Sunday, April 4, 2010

Ethics Breach: Princeton Prof Who Writes Regularly For NYT On Health Care Holds More Than $5 Million In Health-Care Industry Stock.

In a significant apparent breach of NYT ethics rules, Princeton professor Uwe Reinhardt -- who writes regularly for the NYT website on health-care issues -- earns more than $500,000 a year from posts with various private health-care companies, and holds stock worth more than $5 million.

That income is in clear apparent violation of the NYT rules, which specifically ban both staffers and freelancers from owning stock or having any financial interest "in a company, enterprise or industry that figures or is likely to figure in coverage that he or she provides, edits, packages or supervises regularly."

For Reinhardt, that would be the obvious conflict between his high-paying part-time gigs in the health-care industry, and his health-care blogging since November of 2009 for the NYT -- which, by the way, identifies him in its online bio only as a Princeton professor, and as a "leading health policy expert" with ties to various nonprofit groups and government agencies.

The three-paragraph NYT bio makes no mention of Reinhardt's financial ties to the health-care industry.

The matter of NYT contributors' conflict of interest has been raised recently by the NYT's Public Editor, Clark Hoyt. He wrote a column in January, "The Sources' Stake In The News," that cited several examples of NYT contributors and sources who'd been allowed (improperly, in his view) to write for -- or be quoted in -- the NYT despite an undisclosed financial interest.

The examples included an MIT health economist, Prof. Jonathan Gruber, who'd written an op-ed piece on health care without disclosing he had a contract with the Department of Health and Human Services, to study health care issues. At $400,000, Gruber's contract pales in contrast with Reinhardt's seven-figure health-care industry stock portfolio.

"Readers are entitled to disclosure," Hoyt wrote in the NYT, "so they can decide if there is a conflict that would effect the credibility of the information."

The NYT's ethics policy specifically addresses health writers, perhaps because the potential for conflicts is more significant.

"A book editor, for example, may not invest in a publishing house, a health writer in a pharmaceutical company or a Pentagon reporter in a mutual fund specializing in defense stocks," the policy says. "For this purpose an industry is defined broadly; for example, a reporter responsible for any segment of media coverage may not own any media stock. “Stock” should be read to include futures, options, rights, and speculative debt, as well as “sector” mutual funds (those focused on one industry)."

The NYT has been vigilant in policing breaches of its ethics rules in this area by freelance contributors. The paper has issued several editors' notes in recent months, disclosing conflicts of interest discovered after the fact. Honestly, we're a little shocked that Reinhardt slipped through the cracks, given his multitude of industry deals.

Here's a basic rundown of Reinhardt's conflicts of interests. We may have missed one or two.

As of this moment, Reinhardt is a trustee, or on the board of directors, of at least five different private health-care companies and funds -- and either now earns an income from, and/or is being paid in stock options by those for-profit businesses.

Reinhardt has sat on the board of Amerigroup Corporation, a managed health care company, since 2005. SEC documents filed in 2009 show Reinhardt holding 144,558 shares in the company, and earning $226,531 in cash-and-stock compensation. Amerigroup was trading at $33.89 a share when the markets closed on Friday, giving Reinhardt's shares a value of approximately $4.8 million.

Not bad for a Princeton prof! Or a NYT blogger. Or anybody.

As of March 2010, Reinhardt also held 75,625 shares of Boston Scientific, where he has also served on the board since 2005. At $7.23 a share, the company's current market price, his holdings are worth more than $500,000. In 2009, including stock options, Reinhardt also reported income of $213,132, according to an SEC filing.

Oh, and Boston Scientific? They make medical devices. That's health-care, too.

But wait, there's more: In 2008, the proxy statement for H&Q Healthcare Investors and H&Q Life Sciences Investors -- two funds that invest in the health care industry -- identified Reinhardt as a trustee for "HQH" since 1988, and HQL in 1992. His 2008 income from both companies totaled $43,000, and also included "between $1 and $10,000" worth of securities.

These are exactly the sort of "sector" funds that the NYT ethics policies mean when it tells its staff to steer clear.

In January of 2008, Reinhardt joined the board of directors of Legacy Hospital Partners, a private company that buys hospitals and links up the deals with not-for-profit businesses. It has no disclosure requirements that would reveal Reinhardt's pay from Legacy, but any association with a company like this -- even unpaid -- would demand disclosure.

There's a trail of Reinhardt's industry income past strewn across the Internet in SEC filings and corporate biographies. One SEC document shows Reinhardt earning $2.3 million from the sale of Triad Hospitals to Community Health Systems in 2007 for $5.1 billion. For the previous four years, Reinhardt had been on Triad's board of directors.

Does the NYT really want its health-care analysts to be folks who make millions off of hospital-chain sales deals?

By the way, all of this comes on top of Reinhardt's presumably healthy salary from Princeton, where he serves as the James Madison Professor of Political Economy. Whoops, think we forgot to mention that he's also on the board at Duke.

There has been a lot of talk lately about the NYT's strict rules on freelancers, and the fact that they've resulted in an exclusion of outside talent from the paper. Some of that we agree with. For example, we'll never understand why the NYT fired its talented Critical Shopper, Mike Albo -- a freelance writer with no apparent stock portfolio or corporate directorships -- for taking a Jet Blue junket that had nothing to do with his work.

Meanwhile, the rich Professor Reinhardt writes essays on the latest health-care debate as though he doesn't have a horse in the race. But it turns out his financial interests are tied directly to those of the companies whose stock he holds -- companies whose fortunes will change in the wake of the Obama health-care program.

People like Reinhardt are the reason these rules were written. It will be interested to see if the NYT enforces them, or ignores the problem. After firing freelancers for far less, to ignore Reinhardt's apparent rule violations would risk seeming to have a double standard.

On Saturday, we emailed Reinhardt, NYT spokesman Robert Christie and Catherine Rampell, the editor of the Economix blog, for comment on this. We'll update if/when we get a response.


Anonymous said...

Hmm, will he give up the blog, or the stocks? Tough call.

Anonymous said...

Uwe is despicable. Not because he owns stock, but because he regularly criticizes other people on conflict of interest rules. I remember him writing a post about Sanjay Gupta suggesting a conflict of interest because CNN has drug advertising. And, all the time, Uwe himself was sitting on boards of companies!!! He should resign at once from the NYtimes and Princeton and his studies and research should all be considered tainted. What a hypocrite!!!

Anonymous said...

Agreed. He has to go.
If he isnt't gone in a week -- never to be heard from again -- I will organize the letter writing campaign to Princeton and the Times. How could any student ever trust this guy or any reader?

Anonymous said...

I think he should have to give up blog for sure. The problem is all of his writings and research are suspect at this point. He would have gained a lot of money if the public bought into his "unbiased" writing. The New York Times was essentially being used as a money train for this clown. Princeton is even more suspect. How can a University allow its Health Economic Professor to sit on boards of private companies? Stock is one thing, but Boards???!!!

Anonymous said...

Where did you get this information? Why aren't you guys providing links to any of it?

I ask because a lot of it has been out there for months already, if not years. Look at the links below.

It would also help to discuss the views that he's advocated. He seems to go back and forth about the appropriateness of a single payer system, but regardless, he's highly critical of the U.S. system as it has been for some time.

This blog raises some good points, particularly about the lack of disclosure here, but it'd be nice to see more links to where you got your information and more discussion of his stated views.

Anonymous said...

You seem to be attempting to minimize Prof. Gruber's actions because his reimbursement his small compared to Reinhardt's or is it because Gruber's comments are more in sympathy with the administration. Sorry but as the old joke goes we are quibbling over price not what we call the the two commentators.

Anonymous said...

Blokes like this run dime-a-dozen. He'd make a perfect editorial contributor.
Were it solely his shares being exposed, he could still write as an ideological healh investment advisor; but since he's seated on boards, he is tacitly a company/institutional spokesman, here, sleezing his way unto free ads in the nyt.

As for his academic theses, someone like this most likely bends them to fit the whims of the market, rather than not.

Anonymous said...

On to you and your stock, Uwe. How much further do you think you can take your game of passing as an uninterested, dispassionate, objective voice?

Anonymous said...

Re: "I ask because a lot of it has been out there for months already, if not years."

Which makes those responsible for this farce seem all the more as if they have been complicit or complete dunces.

Anonymous said...

"Hypocrite" seems inadequate to describe this conflict of interest. I'd love to read his rationalization. I only hope that his Princeton colleague Paul Krugman doesn't have similar skeletons clanking around in his closet.

Rumsfeld Nightshift said...

If he's as manly as his facial structure, he needs no rationale, for he has the capacity for moral disengagement to self-absolve when the situationalist particulars necessitate it.

Anonymous said...

Good find. This is an outrageous breach of ethics. Did he not get the ethics talk everyone in the newsroom is supposed to get? Craig Whitney where are you?

Anonymous said...

Here's a great quote about Professor Reinhardt in a recent feature on him in the Princeton U paper:

“Uwe is the premier health economist in the country, but most importantly, he is our conscience,” said Stuart Altman, a professor of national health policy at Brandeis University and a leading expert on health care. “He doesn’t hesitate to tell important groups and important individuals when he thinks they’re not adhering to a high moral code.”

BTW NYTPicker, it appears that Reinhardt has been writing for Economix since late 2008 rather than 2009.

Anonymous said...

Oh sweet irony. Could find from above.

Anonymous said...

Why Prof not just drop the Prof and do Fox as James Madison

Anonymous said...

What does "clear apparent violation" mean?

I like NYTPicker (I think they mean the best for The Times), but I don't know what that phrase means.

Anonymous said...

When one talks about conflict of interest in the media, almost everyone will agree that even an "appearance of conflict" is a no-no. Professor Reinhardt has occasionally let down his guard when talking about health care reform to the press. Here's Reinhardt talking about health care reform to McClatchey newspapers:

“It’s a boon to the drug industry, and it’s a boon to hospitals and doctors, because they are all getting all of these people who are going to be able to pay their bills,” said Uwe Reinhardt, professor of economics and public affairs at Princeton University. “Deep down, these people know that. Otherwise, they would have fought it.”

Deep down, given his financial interests in the health care industry, Reinhardt seems to be "one of these people", too. That is why his regular column on health care economics in the NYT (and occasional columns in other outlets) was not only an apparent conflict, but an actual one.

Brenda Float said...

Reinhardt is consistent in rolling over like a puppy for the Health Insurers to tilt the balance of the debate away from any sensible analysis of that industry's profits and interests.

Getting by just by looking the part while masking dishonesty is not a point of view or a set of credentials worth paying for; especially when it comes at the expense of millions of Americans.

Anonymous said...

I expect better vetting from the New York Times.

Roy M. Poses MD said...

I am glad this issue is getting some more prominence.

By the way, the information about his positions on the boards of public for-profit corporations are a matter of public record. SEC rules require all such corporations publish lists of all board members in their proxy statements. However, this information is easy to find only if one knows what he or she is looking for. While this information is nominally public, it clearly would not be obvious to most readers or listeners.

Please note that we have been writing about Reinhardt's conflicts of interests vis a vis his prominent opinions on health policy since 2006 on Health Care Renewal (

In 2006, we first wrote about a letter to the editor of the NY Times by Reinhardt which failed to disclose the board memberships he held at that time:

In 2009, we wrote about how Reinhardt left out some crucial facts in his discussion in the Economix blog of how physicians are paid:

That year we also wrote about how Reinhardt defended Ms Karen Ignagni, CEO of America's Health Insurance Plans (AHIP) in an interview quoted in a Washington Post article:

In neither case above did Reinhardt or the newspaper reveal his conflicts.

Note that Reinhardt is not the only case of a prominent health policy expert with undisclosed conflicts of interest. See this post for some examples we had found in 2006:

Anonymous said...

Regarding Professor Altman of Brandeis University and his quote about Uwe Reinhardt's high moral standards, one should note that the good Professor Altman is on the boards of Lincare and Aveta. The former is a medical equipment provider and the latter a non-profit health insurer. Altman also got well over $500,000 in compensation as a board member of Lincare and he owns about $10 million in Lincare stock. It is interesting how these two "academics" seem to travel in similar business circles and have similar ideas about moral and ethical standards. It seems that these days being a Professor at our top universities is just a cover for one's "sideline" business activities which they rarely deem important enough to mention when they teach their classes on health care to the general public. Do these universities have any idea what is going on? Do they even care?