Politics and Medicine - Some Not-For-Profit Hospital Executives Paid To Advise Drug, Medical Device, Financial

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Some Not-For-Profit Hospital Executives Paid To Advise Drug, Medical Device, Financial

Jan Drew

2006-07-31, 9:25 pm

http://www.medicalnewstoday.com/med...d=47526&nfid=nl

Some Not-For-Profit Hospital Executives Paid To Advise Drug, Medical Device,
Financial Companies
The New York Times on Monday examined how some not-for-profit hospital
executives are "paid thousands of dollars" to "advise companies
confidentially on how best to sell their drugs, medical devices and
financial services to hospitals." The Times highlights the Healthcare
Research and Development Institute, a for-profit company that is owned by
about 36 hospital executives and is underwritten by about 40 "handpicked"
corporate members, all suppliers to hospitals. Although it is unclear
exactly how much HRDI executives are paid for their consultations -- in
which hospital officials and their spouses receive free "luxury" trips to
attend conferences at resorts -- Gary Mecklenburg, HRDI's chair said, it is
between "$20,000 [and] $30,000" annually. Mecklenburg, who also is CEO of
Northwestern Memorial Hospital in Chicago, receives $50,000 annually for his
consulting services, including $18,000 for serving as HRDI's chair,
according to the Times. Vendors who attend the conferences -- such as Eli
Lilly, Johnson & Johnson, Morgan Stanley and Citigroup -- typically pay
$40,000 to receive advice from the hospital executives at the conferences,
Mecklenburg said. Additional access to hospital executives, such as on-site
visits to hospitals, can cost companies over $55,000, the Times reports. The
company used to decline access to its Web site and would not disclose who
its members were, "[b]ut that is changing," the Times reports.
Investigation
According to the Times, HRDI's practices have come under scrutiny recently
as Connecticut Attorney General Richard Blumenthal (D) investigates whether
HRDI enables certain vendors to purchase access to influential hospital
executives urging them to buy their products. Blumenthal said the consulting
arrangements fostered by HRDI might lead to hospitals not receiving the best
terms, cost or quality in its supply agreements. To date, he has issued more
than 100 subpoenas, mostly to hospital suppliers, related to his inquiry.
"At the very least it suggests insider dealings -- an insidious, incestuous,
insider system," Blumenthal said. Mark Leahey, executive director of the
Medical Device Manufacturers Association, expressed concern that HRDI
members include leaders of groups that negotiate large purchasing contracts
for hundreds of not-for-profit hospitals. "These conflicts prevent
innovative, cost-effective products from entering the market," he added.
However, Mecklenburg -- who also is a former chair of the American Hospital
Association and who serves on the board for medical device supplier Becton,
Dickinson -- said, "I would call this market research," adding that HRDI is
working to "improve products and services in health care -- not more
complicated than that" (Bogdanich, New York Times, 7/17).