Bad Medicine

Published: November 10, 2014

By Jim Lichtman
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On November 8, Dennis Wagner, writing for The Arizona Republic, reported that the Veteran’s Administration, charged with the healthcare needs of American veteran soldiers since 1917, “has been under fire since April, when Arizona whistle-blowers set off a national furor by exposing mismanagement, falsified data, delayed medical care and a broken ethics system.”

Wagner points to many changes that have taken place since an Inspector General’s report pointed to a widespread breach of trust.


“• Based on findings in Phoenix, the VA Office of Inspector General launched probes at more than 90 veterans’ medical facilities and uncovered system-wide manipulation of appointment times. Investigators concluded that some VA staffers were intentionally ‘gaming’ the system, in part to secure performance bonuses.

“• In House and Senate committee hearings, VA executives were interrogated and the department’s bureaucracy was reviled. Secretary Eric Shinseki resigned and his Cabinet post eventually was filled by Robert McDonald. Other top administrators were forced out.

“• Congress passed bipartisan reform legislation that included $16.3 billion to expedite care. The Veterans Access, Choice and Accountability Act also empowers the VA secretary to more rapidly fire and replace executives for misconduct, negligence and incompetence.

“• Veterans organizations such as the American Legion and the Veterans of Foreign Wars staged nationwide protests, and the VA ordered hospital administrators to conduct quarterly town halls for feedback. Although many vets praised their doctors, nurses and other staffers, they vilified VA leaders for running an unresponsive, broken and dishonest health-care system.

“• The VA reached out to hundreds of thousands of veterans who were sidetracked in a bogus scheduling system, some waiting more than a year for doctor appointments. Additional medical workers were hired, new clinics were opened, and patients who could not get appointments within the VA were referred to private care.

“Yet while the reforms and initiatives seem expansive, debate is growing about whether the federal government’s largest civilian department has changed at its core.

“The VA, with more than 300,000 employees, operates on a budget of $164 billion. Members of Congress and veterans’ advocates continue to rip the agency for a lack of transparency and accountability.”

Part of that lack of transparency came to light by way of a recent e-mail from a surgeon who pointed me to a November 6 story in The Washington Times.

“Unauthorized and potentially counterfeit, dangerous surgical devices and medical supplies have flowed unchecked into the Department of Veterans Affairs supply chain and into VA operating rooms, according to internal agency correspondence from a major supplier who blamed new procurement rules.

“The bogus supplies gained a foothold when the department started using reverse auctions to fulfill some contracts, according to both department officials and a 2012 memo from Johnson & Johnson, the world’s largest medical device business. In the memo, the company told the VA it was getting surgical supplies bought from unauthorized distributors through the so-called ‘gray market,’ and said those supplies raised serious questions about patient safety, according to emails obtained through the Freedom of Information Act.

“Officials also warned the VA that an ongoing corporate investigation into the gray market showed how some unauthorized sellers were passing off products stolen from other hospitals.

“We do not believe that the VA intended for its efforts to utilize new procurement tools such as reverse auctions to result in these outcomes,” a company official wrote.

Really? With all the waste, fraud and deliberate abuse pointed out by the IG report, this “company official” says they never intended these outcomes. Did this official read the IG report?

It gets worse.

“The Johnson & Johnson memo included a list of seven gray market surgical supply purchases by agency medical centers in a half-dozen states. But the company made clear there were more examples across the VA.

“The warnings were issued months after the VA had a fierce internal debate over using reverse auctions, which have sellers compete to offer goods or services at the lowest price.

“A top contracting official, Jan Frye, had put a halt on reverse auctions earlier in 2012, citing a ‘groundswell’ of complaints from VA suppliers. But within weeks, the VA reversed after fierce lobbying from FedBid, the politically connected contractor handling the VA’s reverse auction platforms.

“An inspector general’s report earlier this year issued a scathing rebuke to the VA over its dealings with FedBid, and said a VA procurement official, Susan Taylor, had improper contacts with FedBid. The inspector general recommended FedBid be disbarred. Ms. Taylor resigned soon after the report.

“Emails obtained by The Times show concerns about reverse auctions persisted.

According to Johnson & Johnson, a South Carolina VA facility received a delivery of ‘trocar’ surgical devices from an unauthorized distributor that was sent to VA without a box and was instead wrapped in yellowed packaging and rubber bands.”

I’m going to look deeper into the VA issue.


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