This story was co-published with The Las Vegas Sun.
The telemarketer called in February with an unusual offer: free heart scans for me and my wife, an $800 value, from a company called Heart Check America.
The procedure would be “non-invasive,” he promised. No needles. “Just lie on a table and hold your breath.” The scans could identify heart disease and might just save our lives, he added.
Three weeks later, at a clinic in a stucco Las Vegas office park, Tom, a salesman for the company, led us through an ominous PowerPoint presentation that was a prerequisite for getting the scans.
He gave example after example of athletes and celebrities – figure skater Sergei Grinkov, baseball player Darryl Kile, newsman Tim Russert – who seemed to be in the prime of life, then dropped dead of heart attacks.
“You never know when it could happen. … Boom, you’re dead!” he exclaimed, slapping a desk for emphasis.
If only they had come to Heart Check America, Tom said ruefully. The company’s Electron Beam Tomography machines could have spotted the harmful build-up of calcium in their arteries, indicating they were at risk. The company scanned other organs, too. Perhaps a test could have helped Patrick Swayze, who died of pancreatic cancer, Tom said.
After 45 minutes, Tom got down to business. He pulled out a price sheet and urged us to go beyond the free scans and upgrade to a 10-year contract for annual imaging services, including heart, lung, bone-density and other scans. If we signed up immediately, the contract – usually $7,995 – could be ours for just $2,995 plus $199 in annual dues. Financing was available on the spot.
In the last two years, Heart Check America has made similar pitches to tens of thousands of Americans in five states, bringing in about $30 million in sales revenue, according to its manager, David Haddad.
But recently, the company has come under fire from patients, regulators and medical experts.
In scores of consumer complaints, Heart Check America clients have accused the company of using pressure sales tactics inappropriate for a health-care company.
“They are manipulating your health, your life and your future,” said Elizabeth Lucki, who entered into a Heart Check America contract after sitting through a two-hour pitch, then spent two months fighting to cancel the deal, forfeiting the $1,990 she paid up front. “This was like brainwashing.”
Doctors have lashed into the company for marketing scans to those who most likely do not need them – people under 40 who don’t smoke, aren’t overweight, and have no family history or symptoms of heart disease. Even for patients at risk of heart disease, some experts say, there is no medical evidence that the benefits of the tests outweigh potential dangers. Scans can result in false positives, leading to unnecessary treatments that are invasive and risky, said Dr. Gilbert Welch, a Dartmouth Medical School professor who studies the problems created by attempts at early disease detection.
“The assumption they’d like you to make is that this could only help you,” Welch said of Heart Check America. “But that’s not right. It could hurt you.”
In the last two months, regulators in Nevada and Colorado have cited one Heart Check America location and shuttered another, saying they lacked adequate medical supervision and had not taken proper precautions to avoid exposing patients to excess radiation. The company closed its Las Vegas center a few weeks after my appointment with Tom. Last week, calls to some other locations were answered with an automated message saying the company was being reorganized.
Haddad has run into similar difficulties before. In 2007, Indiana’s attorney general filed a lawsuit against companies run by Haddad and his wife, alleging they had deceived customers to get them to buy timeshares, vacation packages and travel club memberships.
Haddad acknowledged that Heart Check America has made some missteps, but he blamed most of the recent patient complaints on a temporary backlog caused when the company switched to a new radiology group to read its scans. He characterized the regulatory violations as minor and said the company was taking steps to bring all of its centers into compliance with government standards.
He vehemently defended the value of the company’s services, saying its scans give patients peace of mind and had even saved lives.
“People come back and say, ‘Thank you, my wife will be [alive] because we found this,’” Haddad said. “I made my mom and sister go. People hug and kiss us goodbye in these clinics.”
From Timeshares to Health Care
California entrepreneur Bruce Friedman founded Heart Check America with another investor in 1992.
Friedman had no background in health care – he had been a CPA and worked at a real estate firm – but he saw a business opportunity in the scanning gadgetry emerging at the time.
Some medical centers were using Electron Beam Tomography machines – a type of CT machine that takes rapid-fire images not blurred by the beating heart – but the technology was new and tests done for preventive purposes were not usually covered by insurance.
Heart Check America was among a handful of startups launched to market EBT scans to patients willing to pay cash and to physicians who could make referrals.
Friedman opened his first centers in Los Angeles and Chicago, then expanded to St. Louis, Indianapolis, Washington, D.C., and Arlington Heights, Ill.
His business model was starkly different from the one used by the company today. Each clinic was affiliated with local doctors and radiologists. Almost all the patients came through doctors’ referrals. The doctors ordered specific tests, for which patients paid flat rates. There were no long-term contracts.
By 2008, however, the chain was foundering. Though its EBT machines were still considered best for cardiac scans, newer high-resolution CT machines did other types of body scans better and more cheaply. Imaging centers proliferated to compete for this business. There are now more than 4,400 CT centers nationwide accredited by the American College of Radiology. Only about 50 of them have EBT machines, which are no longer in production.
Friedman shut down all but two Heart Check America locations. Then he was approached by David Haddad.
Haddad, too, had a background in business, not medicine, operating timeshare companies for 17 years.
That came to an end after the Indiana attorney general alleged that timeshare businesses he ran with his wife had deceived scores of customers. The Haddads were accused of drawing people in with prizes that were never delivered and misrepresenting conditions attached to travel deals or contract cancellations.
Haddad said he became a scapegoat when his businesses lost their financing and failed, but he maintained he had done nothing wrong. “I’m not living on a yacht in the Caribbean,” he said.
In 2009, a $470,602 default judgment was entered against the companies to cover restitution, civil penalties and the cost of the investigation. None of the money owed by the Haddads or their businesses has been paid, Indiana officials said.
Haddad said he was drawn to Heart Check America because it offered the chance to use his marketing skills to a more meaningful end. As a child, he had watched his aunt die of breast cancer at 33. Heart Check’s scans could help identify such diseases earlier, he said, giving patients a better chance at survival.
“If I’m going to sell alarm systems or timeshares or carpets, I’d rather sell something I really believe in,” he said.
Haddad struck a deal for his mother, Sheila Haddad, to purchase the company in 2009. Haddad and his mother are listed as officers or managers on the company’s corporate filings in various states, though its ownership shares are not public. Haddad said he supervises the company’s sales and marketing.
According to Haddad, a separate investor group that includes Friedman also has a stake in the company. Neither he nor Friedman would describe its size.
Sales Push Brings Growth and Gripes
Soon after Haddad took the helm, he told Friedman about his plan to direct market 10-year service packages. Friedman said he told Haddad that binding clients to long-term contracts might not be fair – or medically advisable.
“How can you know what test is going to be appropriate three years from now?” Friedman said. “How can you know this technology will be relevant, or that this person will be a good candidate for it?”
Haddad did not respond to questions from ProPublica about Friedman’s comments.
Under Haddad’s leadership, Heart Check America undertook a swift expansion. In 15 months, the company added six centers, building some and acquiring the rest. The company also started to employ marketing techniques similar to those Haddad had used in his timeshare businesses, calling consumers at home and offering them free heart scans to come listen to sales presentations.
It worked. Heart Check America administered about 60,000 free scans in 2010 alone, Haddad said.
He wouldn’t say how many scan recipients signed up for long-term contracts, but internal documents show the company persuaded at least some who accepted the initial offer to become clients. A report provided to ProPublica by a former Heart Check America employee shows that in a single week last November, 148 of about 600 people who attended the company’s pitches signed contracts worth upwards of $400,000.
The company’s sales push also triggered a spike in consumer complaints.
The Federal Trade Commission has received 681 complaints about Heart Check America since January 25, many of them alleging violations of the National Do Not Call Registry, which restricts telemarketing.
More than three dozen complaints about Heart Check America have been filed with the Better Business Bureau, most since the start of this year. The organization has given the company an F grade, based not only on the volume of problems, but on the company’s response to them.
Scores of additional complaints have popped up on Internet sites such as www.ripoffreport.com and www.merchantcircle.com, many citing the tactics used by Heart Check staffers to get people to enter into contracts.
In one complaint filed with the Illinois attorney general, family members alleged their elderly mother was forced to sit through a two-hour sales presentation, then intimidated into signing loan papers to cover the cost of a long-term contract.
Arthur Caplan, director of the Penn Center for Bioethics, said it was unethical to use fear or pressure to get consent for a medical procedure. He called Heart Check America’s sales tactics “medically absurd and morally ridiculous.”
Other Heart Check America clients have complained that it takes far longer than promised for the company to deliver scan results and, in some cases, that the results appeared to be inaccurate.
Last June, Stephanie and Mark Sojka signed up for free heart scans at Heart Check America’s booth at a hot air balloon festival. They elected not to sign a long-term contract but paid $995 to have a battery of tests at the company’s Tinley Park, Ill., clinic.
The clinic promised the couple they would have the results within 10 days, but two months passed without word. After the Sojkas complained to the Better Business Bureau, Heart Check America sent the results, but the delay left the couple uncertain whether they could be trusted.
“If they had such a hard time getting a report to us, how do I know they didn’t generate a template to get us off their back?” Stephanie Sojka said.
Haddad did not respond to questions about the Sojka’s case, but said the “handful” of complaints against Heart Check America was dwarfed by the praise the company has received from satisfied customers. “I’ve gotten hundreds of testimonials,” he said.
Benefits of Screening Uncertain
Within the medical community, there is concern that imaging companies may be marketing services to patients for whom they are unnecessary or, possibly, harmful.
I consulted with experts at several medical schools, the American College of Cardiology, the American College of Radiology and the U.S. Preventive Services Task Force, a panel assembled by the federal government to study scientific evidence and make independent recommendations for care. All agreed that heart scans of the type offered by Heart Check America were inappropriate for patients with a low risk of heart disease – a category that included me and my wife.
EBT scans also are inappropriate for high-risk patients, for whom there are more effective assessment techniques, such as stress tests, said Dr. William Zoghbi, director of cardiovascular imaging at the Methodist DeBakey Heart & Vascular Center in Houston and president-elect of the American College of Cardiology.
Zoghbi said the scans are best suited to people who exhibit some possible indications of heart disease, such as high cholesterol, or who have a family history of premature coronary disease.
But other medical experts questioned the value of screening for any patients.
Welch, the Dartmouth professor, said early screening sometimes prompts patients and their doctors to over-react, treating minor conditions better left alone. Once discovered, a buildup of calcium in a patient’s arteries that might never lead to heart disease can trigger a cascade of invasive treatments, such as a cardiac catheterization or balloon angioplasty, he said.
No randomized controlled trials have been conducted that indicate that EBT scans can predict heart disease, said Dr. Virginia Moyer, chairwoman of the U.S. Preventive Services Task Force.
“The scientific evidence is just not there one way or another,” said Moyer, a professor of pediatrics at Baylor College of Medicine.
It’s not uncommon for imaging centers to market their services directly to consumers, advertising or sending flyers by mail. Moyer said she recently received a flyer from a company that performs scans out of a van in church parking lots.
Though it’s impossible to say how much business is generated this way, “the issue is that these are people who are preying on the fears of the public,” Moyer said.
Clinics operated by Heart Check America have received increasing scrutiny from government overseers in recent months.
Imaging centers are regulated by state health agencies, which set safety guidelines for tests and scanning equipment and conduct periodic inspections.
After I called the Nevada State Health Division to ask if Heart Check America was allowed to give me a heart scan without a doctor’s prescription, the agency inspected the company’s Las Vegas facility. Based on their findings, regulators ordered the clinic to stop conducting scans without doctors’ orders and to take steps to protect employees from radiation exposure.
The center subsequently closed. Haddad said it was shut down because it was losing money, not for safety reasons. He said he was not aware of the findings by Nevada officials. Haddad said other imaging companies had agreed to honor contracts held by Heart Check America patients in the area.
After being notified of Nevada’s action, Colorado regulators checked Heart Check America’s Denver center. They found a litany of deficiencies, including no proof that staffers operating the scanner were qualified, no controls to ensure patients received as little radiation as possible, and that tests were being conducted without doctors’ orders.
Inspectors also found that the clinic was not supervised by a physician licensed in Colorado and that test results weren’t being read by a qualified radiologist or delivered to patients in a timely manner.
According to regulators, Heart Check America listed Dr. Matthew Budoff, a California cardiologist, as the Denver center’s medical director. Budoff, who is medical director of the company’s Irvine, Calif., site, said he was not associated with the Denver facility in any way.
“It’s a little disconcerting to hear that I’m affiliated with a site that I’m not familiar with,” he said.
Heart Check America shut its Denver facility without responding to the state’s findings. Haddad said he expected the clinic to reopen shortly and promised that all Heart Check America centers would soon be in compliance with state regulations. The Colorado attorney general’s office said it had fielded almost 80 complaints from patients since the center closed its doors.
Friedman said he had built a strong reputation for Heart Check America during the 17 years he operated the company, which Haddad “trashed.”
“You can’t build a business for the long term … by misleading people,” he said.
Budoff said he’s “very concerned” that the controversy surrounding Heart Check America could dissuade people from getting scans that could identify heart disease.
“We have to separate out a single provider from the test itself,” he said. “The test is good. The provider may not have done something proper.”
Haddad said he is continuing to look for opportunities in the imaging business. He has formed a new company, Cancer Check America, in Hilton Head, S.C, to focus on cancer screening.
A week after my wife and I received our free heart scans (which showed no blockages in our arteries), I received another call from Heart Check America.
This time, the rep offered me the chance to join the company’s referral program by providing contact information for 10 friends, so they could be invited to get free scans and sit in on sales presentations.
For every couple who attended, he said, I would receive $50.
“My point today is to get as many people possible for the free scan,” he said. “To make sure their hearts are healthy.”