The Lung Institute and the stem cell hard sell

My attention this week has been so focused on the deadly ongoing measles outbreak in Samoa and the way that antivaccine activists, both US (I’m talking to you, Robert F. Kennedy, Jr., with your letter to the Samoan Prime Minister, and Jim Meehan) and local (I’m talking to you, Tay Winterstein and Edwin Tamasese), are actively working to make things worse by treating victims with quackery, demonizing vaccines, and frightening parents out of taking their children in to be vaccinated, that another story (temporarily) escaped my notice. I’m referring to the big story in the Washington Post a few days ago about the Lung Health Institute, a for-profit stem cell clinic that has been mentioned or discussed in this blog a few times now, including one of its patient recruitment seminars, its unethical practices, and how it was one of several for-profit stem cell clinics using as a marketing tool.

Let me just preface my remarks on the story by saying something that I’ve learned over the last decade or so writing about for-profit stem cell clinics like the Lung Institute. Although I’ve said it on Twitter several times, I don’t believe I’ve yet said it here on the old blog; so here it is: Every single for-profit stem cell clinic is a quack clinic scamming patients. EVERY. SINGLE. ONE OF. THEM. If there is an exception to this rule of thumb, I have yet to find it, and I’ve been looking for a decade now. For-profit stem cell clinics charge large amounts of money for unproven and potentially risky treatments, and, although the FDA has recently made moves to regulate them more tightly, as the WaPo story shows, there are many hundreds of these quack clinics throughout the US. It used to be that it was stem cell medical tourism that was the issue, with patients being lured to countries with—shall we say?—less robust laws and regulations to protect patients, but these days stem cell tourism has come home, and there’s no need for patients to leave the country, particularly if they live in California or Florida, which have become havens for stem cell quacks (although California might be finally on the verge of cracking down on them).

On to the story:

By the time he called the Lung Health Institute, Ed Garbutt was desperate. The Dallas computer parts salesman could barely walk the length of his house without gasping for breath. Unable to work, Garbutt, 64, was going broke paying for trips to the emergency room.

Lung Health Institute staffers were reassuring, Garbutt recalled, telling him that more than 80 percent of their patients with lung disease said they found relief through their stem cell treatments — which would cost him $5,500, thanks to a summer sale. He said they told him that if he didn’t have the money, he could get it other ways, like fundraising on GoFundMe.

So Garbutt raised $1,500 in donations, tapped the last of his savings and charged the rest on his credit card. “I spent every dime I had,” he said, “hoping it would make a difference.”

Over the past decade, hundreds of clinics have sprouted across the United States selling stem cell therapies for incurable conditions like Garbutt’s lung disease, Parkinson’s disease and macular degeneration. But often, patients say, the only thing affected is their finances.

Former patients of the Tampa-based Lung Health Institute said they were encouraged to take out bank loans or borrow money from family members. Some withdrew from their retirement accounts and took up church offerings. Others borrowed against their homes.

Over the years, I’ve been using images of Kurt Russell from the 1980 comedy Used Cars to illustrate my posts about the predatory for-profit stem cell clinics. (Actually, the word “predatory” is superfluous. Given the current state of evidence for the stem cell treatments sold by for-profit stem cell clinics, they are all predatory.) In retrospect, I almost regret it. Judging by how the Lung Institute was run, used car salesmen like Kurt Russell’s character Rudy Russo and his unethical rival Luke Fuchs look like downright ethical, upstanding businessmen by comparison. Hell, owners of time share businesses who use the hard sell to close the deal are more ethical than the Lung Institute. There’s a reason why I’ve referred to the business tactics of stem cell clinics like the Lung Institute the “stem cell hard sell.”

Let’s take a look at the Lung Institute’s reported business practices:

Since 2013, the company has conducted a multimillion-dollar campaign to lure patients with targeted online ads, hyped claims and high-pressure seminars, according to internal documents and former staff.

In interviews, former employees responsible for fielding patients’ calls said they were given monthly sales quotas. Former company doctors and nurses described working as “closers,” using their medical credentials to persuade wavering patients to put money down.


This article is based on documents obtained by The Washington Post, including internal memos, telephone scripts, emails and financial records. The Post also interviewed 14 former employees of the Lung Health Institute, including marketers, doctors, nurses and patient coordinators, whose job is to talk to potential customers. All were approached separately and spoke on the condition of anonymity; most said they were required to sign nondisclosure agreements and feared that the company would sue them for speaking out.

See how much like time share sales these clinic’s sales tactics are, just as I’ve been saying for years! The article mentions how, in seminars designed to recruit patients, potential patients were offered discounts on the treatment if they signed up and laid down a deposit there on the spot. Also, non-disclosure agreements are a huge red flag.

Basically, the Lung Institute began as the offspring of the Laser Spine Institute. Its founder was James St. Louis, an osteopath and orthopedic surgeon who offered a minimally invasive surgery as an “alternative” to traditional neck and back surgery. It was a clinic that was subject to dozens of malpractice suits, and several of its surgeons said that many of the surgeries were unnecessary or inappropriate. In 2014, Laser Spine Institute was sued for illegal marketing practices such as offering free airfare and hotels to persuade Medicare patients to sign up to undergo procedures. The lawsuit is ongoing, and the Laser Spine Institute essentially imploded earlier this year after banks froze its assets. In any event, the CEO of Laser Spine Institute was St. Louis’s son, Jimmy St. Louis III, who left the company in 2011 to found what would eventually become the Lung Institute, with his father listed as the chief medical officer. According to a former employee, “He took the Laser Spine business and marketing and made an exact carbon copy. The only thing we did different was swap out the product — stem cells instead of spine surgery.”

The Lung Institute was very canny in its marketing. It knew its potential customers and went after them aggressively: “Elderly patients suffering from incurable lung diseases who need supplemental oxygen and are not able to leave home easily — and therefore spend hours online…” Its marketing was amazing in its unethical savviness:

Early on, the company’s marketers bought ads on search engines such as Google and Bing so its website would appear prominently whenever anyone searched for “cure” and “treatment” for illnesses such as chronic obstructive pulmonary disease, said three former marketing team members.

They bought ads on solitaire and blackjack sites popular among older patients, the former marketers said, and if a city was hit by a snowstorm, they would quickly buy more search ads in that location, knowing patients on oxygen tanks would be homebound. And they targeted cities with direct flights to their clinic locations, knowing that patients on oxygen often struggled to travel with their equipment, former marketers said.

Then came the time share sales:

The ads generated hundreds of “leads” each month as patients called, emailed or clicked for more information, internal budget documents show. Those in charge of converting the leads into sales were called patient coordinators.

Former coordinators said they were given a minimum quota of 10 sales each month. And as recently as last year, coordinators got paid only if they made a sale, working purely on commission, according to Miller, the company’s COO. In recent months, the company has returned to the practice of giving coordinators a base salary in addition to their commission, Miller said. She disputed former coordinators’ assertions that they were given firm quotas, saying that, “like any healthy organization, we have to have projections.”

If you work strictly on commission, you can imagine the pressure there is to sign up patients, particularly if there are minimal quotas to make. This is not a system that should be used to sell medical care of any kind, ever, because it is inherently a massive conflict of interest and encourages hard sell techniques and even lying.

The scripts were disingenuous, too:

According to a 2013 marketing script, if patients asked whether the treatments were approved by the Food and Drug Administration, oordinators were taught to respond: Although “the treatments are not FDA approved . . . all of the drugs and equipment we use are FDA-approved.”

If patients asked why insurance wouldn’t cover the procedure, the script told coordinators to answer: “I am sure that one day it will, however, right now we want to provide treatment to those who want it.”

If patients asked whether the treatments would work on them, coordinators were taught to point to a handful of patient testimonials.

Here’s an example of just such a patient testimonial:

Quack clinics, whatever quackery they’re selling, love to use testimonials like this. Unfortunately, testimonials are not good evidence that a treatment works.

It gets worse, though. The story describes how these patient coordinators became increasingly troubled by the phone calls and sales pitches they were required to make. They were also very much disturbed by patients for whom the treatment didn’t work would sometimes call them to vent:

Several patient coordinators said they were troubled by these calls. “Some people wouldn’t have that much money, and you’re doing everything you can to convince them to use it on something you’re not sure even works,” said a woman who worked at the Lung Health Institute for two years and left for another company after she said she became uncomfortable with the job. “People would call afterward and say, ‘I trusted you, but I don’t feel any better.’ Some would call just to yell: ‘I spent all this money, and you guys said this and that. You sold me fake medicine.’ Often I’d need a drink by the end of the day.”

The rest of the story is familiar. The Lung Institute encouraged patients to go into debt or to use crowdfunding in order to be able to afford the treatments. They published crappy research based on surveys instead of hard outcomes, like improvement in pulmonary function tests, exercise capacity, and the like. They hired a stem cell researcher who is not a physician and therefore, embarrassingly (he’s from the university where I did my residency and obtained my PhD, Case Western Reserve University), found such dubious research convincing:

A stem cell researcher, Arnold Caplan — hired by the Lung Health Institute to testify in court as its expert — said he found the data convincing.

“The truth is, I don’t exactly know how [the treatments] work,” said Caplan, a biologist at Case Western Reserve University. But after seeing the phone surveys conducted by the company, he said, “The important point for me is, there are clearly statistically relevant and positive outcomes from these treatments.”

The only reaction for someone like Caplan agreeing to be a hired gun for a highly unethical quack clinic and saying something as ignorant of clinical evidence interpretation is this:

Naturally, those who know clinical trials were not impressed:

But three leading pulmonologists with no connection to the company or to any legal action said they found the data unconvincing and flawed, given its lack of comparative groups and placebo controls and other methodological problems.

“It’s borderline propaganda to suggest this information is evidence of efficacy,” said Cosgrove, a pulmonologist at National Jewish Health in Denver, which runs one of the world’s largest interstitial lung disease programs.

The company’s claims are “a nothing, a come on,” said Michael Matthay, a pulmonologist and stem cell researcher at the University of California at San Francisco. “Those statements are not supported by any medical data or medical studies.”

“There has never been a randomized trial” for this treatment’s effect on lung diseases, said Marilyn K. Glassberg Csete, a leading expert in lung diseases and stem cell therapies at the University of Miami. “There’s no data.”

It’s not “borderline propaganda.” It’s propaganda, period. For shame, Professor Caplan! For shame! How much did the Lung Institute pay you to sell your scientific soul like that?

One good thing mentioned in this story is that new Google policies are hurting the Lung Institute’s business. In 2017, Google stopped selling ads to the Lung Institute for violating its policies, resulting in a sharp drop in sales leads. Of course, the Lung Institute “evolved” to try to get around the ban:

Around the same time, the company changed its name. For years, it had been called the Lung Institute, but in 2017, the company inserted the word “Health” and moved to a new main website — Former employees said the rebranding solved some of the search engine and ad problems. Company officials said it was done to reflect “expanded services.”

In September this year, Google announced a policy barring ads for “unproven or experimental medical techniques such as most stem cell therapy.” Google said it was taking the step after seeing “a rise in bad actors attempting to take advantage of individuals by offering untested, deceptive treatments.”

Amid growing scrutiny and regulation of stem cell clinics, the Lung Health Institute made another change last year, removing all mention of “stem cells” from its website. The company now calls its procedure “cellular therapy” and “platelet-rich plasma platelet-concentrate,” or PRP-PC. Company officials said that their procedure hasn’t changed, and that they still believe their treatment contains stem cells. They said their language change reflects how “regenerative medicine has evolved.”

No, it reflects the Lung (Health) Institute’s desire to get around Google policies against advertising for unproven, untested, and deceptive treatments like the sorts of stem cell therapies it sold. Also, PRP-PC doesn’t work either. At least, there’s no good evidence that it is an effective treatment for lung disease or the plethora of other diseases for which the Lung Health Institute markets it. It’s also designed to get around the new proposed FDA regulations for stem cell therapies and shoehorn its unproven treatment into a different set of FDA regulations, those for blood products.

One thing’s for sure. The FDA needs to act. People are being harmed by these unproven treatments, such as the patients with macular degeneration who were blinded by injections of “stem cells” into their eyes. Even those who are not being physically harmed are being financially harmed. They drain their savings, take out second mortgages or other loans, and launch desperate crowdfunding efforts, all in order to afford these treatments, which often must go on indefinitely, as several grand a pop. Unfortunately, the FDA is chronically underfunded, and the current administration is not exactly predisposed to tighten regulation. I fear that the stem cell hard sell will continue for the foreseeable future.