By Paul Levy
First Posted at Not Running a Hospital on 1/25/2014
Curious observers have been asking me why someone at the University of Illinois would knowingly aid and abet an effort to use the University’s reputation to support the commercial objectives of a private firm. I suspect that, when the facts come out, it will be about the money. But I am just speculating.
Let’s imagine the following scenario. A major manufacturer of medical equipment, which has succeeded in part by recruiting surgeons to be its spokespersons with the public and in medical conferences, finds that its place in the capital market is faltering. This may be a result of a number of adverse incidents related to the technology. It may be because the market for its machine has become saturated, and it is facing a harder time entering new market segments.
- Sell-side analysts aren’t happy with the lack of revenue guidance offered by Intuitive Surgical (ISRG) after its Q4 earnings report.
- J.P. Morgan says the earnings call was a disappointment, and that the 2014 outlook is murkier than just a week ago.
- Morgan Stanley says its expectations for guidance were muted, but its below consensus 2014 EPS outlook is coming down another 10%.
- BAML says the stock remains Buy rated but investors mustbrace for another year of negative earnings growth.
- Canaccord says it wouldn’t be buyers on weakness.
This would be an opportune time to conduct a direct-to-consumer national marketing campaign, burnished by the reputation of a major academic medical center. Some people in that center have been participating in financial gain from the company in the form of “compensation from the company for providing education services to other surgeons and patients.” Or, perhaps in other forms.
So the company and those people decide to create an advertisement, loaded with people in white coats, to give the impression of an institutional endorsement of the company’s product.
Or maybe I have it totally wrong. Maybe it is an absolute coincidence that doctors who have been receiving compensation from this company have appeared in the advertisement. Maybe they posed for another picture, which was used without authorization by the company. Maybe they are totally innocent dupes.
The University requires its researchers to file financial disclosure forms every year.
Did the doctors referred to in the advertisement file these forms? Most, as researchers, are required to: Dr. Antonio Gangemi reports on LinkedIn that he and Dr. Pier C. Giulanotti “have started two main research projects aiming to develop guidelines for training and credentialing in robotic surgery.” Dr. Enrico Benedetti lists extensive research activities on his UIC home page,as does Dr. Bernard Pygon.
Questions to be answered: Are these forms a matter of public record? Since they are financial disclosure forms designed to promote unbiased research and encourage public confidence in the accuracy of research endeavors, we’d like to think so. What do they say? Is there any review of those forms by University compliance administrators? For that matter, does the University have compliance administrators who are charged with reviewing the accuracy of such forms? Is there any reconciliation between the dollars listed on the forms and the state tax filings of those individuals? After all, the University is a state entity and could require such a reconciliation.
That’s a start. This whole issue could be cleared up by the University’s Board of Trustees. So far, the entirety of their public response is published here: