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The many extracts on these pages are from copyright material. They are owned by the reference given or its owner. They are reproduced here for educational purposes and to stimulate public debate about the provision of health and aged care. I consider this to be "fair use" in the common interest. They should not be reproduced for commercial purposes. The material is selective and I have not included denials and explanations. I am not claiming that the allegations are true. The intention is to show the general thrust of corporate practices as well as the nature and extent of any allegations made. Any comments made are based on the belief that there is some substance at least to so many allegations.

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Introductory page
This corporate web site addresses the issues of corporate health care within a broad framework. A web page describing this broad context should be considered as an introduction to each page on the web site. If you have not yet read it then CLICK HERE to open it in another tab or web page.

Content of this page
This web page traces the dialysis services supplied by Gambro.
a Swedish multinational. It examines its repeated fraud settlements in the USA, the problems with its equipment, the sale of its US dialysis clinics to DaVita, and the sale of its remaining global dialysis business to private equity. It was renamed Diaverum. It operates in Australia.   

US section

Diaverum
(New Name for Gambro Healthcare)

  

CONTENTS


Gambro international

History

Gambro was founded in Lund, Sweden in 1964 soon after the first artificial kidney was invented by Holger Crafoord who felt he had to "develop and market this life saving innovation".  It commenced its international expansion in the 1970s and was publicly listed in 1983. It sold blood products and renal care products as well as providing dialysis services.

Gambro grew by acquisitions and purchases and by 2001 was one of the major providers of dialysis services in the USA and many other countries.   The extent of the dialysis business is described by Gambro in a 2001 legal dispute.

May 2001 Gamdro's operations

Founded in 1964, Complainant has offices and facilities in more than 40 countries throughout the world, and employs approximately 18,000 employees.

Complainant owns and operates more than 580 dialysis clinics, serving over 44,000 patients worldwide. The majority of Complainant's clinics (over 80%) are located in the U.S., including 11 clinics in Illinois where Respondent is located.

Gambro AB, Gambro Lundia AB and Gambro Healthcare, Inc. v. Family Health & Wellness Center Case No. D2001-0447 WIPO Arbitration and Mediation Center ADMINISTRATIVE PANEL DECISION 25 May 2001 http://www.wipo.int/amc/en/domains/decisions/html/2001/d2001-0447.html  

In 2001 Gambro claimed that it operated 580 dialysis clinics, most in the USA. After its second major US fraud settlement in 2004, Gambro sold its 565 US clinics to Davita.

Gambro itself fell into the hands of major financiers in 2006. In July 2007 they sold Gambro Healthcare's remaining 155 clinics to private equity firm Bridgepoint.


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A new name

In 2006 Gambro was sold to a financial consortium. In 2007 it onsold Gambro Healthcare, the subsidiary providing dialysis services to Bridgepoint, a private equity firm. This tarnished business was renamed "Diaverum".  As with other tarnished organizations, the new name was chosen in order to claim exactly those attributes that had been so conspicuous by their absence in the past.  Experience and their own past conduct suggests that this might not stop them offending again (eg. Tenet Healtrhcare)

Apr 2006 Gambro sold

Diaverum (previously Gambro Healthcare) operates in Argentina, Uruguay, France, Germany, Hungary, Italy, Lithuania, Poland, Portugal, Spain, Sweden. Turkey, United Kingdom and Australia.

The Nordic region's leading investment companies made a bid of 38.26 billion Swedish kronor ($4.85 billion) for Gambro AB, a Stockholm-based medical-technology group.
Investor AB, controlled by Sweden's Wallenberg family, and EQT, controlled by Investor, said their 111-kronor-a-share cash offer has been recommended by Gambro's board of directors and presents a premium of 30.5% to the average share price of 85 kronor for the past three months.
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The cash comes from Gambro's sale in December of its U.S. dialysis clinics to DaVita Inc. for $3.05 billion. Those clinics had offered the U.S. government a $310 million settlement of U.S. Medicaid-fraud allegations. Gambro then switched its focus on clinics outside the country and on renal care and blood products. The company ranks third world-wide for sales of renal-care products, - - -
 Gambro Gets a $4.85 Billion Bid From a Nordic Investment Group The Wall Street Journal April 26, 2006

Apr 2007 Selling off dialysis clinic business

Sweden's billionaire Wallenberg family is leading a group that may sell Gambro Healthcare, an owner of dialysis clinics in 15 countries, four people with knowledge of the plan said.
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The family last year took over Gambro, the world's largest maker of kidney dialysis products, in a transaction valued at $5.4 billion. The Wallenbergs had owned 19.9 percent of the company before they made the purchase with EQT Partners AB, a Stockholm-based buyout firm partly owned by the family.
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 - - - - - and the health-care division operates facilities in Europe, South America, Asia and Australia.
Wallenbergs Examine Gambro Unit Sale, People Say (Update3) Bloomberg News 18 Apr 2007 http://www.bloomberg.com/apps/news?pid=20601087&sid=aLfGYgq4VUCA

May 2007 Sold to Bridgepoint

Private equity firm Bridgepoint said today that it has signed an agreement to buy Gambro Healthcare.
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Gambro currently has 155 dialysis clinics in 15 countries.
Bridgepoint buys Gambro Healthcare Renal Business Today May 7, 2007

Jan 2008 Changes name

Gambro Healthcare has been operating as an independent company since July 2007, 100% focused on renal services. As a consequence, Gambro Healthcare is now changing name to Diaverum. Dag Andersson, formerly Mölnlycke Healthcare, has been appointed CEO and assumes responsibility January 7, 2008.
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Diaverum is a name with two key facets. The first part, ‘dia’, represents Diaverum’s core activity, dialysis, and signals that Diaverum focuses exclusively on renal services. The second part ‘verum’ means truth in Latin. Hence this new name is symbolic of the honesty, transparency and reliability that the company will continue to be known for.
Gambro Healthcare Becomes Diaverum and Introduces a New CEO  Business Wire 7 January 2008


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Gambro in the USA

Fraud Settlements

In March 2001 Renal Web <http://renalweb.groupee.net/eve/forums/a/tpc/f/5711014023/m/8841024023/inc/1>, run by Gary Petersen, described the complex trail of fraud linking Transitional Hospital Corporation (THC), Community Dialysis Centers, Damon Clinical Laboratories (US $119million settlement and exclusion from Medicare in 1996), Vivra Incorporated, and finally Gambro which purchased Vivra in 1998.

Gambro was a recurrent offender. Its first fraud settlement, in 2000, for US $53 million, involved Vivra and Gambro services. Among the many charges were doing unnecessary laboratory tests and violating kickback laws.  Gambro entered into a 5 year corporate integrity agreement.

July 2000 First fraud settlement US $53 million

The settlements with the GAMBRO companies resolve allegations that the firms submitted false claims to Medicare, Medicaid and TRICARE - the Defense Department's health care program -- for laboratory services. The allegations are that the services were provided by GHLSI's Ft. Lauderdale, Florida laboratory and DHLSI's Deland, Florida laboratory (formerly known as Vivra Laboratory) to End Stage Renal Disease (ESRD) patients.
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"The corporate integrity agreement provides important safeguards to prevent misconduct and requires ongoing monitoring of the companies to help ensure compliance with federal health care program requirements," Inspector General June Gibbs Brown said.
GAMBRO HEALTHCARE, INC. AGREES TO PAY $53 MILLION FOR OVERCHARGING MEDICARE, MEDICAID & TRICARE FOR IMMEDIATE RELEASE  July 2000 http://www.usdoj.gov/opa/pr/2000/July/399civ.htm

It says little for the 5 year corporate integrity agreement that Gambro reached a much larger US $350 million civil and criminal settlement of a whistle blower initiated action in 2004 after only 4 years.  A subsidiary was disqualified from Medicare payments.  Charges included kickbacks to physicians and overcharging. 

Dec 2004 Second fraud settlement US $350.5 million

Gambro Healthcare, with main offices in Nashville and Denver, acknowledged criminal and civil liability for overcharging for services and making kickbacks to physicians in violation of federal rules, officials said.
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"Missouri's Medicaid program was put in place as a safety net for those individuals who find themselves without medical care," Nixon said. "For a company to steal from that program for their own financial gain is tantamount to stealing from the church poor box."
Health care firm agrees to $350.5 million fraud penalty Post-Dispatch Dec. 02 2004

The civil settlement resolves allegations that Gambro Healthcare:

    * Provided home dialysis patients equipment and supplies through a “shell” durable medical equipment company, Gambro Supply, in violation of Medicare regulations. By billing in this manner, Gambro received a higher rate of reimbursement than it would have received if it had directly submitted the claims for payment. Also, emergency home dialysis supplies were not provided as billed by Gambro;
    * Engaged in “hard coding” of diagnostic codes on submitted claims. This practice resulted in the submission of false statements and bills being submitted for ancillary medications and services which were not medically necessary (bone density studies, nerve conduction studies, electrocardiograms, carnitor, epogen, vitamin D and iron); and
    * Hired and compensated physicians as medical directors for their dialysis clinics based on the number and volume of anticipated patient referrals to Gambro clinics. This conduct violated the Medicare Anti-Kickback Act.

Gambro also violated the Anti-Kickback Act by entering into joint venture relationships with physician partners. Again, Gambro’s contractual dealings were premised upon the number and volume of anticipated patient referrals. Kickbacks of this type are prohibited to ensure that health care providers do not make treatment decisions based upon improper financial considerations rather than the necessity, reasonableness, quality and effectiveness of services.

Gambro Healthcare has corporate headquarters in Nashville, Tennessee and Denver, Colorado. It is the third largest owner and operator of renal dialysis clinics in the United States.
GAMBRO HEALTHCARE AGREES TO PAY OVER $350 MILLION TO RESOLVE CIVIL & CRIMINAL ALLEGATIONS IN MEDICARE FRAUD CASE   FOR IMMEDIATE RELEASE Department of Justice, December 2. 2004 http://www.usdoj.gov/opa/pr/2004/December/04_civ_774.htm

Mar 2005 Whistleblower becomes very wealthy

A St. Louis doctor who blew the whistle on fraud at a major health care company will get $56 million as his share of the government's settlement.
Doctor who exposed fraud will get $56 million The ex-medical director's take is large, says the U.S. attorney, but his role was critical. St. Louis Post-Dispatch March 26, 2005

Apr 2006 States get their cut - comment on fraud

"...how many patients received unnecessary testing, medications and equipment, and how many patients went without services that were billed for? Also, how much out-of-pocket money did patients lose in co-payments as a result of bogus billings for services not rendered or for services rendered needlessly?"
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The 6th largest medical fraud case in US history was settled in December 2004 against Gambro Healthcare, for $325 million. At the time, Gambro was the third largest operator of renal-dialysis clinics in the US. The settlement period covered fraud that occurred from January 1, 1991, through September 30, 2004.
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Upon receiving his state's portion of the settlement last fall, Connecticut Attorney General, Richard Blumenthal, said in a September 27, 2005 press release, "Gambro's conduct was reprehensible. Their scams and schemes - including kickbacks, unnecessary tests and billing fraud - stole precious funds intended to care for some of society's neediest patients."
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In a move that seems kind of silly in hindsight, as part of the 2000 settlement, Gambro entered into a 5-year integrity agreement with the Department of Health and Human Services' Office of Inspector General.
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In light of the recent $300 million plus 2004 settlement, its probably safe to assume that signing the "integrity agreement" was a meaningless gesture on the part of Gambro.

However, for whatever its worth, if anything, Gambro was required to sign another "integrity agreement" as part of the December 2004 settlement.
Gambro Healthcare - Dialysis Fraud Pays Big Buck Media Monitors Network April 2, 2006 http://usa.mediamonitors.net/content/view/full/28817

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No sooner had Gambro agreed to the US$350 million settlement and entered into an integrity agreement, than it received a subpoena relating to another alleged fraud.

Nov 2004 Another fraud investigation

Gambro Healthcare Inc., a subsidiary of the Swedish company Gambro AB, received its subpoena Friday night.
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The investigation apparently centers around testing for parathyroid hormone (or PTH) levels and vitamin D therapies. Patients with kidney disease have their PTH level monitored to see if they need more vitamin D.
Gambro Healthcare is subpoenae  Denver Business Journal Denver Business Journal November 8, 2004 http://www.bizjournals.com/denver/stories/2004/11/08/daily1.html


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Selling to DaVita

Were they found to have re-offended after breeching 2 previous integrity agreements Gambro would almost certainly have been barred from providing Medicare services - so putting them out of business.

Gambro sold their US dialysis business to DaVita, another group with a tawdry history, for US $3 billion.

Dec 2004 Sells US dialysis business to DaVita

McDermott Will & Emery client DaVita Inc. (NYSE: DVA), announced that it has entered into a definitive agreement to purchase the U.S. renal care business of Sweden's Gambro Healthcare, for a total consideration of approximately $3.05 billion in cash.

The acquisition will add approximately 565 dialysis centers to DaVita's operations, a total census of approximately 43,200 patients.
DaVita to Acquire Gambro Healthcare McDermott, Will and Emery December 7, 2004  http://www.mwe.com/index.cfm/fuseaction/media.prdetail/object_id/2c1ccc70-92b2-4ee4-9eb9-1bc4ae6f79d9.cfm

 


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Problems with Equipment

There have been allegations and expressions of concern about Gambro equipment.  These are summarised in Media Monitors Network article "Gambro Healthcare - Dialysis Fraud Pays Big Buck" April 2nd 2006. <http://usa.mediamonitors.net/content/view/full/28817>. The article says that "Gambro also has a long history of causing death and injury by producing faulty products".

The allegations include shipping 6000 sets of defective tubing in 1998.  This caused haemolysis resulting in 4 deaths and problems in New York, Nebraska, New Jersey, Alabama, Massachusetts and Maryland.  In 2005 Gambra issued a "Worldwide Safety Alert" about its Prisma System Dialysis machine. In 2006 the FDA claimed that this machine had caused problems with deaths and serious injuries.  A ban was placed on Dialysis machines made in its Italian factory because numerous violations had been found at the plant.  In addition more than 90 incidences of serious problems with the device had been reported to Gambro but these had not been reported to the FDA.  This included deaths.

May 1998 Defective tubing

Defective tubing used to transmit blood to and from a dialysis machine is believed to be the cause of illnesses reported in three states, including two deaths in Maryland.

The company that makes the tubing issued a recall today, and dialysis centers where dozens of patients became sick in Nebraska, Massachusetts and Maryland shut down temporarily.
Dialysis Tubing Is Recalled After Reports of Two Deaths The New York Times May 26, 1998

Jun 1998 Patients died

Four hemodialysis patients died and at least 40 others required hospitalization because of defective tubing that damaged their red blood cells, health officials said here today.

Faulty Tubing Is Blamed For 4 Dialysis Deaths The New York Times  June 19, 1998

Apr 2006 Dialysis machines unsafe - banned in USA

Gambro, which focuses on renal care, recently had some difficulties with U.S. health authorities. In January, the Food and Drug Administration banned the import of three of Gambro's kidney-treatment monitors, citing safety concerns. The FDA found quality-control systems to be inadequate at the Italian plant that makes the monitors.
Gambro Gets a $4.85 Billion Bid From a Nordic Investment Group The Wall Street Journal April 26, 2006


Diaverum's web site is http://www.diaverum.com/

Gambro's web sites are http://www.gambro.com/int/ and http://www.usa-gambro.com


Gambro Healthcare/Diaverum is one of the three large multinationals that have recently started operating dialysis clinics in Australia.

Click Here to go to the Australian Dialysis web page

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This page created August 2008 by Michael Wynne