

    In 1990 there were “new” hip replacements that had a 19%-22% failure rate. Because of this, my Guy gave me the “old one.” However, once its mfg. discovered that the device wasn’t long lasting, they pulled it. My 1990 model was replaced in 2006 & the new one is doing fine.

    There was a time when Cessna wouldn’t improve their airplane for fear that when an old one would crash, the new improved one could be used to demonstrate that the old one wasn’t as safe as it could have been. Heck of a world we live in isn’t it!

    Medical liability lawsuits need to be settled by Arbitration Boards (having caps & power to lift licenses to practice-which don’t exist in medicine today). However, we are required to use Arbitration Boards when we have a dispute with a NYSE member. Yes, the NYSE has an Arbitration Board! I wasn’t allowed to go to the courts first, I had to use them first. I did and was satisfied with the outcome.

    You wrote: “tinkering with the legal and the governmental need to be mindful of the medical, because the medical affects all of us.”
    So does the Stock Market! Arbitration works. What didn’t in the last several years were Barney Frank & Senator Dodd regarding the Fannie & Freddie “stuff.” They, IMHO, were the root causes of what happened in the Home mortgage markets.

    You said: “More to the point, what’s the best way to advance the cause of helping people to live longer and better in the face of heart disease?”
    Leave the doctors & their patients alone. The market place will handle it. It doesn’t need uber government except for Arbitration boards. But that wont happen because of corruption between Hill People and Trial-lawyerism.

    As for drug companies, I don’t know. If a CEO looked the other way on a new Thalidomide drug. Well, I think old Arab justice would be too good for him!

    When it comes to medicine, for sure, we don’t want to make people sicker.
    Trial-lawyerism is a corrupt obstruction to justice aka fairness. I’m afraid that further government intervention into medicine will lead to less research and actualize your and my concerns:-(
    Thanks for writing this. Maybe some one “with Power” will read & take it to heart & do something before the finest medicine in the world is wrecked!