All posts by Nael Shiab

When going to the hospital kills you

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A micrograph of bacterium Clostridium difficile. Credit: Wikimedia Commons.
A micrograph of bacterium Clostridium difficile. Credit: Wikimedia Commons.

The number of Canadians infected by bacteria spreading within hospital walls is increasing, according to the Public Health Agency of Canada. Healthcare related infections are now the fourth leading cause of death in Canada with thousands of victims every year and it costs millions of dollars.

When you go to the hospital, it is to be cured. However, for 220,000 Canadians every year, it is not what happens. Staying at the hospital will get them sicker than ever.

These unlucky patients contract diseases triggered by bacteria multiplying inside medical institutions, also called nosocomial infections. On an annual basis, between 8,000 and 12,000 patients do not survive the infection.

“If you get a nosocomial infection, for sure, you need more treatments, more interventions,” explains Joanne Langley, professor of epidemiology at Dalhousie Medical School. “Each added illness increases the chances of things going wrong.”

On average, a patient having complications because of healthcare related infections stays 2.5 times longer in the hospital, a situation that costs more than $100 million per year for the healthcare system.

Source:  The Economics of Patient Safety in Acute Care, Canadian Patient Safety Institute
Source: The Economics of Patient Safety in Acute Care, Canadian Patient Safety Institute

Numbers going up

“The natural tendency for these rates is to trend up incredibly,” says Virginia Roth, co-chair of the Canadian Hospital Epidemiology Committee.

For example, the number of infections caused by Clostridium difficile was up by 6% in 2012, compared to six years earlier, according to the most up-to-date data from the Public Health Agency. In 2007, this bacterium, which spreads through contaminated feces in hospitals, killed 30 people. In 2012, the number went up to 49.

Medical authorities are also monitoring the Staphylococcus aureus, a bacterium transmitted by skin-to-skin contact, mostly between healthcare workers and patients. “In 2012, there were 7,000 cases. That’s a lot of Canadians that are affected by this,” says Langley. The infection rate increased by more than 1,000% since 1995. More people are getting sick because of it, but more patients are also carrying it without having any symptoms.

While some of the infections are well known, others also emerge. It’s the case for VRE, acronym for Vancomycin-resistant Enterococci. This infectious microorganism lives in the human intestine. In 1999, only 10 cases where noticed. Since then, it is spreading exponentially. In 2012, 482 patients were affected by it and the Public Health Agency indicates that the data understates the gravity of the situation.


Multi-resistant bacteria

“Normally, we would treat VRE with vancomycin,” explains Langley. “But the bacterium acquired the ability to destroy this antibiotic. So that makes it a very difficult infection to treat now.”

Staphylococcus aureus also became a multi-resistant bacterium that complicates the work of doctors and threatens the life of patients. Moreover, it is a difficult microorganism to get rid off. It can survive on the floors for several days and even several months on fabrics.

For C. difficile, the situation is different: the microorganism is naturally resistant. When a patient is given antibiotics, the non-resistant bacteria present in his gut die, but not C. difficile. The bacterium then starts to multiply in dangerous proportions while producing toxins. It is also a very difficult bacterium to remove. C. difficile creates spores able to survive up to 5 months on surfaces such as tables or medical equipment.

What are the causes?

For the Canadian Union of Public Employees, it is very clear: there is not enough money attributed to the healthcare system. According to their reports, hospital beds were cut by 36% between 1998 and 2002. The data from the Organisation for Economic Co-operation and Development (OECD) shows that there are now less than 3 beds per 1,000 citizens in the country. Canada is at the end of the organization list, just before China.

The Union claims that the bed cuts increased the hospitals occupancy over 90%, creating a favourable context for outbreaks. The Public Health Agency of Canada states itself that overcrowding is a risk factor for VRE.

Another cause: healthcare workers do not wash their hands enough. “Typically, hands hygiene rates, not only in Canada but globally are significantly low,” says Suzanne Rhodenizer Rose, President-Elect for Infection Prevention and Control Canada (IPAC). We verified the hand washing rates for Capital Health Hospital, in Halifax. The latest data available on the hospital’s website showed that hospital workers wash their hands just half of the time before a contact with a patient, even if it is one of the best ways to prevent infectious diseases to spread.

However, for Joanne Langley, washing your hands seems simple, but not in a context of financial constraints for provinces and, therefore, hospitals. “If the staff is more rushed or stressed, they tend to not fully comply with all the infection control measures, just because they are doing so much work and they are so busy. So with less staff, budget pressures can harm the ability to control infections for sure.”

The Canadian Union of Public Employees also claims that the budget cuts reduced the amount of money spent to clean hospitals, leading to a multiplication of dangerous bacteria inside the facilities.

A fight already lost?

According to the World Health Organization, it is possible to reduce the number of healthcare associated infections by half. However, for Dr. Roth, the reality is less optimistic: “We can’t control what’s outside our hospital walls. In other parts of the world, we see emergence of newly resistant organisms. They travel. We will see them at one point. So I am not sure we can be successful.”

One thing is certain though, “we should be more judicious in our use of antibiotics overall,” says Joanne Langley. “Overuse of antibiotics leads to resistance in bacteria and fewer solutions to treat them.”

With antibiotics used on humans, but also extensively on crops and cattle, the experts want to establish an antimicrobial stewardship in the years to come. “It is a high priority,” says Suzanne Rhodenizer Rose, from IPAC. Without it, the most common bacteria could become almost impossible to stop and the number of nosocomial infection victims could go up, without any existing treatment to save them.

Have you been bankrupt? You could become Minister of National Revenue

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Kerry-Lynne Findlay being appointed as Minister of National Revenue, in July 2013.
Kerry-Lynne Findlay being appointed as Minister of National Revenue, in July 2013. Credit: kerrylynnefindlaymp.ca/

In 2001, MP Kerry-Lynne Findlay owed so much money that she had to declare bankruptcy. Now, as Minister of National Revenue, the politician from British Colombia is in charge of a $4.3 billion budget. For political experts, the situation raises many questions.

“It’s a little bit ironic that someone who is a minister of National Revenue suffered a personal bankruptcy”, says Cristine De Clercy, who is a professor at the University of Western Ontario and also co-director of the Leadership and Democracy Laboratory.

She is not the only one to think that way. Nelson Wiseman, Director of the Canadian Studies Program at the University of Toronto, says he is surprised the Conservative Party chose her for the job. “A question that you could ask is: Do you think you are in a good position to be the Minister of Revenue in light of the fact that you’ve been bankrupt?”

The 2011 controversial election

Ironically, Findlay’s personal finances became of public interest because of another conservative member that went bankrupt as well.

In 2011, Findlay, who is a lawyer, was seeking the conservative nomination in Delta-Richmond East riding, in British Columbia. However, she lost against Dale Saip, who was at that time Chair of the Delta Board of Education.

It should have been the end for Findlay, but fate decided otherwise. A few days after his nomination as a conservative candidate, Dale Saip had to step down after revelations about his past bankruptcies. In 1993, the candidate owed $289,000 to his creditors and wasn’t able to pay them. Saip also declared bankruptcy in 2004, with $71,000 in debts, and again in 2005, with $102,000 in liabilities.

Therefore, Kerry-Lynne Findlay, who was the next in line, became the conservative candidate for Delta-Richmond East riding, even if she went bankrupt too and with more debts. According to her file in the records of the Superintendent of Bankruptcy, she owed more than half a million in 2001.

Why did Saip have to resign because of his past financial troubles but not her? We contacted Minister Findlay’s office to ask her the question. Her Director of Communications, Rebecca Rogers, answered that the Minister would not comment.

Findlay was elected as MP in May 2011 and then appointed as Minister of National Revenue in July 2013. Her ministry is one of the largest federal departments with 43,000 employees. The previously bankrupt lawyer suddenly became accountable for the government main source of revenue: the 200 billion dollars collected every year through the taxes.

Her financial problems

We asked Findlay’s office why the Minister went bankrupt in 2001, but the question stayed without answer. However, before being elected, Findlay explained to several media outlets that a long judicial battle against the Musqueam Indian Band sank her financially.

In 1999, she also testified in front of the Standing Senate Committee on Aboriginal Peoples about her situation. Findlay was a leaseholder on the Band’s land. The First Nation decided to increase the rent from $450 a year to $35,000 a year. However, the leaseholders and the Band had a contract stating that the rent had to be 6% of the “current value” of the land. Leaseholders and members of the Band couldn’t agree on how to evaluate the value of the site. Therefore, the case went on trial, up to the Supreme Court.

Leaseholders won the case with a decision in their favour on November 9, 2000. Nevertheless, the value of the rental contracts and the houses, built by the leaseholders themselves, dropped. Because of the judicial troubles, the land interested nobody anymore and the financial institutions considered the investment risky.

“Her assets were evaluated at $175,000 at the time,” notes Tim Hill, lawyer specialized in bankruptcy for Boyneclarke law firm, in Halifax. “It was much less than her $557,000 debts.” Hill adds that because of the bankruptcy process, her property was certainly seized and the rest of her debts wiped off. The bankruptcy statement would have stayed in her credit history for six years. “It’s an embarrassment for sure, but at least it, it allows you to have a fresh start,” says Hill.

However, for the lawyer, it is not because someone went bankrupt that he is an incompetent or irresponsible person. “It could happen to anyone.”

But would he trust someone who went bankrupt when money is at stake? “If someone came with a good business idea and asked me: ‘Would like to be my partner?’ If this person was bankrupt in the past, I would probably say no.”

What’s private? What’s public?

In her answer by email to our questions, Findlay’s Director of Communications wrote “this is a very personal matter that was fully resolved over a decade ago.”

However, Nelson Wiseman, professor in political studies at the University of Toronto, strongly disagrees. For him, Kerry-Lynne Findlay’s bankruptcy is not a private matter because she is not a private person. “I gave you another example. If she was convicted of a crime, could she say now ‘it was a private matter’? I don’t think so. Being bankrupt isn’t a crime, but it’s on the public records the same way.”

Cristine De Clercy, professor in political sciences at the University of Western Ontario, underlines that it is normal to have MPs that went bankrupt since over one hundred thousand Canadians declare bankruptcy each year. “The legislature does reflect the composition of the society,” she says. Though voters often want their representatives to be exactly like them, there is a tendency to hold politicians to a higher standard, explains De Clercy. “So there is a bit of a contradiction and it’s a problem in every democracy.” The professor adds that the only counterweight to the problem is to ensure that citizens receive as much information as possible about their candidates “so they can make an informed choice on the day of the vote.”

Mark Zuckerberg wants your money, not your opinion

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Facebook_picture

Concerned Facebook shareholders want the company to give them an “equal voice”. The social media platform became public in 2012. However, thanks to a controversial company structure, Mark Zuckerberg kept all power over the corporation, even if he is no longer the main owner.

James McRitchie and Myra K. Young from California, who own 100 Facebook shares, publicly asked the company to change its stock structure last March. “Our company takes our public shareholder money but does not let us have an equal voice in our company’s management,” wrote McRitchie and Young in the last proxy of the company.

The shareholders point out the company dual-class structure as the root of the problem. There are two kinds of Facebook shares: the Class A gives the owner one vote per share and the Class B gives ten votes per share.

The vast majority of Class B common stock is in the CEO’s wallet, Mark Zuckerberg. Therefore, it does not matter if the company is more your property than his, because he will always have more voting power than you.

Facebook_Charts_V2

For Gregory Nazaire, finance lecturer at Dalhousie University, for Facebook to have two types of shares is not surprising. “We see this structure for companies where the CEO or the founder wants to have some latitude with regards to innovation.” By keeping all the voting power in his hand, Zuckerberg can lead Facebook in whenever direction he wants, without being pressured by the shareholders votes, explains Nazaire.

However, the shareholders are not comfortable with the situation: they want more control over their investment. “Without a voice, shareholders cannot hold management accountable,” says MicRitchie and Young in Facebook’s financial documents.

In its answer to McRitchie and Young, the Facebook Board of Directors affirmed that Zuckerberg is the best person to lead the company. The Board is urging the other shareholders to vote against the proposition (even if they don’t have enough vote power to change anything).

Zuckerberg doesn’t have to worry for the moment. With over 60% of the vote power, nobody can oppose him. But at what cost?

A risky game

Between 2004 and 2012, Facebook was a private company. Therefore, Zuckerberg was able to take any decision he wanted and he was not accountable to anyone for it.

Then, the company turned public on March 2012. Its Initial Public Offering (IPO) raised $6.8 billion from the public market. Facebook became the property of over 4,000 shareholders on the planet and Mark Zuckerberg, as CEO, became accountable to them.

As Gregory Nazaire says, Facebook is playing a risky game. Since the shareholders’ votes don’t count, they can’t involve themselves into the company management and probably feel less attached to the company. The finance lecturer at Dalhousie says that it could have a big impact on the price volatility of the shares.

“If the shareholders don’t feel, don’t know or don’t understand what Zuckerberg is doing, it is really easy for them to dump the stock and drop the price,” explains Gregory Nazaire. “Investors don’t have the vote, but they still have a level of control: they can control Facebook through the purse.”

 

Facebook is aware that the almighty position of Zuckerberg could be prejudicial. The 2013 annual report indicates that Zuckerberg’s “concentrated control could […] discourage a potential investor from acquiring our Class A common stock due to the limited voting power of such stock […] and might harm the trading price of our Class A common stock.”

A study by the Investor Responsibility Research Center Institute, conducted in 2012, compared corporations with two or more classes of shares with corporations with just one type of share. Their results show that companies like Facebook are more profitable for shareholders over a one-year period. However, after three years, it’s the single class companies that bring more money for the shareholders, with higher share price and higher dividends.

Nevertheless, the Facebook Board of Directors still believes that a dual-class structure will help for the long-term success of the company, as long as Mark Zuckerberg will be the main voting owner and the CEO.

Controlled companies: a new trend

The multi-class companies were forbidden on the public markets for a large part of the 21st century, before being allowed in the 80’s and 90’s. Since then, their number increased. Google, LinkedIn, Zynga and Groupon are all public, but tightly controlled companies. Between 2010 and 2012, 20 new companies with a multi-share structure conducted an Initial Public Offering.

Like the Facebook shareholders James McRitchie and Myra K. Young, the Council of Institutional Investors would like the rules to change. Jeff Mahoney, General Counsel of the Council, sent letters to the New York Stock Exchange and the NASDAQ Stock Market, asking them to “prohibit companies seeking an initial listing from having two or more classes of common stock with unequal voting rights.”

However, Gregory Nazaire doesn’t think it will change. As long as Facebook increases its value, the shareholders will close their eyes on the fact that they are powerless, he predicts.

Facebook share price started at $38 in 2012 and is now worth around $70. Moreover, at the last quarter, the company net income increased by 23% between the first and second quater of 2014, as did the cash and cash equivalents by 46%. The liabilities stayed under control with only a 6% increase over the same period of time.

Facebook stock market price (Google Finance)

“The vast majority of the shareholders will tell you: we need some kind of democratic process,” says Nazaire. However, for the finance expert, too much pressure from the shareholders could inhibit a CEO to take any decisions. He also adds that a CEO without opposition could lead a company in the wrong direction.

So what’s the fine line between the two? For Nazaire, it’s the question finance experts are currently asking themselves to find a more balanced structure that would satisfy both involved investors and strong willing CEOs.

A first national class action in Nova Scotia

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Ken Taylor broken Profemur Hip Implant System. Credit: David Komm affidavit.
Ken Taylor broken Profemur Hip Implant System. Credit: David Komm affidavit.

When Ken Taylor’s hip implant broke in 2009, he did not think that his injury would one day make history. However, five years later, he is leading the first national class action ever certified in Nova Scotia.

Taylor’s legal battle is taking place at the Supreme Court of Nova Scotia against the Tennessee based company Wright Medical Group (WMG) and its subsidiaries in Canada. The resident of Dartmouth claims that WMG knew that their Profemur Hip Implant Systems had a high risk of failure, but the company sold them anyway. After receiving one in 2007, Taylor had to overcome three surgeries and he is now asking for compensation.

This first national class action could make a precedent and bring hope for better justice access for Nova Scotians. Class action procedures allow the plaintiffs to share the expensive costs of a trial. They also permit the Court to rule one case for many members, instead of having several similar trials backlogging the judiciary system.

“Usually, a national class action is certified in Ontario, as if it’s the only place that it could be done”, explains Michael Dull, from Wagner law firm, who is Taylor’s lawyer. “What this case says is that there are provinces outside of Ontario. We are pleased that the Court of Nova Scotia recognized that and didn’t take a back seat to Ontario.”

However, the battle is not won yet. Judge Michael J. Wood from the Supreme Court of Nova Scotia certified the lawsuit on March 7, but WMG appealed of the decision on July 8. For the American company, each medical case is different. Therefore, the class action should not be allowed, says the Tennessean corporation, that would prefer to manage the situation with each plaintiff separately instead of having them fighting together. Between the two sides, the legal battle in the Halifax Court House could last for years to come.

Taylor’s multiple surgeries

On September 1, 2009, Ken Taylor was plugging an amplifier at the bottom of his TV. “I was trying to get myself up and then I could hear a crunch.” At first, the large build man – Taylor measures 6 feet 1 inch and weights over 200 pounds – thought he just pulled something.

However, a few hours later at the hospital, radiography showed that it was serious: the neck of his hip implant broke. “The doctor told me: ‘You’re not going anywhere. The only thing that is holding your leg right now is the ligament under your skin.’”

Three days later, Ken Taylor had his first revision surgery. He received a new hip implant. Unfortunately, his bone was not growing around the prosthesis and the WMG product was loosening.

Six months later, on February 24, 2010, he underwent a third surgery, this time with a bone graft.

“And because of all that, I had my other hip done too,” says Taylor. “I put so much weight on my good hip for so long. So I had four operations in total: three on my left hip and one hip replacement on the right.”

A faulty product?

The hip implant was supposed to improve the quality of life of Ken Taylor who was suffering of osteoarthritis. This inflammation of the joints affects one in ten Canadian adults. Before receiving the hip implant, the cartilage of Taylor’s left hip eroded with time and became painful.

His doctor, Dr. Gross from Halifax, had good hope with the WMG hip implant, as he wrote it in 2006: “we will be using a ceramic articulating surface which I am hoping will give him twenty/twenty-five years of pain free range of motion without wear.” However, the implant only lasted two years and three months.

To support Ken Taylor’s case, two affidavits from experts were filed. In his testimony, Dr. David Zukor, Chief of the Department of Orthopaedic Surgery at the Jewish General Hospital in Montreal, indicates that the prosthesis Taylor received has been reported “to have a much higher than normal rate of failure at a much earlier time.” Zukor quotes the 2009 report of the Australian Hip Registry indicating that the WMG implant has an expected revision rate of 11.2%, instead of less than 2.5% for conventional hip replacements.

The second expert is David Komm, a mechanical engineer living in Arizona who has over 29 years of experience in examination of product failures and personal injuries. For Komm, it is “well within the balance of probability” that the WMG hip system has manufacturing or design issues. He uses the Manufacturer and User Facility Device Experience Database (MAUDE) from the Food and Drug Administration to make his point. His review suggests that the most common issue with the WMG hip implant is the fracture.

Battle of numbers

Revision rate for Profemur Hip System

Although David Zukor and David Komm’s opinions were damaging for Wright Medical Group, the company did not throw in the towel. Ken Taylor and his lawyer presented their expert opinions in October 2012. WMG presented its version of the situation in February 2013.

WMG’s expert, Byron Deorosan, a biomedical engineer from California, claims that both David Zukor and David Komm are wrong in their analysis. They used the MAUDE database which was an error, says Deorosan, because the FDA does not review the MAUDE reports. Therefore, the information is not a reliable source, he thinks.

In the affidavit of Debby Daurer, the Senior Manager with Wright Medical Technology contradicts the high rates of failure of the Profemur Hip Implant System. Quoting WMG records, she indicates that the worldwide fracture rate is 0.13% for the prosthesis. This number is well below the statistics from the 2009 Australian registry, used by David Zukor and David Komm.

Next step

The class action has been certified but the Supreme Court of Nova Scotia will hear the appeal from WMG this upcoming October. If the appeal is received, it could mean the end of the lawsuit, but if the appeal is rejected, the class action will go on.

“Then it could end in two ways,” explains Michael Dull. “The defendants could settle at any time. Otherwise, we would go on trial. If we win, we win for the benefit of everybody that had a fracture. If we loose, we loose to the detriment of everyone. That could take at least a couple of years.”

Thirty Canadians already joined Taylor’s class action.

Contacted by email, Wright Medical Group refused to give us an interview. However, in its 2013 Annual report, the company indicates that they changed the material of their Profemur implants in 2009 to improve their solidity. It is also specified that management estimates the liability cost of the Profemur prosthesis related claims from $17 million to $26 million in North America.