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The Coming Bear Market: Part II How to Prepare
Issue #492, October 16, 2017

Some Observations on Cemeteries
Issue #Interim Bulletin #491A, October 12, 2017

The Coming Bear Market: Part I: The Myth of Buy and Hold Forever
Issue #491, October 09, 2017

The Market makes New Highs
Issue #490, October 02, 2017

The Importance of a New High
Issue #489, September 25, 2017

A Little Insurance: Wealth, War and Wisdom
Issue #488, September 18, 2017

Some Observations
Issue #487, September 11, 2017

How to be Successful in Your Career
Issue #486A, September 07, 2017

How NOT to Buy a Home
Issue #486, September 04, 2017

This Week in the Market
Issue #485, August 28, 2017

Is the “Trump Bump” Running Out of Gas?
Issue #484, August 21, 2017

Gold is on the Move
Issue #483, August 14, 2017

The Importance of Estimation
Issue #482, August 07, 2017

Buying Art and Collecting: Part II of II
Issue #481, July 31, 2017

Buying Art and Collecting in General, Part I of II
Issue #480, July 24, 2017

Physicians need to be More Forceful: Follow-up
Issue #479, July 17, 2017

Physicians need to be More Forceful
Issue #478, July 10, 2017

Your First “Real” Investment
Issue #477, July 03, 2017

Leasing a Watch: Don’t
Issue #476, June 26, 2017

The Importance of Your Children having a Job
Issue #475, June 16, 2017

The Problem with Medical Student Debt is—the Med Schools
Issue #474, June 12, 2017

Critters and Varmints in your Home and Yard
Issue #473A, June 07, 2017

Leveraged ETFs
Issue #472, May 29, 2017

Leasing a Vehicle: Don’t!
Issue #471, May 22, 2017

Issue #470, May 15, 2017

More on Buying Jewelry
Issue #469, May 08, 2017

Buying Jewelry: Gold, Diamonds and Pearls
Issue #468, April 30, 2017

Thomas Sowell: Part III of III
Issue #467, April 24, 2017

Thomas Sowell: Pat II of III
Issue #466, April 17, 2017

Live Close to Where You Work
Issue #465, April 10, 2017

Medtronic in Hospital Management
Issue #Interim Bulletin #464A, April 07, 2017

Thomas Sowell: Part I of II
Issue #464, April 03, 2017

A Political Contribution a an Investment: Part II of II
Issue #463, March 27, 2017

A Political Contribution as an Investment: Part I of II
Issue #462, March 20, 2017

Buffett Selling Vacation Home
Issue #461, March 13, 2017

Advanced Placement (AP) ourses
Issue #460, March 06, 2017

The Importance of a Credit History
Issue #459A, March 02, 2017

A Credit Card Scam
Issue #459, February 27, 2017

The Electronic Health Reord
Issue #458, February 20, 2017

Issue #457, February 13, 2017

Platinum and Palladium
Issue #456, February 06, 2017

Economic Outlook for 2017: Part II of II
Issue #455A, February 02, 2017

Economic Outlook for 2017: Part I of II
Issue #455, January 30, 2017

A Story From Vegas
Issue #454A, January 25, 2017

Land Donation Deals and the IRS
Issue #454, January 23, 2017

The Theory of Gambler’s Ruin
Issue #453, January 16, 2017

Student Loans: But Wait, There’s More!
Issue #452, January 13, 2017

A Second Home
Issue #Interim Bulletin #451A, January 04, 2017

The Consumer Confidence Index
Issue #451, January 02, 2017

Social Security
Issue #450, December 26, 2016

My Outlook for 2017: Part II of II
Issue #449, December 19, 2016

My Outlook for 2017: The Market
Issue #448, December 12, 2016

Medicine in 20 Years
Issue #447, December 05, 2016

Higher Interest Rates
Issue #446, November 28, 2016

Trump and the Markets: The Bad and Ugly
Issue #445A, November 23, 2016

Trump and the Markets: The Good
Issue #445, November 21, 2016

Negative Trends: The Suits aren’t Makin’ Steel
Issue #444, November 16, 2016

The New DOJ Fiduciary Rule
Issue #443, November 07, 2016

Barron’s Conference, Part IV of IV
Issue #442, October 31, 2016

Barron’s Conference, Part III of IV
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Barron’s Conference, Part II of IV
Issue #441, October 24, 2016

Barron’s Conference, Part I of IV
Issue #440, October 20, 2016

This Newsletter
Issue #439A, October 12, 2016

Memoirs of US Grant: Vol II
Issue #439, October 10, 2016

More Points on Collecting, Investing and the Economy
Issue #Interim Bulletin #438A, October 05, 2016

Personal Memoirs of US Grant
Issue #438, October 03, 2016

Ideas for a High School Part-Time Job
Issue #Interim Bulletin #437A, September 29, 2016

Collecting, Investing, and the Economy
Issue #437, September 26, 2016

Free College
Issue #436A, September 22, 2016

A Military Commitment to Pay for Med School
Issue #436, September 19, 2016

When a CD isn’t a CD
Issue #435, September 12, 2016

I Made a Mistake
Issue #Interim Bulletin #434A, September 07, 2016

What is Your Spare Time Worth?
Issue #434, September 05, 2016

Credit Cards and Bonus/Loyalty Points
Issue #433, August 29, 2016

The Write-off of Student Loans
Issue #Interim Bulletin #432A, August 25, 2016

412 Retirement Plans
Issue #432, August 22, 2016

Join the Club
Issue #Interim Bulletin #431A, August 18, 2016

The Case for Precious Metals and Hard Assets
Issue #431, August 15, 2016

When the US went off the Silver Standard
Issue #430, August 08, 2016

Why NOT to Open a Restaurant
Issue #429, August 01, 2016

Some Tips on Life Insurance
Issue #428, July 25, 2016

More Observations on Negative Interest Rates
Issue #427, July 18, 2016

Issue #426, July 11, 2016

Is a PhD Worth It? Part II of II
Issue #425, July 04, 2016

Is a PhD Worth It? Part I of II
Issue #424, June 27, 2016

Avoid Part-time real Estate Agents
Issue #423, June 20, 2016

Issue #422, June 13, 2016

The Problem with Auction Reserves
Issue #421, June 06, 2016

Make Full Use of Your Capital Investments
Issue #420, May 30, 2016

The Fed’s Announcement
Issue #419, May 23, 2016

Quit While You’re Ahead: A True Story
Issue #418, May 16, 2016

The Precious Metals
Issue #417, May 09, 2016

Negative Secular Trends: Part Ii of II
Issue #416, May 02, 2016

Negative Secular Trends: Part I of II
Issue #415, April 25, 2016

Not Winning is not the same as not Losing
Issue #414, April 19, 2016

Behavioral Economics: Part II: Weaknesses
Issue #413, April 11, 2016

Behavioral Economics: Part I: Valid Points
Issue #412, April 04, 2016

The Most Important Books I’ve Read
Issue #411, March 28, 2016

Secret to Success: Take Risks and do Things Differently
Issue #410, March 21, 2016

The Over-Priced Food Presentation Hustle
Issue #409, March 14, 2016


By Robert M. Doroghazi, M.D., F.A.C.C.

Medtronic in Hospital Management

Issue #Interim Bulletin #464A, April 07, 2017

    This is from the MedPage Today article on 3/30/17 “Bringing Device Makers into the Hospital: Good Business or Ethical Risk?” by Nicole Lou.
    UH Cleveland is the first hospital in the US to outsource the management and operation of their cath lab to medical device maker Medtronic (MDT). This business model has already met with success in Europe, saving the hospitals money and expanding MDTs business portfolio. It also raises questions about hospitals controlling their operations, and whether physicians can use devices from other manufacturers.
    MDT launched its Hospital Solutions business in 2011, and in 2014 purchased the Italian firm NGC, which already managed several cath labs. This began after a senior official said MDT “needs to switch from a medical device company to a healthcare company…if we want to be part of the solution of the delivery of healthcare”. Insourcing—bringing a company in to do a job onsite—is become more common across many industries. 
    Maastricht Med Center in the Netherlands saved $2.5M in one year from MDT health directives, including a new time-in, sign-out procedure, more best practice procedures, and staff development and educational programs. The results decreased cancelled procedures, increased efficiency, and boosted patient satisfaction. Imperial Healthcare in London also reports positive results.
    MDT says the goal at UH Cleveland is to “leverage functional expertise, such as inventory management, as well as consulting capabilities in various process improvement and change management methodologies, to identify opportunities to improve system capacity, cost efficiencies, and patient engagement (RMD comment: Vigyaz, Hungarian, “look out for danger”. That is corporate double-speak. It can mean anything)…The health system will maintain responsibilities for all activities requiring professional licensure and full discretion…to medical decision making and patient care, including decisions related to procurement and device selection”.
    Encouraging such arrangements is the focus of Medicare and Medicaid to bundle charges. Hospitals are looking to improve efficiency and reduce costs while MDT is looking to increase penetration. Such partnership also gives companies access to performance data (see my #2 comment below).
    Concerns among physicians include A) whether they will be pressured to use certain devices or products over others, esp. if they believe the products aren’t equal. B) If products of other companies will even be available.  C) They will be working alongside company employees. D) What happens if a different company is the first to come out with a new procedure or device not carried by MDT?
    RMD comment: Here’s what I see as some of the issues.
    1) This illustrates and reinforces what I see as the continued “corporatization” of Medicine. The government, huge insurance companies, huge publically-traded pharma and instrument-makers, with the ability to raise billions in the capital markets, and who spend millions on political lobbying, hospitals (whether profit or non-profit) run by huge corporations. Physicians have little power to stand up to this onslaught, and are continually being marginalized and losing influence.
    2): From above: gives manufacturers access to performance data. Say there are 5 interventional Cardiologists at a hospital. One is “weak” (has below-average results), 2 average, and 2 first-class. Will the administrators of the cath lab have the discretion to direct all procedures to the 2 stars, and put the other 3 out of business?
    3) Everyone should always try to improve efficiency and hold down costs. But it is safe to say that hospitals won’t, Heaven-forbid, share the savings by lowering charges to patients, or raising the salaries of nurses and other front-line employees. Rather, they will retain the savings to protect profits and pay the “Suits” their 6, 7, and 8-figure salaries.
    In support of this view, see my Commentaries:
    A) Negative Secular Trends in Medicine: High Hospital Profits. American Journal of Medicine. November, 2016.
    B) Negative Secular Trends in Medicine: High CEO Salaries. American Journal of Medicine. February, 2016.
    4) It is naïve in the extreme to believe that physicians won’t be pressured to use the in-house products. Does a wild bear…, is the Pope…is a frog’s heinie water-tight? Physicians employed by the hospital will have no choice: they must do what they are told, or they will lose their jobs.
    5) If things don’t work out well, how does a hospital extricate itself from the agreement? Agreement ends on December 31, on January 1, you must hire all new cath lab employees and stock hundreds of new products. Hard to imagine a smooth transition.
    6) Who has ultimate control of the lab and the employees? Is the Director responsible to their superiors at MDT or a hospital executive? Two guesses, and one doesn’t count. One person must have ultimate control. All I can say for sure is that it won’t be a physician.
    7) From the point of MDT, I find the idea innovative, and I don’t blame them for pursuing it. It is up to all participants—hospitals, physicians and MDT—to make sure the patient is best served.
    8) There would be far less concern if the insourcing was a management company whose expertise was to run cath labs, with no ties to an instrument maker.
    9) I’m sure the talking heads will have answers to all my questions. Be skeptical.
    I need to think about this a lot more, and need more information and insight. I would greatly appreciate any feedback (source will be held in confidence).

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