The Sheldon Silver Medical Connection: None Dare Call It Health Care Corruption

Yves here. Aside from the independent merit of this post, in calling out an aspect of the Sheldon Silver scandal that the media has sanctimoniously overlooked, I am also a big believer in encouraging the use of the word “corruption” when it fits, which is sadly all too often these days.

By Roy Poses, MD, Clinical Associate Professor of Medicine at Brown University, and the President of FIRM – the Foundation for Integrity and Responsibility in Medicine. Cross posted from the Health Care Renewal website

None dare call it health care corruption… even when allegedly a prominent academic physician traded referrals of cancer patients to a law firm, resulting in referral fees to a prominent politician who worked for the firm, for government research grants to the physician’s foundation and another foundation on whose board he sat, and a job for his son at yet another non-profit organization.
***

Health care corruption, remains a largely taboo topic, especially when it occurs in developed countries like the US.  Searching PubMed or major medical and health care journals at best will reveal a few articles on health care corruption, nearly all about corruption in less developed countries far away from where the authors live.  When the media may publish stories about issues related to health care corruption, they are almost never labelled as such.

For example, last year we discussed two widely reported cases of alleged political corruption.  One included allegations that a company producing a supposedly anti-inflammatory dietary supplement bribed Robert McDonnell, the former Governor of Virginia.  Mr McDonnell was later convicted and sentenced to two years in jail for public corruption (look here).  Another included allegations that Rick Perry, the former Governor of Texas abused his power by cutting funding of the state anti-corruption unit, which was investigating whether the Texas Cancer Research and Prevention Institute was awarding grants based on political influence rather than clinical and methodological merit. The reporting of both cases underplayed the health care aspects, and never mentioned health care corruption, or words to that effect.

Yet Transparency International’s report on global health care corruption suggested health care corruption occurs in all countries.  A recent TI survey showed that 43% of US citizens believe the country has a health care corruption problem (look here).  Perhaps some US citizens have been reading between the lines, or have personal experiences with health care corruption. However, as long as we cannot talk about this problem openly, there is no chance it will be solved.

In January, 2015, a case of apparent political corruption made headlines.  It turns out to also be a case of apparent health care corruption.  

New York Assembly Speaker Sheldon Silver Charged with Fraud, Extortion, and Receiving Bribes

In late January, 2015, from early reporting  by the Capital New York,

The federal corruption case against Assembly Speaker Sheldon Silver rests in part on his alleged scheme with a doctor who referred asbestos cases to the Weitz & Luxenberg law firm where Silver is of counsel.

A criminal complaint from U.S. Attorney Preet Bharara alleges that Silver obtained referrals of asbestos
cases from a doctor affiliated with a university in Manhattan, referred to as ‘Doctor-1,’ by using his position as speaker to quietly direct $500,000 in state funds to the doctor’s research and give ‘additional benefits’ to the doctor and the doctor’s family.

The Doctor-1 described in the criminal complaint appears to be Dr. Robert Taub of Columbia University, based on details outlined in the criminal complaint, and confirmed by a secretary at his office and separately by a knowledgeable source. Taub specializes in mesothelioma research, for which it is hard to find research funding.

Regarding the advantages gained by Mr Silver,

Silver allegedly received millions of dollars in referral fees from Weitz & Luxenberg, and was credited with referring more than 100 clients, many of whom were referred for asbestos cases, according to the complaint.

The firm paid Silver $3.2 million for referrals related to asbestos cases between 2003 and 2014, according to the complaint. Prosecutors claim that several of those asbestos clients said they had been referred to Doctor-1 for treatment, and said the doctor had also recommended they retain Weitz & Luxenberg as their counsel.

Regarding the benefits to Dr Taub,

The complaints say the scheme began when the doctor allegedly asked Silver if his firm would help fund mesothelioma research and Silver declined. But prosecutors claim the doctor became aware that Silver wanted him to refer asbestos patients to Silver and the law firm for counsel, in exchange for funding for his medical research.

Doctor-1 started referring patients to Silver, and Silver began directing state funding to the doctor’s research, the complaint alleges.

In December 2003, Doctor-1 requested a $250,000 grant from Silver to establish a Mesothelioma center at a university, according to the complaint. The complaint also says that the request was granted, and Silver approved payment from a pool of discretionary funds paid for by health care-related assessments that was under Silver’s sole control until the year 2007.

Silver later directed another grant from the same pool of funds, also worth $250,000, to the Mesothelioma Center.

In 2008, the speaker directed a further $25,000 discretionary member item grant to a not-for-profit where the doctor was a board member, according to the complaint.

In 2012, the complaint alleges that Doctor-1 asked Silver for help in finding a family member a job with a nonprofit organization that ‘received millions of dollars in member items and capital funding from Silver.’

A New York Times article verified that “Doctor-1” was Dr Robert N Taub, a previously highly reputed academic.  

In the criminal complaint against Sheldon Silver, he is identified simply as “Doctor-1.”
But Dr. Robert N. Taub, who headed a Columbia University center dedicated to curing a rare form of cancer caused by asbestos, is no ordinary doctor.
Also,
In 2002, Dr. Taub created one of the nation’s few mesothelioma research hubs, the Columbia University Mesothelioma Center. He was also active in an organization that raised money for research, sitting on the scientific advisory board of one of the few nonprofits created to help victims, the Mesothelioma Applied Research Foundation. The foundation, which awards research grants, relies heavily on gifts from law firms.

Finally, the NY Times story identified Dr Taub’s family member who got a job through Mr Silver’s intervention,

 According to the complaint and people briefed on the investigation, Dr. Taub also asked Mr. Silver in 2012 to help his son, Jonathan, find a job. The speaker arranged for an interview at OHEL Children’s Home and Family Services, a social services organization based in Brooklyn that had received millions of dollars in state funds from Mr. Silver.

After the allegations were made public, the NY Times also reported that Dr Taub “is leaving his position as head of a Columbia University cancer center, and the center is being disbanded,” and the New York Post reported that Mr Silver is stepping down from his position as Speaker of the NY Assembly.

Political Corruption Highlighted, Health Care Corruption Ignored 

Corruption as defined by Transparency International is abuse of entrusted power for private gain.  Thus TI does not limit the term to cases involving politicians or government. Clearly, the allegations above were for corruption in this sense, and that corruption involved health care.

Furthermore, the alleged facts in the case implied,
–  Dr Taub abused his patients’ trust in him by directing them to Mr Silver’s firm, whether or not that was the best choice for these patients
–  Dr Taub abused the trust he inspired as a medical researcher by trading referral of his patients for government research grants
–  Dr Taub personally profited from these arrangements by obtaining a job for his family member, and a grant for another (non medical research) foundation on whose board he sat.
–  By directing grants to Dr Taub’s research foundation, and the foundation on whose board Dr Taub sat, Mr Silver allocated scarce research funding for private gain, rather than for clinical, public health, or scientific reasons.

However, the coverage of the charges against Mr Silver, and particularly those relating to Dr Taub, was solely in terms of political corruption.  While the media reported the facts related to health care, there was no mention of health care corruption.

Even the pithy op-ed on the case by Prof Zephyr Teachout, now widely known for her expertise in corruption, and for increasing awareness of the importance of corruption in modern US society, did not mention health care corruption.  Her op-ed did note the earlier case of former Virginia Governor McDonnell,

As with the recent conviction of the former Virginia governor Bob McDonnell for receiving improper gifts and loans, a fixation on plain graft misses the more pernicious poison that has entered our system.

However, Professor Teachout did not note that these gifts and loans resulted from Governor McDonnell using his influence to market a supposed anti-inflammatory nutritional supplement.

Summary

Professor Teachout has decried how the definition of corruption has narrowed.

A fixation on plain graft misses the more pernicious poison that has entered our system.

However, our system is poisoned not only by political, but by health care corruption.  

However, when health care corruption is clearly the issue, the news media will not use that term.  Only when the corruption is occurring far away, usually in a supposedly benighted less developed country, will the news media or the scholarly medical, health care, and health policy literature discuss it as such.  So the anechoic nature of health care corruption has not changed since my post of August, 2014.

If we are not willing to even talk about health care corruption, how will we ever challenge it? 

So to repeat an ending to one of my previous posts on health care corruption….  if we really want to reform health care, in the little time we may have before our health care bubble bursts, we will need to take strong action against health care corruption.  Such action will really disturb the insiders within large health care organizations who have gotten rich from their organizations’ misbehavior, and thus taking such action will require some courage.  Yet such action cannot begin until we acknowledge and freely discuss the problem.  The first step against health care corruption is to be able to say or write the words, health care corruption.

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19 comments

  1. mmckinl

    Yves ! … Call it what it is ! …. Racketeering, pure and simple … Both the Dems and Rethugs are selling access and decisions and that is why they fight so fiercely to feather-bed commissions with their minions for high paid seats. The more commissions the better. Large corporations can afford the freight especially when these entities limit competition or set rates. Just look at the PG&E PUC scandal in California.

    The major political parties are modeled after the Mafia. Gingrinch really got the ball rolling when he basically turned chairmanships into profit centers to launder political contributions. The Koch Brothers are trying to set up their own mob by throwing money into politics. The politicians they buy sell the public interest for pennies on the dollar as in Wisconsin … Racketeering plain and simple …

    1. NotTimothyGeithner

      Gingrich also did a number with his recruitment profile. The GOP once just recruited prices and local scions interested in buying a title and following orders, but now they really make an effort to find real thugs.

  2. Carla

    Thank you, Yves, for posting this important piece.

    However, even the good Dr. Poses pulls his punches with a sentence like this: “Such action will really disturb the insiders within large health care organizations who have gotten rich from their organizations’ misbehavior, and thus taking such action will require some courage.”

    How about: “Such action will really disturb the insiders within large health care organizations who have gotten rich from their organizations’ CRIMES, and thus taking such action will require some courage.” There. Fixed it for ya.

  3. Jim Haygood

    ‘Dr Taub abused his patients’ trust in him by directing them to Mr Silver’s firm, whether or not that was the best choice for these patients.’

    Whether or not Silver’s firm, Weitz & Luxenberg, was the best choice for mesothelioma patients depends on whether they in turn exerted improper influence on the New York judiciary to ensure a friendly venue. As the WSJ reported:

    The firm’s lawyers have poured hundreds of thousands of dollars in contributions to New York state political campaigns, including more than $200,000 into the 2010 bid by Kathleen Rice, then the Nassau County district attorney, to become state attorney general. (Ms. Rice is now a Democratic U.S. congresswoman.)

    [Managing partner Gary] Klein said the firm “has always been a major supporter of the Democratic Party.”

    http://www.wsj.com/articles/sheldon-silver-charges-highlight-allure-of-asbestos-cases-1422059465

    And the Democratic party gave us Obamacare, which has health insurers submitting pro forma invoices for billions in subsidies, to be reconciled ‘later.’ This all looks perfectly clean, if you close your eyes and put your palms over them!

  4. Nat Scientist

    The results of Richard Nixon’s imposition of Corporatism over Science and Medicine were not an unintended consequence. Military mercantilism and global financialisation couldn’t handle the Truth.

    1. NotTimothyGeithner

      The HMO Act of 1973 was another shining example of the turd that is bipartisanship. It was Ted Kennedy’s project in the Senate. George Carlin was a prophet.

  5. Terrence Jared

    It’s significant that Dr. Taub resorted to this sort of financing because of the lack of available funding for mesothelioma research. Reportedly he was able to fund the Columbia University Mesothelioma Center as well as the non-profit Mesothelioma Applied Research Foundation with money obtained through Sheldon Silver’s apparent abuse of his position as an elected official. Dr. Taub also apparently obtained a personal benefit through Silver, who allegedly found a job for Dr. Taub’s son. Frankly, I’m rather sympathetic to Dr. Taub. The quid pro quo was that he refer his mesothelioma patients for possible litigation to the prominent law firm of Weitz & Luxenberg, which is clearly no slouch when it comes to litigation. It’s not as though he referred them to some storefront divorce lawyer down the block. But is all this corruption? Yes, of the ordinary, everyday variety we’ve come to expect from our government at all levels. It clearly is not just (for example) Joe Bruno or Sheldon Silver: corruption is part and parcel of the way we do government. Dr. Taub’s choices were realistic, pragmatic ones: funding for research into a rare and devastating form of cancer is nearly non-existent so Dr. Taub apparently took the “Robin Hood” approach to obtain this funding, with a little benefit on the side (a job) for his son. And now Dr. Taub is no longer doing mesothelioma research and the Columbia Center has been shut down. So who benefits from this little drama? We’re not really going to get better government as a result of this. But those people who suffer from mesothelioma, a devastating form of cancer, have lost a research center because conventional funding has pretty much ignored them.

      1. beans

        Sev,
        Have you ever heard of Gresham’s Law? This is corruption – call it what it is. Dr. Taub played the game and got the goodies. He got national recognition, experience and lots of contacts that will benefit him with or without the Columbia center. What he did makes it very difficult for any other doctor seeking to grow his/her research and clinic without corrupt influence from persevering. Why would they when colleagues like Dr. Taub just exchange a wink and a nod with deep pockets to get the things doctors used to have to earn?
        Call it what it is and turn the tide within healthcare.

    1. bob

      “Reportedly he was able to fund the Columbia University Mesothelioma Center”
      What did Columbia bring to the table?

      The rest is sycophantic dribble. Robin Hood? Was he on contingency? He kept one third, plus expenses, for each body he collected?

      I remember the story a little different.

  6. AJ

    I think many of you are making assumptions here that are leading you to think this is corrupt, when it might be otherwise. Did the speaker benefit from this? Yes. Does that mean it was illegal? No. Additionally, does that mean it wasn’t in the best interest of the people of the state? No. I have extensive experience working with the nys budget, specifically the assembly side of the budget. So, here’s how this could have worked in what I believe to be a legal manner:

    Shelly is an employee of the law firm. As part of his job for the law firm he approaches the doctor requesting the doc to send patients to the firm. I believe that’s perfectly legal. They have a conversation and the doc mentions that he will consider referring his patients, and goes on to ask if the firm can help with finances for his research- after all, it’s hard to get funding for this asbestos stuff.

    Shelly tells the doc the firm can’t do it, but Shelly recognizes the doc’s need as well as the public’s need for research in this area. So, he tells the doc to get some information to his secretary or to the health committee. Again, I believe legal. This happens often. If you have a financial need for the benefit of the people of New York and the legislature can help, then you get referred to the speaker’s staff or to the appropriate committee. Most often, you get referred to the speaker’s staff. If it’s a legislative need, then you go to the committee staff (also speaker’s staff). If you have a financial need, then you’re going to speaker’s staff and definitely to ways and means people with your request.

    It is very common for people and groups to schedule a meeting with the speaker’s staff hoping to convince the staff that they should be included in the budget for x amount of dollars. The staff reviews the request pretty thoroughly. They meet as a team of experts (For example, if an environmental request, then you have environmental law experts, scientists, and legislative people on the team.) to determine whether or not it is good for the people of NY, the party, the speaker, etc.

    If the speaker’s staff reviewed the request and approved it, then it would go to the next level and finally to ways and means for final review/calculations and addition to the budget. So, that would be the assembly budget proposal. That budget would, of course, be reviewed by minority staff and finally voted on in the Assembly.

    After that the assembly and the senate and the governor agree on something the governor can sign. So, an additional two groups of people and their staffs are reviewing the budget and signing off on the money for the asbestos research.

    Based on that process, I believe it’s possible that this was not corrupt. It’s unlikely that the money for research was paid out without being carefully analyzed. It was likely vetted at various levels of the legislative process.

    One way to check this would be to get a copy of the nys assembly budget for the years in question. If the money for the research is a line in the budget, then it was vetted, and I would say has a good chance of being okay. If the money was part of the health care chunk administered by the assembly, then it might not have required a line in the assembly budget and you would have to subpoena the right person for records of the vetting that would include meetings, documents, emails, etc. For a period of time this healthcare aspect did not require disclosure on a line. If it’s not a line, then the chance that it’s corrupt certainly goes up, but isn’t a certainty.

    In my experience, the speaker was genuinely concerned for the people of the state of New York. I realize that doesn’t mean he didn’t break the law, but the budget process for the assembly is more complex than people realize.

    1. zapster

      This sort of scenario occurred to me, as well, especially considering the research focus. As you say, such programs are needed. I have had a friend die of mesothelioma. It’s a bad one, and it’s not all that rare. If the research was legitimate and not just a front for sucking up state money, losing it is a tragedy.

      My question then is whether there were other programs that might have been better recipients. Was it actually analyzed thoroughly? And the part about the son being given a job by a connected org. Would that org have been threatened if they’d refused?

      The fundamental question then is “Was the public interest foremost?” I have my doubts.

    2. bob

      “Shelly is an employee of the law firm. As part of his job for the law firm he approaches the doctor requesting the doc to send patients to the firm”

      This relationship is no different than oil companies funding all “experts” in geology. The funding would presumably go toward “research” that might effect the legal cases that his firm was perusing, in a positive way. It’s much more than a one way, “for the children” robin hood transaction. It’s one hand washing the other.

      As to the budgeting mechanics- “Silver approved payment from a pool of discretionary funds paid for by health care-related assessments that was under Silver’s sole control until the year 2007.”

      If there is an honest need for the type of research he was doing, then it shouldn’t be discretionary.

      The general idea of your comment, and the reverence you seem to shower “the process” with is sorta creepy, especially when you’re explaining that the speakers office, run by the speaker, is on top of everything. He’s the king.

      He also works on commission for what amounts to an ambulance chasing law firm.

      1. AJ

        Bob, I see what you’re saying on one hand. I didn’t mean to shower the process with reverence. I’m simply pointing out that this could have happened like most budget items happen- someone has a need and they take it to the Assembly for consideration.

        Furthermore, I’m not suggesting that Shelly is on top of everything. Quite the contrary- there are too many things going on and too many people for him to know what’s going on. I don’t agree or disagree with the process- it is what it is. But the staff is on top of most of the budget items. And obviously, the Speaker is too, because that’s how can wiled authority and reward loyalty. To your point of Shelly as the King, well that’s the problem isn’t it?

        It would be the same with another Speaker. The sheer number of people who “serve at the pleasure of the speaker” is staggering. You know if that’s you when you’re hired at the Assembly, because you sign an agreement stating just that. It’s creepy, indeed. Assembly staff used to joke about the creepiness of it. Lots of secrets running through those halls.

        1. bob

          I think you’ve had too much of the kool-aid.

          “I’m simply pointing out that this could have happened like most budget items happen”

          I’m simply pointing out, from the facts presented above, that your reasoning with respect to how things “might” have happened is patently false.

          The money was assigned from a DISCRETIONARY pool, at the discretion of the Silver, and only after Silver had been passed his first referral.

          There’s a whole story about it above this. Even some facts.

          “Furthermore, I’m not suggesting that Shelly is on top of everything.”
          “To your point of Shelly as the King, well that’s the problem isn’t it?”

          Are there two of you in there? The words sprinkled between the two statements don’t help to resolve the underlying inconstancy of the statements.

  7. zapster

    I think I am seeing the glimmerings of another corruption story here in California. It appears to be collusion between groups of doctors and “pain clinics.” The shape of it, as dimly as I can perceive it, is they force patients to these clinics, who then put them on drugs that are antagonists, meaning they must take much more to get any help with pain, leading to scary amounts of fake “tolerance”, selling massive amounts of these in-patent drugs, and leading to expensive “detox” programs. I suspect there’s a nice kickback system behind all this.

  8. mrtmbrnmn

    C’mon folks! When virtually everything in this benighted country is a criminal enterprise or an interconnection of a number of them, is it any surprise that our grotesque “health care” system is way out front of that ghoulish and corrupt parade? Sheldon Silver is a mere baton twirler in the marching band. His $4 million in kickbacks is chump change and took him 20 years to accumulate. On the reviewing stand taking the passing salutes are the usual suspects: Big Pharma, the Insurance Mafia, the hospital conglomorates, the Techno-bandits, and all the other brothers-in-arms of the Wall Street/Washington DC Axis of Evil. Sheldon Silver may have just gotten the hook, but the band plays on…Alas!

  9. bob

    Health care corruption was also a part of NSA whistle-blower William Binney’s story. He took some NSA tech and looked at medicare billing. He immediately saw the fraud, and according to him, it caused a giant backlash from above that ultimately ended in his leaving the agency after being viciously harassed.

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