The advisory board to the new Health Care Solutions Group, a quality-improvement collaborative backed by the Nashville Health Care Council and Vanderbilt University Medical Center, includes chief executives, directors and trustees from some of healthcare's biggest players, particularly from the managed-care and pharmaceutical sectors.
The board members' stock holdings and related executive leadership positions raise questions by some as to whether or not the group can keep its promise to stay nonpartisan as it works on shaping policy and legislation at the national level. Those outside interests represent a wide range of businesses whose dealings and controversies have been high-priority topics on Capitol Hill.
How those interests affect the group remains to be seen. While the group's board is still in its infancy-and more members are expected to be announced-what's clear is that it's going to be difficult to separate their own interests from the broader ones of the organization.
Not that this is lost on any of the board members. Thomas Cigarran, chairman of American Healthways and a Health Care Solutions Group board member, said that the board will make recommendations based on data-driven, well-tested practices and not be influenced by other interests.
"We have no political agenda, no political view," Cigarran said. "We're about coming up with the best solutions. We're not about advancing the interest of any segment of the industry versus any other."
The group was formally unveiled in Washington last week (Oct. 24, p. 8).
In a group interview with several members of the board, Cigarran said that the members have been instructed to keep competing interests from influencing the group so it can better tackle the challenge of growing into a repository for data collection and analysis. What's more, the group said that it would refrain from any lobbying efforts and instead rely solely on the input of 40 or so members to help sway legislators and policymakers.
Cigarran added: "We recruited people who checked their guns at the door."
Still, it will take an awfully big gun rack.
A search of Securities and Exchange Commission filings and news databases shows that at least seven of the group's members who are board members have significant holdings in various healthcare companies-many of which have had legislation proposed on Capitol Hill that would greatly affect their standing. Consider:
Cigarran is chairman of American HealthWays, a publicly traded disease-management company in which he also recently held more than 400,000 shares, according to public filings. He also is chairman of specialty hospital operator and owner AmSurg Corp.; the most recent SEC filings indicate he owned more than 200,000 shares.
Nancy-Ann DeParle, who headed HCFA before it became the CMS, sits on the board of four big names in healthcare: Cerner Corp., a technology company; DaVita Corp, a dialysis services provider; Guidant Corp., a medical devicemaker; and Triad Hospitals, a for-profit hospital owner and operator. Recent filings show she owned 2,498 shares in DaVita and was a director at Accredo Health before it was bought by Medco Health Solutions. She also is a member of the Medicare Payment Advisory Commission and a trustee of the Robert Wood Johnson Foundation.
Ken Melkus also was a director at Accredo. In 1996, Melkus sold a company he founded, called HealthWise of America, to United Healthcare in an all-stock deal. Bill McGuire, chief executive officer of United's parent, UnitedHealth Group, is also on the Health Care Solutions Group board.
Healthcare economist Uwe Reinhardt is a board member at Triad Hospitals and owned 2,000 shares in Triad, according to the most recent filings. He also is a director at Amerigroup Corp. and Boston Scientific Corp. Reinhardt receives $60,000 in compensation from Boston Scientific annually and owned 18,000 shares in the company, according to filings.
Edwin "Mac" Crawford is chairman, president and CEO of Caremark Rx. Crawford held 80,000 shares in the company, according to recent filings.
Jack Bovender Jr. is chairman and CEO of HCA and owned more than 260,000 shares of the company, according to recent filings.
Jane Henney is a director of AstraZeneca, and she owns about 500 shares in the pharmaceutical company. According to recent filings, she owned 6,549 shares of Cigna Corp., where she is a director. She also is a director at AmerisourceBergen Corp and owned 2,039 shares in the company.
But governance experts say it's difficult for any association-particularly in healthcare-to avoid naming board members who have ties to outside businesses. The goal is to get big enough names within the industry so that they can trade on their political capital and access as a way to advance the association's ideas. Often those big names come with some baggage, said consultant Eric Lister, managing director of Ki Associates, a consultancy that works with healthcare organizations on governance issues.
"When an organization is in the process of creating itself, it obviously looks to attract trustees and directors with credibility, knowledge and connections," said Lister, who works with membership organizations and associations on governance issues.
Lister said that the primary duty of the board is one of loyalty, and trustees or directors can only best serve the group that they represent by coming clean and acknowledging any conflicts of interests they might have.
Lister says that the healthcare industry is particularly ripe for conflict because "everyone has been on boards before." His advice: "It is critical that they create guiding governance policies that allow them to pass the `front page of the newspaper' test every time."
Dick Cowart, a past-president of the American Health Lawyers Association and an attorney for Vanderbilt University Medical Center, Nashville, said he agrees, and that the group will have to police itself to avoid any conflicts of interest.
Cigarran said he is aware that any perception of outside interests could be detrimental to the group, especially in its efforts to grow into a national player. "We all have interests in our (own) organizations, but this is a bigger interest," he said. "This is about what we can do to make the whole healthcare system better for the country, for our employees or our families. And that's the kind of people that we tried to recruit."
Suzanne Delbanco, CEO of the Leapfrog Group, said that board recruitment depends largely on an organization's goals. "A board needs to help guide the missions, the vision and strategy of the organization, and they have to be suited to whatever that is," she said. The Leapfrog Group shares one board member with the new Health Care Solutions Group-Robert Galvin, director of General Electric Co.'s global health department sits on both boards. Depending on the mission of the group, "Having luminaries and notables may be the best thing in achieving its visions," she adds.
Other members of the group include executive director David Osborn, Rep. Jim Cooper (D-Tenn.); Janet Corrigan, president and chief executive at the National Committee for Quality Health Care; Harry Jacobson, vice chancellor for Health affairs at Vanderbilt University; and John Wennberg, director of the Center for the Evaluative Clinical Sciences and a professor at Dartmouth Medical School.
Most healthcare associations have conflict-of-interest policies in place that restrict officers from having direct or indirect interests in outside businesses. At the American Heart Association, for instance, people who have interests or relationships in an outside business must refrain from "attempting to exert any influence on the association," according to its policy.
"For some people it's difficult," Cigarran said. "But those are not people we want to participate in this thing. We want all the real world experience that they had in running their companies. Everyone on this board ... is exactly like that. The others we recruit will be the same."