LUBE RUBES. Hospital regulators for Duke University Health System revealed that doctors operated on about 3,800 patients at two of its hospitals last year with instruments washed in hydraulic fluid instead of detergent, according to an Associated Press report. Apparently, the "mix-up occurred when an elevator company drained hydraulic fluid into empty detergent barrels last summer. The detergent supplier later picked up the barrels and mistakenly redistributed them as washing fluid." Who’s culpable? Who isn’t? Why is an elevator company using a hospital’s empty detergent barrels? Why is environmental services or sterile processing leaving these barrels around? How come the detergent manufacturer couldn’t tell the difference between its own product and a foreign substance like hydraulic fluid? Why couldn’t sterile processing technicians tell the difference? The medical staff allegedly complained about "slick tools," according to the Centers for Medicare and Medicaid Services. So why did the physicians continue to use the tools? Duke Health officials pooh-poohed any potential infection risks beyond the ordinary and clammed up, fearing lawsuits. Imagine that. Good thing they revealed this on a slow Mad Cow/CJD news week. After Duke’s high-profile organ transplant fiasco, will someone please tell me why this facility is ranked among the best in the nation, if not the world? Everywhere, champions of mediocrity are cheering about how they’re not so bad after all.

REDRESS DURESS. All the hoopla surrounding VHA’s recent "come to Jesus" supply chain business practice and strategy changes, raises more questions than it answers. Chief among them: Where is Novation in all of this and why isn’t Novation the one making this revelation? After all, did not VHA and UHC create Novation nearly a decade ago to, in part, distance itself from supply chain operations? This leads the industry (and with good reason) to believe that VHA pulls more strings and more weight in Novation than many realize. Of course, this begs the question: Why didn’t VHA chief Curt Nonomaque appear before the Senate Antitrust Subcommittee for those delightfully obtuse GPO ethics hearings instead of Novation chief Mark McKenna? Not that it would have made a difference.

BLIND JUSTICE. Wall Street’s favorite accounting fraud flavor of the moment HealthSouth Corp. agreed to pay $100 million to settle a Securities & Exchange Commission lawsuit stemming from the company’s fiscal peccadilloes. HealthSouth’s settlement, which did not include any admission of wrongdoing, followed the December 2004 civil settlement of $325 million with several federal agencies. That agreement also included the acceptance and adoption of a five-year corporate integrity agreement. Don’t forget the more than $6 million in bonuses that several company executives received last year. The SEC alleged that HealthSouth originally overstated its earnings by $1.4 billion. Subsequent analysis by other organizations pushed that total to $2.7 billion. That’s nearly as good a return as creditors receive in a Chapter 7 bankruptcy filing. Imagine if HealthSouth could negotiate group purchasing contracts as deftly?

DRUG BUST. Authorities in New York are dinging a growing number of pharmaceutical companies for "grossly" inflating the average wholesale prices of prescription drugs charged to the Medicaid program. Aside from the obvious issue at stake here is the question as to why drug manufacturers try to get away with this by pursuing the state agency least likely to be able to pay for it anyway? Unless they realize that it isn’t worth their time to go after the more lucrative private payers, which aggressively protect their profit margins, or after the federal Medicare program, which might attract more damaging publicity, if not Hollywood producers looking for the next movie of the week.

MED CHRONIC. To settle ongoing litigation with a surgeon-inventor who crafted a spinal surgery device Medtronic Inc. agreed to pay $1.35 billion to the good doctor. Of that total, $550 million goes to the doctor to settle the lawsuit and $800 million goes to acquire his patents, as well as to "virtually all of the spine-related inventions he makes in the next 15 years," according to a report in The New York Times. The doctor is relieved because the litigation has monopolized his time for the last four years and he now can go back to inventing. To his credit, he’s going to drop $200 million into a medical foundation he is launching. Medtronic originally balked at an earlier jury award of $559 million to the surgeon-inventor but now sees this as a "strategic acquisition." Hospitals should see this as a "strategic justification for raising product prices."