Author: Kathleen Boozang

10

“You see then that a man is justified by works, and not by faith alone.” James 2:24

When I heard these words at mass a few weeks ago, my heart soared, because it was the perfect lead-in for a sermon about the urgency of health care reform, based upon Christian notions of distributive justice and social solidarity seeking our collective good.  The punch line won’t surprise you – Not a mention of health care.    Why aren’t  progressives of faith, whether in the pulpit or in the well of Congress, not employing every persuasive tool to advance healthcare reform as an imperative not only for the least among us but for us all?

Evoking religious values has long been effective in achieving social transformation.  This tradition of social reformers, clergy and politicians joining together, and invoking faith to obtain fundamental change experienced its apex during the abolition, anti-Vietnam, and civil rights movements.  Progressives abandoned the device of transcendent vision almost simultaneous with Conservatives adopting this successful script of shared values and worldview based upon God’s will.  The religious right employs Christianity to resist protections against anti-discrimination laws  — the Christian Coalition is currently mobilizing on a bill that would give gays and transsexuals federal protection in the workplace — and to support war — President George Bush famously explained to foreign leaders that God told him to invade Iraq and Afghanistan. 

Televangelists employ prophetic language to preach against social evils, which are, in their view, largely perpetrated by, well, Democrats.  But the prophetic vision also embraces “a vision of a more equitable society characterized by the virtues of solidarity and compassion and of justice inspired by the love of God and neighbor.” (Lisa Sowle Cahill)  Why don’t we hear our elected representatives cry that “respect for life” and “human dignity” compel universal access to healthcare?

The left has ceded public policy grounded in faith to the right.  It can’t be because nobody on the left prays.  A Pew Survey reports that 84% of respondents self-identify affiliation with a specific religious denomination. I interpret that as meaning that progressives go to church and temple too. A Census Bureau 2001 American Religious Identification Study concluded that 76.7% of the U.S. adult population of 208 million is Christian.  Democratic presidential candidates emphasize their faith (Obama, Hillary Clinton, Bill Clinton, Jimmy Carter)  when they run, but as soon as they take office they revert to dry policy arguments for social goals that meet with passionately poetical threats of sin and damnation from the right.  Are Democrats unable to invoke a competing interpretation of faith to inspire outrage that 50 million people living in the United States are uninsured?  Such a position could find more persuasive biblical support than the position that “government takeover” of healthcare is unchristian.  Progressives were likewise paralyzed in the “death panel” debate, with no politician effectively arguing that the over-medicalization of death seemed an ironic position for people of faith who aspire to an after-life with God. 

Many Progressives of faith are organizing to support health care, but Democratic politicians have left behind the rich tradition of invoking faith to achieve social reform.   Nobody even has to use the word God – like Susan Dentzer of Health Affairs, we can simply demand a debate about whether our system is ethical and just.

 

This is a cross-post with Health Reform Watch

0

Sometimes It’s Better Not to be Ranked #1

The Chronicle of Philanthropy lead off its annual executive compensation story with the headline that “Nearly three in 10 of the leaders of the nation’s biggest charities and foundations have taken pay cuts in the past year as the recession causes donations to drop and batters endowments”. 

USA Today interpreted the annual survey results differently, with yesterday’s headline: “Non-profit execs make millions: Big organizations have highly paid leaders,” coupled with the usual USA Today chart, this one listing the leaders of the pack, compensation-wise.  The accompanying article questioned why nonprofit compensation is so high.

How much is too much is a fair question, and one readers of this blog will recall that Attorney General Ann Milgram is asking about Stevens Institute’s President.  The ubiquitous Senator Grassley thinks non-profit salaries are too high, and is using health care reform as an opportunity for reforming more than the health sector – one of the 500+ amendments to the Baucus healthcare reform bill comes from Grassley, who wants to eliminate the presumption of reasonableness afforded federally tax exempt organization salaries as long as boards obtain inter alia a comparability study (which unsurprisingly, most do).         

According to a recent IRS hospital study, “Although high compensation amounts were found in many cases, generally they were substantiated based on appropriate comparability data”.  The IRS is currently focusing on salaries at colleges and universities.   Somewhat unclear is whether the comparability study may include salaries from the business sector – the IRS has waffled so far, but then-New York Attorney General Spitzer was pretty clear in his mind that it was improper for Richard Grasso’s friends on the compensation committee to have relied on for-profit numbers when it came to setting Grasso’s $187 million compensation package as head of the then-nonprofit NYSE.

Some are outraged by non-profits’ salaries, which are, after all, subsidized by donors and the tax-payer, while others think that politicians should let nonprofit boards run their own show.  The argument is that nonprofits have to compete with the business-world for the best talent.

 Is there any law on the subject?  Yes, but it’s rarely enforced.  State nonprofit corporate law contains a non-distribution constraint–that is, nonprofits can’t pay out dividends or excessively pay its employees or those with whom they do business – the money is supposed to be used to further the entity’s mission.  On the tax side, federal law prohibits private inurement and excess benefit, which essentially seeks to accomplish the same goals.  So, on the one hand, critics of excessive compensation do have a legal leg to stand on. On the other, all anyone seems to do about the issue is complain – neither the IRS nor state AG’s have boards particularly concerned about their compensation decisions.  In fact, all boards have to do is follow the right procedure, and their CEO salaries are presumptively reasonable.  So, if all non-profits essentially use the same small group of compensation consultants, and set salaries coincidentally high, then it’s a self-reinforcing system and nobody gets in trouble.

I have little hope that the real questions will be seriously considered, which include what the role of the nonprofit is in our society, and what we expect of nonprofits in exchange for their not having to pay taxes, and for their donors getting tax deductions.  The IRS has begun collecting information on the revised 990 about hospital “community benefit”, but the real question is whether any real change will come out of the whole thing, and whether it will go further than health care.  Nudge would suggest that merely by asking the right questions behavior will change!  I’m more in the Grassley camp of being a noodge….

2

Carnegie in a Post-Downturn Light

Most faculties reacted to the Carnegie Report with a big yawn.  Been there; done that.  MacCrate.

And then the market crashed. 

The number of entry level positions for lawyers has severely contracted.  Big firms have “furloughed” new hires – it remains to be seen whether they really bring them on in January.  Third year students are returning from summer positions with big and medium firms — without offers.  Many firms have cancelled interviews with second year students, and those that are interviewing are hiring fewer summers.  Federal judges want clerks with firm experience – they are receiving resumes from attorneys with four and five years experience; firms want to hire out of clerkships.  Many federal judges are also converting at least one of their clerkships into a permanent position. Many of graduates just now finishing their clerkships have nowhere to go – unless they’ve lined up another clerkship which, of course, hurts graduating students. The federal government is hiring, but lawyers there say they are being inundated with resumes from mid-level associates for entry-level positions.

Firms say their “entire business model” is changing.  Many bet that on-campus interviewing will happen in the Spring rather than the Fall for second years.  Some predict that summer programs will disappear altogether. Others are wagering whether the “apprentice” model will really take hold, because clients allegedly don’t want to pay for the learning curve of first and second year associates. In any case, clients are forcing billing structure changes.  While we don’t know when or where it will all end,  a fair number of entry level lawyers will be backed up in the pipeline (small and medium firms are doing better than many larger firms, so we’ll see what the Spring holds). 

This all raises the question of whether these market changes will affect what we are doing with our students. It makes me wonder whether we should to revisit the Carnegie Report.  Should we be differently preparing students who may face a one- to two-year gap in obtaining legal employment that will provide them with the traditional training they would have received at a law firm?  Should we be filling the “training gap” by offering more externships for courts, government agencies, or nonprofits?  Some in the bar propose externships in law firms, which raises many more issues than can be addressed here.  But to the extent that the law schools funnel free labor to any entities that would otherwise hire attorneys, they will be exacerbating the problem rather than solving it. Presumably, a greater percentage of graduates will be hanging their shingle sooner rather than later, which possibly implicates our curriculum as well – perhaps we should include more courses related to professionalism and starting a law firm, with attendant skills courses focusing on the kinds of transactions in which these graduates are most likely to be engaged in a small firm. 

What , if anything, can we do for graduates who aren’t using their legal training now to enable them to maintain and develop their skill set for the future?

Any re-envisioning of the curriculum in response to a dramatically different market for lawyers, with an increased focus on professionalism and practice, raises questions about who we should look for in new faculty.  The Carnegie Report recommendations were significantly derived from engineering and medical schools, where professors continue to practice their respective professions as academics.  By contrast, law schools have increasingly hired new professors with little to no experience beyond their clerkships.  Many of these professors have neither the skill set nor the self-conception of a practicing lawyer, both of which Carnegie recommended we pass on to nascent lawyers.  Many law schools’ current budgets preclude them from adding significant numbers of contract faculty who might comprise a skills faculty.  Clinics that have historically relied on grant funding are also feeling the squeeze and are unlikely able to expand their capacity, at least as clinics traditionally function.

In sum, current market conditions for lawyers require us as stewards of our institutions to look beyond “what Career Services is doing” to what we as faculty need to be doing to prepare our students to weather hopefully short-term, but possibly long-term changes to the business model of legal practice – which assumes that most of our students will continue to choose this career path.  This should not be done in a vacuum, but requires conversation with multiple sectors of the bench and bar.

2

New Jersey AG Challenges Non-Profit’s Board Oversight

As reported in this morning’s (New Jersey) Star-Ledger “Attorney General Anne Milgram plans to file a lawsuit today against Stevens Institute of Technology, charging the school with fiscal impropriety and seeking to remove its top two leaders, a spokesman for her office said last night.”   According to the story, Milgram met with the school’s board earlier this month, giving it two weeks to agree to her non-negotiable changes, else she would make leadership changes and install independent oversight.

This isn’t the first time a New Jersey corporation has faced a government take-over of its operations.  Former-U.S. Attorney Chris Christie installed a federal monitor to oversee UMDNJ, which is the largest public healthcare system in the country, and engineered the replacement of the board as well as numerous officers.  He also used the Deferred Prosecution tool with Bristol-Myers Squibb to appoint a federal monitor and obtain personnel changes at both the director and officer levels.

UMDNJ and the Stevens Institute of Technology are nonprofits, which means they fall into a block hole with regard to regulatory oversight.  Apparently one of Milgram’s concerns about Stevens is certain executives’ compensation packages.  Well, traditionally, that’s the IRS’s territory. The IRS just concluded a big study of tax-exempt hospitals’ CEO compensation focusing on some “apparent high salaries” and concluded that “nearly all the compensation amounts…were reasonable under the current statutory standard, even though some of the amounts were quite substantial.”  Tax-exempts earn a rebuttable presumption of reasonableness if they follow certain procedures in setting compensation – primarily doing comparability analysis (one apparently outstanding question is whether T/E entities may use salaries from for-profit CEO’s in setting their numbers).  Unsurprisingly, almost every entity studied follows the rules to qualify for the rebuttable presumption.  There’s no reason to think that Stevens hasn’t followed the IRS process.  If that’s true, does this mean that the IRS rules are too lax, or that a state AG may impose different expectations regarding executive compensation?   

It’s too early to know what the NJ AG thinks Stevens problems are, but if there are big problems, she’s really the only person with standing to do anything about it.  Exactly what and how she can affect change is the big question.  The law governing the behavior of non-profits is extremely sparse –there’s almost no common law exploring how fiduciary duties apply to the non-profit.  In short, the AG’s powers are very vague. 

Whatever happens, this process should not occur in secrecy.  While the story would have likely hit the newspapers even if the AG and Stevens had quietly resolved things, we wouldn’t have gotten too many details.  Even now, Stevens has filed a pre-emptive lawsuit against Attorney General Milgram seeking a confidential process to resolve the situation.  While this isn’t the first time we’ve seen prosecutors intervening in corporate operations, we’ve learned little about whether it works, precisely because of the lack of transparency.  What kinds of corporate behavior are so serious as to be unfixable by the board, requiring a government monitor?  Is it good practice for a government official to be firing and/or replacing corporate officers and directors?  Have monitors effected permanent and positive change to the corporate culture?

If prosecutors seek to achieve corporate reform, then there has to be some understanding of the behavior they are challenging, and an opportunity to develop some law to guide boards in the fulfillment of their fiduciary duties.  Maybe a lawsuit with a robust appellate opinion would do nonprofits a lot of good.

2

Disclosing Our (or Our Institution’s) Potential Biases. Or Not.

I teach at a university with no medical school, so we don’t have a conflict of interest (COI) policy addressing teaching, speaking and scholarship.  This isn’t a criticism of my institution – my calls to colleagues at other institutions suggests that most law schools haven’t adopted such a policy; if anything, they fall under a university policy adopted primarily to deal with conflicts of interest in medical research. Indeed, the ABA Law School Accreditation Standards address conflict of commitment (outside activities); a search of AALS Statements on Good Practices produced nothing about faculty conflicts of interest except in the context of serving on an accreditation team; and even the AAUP conflict of interest guidelines focus exclusively on human subject research. 

Given the recent work I’ve done critiquing physicians and medical schools about their inadequate management of COIs, I felt hypocritical about the lack of guidance from my own institution on this issue, and (naively) became excited about the opportunity, given the apparent lack of attention to the issue in the legal academy, to create a cutting edge policy.  Like many law schools, our dean spends a disproportionate amount of time fund-raising, and he’s getting pretty good at it.  My institution is located in New Jersey, where pharmaceutical companies are among the most generous corporate givers, including to my institution.  Wholly unsolicited, we were also the beneficiary of a (very controversial) endowed chair as part of a deferred prosecution agreement (DPA) between the then-New Jersey U.S. Attorney (an alum) and a pharma company.  We were perfectly positioned to lead this self-reflective process, I thought, and could be a thought-leader among law schools.

So, having been steeped in articles about conflicts policies for months, and having nightmares about being the first law school swept up in Senator Grassley’s campaign against COIs, I blithely placed a proposal on a faculty meeting agenda, recklessly assuming it would be a no-brainer, because, I reasoned, lawyers are at least as attuned to and sensitive about COIs as other professions.  I have terrific colleagues who are very thoughtful – about everything, including as I painfully learned, my proposed COI policy. 

Like academic physicians, our faculty fell along the entire spectrum of never seeing a scenario that created a conflict of interest to, as I’m sure some would describe my position, seeing everything as a conflict.  An extremely abridged recounting of a faculty dialogue is illustrative.  I thought that disclosing to an audience, including students in a class, when one had represented one of the parties in a case under discussion was a clear case of a conflict simply resolved by such disclosure. A good place to start, I reasoned, since it is so uncontroversial.  Well, actually, one of my colleagues passionately argued that his legal positions precede his agreement to work on any case, so that his consultations and involvement in litigation do not comprise a conflict, because his positions do not arise from his representation or expert testimony.  Further, even if they did, he felt strongly that his audience should not know that he assisted a particular litigant because it might bias their reaction to his legal analysis. (Really.)  And finally, even if the policy required disclosure of such representation, there should be a statute of limitation on the obligation because…I forget why….

And then there’s indirect financial benefit. Clinical investigators’ holding investments in the product being tested in a trial involving human participants has come under tremendous criticism of late.  I didn’t think it was necessary to go so far as to state that law faculty shouldn’t write about the law’s affect on entities in which they invest, simply that they should disclose that investment interest.  Let me begin by admitting how refreshing it was to learn that some of my colleagues aren’t quite sure what their Wall Street spouses actually do, except that it’s something to do with the stock market.  Acknowledging the conflict, the question then became whether it could be managed by the law professor spouse remaining ignorant of family equity holdings, which could include, of course, investments in entities that are the subject of the professor’s scholarship.  This was the subject of extensive discussion which, if I recall correctly, led to the crafting of language of which I am certain we had about four interpretive understandings, which enabled it to pass when voted upon.

 Our energies were depleted by the time we finished addressing individual conflicts of interest, so we punted on institutional conflicts of interest until this year.  If you are wondering what we could possibly have left unaddressed that would require another year of discussion — remember the DPA endowed chair – it presents a possible institutional conflict of interest for those few faculty who write or speak about prosecution of corporate corruption, DPAs and federal monitors.  Do these faculty have to disclose the institution’s status as a beneficiary of a DPA?  This discussion raised the jurisdictional question of whether our own conflict of interest policy should compel disclosure by a faculty member publishing or speaking in a context ungoverned by a COI policy (which remains the case at many law schools), or whose policy fails to capture institutional conflicts such as this one. It is probably unsurprising to you that the school year concluded before we truly plumbed the depths of these questions. 

I speak frequently at medical schools, where I complete paper-work in advance disclosing any conflicts, and, more recently, am now required to address COIs in one of my first powerpoint slides.  I have begun revealing my conflicts to legal audiences as well, even though I have yet to be asked about it.   I know other law school deans are even more successful than my own in fund-raising.  So, I find it curious that I never hear colleagues at law conferences disclose conflicts, and rarely see an asterisk footnote in law review articles identifying conflicts.  While law professors’ conflicts of interest may not attract Senator Grassley’s attention, our standing as a profession, and our duties to our students and readers suggest that the issue might merit some of our consideration.   

Seton Hall Law School, the author’s employer, is the recipient of grants, donations and endowments from the pharmaceutical industry.  No part of the author’s compensation is funded by these gifts.

8

My Disaffection with Advance Directives, and Maybe Autonomy Too.

I just started teaching the Law of Death and Dying for the umpteenth time.  I’ve always more or less been a part of the cadre of (former in my case) hospital lawyers who advocate for everyone to have an advance directive so that doctors know what they’re supposed to do when you’re incompetent and life and death decisions must be made.  Innumerable studies suggest the Advance Directive experiment hasn’t worked, but we haven’t come up with anything better, and in certain populations (those for whom death in the next decade is a statistical probability due to age or diagnosis), they can help with decision-making.  The war in Iraq has caused me to become much more skeptical about Advance Directives.

Rebecca Dresser of Washington University in St. Louis employs personal identity theory to oppose exclusive reliance on  advance directives, arguing that the competent, functioning person who decides what health care she should receive, say, fifteen years hence is not the same person to whom these directives will apply.  That is, that the person now in a nursing home with Alzheimer’s Disease  who no longer recognizes his wife or children but seems basically content , is not the same “person” who executed the Advance Directive a decade or two ago with a dread of incompetence.

I have tossed my students into this debate every year.  Last year, I unequivocally took the position that Dresser is right, to the consternation of most of my students.  The prior semester, one of my (somewhat older) students was preparing to ship out to Iraq with his National Guard unit. That he enrolled in Death & Dying his semester before deployment was a remarkable thing to me, but I went with it, and we talked quite a bit about advance directives for soldiers. I even toyed with the idea of training law students to assist my student’s unit in preparing their own Advance Directives – this war’s soldiers are much more likely than those of prior wars to return home brain-injured – their torsos are pretty well protected by armor, but they still lose limbs, and the many soldiers who would previously have died are returning home with brain injuries.

But the more I learned about these  soldiers, the more convinced I became that at least for these very young adults leaving for Iraq, Dresser must be right.  There is no way an 18 year old transitioning from his high school foot ball field to boot camp, getting ready to ship out, is the same person as the injured and incompetent (otherwise the Advance Directive would be irrelevant) soldier returning to Walter Reed or a rehab institute.  While my experience with war and soldiers is pretty limited, I found myself unwilling to help the young men and women, many of whom are younger than our students, pre-plan what their treatment decisions were should they got blown up by an IED.

And of course, you can imagine the outrage of most of my students, almost none of whom ever conceived of the remote possibility they’d be plopped down in Iraq or Afganistan. But by rejecting Advance Directives for soldiers, I was refusing to respect their (my students as much as these soldiers) autonomy and constitutionally protected right of self-determination (actually, the constitutional jurisprudence is not so straightforward as they would have it).  To them, I was essentially arguing for a return to paternalism , upending the decades of progress by the adherence to the doctrine of informed consent and patient autonomy.

They are right.  I have become disenchanted with power we accord autonomy.  Sometimes other principles should prevail, and sometimes a decision is patently wrong or irrational or transient.  I can’t bring myself to aid an 18 year old who should be on a date at the movies prospectively decide whether he’s willing to live a life without legs, or imagine whether she can tolerate living with the consequences of brain injury.  My veteran student returned to school this semester.  I look forward to testing my new perspective on him.

3

Alternative Revenue Stream for Private Practice Physicians – Research Investigator

Clinical research is the only way [for a physician in the managed care era] to make a boat payment, quips David Stark, M.D.

 

With increasing frequency, pharmaceutical and medical device companies are turning to physicians in private practice, rather than academic medical centers, to serve as investigators overseeing the 60,000-odd clinical trials each year, between 80 and 90% of which are funded by industry as opposed to, say, NIH. Academic medical centers are losing the “business,” having fallen from 63% to 26% as the site for clinical research between 1994 and 2004. While it might be argued that trials in the private practice setting produce superior results because they occur under circumstances that more closely resemble how the drug or device will actually be used if approved by the FDA, there are significant risks attendant to this phenomenon that have received too little attention.

The ultimate question is whether physicians can compartmentalize the competing incentives that exist in advising patients about whether to pursue conventional therapy or participate in a clinical trial. This is especially true if the physician is being handsomely compensated for each patient she recruits into a trial, and is exacerbated when the physician also has other financial relationships with the trial sponsor (the drug or device company) for, say, speaking and consulting gigs.  The recruitment process for clinical trials is the longest and most costly part of the process – prospective participants have to undergo testing to see if they qualify for the study, and federal law requires that they receive significant amounts of information and have ample opportunity to have their questions answered pre-enrollment. A per capita payment contingent upon successful enrollment of the patient will tempt a physician to fudge on this process and enroll unqualified subjects. This not only may put them at risk because they are too sick, but also skew the research results because they’re not sick enough. Bonuses for meeting enrollment goals only make it worse.

Without impugning physician integrity, how realistic it is for physicians to serve in the dual capacity of treating physician and researcher? Studies have repeatedly confirmed “therapeutic misconception” whereby study participants believe, no matter how clearly told to the contrary, that they are “patients” receiving treatment, rather than “subjects” of research who may be receiving a placebo or an experimental drug. This phenomenon is certainly exacerbated when the patient’s treating physician is doubling as the investigator of the clinical trial. Most patients continue to believe that their own personal physician would be driven solely by their best interests.  Ironically, research shows that some people have more faith in an experimental intervention when they learn that the investigator has a “piece of the action.”

Obviously, significant policy and legal questions arise from this practice, and a more holistic approach to the question of the best way to encourage clinical trials while safeguarding the interests of trial subjects is beyond what I can attempt here. But one possible approach could be drawn from informed consent law – whether statutory or common law, which should require physician disclosure of conflicts of interest to patients. Imagine the beginning of a conversation between doctor and patient/potential research subject:

Doctor: “Just so you know, if you agree to participate in this clinical trial, I get paid $1000 by the manufacturer of the product being tested, but if you don’t, and you just want regular treatment, I’ll only get paid $60 by your insurance company. But, in fairness, that’s because a clinical trial is a lot more work for me….”

But to be honest, I don’t really believe in this solution either. Most recipients of this information either don’t understand it, or have no idea what to do with it, or both. Some fear that too much confusion information might kill trials altogether, which would be a terrible outcome. And there are certainly reasons to fear that such trials are becoming harder to run, to the point where they are not worth the money.

Ultimately, I guess, I want to control how physicians get paid to serve as investigators – the Goldilocks Solution – not too much, and not too little. I want them to be paid just right, so that they are willing to conduct clinical trials, but aren’t tempted to act other than in the patient’s best interest. Of course, what is just right and how to enforce it poses its own problems.

Seton Hall Law School, the author’s employer, is the recipient of grants, donations and endowments from the pharmaceutical industry. No part of the author’s compensation is funded by these gifts.