Joint replacements are the #1 expenditure of Medicare. The process of approving these medical devices is flawed according to the Institute of Medicine. It is time for patients' voices to be heard as stakeholders and for public support for increased medical device industry accountability and heightened protections for patients. Post-market registry. Product warranty. Patient/consumer stakeholder equity. Rescind industry pre-emptions/entitlements.
Twitter: JjrkCh

Friday, November 20, 2015

Hospitals Punish Harmed Whistleblowers & Negligent Credentialing

Ruling opens hospitals to lawsuits

Jonathan Ellis,
Hospitals in South Dakota that grant doctors privileges to practice medicine can be sued if they acted in bad faith or were unreasonable in granting those privileges, a circuit court judge has ruled.
The ruling by Judge Bruce Anderson also opens the door to lawsuits against the individual members of committees that granted those privileges.
Anderson’s ruling sets the stage for South Dakota becoming a state that allows lawsuits against health providers under a concept known as “negligent credentialing.” At least 30 other states recognize the tort that hospitals have an obligation not to allow health providers to practice.
“Based upon this court’s review of the law and the briefs presented in these cases it appears South Dakota has all the necessary legal precedents as ingredients other courts have found prerequisite to adopting such a claim including a hospital’s duty of care for patient safety,” Anderson wrote.

The ruling, which could be appealed to the South Dakota Supreme Court, is a significant victory for three dozen plaintiffs who are suing Dr. Allen Sossan, a spine surgeon who practiced in Yankton. The plaintiffs in the cases are also suing Lewis & Clark Specialty Hospital, where Sossan was one of the doctor owners, and Avera Sacred Heart, where Sossan was also credentialed to perform surgeries. The doctors on the credentialing committees are also being sued.
In addition to ruling that health providers can be sued for failing to properly credential doctors, Anderson also ruled that a statute allowing medical peer review committees to keep their findings and materials private is not an absolute privilege.
Under South Dakota law, medical peer review committees operate in secrecy, and plaintiffs in medical malpractice cases don’t have access to their materials. Peer review is supposed to foster greater patient safety by allowing medical professionals to speak freely and critique each other without fear that the conversations and materials generated by the committee can be used in lawsuits. But critics say the system enables doctors and hospitals to hide their mistakes, thus depriving justice to victims of medical malpractice.
But Anderson noted that other privileges – attorney/client privilege and spousal privilege – are also not absolute, and that they are subject to a crime/fraud exception. Anderson ruled that the medical peer review privilege should also be subject to a crime/fraud exception.
“These committees owe a substantial and important fiduciary obligation to the entire community, and in order for the public to be satisfied that they are properly carrying out that important fiduciary obligation, when the appropriate case arises, the plaintiffs should have access to the information to make sure the legislative intent as expressed in the statute is upheld,” Anderson wrote.
It’s a big victory for the plaintiffs because they are attempting to prove that Sossan was credentialed by the hospitals because of the profits he would bring them by performing lucrative spine surgeries. Sossan got credentials even though the medical community in Yankton knew that he had lost credentials at a hospital in Norfolk, Neb., and that he had past problems.

John Hughes, a Sioux Falls lawyer who tries medical malpractice cases, said that trial courts have typically ruled that the medical peer review statute is absolute and an “insurmountable barrier to any independent review.”
“Judge Bruce Anderson’s opinion is one of the most well-researched and well-reasoned judicial decisions that I have read,” Hughes said in an email. “He addressed all of the interests in a fair and balanced manner. I cannot recall exactly who said this, but the saying goes like this, ‘those who do not control themselves will soon find themselves governed by others’ or words to that effect. Plainly, that is what we have going here.

Clinic severing ties with patients suing former spine surgeon

 Jonathan Ellis,  12:05 a.m. CDT September 6, 2015
A clinic that provides basic medical services for residents in southeastern South Dakota and northeastern Nebraska is withdrawing care to patients who are suing a former spine surgeon and the doctors who credentialed him.
The Yankton Medical Clinic is not a party to the lawsuits against Dr. Allen Sossan, but some of the doctors who work at the clinic were on the credentialing committee that allowed Sossan to practice medicine at Avera Sacred Heart. At least a half-dozen doctors who practice at the clinic are parties to the lawsuits for their role in granting surgical privileges to Sossan at Sacred Heart.
Patients who filed suit and who also go to the Yankton Medical Clinic were notified by letter late last month that the clinic and its more than four dozen health providers are severing their relationships. The patients were informed that the clinic will cease treating them after Sept. 23.
“This is due to the breakdown of the physician-provider/patient relationship, in particular, your filing a lawsuit against a YMC, PC physician-provider and/or YMC, PC,” the letter says. The notice also bars these patients from the Vermillion Medical Clinic and the Yankton Medical Clinic Pharmacy.
Dr. James Young, a dermatologist and president of the Yankton clinic, signed the letters, which were dated Aug. 24. Young said he didn’t know how many patients were affected, putting the number at a “few.” There are approximately three dozen lawsuits against Sossan, but not all of them include the doctors who credentialed Sossan at Sacred Heart.
Young said the decision to terminate relationships with the patients follows a longstanding policy at the clinic. He added that it’s not unusual for medical facilities to have such a policy.

“Sir, all I know is those people filed suit against our doctors,” he said.
But Steve Johnson, a Sioux Falls lawyer with decades of experience trying and defending medical malpractice suits, said he is not aware of a situation in which a medical facility cut off services to patients.
“I think it’s a little unusual and rare for sure,” Johnson said.
Typically, he added, patients are the ones who pull the plug on a physician-patient relationship.
“Generally speaking, doctors practice medicine and they let the lawyers handle the legal part of it,” Johnson said.
The decision means that the patients who are being cut off will have to find new medical providers. In rural South Dakota and Nebraska, that could require patients to have to travel long distances for basic medical care.

Tim Bockholt, and his sister Judith, were among the patients who are being banned by the Yankton Medical Clinic. The Bockholts’ mother died after undergoing more than a dozen surgeries by Sossan in a year.
Tim Bockholt sees a cardiologist and a family practice doctor at Yankton Medical Clinic. None of the doctors who are being sued for credentialing Sossan provide care to either he or his sister, he said.
Bockholt now faces the prospect of traveling 50 miles to Norfolk, Neb., or 70 miles to Dakota Dunes. The travel will be harder for his sister, who suffered a stroke three years ago.
“She’s not that good at driving into those big cities because she can’t distinguish lefts from rights very well,” he said.
In a motion filed in court last week, Mary Weibel, another patient who is being released by the Yankton Medical Clinic, accused the clinic of using intimidation tactics because she is also suing Sossan. The motion noted that Weibel filed her lawsuit in February, and it accuses the Yankton Medical Clinic of violating a state law that bars corporations from interfering with physician treatment of patients.
Weibel, through a brother, declined to comment.
Health providers have been known to end their relationships with disruptive patients and patients who have not paid bills. At other times, they will sever their relations with patients who don’t take medicines or follow treatment instructions.
The American Medical Association has an ethical code dictating that physicians have an obligation to support continuity of care for patients. “While physicians have the option of withdrawing from a case, they cannot do so without giving notice to the patient, the relatives, or responsible friends sufficiently long in advance of withdrawal to permit another medical attendant to be secured,” the code says.
Jonathan Van Patten, a law professor at the University of South Dakota School of Law, said that someone suing a doctor in a medical practice might be reason enough for the entire practice to part ways with the patient.
“That seems to be enough of a reason to say no,” Van Patten said.
“You don’t have a right to do business with a professional,” he added. “It’s a two-way street.”
Randy Bury, the chief administrative officer for Sanford Health’s health services division, said in a statement that Sanford tries to work with patients even if they have a legal action against the system. Sanford also follows state and federal regulations on terminating patient relationships.
“It is uncommon for physicians to terminate a relationship with a patient,” Bury said. “In those unfortunate situations where it happens, we have policies/procedures to ensure that every effort was made to maintain continuity of care for the patient. At Sanford, we do everything possible to work with the patients regardless of the situation, including those difficult circumstances where legal action is underway.”
Lindsey Meyers, a spokeswoman for Avera Health, said in an email that the issue of terminating patient relations depends on the situation, the facility and the provider.
For Tim Bockholt, the decision to terminate his care means he and his sister have a daunting task of finding new providers. Both of them have health problems, and for Bockholt, who was born in Yankton 64 years ago, he now has to go outside of the place where he has always received basic medical care.
“They’re discriminating against us and we’ve never had anything to do with them,” he said. “We’ve never hurt them in any way I know of.”
More about Sossan

Dr. Allen Sossan began performing surgeries in Yankton in about 2008 to 2012. He practiced at both the Lewis & Clark Specialty Hospital, where he was an owner, and Avera Sacred Heart. Dozens of former patients or their relatives have filed lawsuits alleging he botched their spine surgeries. Last month, a judge unsealed an arrest warrant and grand jury indictment for perjury and filing a false document. The indictment stems from Sossan failing to disclose felony convictions for burglary and bad checks on his application for a South Dakota medical license. Sossan, who went by the name Alan Sossan before the convictions, is currently residing in Iran.

Thursday, November 19, 2015

Collision of Archaic 1976 Congressional Legislation & Power Morcellator and Bayer Essure PREVENTABLE Harm

Congressional Panel Chair Questions Whether J&J, Brigham Reported Morcellation Adverse Events to FDA  November 18, 2015

By Matthew Bin Han Ong
The House Committee on Energy & Commerce has stepped into a key role in the controversy over power morcellation.

At a hearing earlier this week, Rep. Tim Murphy (R-Pa.), chairman of the Subcommittee on Oversight and Investigations questioned whether Johnson & Johnson and Brigham & Women’s Hospital violated federal law by not reporting adverse outcomes resulting from power morcellation.
At the Nov. 17 hearing by the Subcommittee on Health, Murphy quizzed Jeffrey Shuren, director of the FDA Center for Devices and Radiological Health, in an apparent effort to determine whether manufacturers of power morcellators as well as hospitals that used these devices had failed to notify FDA that patients were being harmed.
“Are you aware of this problem?” Murphy asked Shuren. “[Johnson & Johnson] was apparently aware of the dangers of this device as early as 2006, based upon a report from Dr. [Robert] Lamparter, a pathologist from central Pennsylvania, who cited about one out of 300 samples of morcellated tissue from his hospital had evidence of a hidden cancer, which is morcellated.”
At the hearing, Murphy pressed FDA’s Shuren on how much the agency knew about these incidents.
“Let me ask another question: Brigham & Women’s Hospital was aware of the dangers in 2012,” Murphy said. “A patient by the name of Mrs. Erica Kaitz was seriously injured in 2012 by the device and then died in 2013, according to reports.
“I wonder, do you know if the hospital reported that to the FDA? Would you know?”
Shuren: “I’m not aware of that.”
Contacted by The Cancer Letter after the hearing, Brigham declined to comment. The J&J subsidiary Ethicon said the company wasn’t aware of any reportable adverse events prior to December 2013.
“Dr. Lamparter did contact the company in 2006 seeking advice on ways to collect and evaluate endometrial specimens following morcellation,” an Ethicon spokesperson acknowledged to The Cancer Letter.
However, the company spokesman said the communication didn’t constitute a reportable event. “Because Dr. Lamparter did not report an actual experience with a patient, his communication was handled as a complaint, and was not reportable as an MDR,” the spokesman said.
A story about Lamparter’s report to J&J appears here.
In an earlier statement to The Cancer Letter, FDA said it received no reports of adverse outcomes before December 2013. Since then, the agency was informed of about two dozen cases of upstaging of cancer via power morcellation at a variety of health care institutions.
FDA’s answers to questions from The Cancer Letter are posted here.
The congressional hearing this week was part of a string of investigations of the controversy stemming from widespread use of power morcellators, gynecological devices now known to spread undetected cancers during hysterectomies and myomectomies.
The questions also stem from correspondence between FDA and Rep. Mike Fitzpatrick (R-Pa.), who is not a member of Energy & Commerce. Fitzpatrick became involved in response to advocacy by his constituents Amy Reed and Hooman Noorchashm (The Cancer Letter, Nov. 13).
Reed’s uterine sarcoma was upstaged as a result of a power morcellation surgery performed at Brigham.
“Under section 519 of the [Federal Food, Drug, and Cosmetic] Act (see also 21 CFR part 803), manufacturers must report to FDA information that suggests that a device they market may have caused or contributed to a death or serious injury,” the agency said in a Nov. 12 letter to Fitzpatrick. “Moreover, user facilities must report device-related serious injuries to the manufacturer and device-related deaths to the manufacturer and FDA.
“FDA has taken enforcement action in the past against user facilities and manufacturers who fail to comply with FDA’s reporting requirements. We have generally focused our enforcement resources on manufacturers—who are required under law to investigate any MDR-reportable complaint they receive—and not on user facilities. We have found that encouraging more reporting—and more complete reporting—by user facilities is a good use of our limited resources in this area,” FDA wrote in response to Fitzpatrick’s questions.
Fitzpatrick’s letter and the agency’s response are posted here.
“You will note that it is an incomplete response,” a spokesperson for Rep. Fitzpatrick said to The Cancer Letter. “We will be sending out a full release when we get a complete response.”
Separately, the Federal Bureau of Investigation is reportedly looking into the issue, and the Government Accountability Office is investigating the controversy at the behest of 12 members of Congress (The Cancer Letter, May 29, Sept. 11).
In November 2014, The Cancer Letter first reported on Brigham’s role in upstaging Erica Kaitz’s leiomyosarcoma via power morcellation. Kaitz died on Dec. 7, 2013, nearly two months after Reed received her cancer diagnosis at Brigham (The Cancer Letter, Nov. 26, 2014).
Her widower Richard Kaitz, a Boston real estate lawyer, said that Brigham doctors mischaracterized the risk his wife was facing when she underwent power morcellation.
“They gave us numbers—one out of 10,000—that they knew to be wrong,” Kaitz said to The Cancer Letter last year. “The Seidman, Muto article was published in November 2012. It says right in that article that multiple parties at Brigham said that the number they are quoting for the risk are nine times lower than the real risk.”

A transcript of the exchange between Murphy and Shuren follows:
Rep. Tim Murphy: Doctors, doctors, good to have you here. I appreciate this. I want to pivot a little here to talk about and piece together postmarket and premarket analysis and to look at this. In particular, a couple of devices used in women’s health care.
One is called a morcellator. Are you familiar with the morcellator? A device that is supposed to shred tumors etc. but has been associated with complications in women in terms of actually spreading cancer for them. It’s been on the market for 20-plus years, and FDA admitted for the first time it became aware of the safety issue with power morcellators after December 2013—correspondence from a physician citing a case of a family member.
This is someone who just recently had another surgery to remove another recurrence of cancer that was spread by the morcellator. The manufacturer [Johnson & Johnson] was apparently aware of the dangers of this device as early as 2006, based upon a report from Dr. [Robert] Lamparter, a pathologist from central Pennsylvania, who cited about one out of 300 samples of morcellated tissue from his hospital had evidence of a hidden cancer, which is morcellated.
My question is, did the FDA have any evidence of these dangers in 2006 or prior to that? Are you aware of this problem?
Jeffrey Shuren: In the past, the thought was that the risk—what risk of cancer there may be for a fibroma, for a fibroid—was significantly less, and one of the things that we looked into more recently, we came to a different conclusion that the likelihood of cancer is higher.
There’s still disagreement in the community, because, as you know, the [gynecology] health care professional societies disagree. They think we have overestimated the risk of the cancer, we said we have a different perspective, and that’s why we went out and we put contraindications and warnings on the use of that device, that it should only be used in a more limited set—or offered as an option—of women, and think about primarily women who, in the absence of using the device, would no longer be able to bear children, but want to bear children, and we felt in those cases the risk of a cancer is very low. They share the opportunity to weigh in, but we scaled back dramatically how that should be used.
TM: So there’s a case where the science available at the premarket analysis has changed, and once being used in the data, you have a mechanism to go forward on this and make some changes.
Let me ask another question: Brigham & Women’s Hospital was aware of the dangers in 2012. A patient by the name of Mrs. Erica Kaitz was seriously injured in 2012 by the device and then died in 2013, according to reports.
I wonder, do you know if the hospital reported that to the FDA? Would you know?
JS: I’m not aware of that.
TM: Is there a mechanism where the hospital is supposed to report that, or the manufacturer is supposed to report that so you can do an analysis?
JS: So, user facilities have certain requirements for reporting, so do manufacturers, if they become aware of certain events. And what I can tell you is we’ve been looking into those concerns that have been raised regarding reporting.
TM: OK. In a response to Congressional inquiries about this, the FDA admitted that the one out of 350 risk does not address other types of malignancies, which, you would add to that risk, you said. They went on to say the FDA also identified studies showing that morcellated patients had worse outcomes than patients who had not undergone morcellation.
So, this is more than just the issue with just a fibroid or if it’s cancerous. It is also a question of outcomes. Is this something that the FDA is reviewing, also with regard to their stamp of approval on these things, in terms of the outcome measures?
JS: So in terms of the tests we’ve looked at, we think where we have constrained it right now, is for use—is where the benefits outweigh the risks, but we are continuing to look at new data as it arises, and if so, we will act accordingly.
TM: Thank you. There is another issue in women’s health as brought to my attention. It’s a product called Essure. It’s a permanent birth control device that went through FDA’s rigorous premarket approval process.
Yet, despite getting the agency’s approval, it’s been linked to at least four deaths and deaths of five unborn children. Apparently, a total of 24,000 women have come forward, claiming that they have been harmed by this device.
And so the question is, how it remains on the market with potential for problems, and because this has the FDA stamp of approval, these women feel disappointed—they cannot take their cases forward, and feel they don’t have any recourse.
Is the FDA also reviewing this issue as well?
JS: In fact, we held an advisory committee meeting a few weeks ago at our behest to give an opportunity to put what new evidence is on the table to assure that people who wanted to raise concerns about it had an opportunity to provide those concerns.
And we are now currently reviewing the feedback received from the advisory committee, as well as what we have heard from other people as well as the state of the evidence, and we will come out with our conclusions on that to the public.
TM: Thank you. And as this goes through, since this hearing is a lot about premarket analysis, what this comes down to is, I just want to make sure that we are aware of what mechanism you have, because I understand the science of 1996 is different from the science of 2015 and our knowledge base, but to have an ongoing mechanism for review and changes of devices and getting information there and looking at those things.
I’m glad you had some hearings on this, but I’d certainly like to know that that’s part of the system. I’m out of time, but I look forward to hearing your comments on that in the future. Thank you.

Sunday, November 8, 2015

The Lancet and NEJM: Medical Industry Corruption More Dangerous Than All Wars

Shocking Report from Medical Insiders

Published On: Fri, Jun 19th, 2015

A shocking admission by the editor of the world’s most respected medical journal, The Lancet, has been virtually ignored by the mainstream media. Dr. Richard Horton, Editor-in-chief of the Lancet recently published a statement declaring that a shocking amount of published research is unreliable at best, if not completely false, as in, fraudulent.
Horton declared, “Much of the scientific literature, perhaps half, may simply be untrue. Afflicted by studies with small sample sizes, tiny effects, invalid exploratory analyses, and flagrant conflicts of interest, together with an obsession for pursuing fashionable trends of dubious importance, science has taken a turn towards darkness.”
To state the point in other words, Horton states bluntly that major pharmaceutical companies falsify or manipulate tests on the health, safety and effectiveness of their various drugs by taking samples too small to be statistically meaningful or hiring test labs or scientists where the lab or scientist has blatant conflicts of interest such as pleasing the drug company to get further grants. At least half of all such tests are worthless or worse he claims. As the drugs have a major effect on the health of millions of consumers, the manipulation amounts to criminal dereliction and malfeasance.
The drug industry-sponsored studies Horton refers to develop commercial drugs or vaccines to supposedly help people, used to train medical staff, to educate medical students and more.
Horton wrote his shocking comments after attending a symposium on the reproducibility and reliability of biomedical research at the Wellcome Trust in London. He noted the confidentiality or “Chatham House” rules where attendees are forbidden to name names: “’A lot of what is published is incorrect.’ I’m not allowed to say who made this remark because we were asked to observe Chatham House rules. We were also asked not to take photographs of slides.”
Other voices
Dr. Marcia Angell is a physician and was longtime Editor-in-Chief of the New England Medical Journal (NEMJ), considered to be another one of the most prestigious peer-reviewed medical journals in the world. Angell stated,
“It is simply no longer possible to believe much of the clinical research that is published, or to rely on the judgment of trusted physicians or authoritative medical guidelines. I take no pleasure in this conclusion, which I reached slowly and reluctantly over my two decades as an editor of the New England Journal of Medicine.”
Harvey Marcovitch, who has studied and written about the corruption of medical tests and publication in medical journals, writes, “studies showing positive outcomes for a drug or device under consideration are more likely to be published than ‘negative’ studies; editors are partly to blame for this but so are commercial sponsors, whose methodologically well-conducted studies with unfavorable results tended not to see the light of day…”
At the University of British Columbia’s Neural Dynamics Research Group in the Department of Ophthalmology and Visual Sciences, Dr Lucija Tomljenovic obtained documents that showed that, “vaccine manufacturers, pharmaceutical companies, and health authorities have known about multiple dangers associated with vaccines but chose to withhold them from the public. This is scientific fraud, and their complicity suggests that this practice continues to this day.”
Lancet’s Dr. Horton concludes, “Those who have the power to act seem to think somebody else should act first. And every positive action (eg, funding well-powered replications) has a counter-argument (science will become less creative). The good news is that science is beginning to take some of its worst failings very seriously. The bad news is that nobody is ready to take the first step to clean up the system.
Corruption of the medical industry worldwide is a huge issue, perhaps more dangerous than the threat of all wars combined. Do we have such hypnosis and blind faith in our doctors simply because of their white coats that we believe they are infallible? And, in turn, do they have such blind faith in the medical journals recommending a given new wonder medicine or vaccine that they rush to give the drugs or vaccines without considering these deeper issues?

F. William Engdahl is strategic risk consultant and lecturer, he holds a degree in politics from Princeton University and is a best-selling author on oil and geopolitics, exclusively for the online magazine “New Eastern Outlook”.

Monday, November 2, 2015

Administrated tyranny, a national extortion: healthcare costs!

Burns: We need a health care revolution now

Scott Burns,  Dallas Morning News

30 October 2015 
Fidelity Investments’ most recent study of lifetime health care costs made me shudder. It is now almost impossible for working people to educate their children and accumulate enough money to retire. You can’t get there from here.
How do I see such a global conclusion in a report on health care costs? Follow the numbers with me.
The headline number in the report is that a 65-year-old couple can expect to spend $245,000 on health care before they both die. That’s up $25,000 from last year, an increase of 11 percent.
Yes, you read that right. Up 11 percent in a period of low to no inflation. Up 11 percent when retirees will get no cost-of-living increase from Social Security.
The same report tells us that a single man can expect to spend $110,000. A single woman will spend $130,000. Those are intimidating sums. So let’s see what they do and don’t include.
The total expenditure includes Medicare premiums (parts B and D), copays, deductibles and out-of-pocket prescription costs. It doesn’t include dental expenses or long-term care. In each case, the figures assume you have the full sum on hand at age 65.
These figures, by the way, aren’t the kind of bogus claims we get from presidential candidates on the magical power of tax cuts. They’re legitimate research. The Employee Benefit Research Institute reports similar figures. So does the Center for Retirement Research at Boston College.
The numbers vary somewhat, but they converge on one central fact: They are all astronomical relative to the income and net worth of most retirees.
Cutting into net worth
You can see how big a problem this is by checking the net worth of those who are 65 and older. The most authoritative source for this is the Survey of Consumer Finance. The Federal Reserve did the most recent survey in 2013. The health care liability for women is greater than the net worth of 44 percent of women 60 to 65. It is greater than the net worth of 41 percent of men of the same age.
Here’s another way to get a sense of proportion: Use the average monthly Social Security check, $1,291, as a yardstick.
A man with that benefit would pay 85 months — more than seven years — of benefits for medical expenses over his remaining lifetime. For a woman with the same benefit, her higher medical costs would absorb 100 months of benefits. That works out to eight years and four months of benefit checks spent on medical expenses.
It would be ungrateful to complain about some of these increased costs. A portion of the cost increase is due to the ongoing increase in our life expectancies. According to the Fidelity report, the life expectancy of a 65-year-old man has increased from 82 to 85. So the typical retirement would last 20 years.
The life expectancy of a 65-year-old woman has increased from 85 to 87, a 22-year retirement. Added years mean more health care costs.
Eating up benefits
Now let’s combine life expectancy and lifetime health care costs. Health care costs are expected to absorb 85 of 240 months of Social Security benefits for men and 100 of 264 months for women. Change that to a percentage figure and it is 35 percent of benefits for men and 38 percent of benefits for women.
Health care costs are increasing faster than Social Security benefits. That means health care is crowding out the most important source of retirement income for most Americans.
Health care is no longer the large but reassuring elephant in the room. It is the monster in the room, feared by all.
Financial services firms use numbers like this to urge us to save more money. That allows them to appear caring and paternalistic as they push to gather ever more assets. But they miss the point.
Administered tyranny
Our politicians and the vast majority of people in health care miss the point, too.
There is a limit here, and we have reached it. The cost of health care has become an administrated tyranny, a national extortion. It threatens our ability to lead a normal life. People live in fear of any kind of health event, in fear of changes in insurance policies, in fear of cancellation of policies.
People live in fear of health care itself.
It’s time for change. Big change.
Scott Burns is a syndicated columnist and a principal of the Plano-based investment firm AssetBuilder Inc. Email questions to
Twitter: @assetbuilder

Thursday, October 29, 2015

Marijn Dekkers, Bayer CEO: A US Welcome Wagon?

Marijn Dekkers, Bayer CEO: From GE to Germany

Andrew Ward  October 18, 2015

As consolation prizes go, the career of Marijn Dekkers has been a good one. His teenage ambition was to make a living from tennis and he came close, reaching number two in the youth rankings of his native Netherlands and spending several years on the fringes of the professional circuit. But when glory failed to arrive he turned instead to chemical engineering.
Four decades later, as chief executive of Bayer, he presides over Germany’s biggest company by market capitalisation (€90bn), as well as sitting on the board of General Electric, the company where he started out as a research scientist.

The 58-year-old is credited with transforming Bayer from a stodgy chemicals conglomerate into a more focused life sciences group. The latest step came this month with the initial public offering of its Covestro plastics division in the biggest German flotation for years. The IPO turned out to be the financial equivalent of a weak second serve as turbulent market conditions forced Bayer to cut the issue price. But there have been plenty of aces since Mr Dekkers took over in 2010; the share price has more than doubled in res­ponse to steady growth and a series of successful drug launches.
So why, in an era when many chief executives work long into their sixties, is he preparing to quit? An initial five-year contract has been extended by Bayer’s board only until the end of 2016 at the request of Mr Dekkers. He says this was because his children — he has three daughters — will be moving from school in Germany to college in the US. “I need flexibility to spend more time in the US and not have to be at a meeting here on Monday morning that I cannot miss.”
Willowy in stature with a shock of sandy hair, he does not look ready for retirement. But he insists there are no plans for another CEO job; instead he will put family first after a succession of taxing C-suite roles. Likening the pressures of executive life to that of an elite athlete, he says the fainting of his BMW counterpart, Harald Krüger, during a press call at the Frankfurt motor show last month, demonstrated the need for business leaders to protect their health.
“I’m very aware of the strain and stresses on my body, both physically and mentally, and put a lot of measures in place to manage that,” he says. “I know from my tennis days what it is to manage your energy. On the day of a match you need to peak at, say, 2pm not 5pm.”

Born 1957, Tilburg, Netherlands
Education Masters and PhD in chemical engineering from Eindhoven University of Technology
Career 1985-1995: Joined General Electric as a scientist at its research laboratory in Schenectady, New York, and rose to senior positions in GE’s polymers business
1995-2000: Various roles running units of AlliedSignal, the US engineering group later renamed Honeywell
2000-2009: Chief operating officer and later chief executive of Thermo Electron, which becomes Thermo Fisher Scientific after a merger to create the world’s biggest maker of laboratory equipment
2010: Appointed chief executive of Bayer
2012: Joined board of GE
Family Married with three daughters
Interests Played tennis semi-professionally before turning to business
Mr Dekkers witnessed the genesis of the modern, super-CEO at close quarters in the 1980s when he made the trans­ition from laboratory science to management with GE, during the early days of then CEO Jack Welch’s hard-charging leadership. Relatively junior at the time, he had little direct contact with the man who became famous for firing the worst-performing 10 per cent of managers each year. But he recalls: “The company had 350,000 employees and everybody felt they were close to Jack because we would all be very aware of his presence.”
Having survived the annual purges for a decade, Mr Dekkers eventually moved to Honeywell and later built Thermo Fisher Scientific into the world’s largest manufacturer of laboratory equipment during eight years as chief executive.
Despite this pedigree, his move across the Atlantic in 2010 was a surprise. Bayer had always been run by Germans promoted from within the company. “When I arrived, people thought I was American so when I started talking German with a Dutch accent people were a bit relieved,” he says, hinting at local mistrust of shareholder-driven US business culture.
The recent scandal over Volkswagen’s rigging of emissions data has called into doubt the virtues of German corporate governance. Bayer, too, has faced environmental questions over the impact of its insecticides on declining honey bee populations, as well as the myriad ethical controversies that swirl around big pharma.
Yet Mr Dekkers insists the German model of consensual labour relations and strong industrial policy remains a force for good. “I prefer this culture, particularly if you are running a company with a very long time frame,” he says. “In the [US] culture, pressure comes too quickly if something doesn’t go well. People start knocking on your door saying, ‘Why don’t you sell this’ or ‘I want to be on your board as an ac­tivist’.”
But he admits to missing the greater dynamism of US business life and complains of European sniffiness about entrepreneurship. “I lived in Boston and every professor was involved in three start-ups,” he says. “If a professor gets rich through a start-up in Boston everybody admires him or her; here, people are suspicious.”
At Bayer, he found a 150-year-old company with promising new drugs such as Xarelto blood thinner — known generically as rivaroxaban — but weighed down by slower-growing legacy assets. The Covestro IPO marked the completion of an overhaul that has left four remaining businesses: pharmaceuticals, consumer healthcare, animal health and crop science.
There is still wide diversity in products ranging from pesticides and flea collars to cancer medicines and the company’s oldest brand: aspirin. But they do all involve an intervention of one kind or another in the biochemical processes of living species, whether they be plants, animals or humans. This, says Mr Dekkers, positions the group to focus on high-value scientific innovation to meet rising global demand for healthcare and food.
“This is an unprecedented time,” he says, referring to the wave of medical breakthroughs created by advances in genomic science. “It’s like opening your eyes in the morning and seeing things you never saw before.”
He recalls working for Thermo Electron, the predecessor to Thermo Fisher, 15 years ago when it developed a machine that took a full year to sequence the structure of a protein. Today, the same process can be carried out in 20 seconds.
This is greatly accelerating the pace of research, but the data deluge also poses challenges for business leaders in all sectors, he says. “The faster the world moves [the more important is] your ability to absorb things. You get all this information and somehow you have to synthesise it and set the direction.”
Shifting the strategy of a company steeped in German industrial heritage has not always been easy. Bayer remains deeply rooted in its home town of Leverkusen in the manufacturing belt of North Rhine-Westphalia. Its ownership of the local Bundesliga football team, Bayer Leverkusen, symbolises these ties.
Mr Dekkers says he has tried to preserve the best of German culture while encouraging a more entrepreneurial spirit. He likens the process of bringing change to big companies to stretching a rubber band. “You can stretch it, but when does it snap? [If] you force people along at a faster pace than they are capable of . . . you end up out there on your own and no one knows what you are talking about.”

As Mr Dekkers looks forward to spending more time with his family and his tennis racket from the end of next year, he is perhaps also showing that healthy limits can be placed on how long chief executives should expose themselves to the torrid pace of running a multinational company.

Marijn Dekkers
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Marijn Emmanuel Dekkers (born September 22, 1957 in Tilburg, The Netherlands) is a Dutch-American manager and chemist. He's CEO of Bayer AG since October 1, 2010.[1]

Dekkers grew up as the youngest of three children of a merchant in the Dutch city of Tilburg. After attending the local schools, St. Aloysius (primary school) and St. Odulphus (Lyceum), in 1976 he began studying chemistry at the Radboud University in Nijmegen. Three years later he switched to chemical technology at Eindhoven University of Technology, where he received his Master and PhD in chemical engineering.[2] From 1985 he worked in various research departments of General Electric (GE) in the USA and the Netherlands. In 1988 he was Research Director of the GE range of polymers and subsequently held management positions in various polymer units at GE.
In 1995, Dekkers joined Allied Signal (subsequently Honeywell International Inc.) and took over the management of various business units. In 2000, he became Chief Operating Officer at Boston-based Thermo Electron Corporation, one of the world's leading specialists in the manufacture of laboratory instruments. Within a short time, Dekkers implemented a complete corporate reorganization and became President and CEO in 2002. In this role he initiated further extensive restructuring measures, divesting various organizational units and strengthening the company's core business by means of targeted acquisitions, including the purchase in 2006 of the significantly larger laboratory consumables supplier Fisher Scientific. Dekkers thereby created a company (Thermo Fisher Scientific) with 35,000 employees in six business groups.
On January 1, 2010 Dekkers was appointed to the board of Bayer AG, on October 1, 2010 he took over as CEO from Werner Wenning.[3]
On June 3, 2014 Bayer AG announced that the Supervisory Board extended the contract of Marijn Dekkers in line with his own wishes by just two years on expiration of the initial five-year period. Dekkers cited family reasons for extending his contract only until the end of 2016.[4]
Dekkers is a member of the Board of Directors of General Electric in the USA. He is President of the German Chemical Industry Association (VCI), Frankfurt, and Vice President of the Federation of German Industry (BDI), Berlin. Dekkers is also a member of the Business Council and the Business Roundtable, two U.S.-based associations of business leaders and CEOs.
Awards and recognition[edit]
"Manager of the Year 2014" by German business magazine "Manager Magazin" [5]
"Business person of the Year 2015" by the "Finanzen Verlag" publishing group and the readers of its publications "€uro am Sonntag", "€uro" and "Börse online" [6]
"Most Innovative CEO International 2015" by the German industry's "Innovation Award" [7]
In 2013 some controversy was sparked during a Financial Times panel discussion with relation to Bayer's kidney and liver cancer drug Nexavar.[8]
He spoke at a conference in 2014, saying[9][10]
So now, is this going to have a big effect on our business model? No, because we did not develop this product for the Indian market, let's be honest. I mean, you know, we developed this product for Western patients who can afford this product, quite honestly.[11][12][13]
Médecins Sans Frontières responded to Dekkers comment saying that it
sums up everything that is wrong with the multinational pharmaceutical industry. Bayer is effectively admitting that the drugs they develop are deliberately going to be rationed to the wealthiest patients.[14]
Dekkers replied to this, referring to the decision made by the Indian government, not to protect a patent on Nexavar and the intellectual property of Bayer. He also said:
I regret that what was a quick response from me within the framework of a panel discussion at the recent FT Pharma conference has come across in a different way as it was meant by myself. It could not be more opposite to what I want and we do at Bayer.[15]
Marijn Dekkers holds both Dutch and U.S. citizenship. He is married and lives with his wife Andra Moffett Dekkers and his three daughters in Düsseldorf. He is passionate tennis player.
References and Notes[edit]
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    Gisela Maria Freisinger und Martin Noe, Überfliegender Holländer, in: Manager Magazin, January 2010 (1/2010), Vol. 40, pp. 36.
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    Title of Thesis: The Deformation Behaviour of Glass Beaded-Filled Glassy Polymers
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    The original quote causing the debate was "Is this going to have a big effect on our business model? No, because we did not develop this product for the Indian market, let’s be honest. We developed this product for Western patients who can afford this product, quite honestly. It is an expensive product, being an oncology product." – Columbia Journalism Review, January 29, 2014, Videorecording of the panel (19:00 – 19:30)
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External links[edit]

Good Chemistry at Bayer

Aggressive and outspoken, Bayer CEO Marijn Dekkers talks about the problems with the U.S. patent system and government demands for lower drug prices—and how he hopes to drive results at this 148-year-old German firm.

October 8, 2011
"As a tennis player, you win or you lose, and you can't blame anybody," says Marijn Dekkers, CEO of module article chiclet Bayer AG and a former No. 2-ranked junior tennis player in the Netherlands. "So you learn relatively early on when you are winning not to become arrogant. And, as a young child, when you do lose, having to deal with defeat on your own is a pretty good lesson."
Dekkers, 54 years old, has had more wins than losses in his 25-year business career, which has included stints at module article chiclet General Electric, AlliedSignal and module article chiclet Honeywell, and 10 years at what is now module article chiclet Thermo Fisher Scientific, eight of them as CEO. During his tenure at Thermo, the stock price more than doubled, while the market fell 26%.
Nearly 40 years later, tennis continues to inform his decision making: "When you go on the court you have to perform, and that means you have to think about your food, you have to think about your sleep, vitamins, not getting cramps. And you never know if it is going to be raining. So you learn how to manage when you peak in performance. And in business that is actually a very important part of how you manage your day. When you have the critical meeting or presentation, how do you peak for that? Managing your energy is a key thing that you learn as a tennis player."

In October 2010, Dekkers was named chairman of the board of management—the U.S. equivalent of CEO—at Bayer, the $46 billion German pharmaceuticals and chemicals maker best known for aspirin. Bayer (ticker: BAYRY) is expected to have $49 billion in revenue this year. Aspirin, which the company invented in 1897, still brings in $1 billion a year, blockbuster status for a 114-year-old drug.
But other issues, like patent expirations and government pressure on drug pricing, are not so easy, and Dekkers is not shy about speaking out about them.
BUSINESS WASN'T DEKKERS' first career choice, or even his second. Raised in Tilburg, a small city in the Netherlands, he received a classical education, including Latin and Greek. At 16, he was admitted to a prestigious tennis academy in The Hague, where he could train full-time while finishing his studies.
Circumstances intervened. His mother died, and with his two sisters away at college, his father asked him to defer his admission for a year. Without that high-level training and competition, he lost his edge. "That year I sort of lost my connection to tennis," he says.
Dekkers, who remains fit and trim, quickly found another outlet for energy and ambition. "I got more and more focused on my studies and decided to study chemistry and get a Ph.D.," he recalls. "I was not that good a student when I was playing tennis a lot, because I just didn't have the time. But then when I became less of a tennis player I wanted to be a very good student."
And so he did, earning an undergraduate degree in chemistry from Radboud University and a masters and a Ph.D. in chemical engineering from Technical University Eindhoven. His new goal was to become a university professor. "The typical career track for a professor at the university in the Netherlands was to work a number of years in industry and then come back, say, after 10 years, when you are around 40, and take a full professorship," he explains.
At 28, he left to take a position as a staff scientist developing polymer blends at GE's Global Research facility in Schenectady, N.Y. And he didn't look back.
DEKKERS TOOK THE HELM of Leverkusen, Germany-based Bayer at a critical time for the 148-year-old company. Of the company's three segments, pharmaceuticals,is the highest-profile, garnering about $14.5 billion in revenue last year, or 30% of the total and 43% of operating profits. Only one of the company's big drugs, Yaz birth-control pills, has lost patent protection, and the company has a strong pipeline of new drugs. Its cyclical chemicals business, which comprised 30% of revenue and less of profits, has recovered from the last economic turndown. Crop protection, including fungicides, pesticides and disease-resistant seeds, makes up the balance and is a steady single-digit grower.
Some observers argue that the businesses have little in common, and that the company should be broken up, Dekkers says that option is not on the table. The chemist in him explains that they all derive from the innovative use of molecules. And the key to Bayer's success, he says, is and has always been to keep inventing new molecules for which it can charge a lot of money.
Last year, Bayer spent $4 billion on research and development, up 11% over 2009, and it will spend a like amount this year.
Known for charging the net on the tennis court, Dekkers is equally aggressive when he talks about the challenges facing the pharmaceuticals industry.
"It gets harder and harder to spend a lot of money on innovation and to be financially rewarded for it," he says, arguing that the U.S. courts have watered down patent protection. And the big drug makers, he says, are easy targets for governments. "What's easier than just saying to the 15 largest pharma companies, 'We want a rebate'? It is a lot easier than closing 200 hospitals in rural areas in the country, even though that is actually more needed."
HAVING SPENT NEARLY TWO DOZEN years in the U.S., working under some of the best minds in industrial management—Jack Welch and Jeffrey Immelt at GE, and Larry Bossidy at AlliedSignal and Honeywell—Dekkers has strong opinions on the subject.
"It is easy, as a CEO, to get isolated. Usually, if you don't fight it, it will happen, and that's quite dangerous, because then you get very filtered information, and it doesn't allow you to make the right decisions."
At GE Plastics, Dekkers worked closely with Immelt, who he says "was a wonderful communicator and very good at market segmentation." But while he was named technologist of the year in the late 80s for his work with polymers, what he really wanted to do was run a business. Lacking an MBA, he felt his chances of moving up at GE were slim.
So in 1995, he hired on at AlliedSignal, run by former GE hand Larry Bossidy. Over the next five years, he ran three businesses of increasing size. "Bossidy was an extremely results-oriented person," he recalls, "but he gave you the tools to get to the results."
Bossidy returns the compliment, calling Dekkers "a very productive and efficient and smart guy," with a good analytical mind.
AlliedSignal was acquired by Honeywell in 1999. The following year, Dekkers moved to Thermo Electron, a maker of laboratory instruments with 24 separate publicly traded divisions. "I saw there was very good technology there, but pretty much everything else was a mess," says Dekkers, who came in as chief operating officer and moved up to CEO in 2002. "We had 75 different brands."

Some of Thermo's divisions were spun off completely, and the rest were consolidated into a single brand. In 2006, he spearheaded a transformative acquisition, buying the much larger rival Fisher Scientific for $10.6 billion in stock. And Thermo, he takes care to note, paid no premium in the deal. "Every deal is a good idea, but when you pay too much, it quickly becomes a bad idea."
The deal ultimately paid off for shareholders of both companies. Now the world's largest producer of lab instruments, Thermo's shares rose 10% in a sharply down market from the time the acquisition was announced to when Dekkers exited in late 2009.
Dekker's skill at managing a portfolio of businesses and his experience in the capital markets no doubt made him an attractive catch for Bayer.
NONE OF BAYER'S CURRENT big drugs, including Kogenate, a $1.4 billion treatment for hemophilia, and Nexavar, a nearly $1 billion drug for liver and kidney cancer, face imminent patent expirations, and Dekkers says he inherited a strong pipeline with "five or six dream products."
One promising compound is Xarelto, a blood thinner developed with module article chiclet Johnson & Johnson that is now in Phase III clinical trials in the U.S. Dekkers thinks Xarelto could bring Bayer $2.5 billion to $3 billion in annual revenues. But that's not exactly easy money. "Between Johnson & Johnson and us, we will have spent two billion euros [$2.68 billion] on this thing by the time it's commercialized. And we haven't sold anything yet."
Another, Alpharadin, which is designed to treat prostate cancer after it metastasizes in the bones, is also in Phase III. Bone tumors need calcium to grow, Dekkers explains. Alpharadin is a radioactive calcium compound, and when the tumors go after it, the radiation destroys them.

Bayer also produces over-the-counter drugs, such as Aleve and Alka-Seltzer, and it has roughly a third of the global market for aspirin, according to Nicholas Hall & Co., a U.K.-based firm that tracks consumer health-care trends.
Bayer also does a strong business in animal health, and Dekkers points out that ingredients in insecticides that are sprayed on plants, corn, soybeans are also used for tick control and flea control in dogs.
Materials, like plastics for autos and construction, is the straggler in Bayer's portfolio, with sales down 3% from their peak. But Dekkers argues that polycarbonates, which are used in auto manufacturing to reduce weight, can grow faster than GDP.
Bayer's Frankfurt-traded shares, which closed Thursday at €41.14, are down 20% since Dekkers came in, compared with a 10% decline for the MSCI EAFE index.
But Dekkers doesn't fret about the stock price, at least for now. For American CEOs, he says, "the stock price is such a presence all day long. What is the stock doing, and how are investors reacting? What can I do to get the stock price up?
"That characteristic is much less present in a German company, where there is a balance between shareholders, employees, society and of course customers."
Which approach is better?
"It is easy to make quicker decisions here," says Dekkers, who met with Barron's in our New York offices last month, and management has more flexibility.
"There, it is harder to do things quickly. You need to bring more people along," including worker representatives and government officials, "and it is a longer process. But maybe in the end, also more sustainable because you are not just trying to please shareholders in the short term."
And having experienced both approaches?
"I don't think of it just this way or that," he replies. "I look at the conditions that are provided to me and then try to [excel] under those conditions."
So while there may not be big changes at Bayer in the next quarter or even next year, Dekkers, the competitor, is unlikely to play from the baseline forever. Ultimately, he will find relief for shareholders' pain.