Cozy relationships between hospital chief executives and healthcare companies they do business with may raise ethical questions
If hospital employees, including pathologists, wonder why their hospital uses a certain company’s products and services it may be because their Chief Executive Officer (CEO) sits on the Board of Directors of the same companies from which the hospital buys products and services. That’s the suggestion in a recent Boston Globe investigative report.
In “Boston’s Hospital Chiefs Moonlight on Corporate Boards at Rates Far Beyond the National Level,” The Boston Globe reported that, in Boston, hospital CEOs at the city’s academic medical centers frequently sit on the boards of healthcare companies with which their hospitals do business. However, because the investigative reporters did not list the healthcare companies which had Boston hospital CEOs as board members, clinical laboratory managers and pathologists cannot determine from the article if their medical laboratories are using products from those same companies.
According to The Globe, five of seven CEOs and Presidents of Boston’s major teaching hospitals also receive compensation for serving as directors of publicly traded companies. And in their roles as corporate board members, hospital CEOs often receive stock in these companies, making the value of their remuneration potentially worth millions of dollars, The Globe reported.
Not Illegal, But Is It Ethical?
The Boston Globe’s investigation noted that such moonlighting, while not unheard of elsewhere in the country, is commonplace in Boston, raising ethical concerns despite conflict-of-interest policies aimed at limiting outside relationships.
“Hospitals in Boston and elsewhere that allow this outside corporate work do so under the terms of conflict-of-interest policies,” The Globe reported. “A Globe review of more than a dozen hospital conflict-of-interest policies across the country found more similarities than differences. Almost all require hospital trustees to approve a hospital chief’s outside board work and consider certain factors, such as the amount of business a company does with the hospital and time required.
“But the policies offer limited evidence about actual practices,” The Globe added. “Trustees typically retain significant discretion over what is permitted or barred, and their deliberations are generally hidden from the public. It is hard to tell if the relative rarity of hospital chiefs in other cities holding outside directorships is because of a lack of interest or opportunity, or is the result of trustees saying no.”
Though no laws were broken, some questioned the ethics of such actions. Nevertheless, The Boston Globe wrote that “Debra O’Malley, a spokesperson for Secretary of State William Galvin’s office, said Fenwick’s actions did not appear to violate the law: She is required to disclose in writing to the state that she is a lobbyist for the hospital and the bills she lobbied on, which she did, O’Malley said. That information is publicly available.”
And though The Globe reported that Boston Children’s Hospital had “declined to answer detailed questions about [Fenwick’s] lobbying efforts,” the paper wrote that a hospital spokesperson said, “[Fenwick’s] directorships are publicly disclosed in filings with the Securities and Exchange Commission.”
Fenwick retired from Boston Children’s Hospital in March 2021. The Globe noted that at that time her Teledoc Health stock, which was compensation for her board work, was worth $8.8 million. Additionally, she had been paid $2.7 million annually as CEO of Boston Children’s Hospital.
Avoiding Conflicts of Interest
Bad optics created by a Boston hospital CEO receiving seven-figure compensation for serving on the board of directors of a publicly traded company is not new. In July 2020, former Brigham and Women’s Hospital President Elizabeth Nabel, MD, resigned from the board of biotech company Moderna (NASDAQ:MRNA) “to alleviate any potential concern about the conduct or the outcome of the COVID-19 vaccine trial when Brigham and Women’s Hospital was identified by NIH as one of the clinical sites for the Phase 3 trial,” a Moderna press release states.
On March 1, 2021, Nabel also stepped down as Brigham and Women’s Hospital president. She then rejoined the Moderna board of directors on March 10, 2021, the press release noted.
In a STAT editorial, titled, “Hospital CEOs, Med School Leaders Shouldn’t Sit on For-Profit Health Care Company Boards,” endocrinologist and former Dean of Harvard Medical School Jeffrey Flier, MD, wrote, “As dean, I vigorously supported the value of robust interactions between faculty and industry to advance innovation and human health, and still do. In my current status as a professor of medicine at Harvard, I serve on several for-profit and not-for-profit boards. I learn from this work, and I believe I am making useful contributions as a board member. But I also believe that the considerations governing such relationships should be judged differently for institutional leaders.”
Flier maintains there are multiple reasons why hospital and medical school leaders should not sit on for-profit boards despite the expertise they bring to the table, including:
The time commitment required,
The “extraordinary compensation packages” they receive in their full-time jobs,
The potential for complicated “business intersections,” and
The risks to an “institution’s reputation for integrity.”
“I recommend that hospital CEOs and academic leaders at the level of Deans and Presidents devote their full attention to their well-compensated day jobs and defer positions on the boards of for-profit companies—and the unavoidable conflicts they raise—to the post-leadership phase of their careers,” Flier wrote.
While cozy relationships between hospital and academic medical center leaders and for-profit healthcare companies may not directly impact hospital pathologists and staff, it is worth staying aware of potential conflicts of interest.
Scientist described the speed at which SARS-CoV-2’s full sequence of genetic material was made public as ‘unprecedented’ and medical labs are rushing to validate tests for this new disease
In the United States, headlines scream about the lack of
testing for the novel Coronavirus
disease 2019 (COVID-19). News reporters ask daily why it is taking so long
for the US healthcare system to begin testing large numbers of patients for
SARS-CoV-2, the virus that causes COVID-19. Yet, pathologists
laboratory scientists know that new technologies for gene sequencing
and diagnostic testing are helping public health laboratories bring up tests
for a previously unknown new disease faster than at any time in the past.
At the center of the effort to develop accurate new assays
to detect SARS-CoV-2 and help diagnose cases of the COVID-19 disease are medical laboratory
scientists working in public health
laboratories, in academic medical centers, and in research labs across the
United States. Their collective efforts are producing results on a faster
timeline than in any previous discovery of a new infectious disease.
For example, during the severe
acute respiratory syndrome (SARS) outbreak in 2003, five months passed
between the first recognized case of the disease in China and when a team of
Canadian scientists cracked the genetic code of the virus, which was needed to
definitively diagnose SARS patients, ABC
In contrast, Chinese scientists sequenced this year’s
coronavirus (originally named 2019-nCoV) and made it available on Jan. 10,
2020, just weeks after public health officials in Wuhan, China, reported the
first case of pneumonia from the unknown virus to the World Health Organization
Increases in sequencing speed enabled biotechnology
companies to quickly create synthetic copies of the virus needed for research. Roughly
two weeks later, scientists completed sequencing nearly two dozen more samples
from different patients diagnosed with COVID-19.
Lower Sequencing Costs Speed COVID-19 Diagnostics Research
Additionally, a significant decline in the cost of genetic synthesis is playing an equally important role in helping scientists slow the spread of COVID-19.In its coverage of the SARS-CoV-2 outbreak, The Verge noted that two decades ago “it cost $10 to create a synthetic copy of one single nucleotide, the building block of genetic material. Now, it’s under 10 cents.” Since the coronavirus gene is about 30,000 nucleotides long, that price reduction is significant.
Faster sequencing and cheaper access to synthetic copies is
contributing to the development of diagnostic tests for COVID-19, an important
step in slowing the disease.
“This continues to be an evolving situation and the ability to distribute this diagnostic test to qualified medical laboratories is a critical step forward in protecting the public health,” FDA Commissioner Stephen M. Hahn, MD, said in an FDA statement.
However, the Washington Post soon reported that the government-created coronavirus test kits contained a “faulty component,” which as of February 25 had limited testing in the US to only 426 people, not including passengers who returned to the US on evacuation flights. The Post noted that the nation’s public health laboratories took “the unusual step of appealing to the FDA for permission to develop and use their own [laboratory-developed] tests” for the coronavirus.
“This is an extraordinary request, but this is an extraordinary time,” Scott Becker,
Parallel efforts to develop and validate tests for COVID-19
are happening at the clinical laboratories of academic medical centers and in a
number of commercial laboratory companies. As these labs show their tests meet
FDA criteria, they become available for use by physicians and other healthcare
Following the FDA’s March 13 EUA for the Thermo Fisher test,
Hahn said, “We have been engaging with test developers and encouraging them to
come to the FDA and work with us. Since the beginning of this outbreak, more
than 80 test developers have sought our assistance with development and
validation of tests they plan to bring through the Emergency Use Authorization
process. Additionally,” he continued, “more than 30 laboratories have notified
us they are testing or intend to begin testing soon under our new policy for
laboratory-developed tests for this emergency. The number of products in the
pipeline reflects the significant role diagnostics play in this outbreak and
the large number of organizations we are working with to bring tests to
Pharma Company Uses Sequencing Data to Develop Vaccine in
Even as clinical laboratories work to develop and validate diagnostic tests for COVID-19, drug manufacturers are moving rapidly to develop a COVID-19 vaccine. In February, Massachusetts-based biotechnology company Moderna Therapeutics (NASDAQ:MRNA) announced it had shipped the first vials of its potential coronavirus vaccine (mRNA-1273) to the National Institute of Allergy and Infectious Disease (NIAID) for use in a Phase One clinical trial.
The Wall Street Journal (WSJ) reported that NIAID expects to start a clinical trial of about 20 to 25 healthy volunteers by the end of April, with results available as early as July or August.
“Going into a Phase One trial within three months of getting the sequence is unquestionably the world indoor record,” NIAID Director Anthony Fauci, MD, told the WSJ. “Nothing has ever gone that fast.”
There are no guarantees that Moderna’s coronavirus vaccine
will work. Furthermore, it will require further studies and regulatory
clearances that could delay widespread distribution until next year.
Nonetheless, Fauci told the WSJ, “The only way you
can completely suppress an emerging infectious disease is with a vaccine. If
you want to really get it quickly, you’re using technologies that are not as
time-honored as the standard, what I call antiquated, way of doing it.”
In many ways, the news media has overlooked all the important
differences in how fast useful diagnostic and therapeutic solutions for
COVID-19 are moving from research settings into clinical use, when compared to
early episodes of the emergence of a new infectious disease, such as SARS in
The story the American public has yet to learn is how new
genetic sequencing technologies, improved diagnostic methods, and enhanced
informatics capabilities are being used by researchers, pathologists, and
clinical laboratory professionals to understand this new disease and give
healthcare professionals the tools they need to diagnose, treat, and monitor
patients with COVID-19.