“Financial Incentives Can Change the Way Medicine is Practiced”


        An angioplasty being performed in Eyria, Ohio.  Source of photo:  online version of the NYT article cited below.

 

Medicare patients in Elyria receive angioplasties at a rate nearly four times the national average . . .

. . .

. . . some outside experts say they are concerned that Elyria is an example, albeit an extreme one, of how medical decisions in this country can be influenced by financial incentives and professional training more than by solid evidence of what works best for a particular patient.

“People are rewarded for erring on the side of an aggressive, highly expensive intervention,” said Dr. Elliott S. Fisher, a researcher at Dartmouth Medical School, which analyzed Medicare data and found Elyria to be an outlier.

Medicare pays Elyria’s community hospital, EMH Regional Medical Center, about $11,000 for an angioplasty involving use of a drug-coated stent.

The cardiologist might be paid an additional $800 for the work.  That is well above the fees for seeing patients in the office.  And with the North Ohio doctors performing thousands of angioplasties a year — about 3,400 in 2004, for example — the dollars can quickly add up.

Some medical experts say Elyria’s high rate of angioplasties — three times the rate of Cleveland, just 30 miles away — raises the question of whether some patients may be getting procedures they do not need or whether some could have been treated just as effectively and at lower cost and less risk through heart drugs that may cost only several hundred dollars a year.

. . .

Experts know that changing the financial incentives can change the way medicine is practiced.

For example, Kaiser Permanente, the big health system that employs its own doctors, says its patients in Ohio, including some in Elyria, are slightly less likely than the national average to undergo the type of cardiac procedures the North Ohio Heart Center doctors perform so prolifically.

Kaiser’s cardiologists, who work on salary instead of being paid by the procedure, typically treat patients in that region at the Cleveland Clinic, where they have hospital privileges.  And they follow established protocols about when a patient should undergo an angioplasty, when drugs might suffice and when bypass surgery might be the best resort.

“It’s not just individual doctors making up their minds,” explained Dr. Ronald L. Copeland, the executive medical director for Kaiser’s medical group in Ohio.  With no financial reason to perform expensive procedures, the Kaiser doctors frequently choose to manage the patients’ heart disease with drugs only.  “Our doctors have no disincentive to do that,” Dr. Copeland said.

. . .

For many cardiologists, the natural tendency when they see a patient with heart disease is to perform a procedure to try to clear arterial blockages.  And patients, cardiologists say, tend to rely on their doctors’ judgment.

“It’s sort of like, you go to a barber and ask if you need a haircut,” said Dr. David D. Waters, chief of cardiology at San Francisco General Hospital, who is currently studying the effectiveness of different kinds of treatment for heart disease.  “He’s likely to say you do.”

. . .

Experts say it can be difficult to detect cases in which doctors cross a medical line and are clearly performing unnecessary treatments.

“A lot of decisions are discretionary,” said Dr. Harlan M. Krumholz, a cardiologist and professor at Yale.

“It’s about where the thermostat is set,” he said, arguing that doctors in a particular geographic area tend to be unaware if the way they are treating their patients is markedly different from the practices of their peers in other areas.

Traditional measures of medical quality are not set up to detect whether patients are being treated too much, he said, unlike the kinds of safeguards that prompt credit card companies to call their customers to discuss unusual spending activity.  “Right now there are no ‘smart’ systems in place,” Dr. Krumholz said.

In the absence of any real monitoring or oversight, doctors in most places, including Elyria, have few incentives not to favor the treatments that provide them the most reimbursement.  Dr. Waters, the San Francisco cardiologist, said that the way physicians are typically paid — more money for more procedures — results in too many decisions to give a patient a stent.

“You can’t be paying people large sums of money to do things without checks and balances,” he said.

 

For the full story, see:

REED ABELSON.  "In Ohio City, a Heart Procedure Is Off the Charts; SIDE EFFECTS; A Stent Epidemic."  The New York Times  (Fri., August 18, 2006):  A1 & C4.

 

Source of graphic:    online version of the NYT article cited above.

Cuban Bureaucrats Fooled by Castro Impersonator

CastroImpersonator.jpg  Castro impersonator Eddy Calderón.  Source of photo:  online version of WSJ article cited below. 

 

(p. A1)  Mr. Calderón says the work can be risky.  Once, he recalls, a woman whose relative had been executed by the revolution hurled a dinner plate at his head.  At a recent gig, a tiny, white-haired lady shouted at him:  "Why did you ruin the country?" Mr. Calderón, as Fidel, answered that she should thank him because if it hadn’t been for him, she’d be stuck in Cuba instead of living well in Miami, "where you can buy hair dye and dentures."

After the Aug. 13 performance, a ballroom attendant, Armando Montes de Oca, approached Mr. Calderón while he was still in his Castro beard and told him:  "If I didn’t know you were Calderón behind that beard, you would never leave (p. A9) this room alive."

"Thank you," Mr. Calderón replied.

Mr. Calderón has been doing his imitation of Fidel for about a dozen years.  He became a local superstar two years ago when a cable-TV channel started weekly broadcasts of a skit called "La Mesa Retonta," or "The Idiots’ Table," a takeoff on a weekly "Meet the Press"-style show Mr. Castro has done in Cuba, called "La Mesa Redonda," or "The Roundtable."

Mr. Calderón’s Fidel voice is so good that on about 50 occasions, he has telephoned Cuban bureaucrats in Havana or Cuban diplomats abroad and fooled them into thinking they were on the line with the man himself.  Mr. Calderón taped the calls, which he still often plays on a Miami radio show.

Two years ago, Mr. Calderón held a 12-minute conversation with Cuba’s deputy construction minister, ordering him to build a giant retractable roof over Havana’s Latin American stadium, as a way to improve conditions for Cuban baseball players and dissuade them from defecting.

"We need a revolutionary roof to uphold the pride of the Cuban Revolution," said Mr. Calderón during the taped telephone call, in a dead-on imitation of Mr. Castro’s edgy, high-pitched, nasal voice.

"I am your unconditional soldier," replied the hapless minister, who promised to get the job done.

That same year, Mr. Calderón telephoned a luxury hotel at Cuba’s Varadero beach resort and ordered the hotel manager to provide a week-long all-expense-paid vacation for one of Cuba’s leading dissidents, whose movements are shadowed by the secret police, to show the government’s good will.  Before hanging up, the hotel manager, Mr. Calderón says, promised to make the reservation.

A year earlier, Mr. Calderón as Fidel told transport official Gumersindo Gómez to round up 200 scarce buses for an outing of some 700 priests of the Afro-Cuban religion Santería, and to find room for their sacrificial goats and chickens.  Make sure the buses don’t have any graffiti saying "down with You-Know-Who," he added.

"Fatherland or death," Mr. Calderón said.

"Onwards to victory," replied Mr. Gómez, according to the tape of the phone call.

 

For the full story, see:

JOSÉ DE CÓRDOBA.  "Fidel Castro’s Illness Has Impersonators Scrambling to Adapt In Miami; Mr. Calderón Does El Jefe’s Voice Perfectly; New Role for Brother Raúl."  Wall Street Journal  (Fri., August 18, 2006):  A1 & A9. 

Eleven-Year-Old Crippled for Life by Mao Supporters


  Source of book image:  http://www.holtzbrinckpublishers.com/henryholt/Search/SearchBookDisplayLarge.asp?BookKey=1524294


(p. B29) This improbable journey, from Maoist orthodoxy to the entrepreneurial quasicapitalism officially described as “socialism with Chinese characteristics,” is the main theme of “Chinese Lessons,” but Mr. Pomfret, a reporter for The Washington Post, gives his tale a twist.  He tells it not only through his own experiences as a student and journalist but through the life stories of five university classmates, who suffered through the Cultural Revolution as children, found inspiration and hope in the growing democracy movement and lived to see a China that neither they nor their parents could have imagined.  . . .

All the lives Mr. Pomfret explores are extraordinary, and each sheds its own light on recent Chinese history.  Perhaps the most endearing of his characters is Guan Yongxing, better known as Little Guan, who as an 11-year-old suffered social ostracism after accidentally using a piece of paper with “Long Live Chairman Mao!” on it to wipe herself in the bathroom.

After classmates threw her to the ground, no doctor would treat her dislocated shoulder, leaving her crippled for life.  Her father’s job as a schoolteacher made the Guan family a prime target for abuse, and Little Guan, rather than endure ridicule and torment at school, picked cotton and sprayed fertilizer on the fields, her back constantly burned by chemicals leaking from the tank on her back.  Tough, determined and highly intelligent, she survives and eventually prospers in the new China.

. . .

Zhou Lianchun, called Book Idiot Zhou by a contemptuous Communist Party official, meted out insults and torture as part of a Red Guard brigade.  “I did what I was told and, being 11, I liked it,” he tells Mr. Pomfret.

. . .

More even than sex, students want just a little bit of the good life that seems to be in reach as China’s rulers relax their economic policies.  To get it they master a strange kind of doublethink, pledging allegiance to the party and Communist ideals while scheming to start a business.

Book Idiot Zhou, a history teacher by day, jumps into a business partnership to process urine for the pharmaceutical industry.  “Several days a week, he taught Marxism, Leninism and Maoist thought and railed against the exploitation of the capitalist class,” Mr. Pomfret writes.  “The rest of the time he spent as a budding entrepreneur, employing dozens at rock-bottom wages, working the system to enrich himself, his partners and his family.”

. . .

His classmates have done well.  But their lives, and the China described in “Chinese Lessons,” bear a heavy load of suppressed grief, terrible compromises and boundless cynicism.  At a new drive-in called the Happy Auto Movie Palace, Mr. Pomfret notices something strange about the concrete slabs underneath his feet.  They show the marks of tank treads.  The drive-in owner bought them after the government repaved Tiananmen Square.

This strikes Mr. Pomfret as bizarre, but not the owner.  “It was a good deal,” he says.

 

For the full review, see: 

WILLIAM GRIMES. "Books of The Times; Twisting Along China’s Sharp Curves." The New York Times (Fri., August 4, 2006):  B29.
(Note: ellipses added.) 


Big Business Is Often Bashed, But Is Not Always Bad

(p. 4) BUSINESS bashing by politicians in America has a long history, including rhetoric far more inflammatory than the denunciations being directed at Wal-Mart this year by some Democrats, who sometimes sound as if they are running against the company instead of another politician.

. . .

The company may not appreciate the honor, but its place in the political debate reflects its revolutionary effect on the American economy.

Put simply, the big winners as the economy changes have often been scary to many, particularly those with a stake in the old economic order being torn asunder.

“Twice as many Americans shop at Wal-Mart over the course of a year than voted in the last presidential election,” said H. Lee Scott Jr., the company’s chief executive, in a speech to the National Governors Association in February.

Wal-Mart’s success reflects its ability to charge less for a wide range of goods.  That arguably has reduced inflation and made the economy more efficient.  It has introduced innovations in managing inventory and shipping goods.

. . .

But the fact that Wal-Mart has more shoppers than any politician has voters shows that many of those workers — and many people higher on the income scale — find its prices irresistible.  That group no doubt includes some of the company’s critics.

Previous business targets of politicians have similarly been both popular and reviled.  The railroads enabled much of America to prosper, but to many people in the late 19th century they were viewed as villains.

They upset old economic relationships by making it possible to ship goods over much longer distances, thus introducing competition for local businesses and farms.

 

For the full commentary, see:

FLOYD NORRIS.  "THE NATION; Swiping at Industry From Atop the Stump."  The New York Times, Section 4  (Sun., August 20, 2006):  4.

(Note:  ellipses added.)

 

   Illinois protesters bashing Wal-Mart during the summer of 2006.  Source of photo:  online version of the NYT article cited above.

 

Perverse Incentives Lead to Useless Heart Surgeries


The old idea was this:  Coronary disease is akin to sludge building up in a pipe.  Plaque accumulates slowly, over decades, and once it is there it is pretty much there for good.  Every year, the narrowing grows more severe until one day no blood can get through and the patient has a heart attack.  Bypass surgery or angioplasty — opening arteries by pushing plaque back with a tiny balloon and then, often, holding it there with a stent — can open up a narrowed artery before it closes completely.  And so, it was assumed, heart attacks could be averted.

But, researchers say, most heart attacks do not occur because an artery is narrowed by plaque.  Instead, they say, heart attacks occur when an area of plaque bursts, a clot forms over the area and blood flow is abruptly blocked.  In 75 to 80 percent of cases, the plaque that erupts was not obstructing an artery and would not be stented or bypassed.  The dangerous plaque is soft and fragile, produces no symptoms and would not be seen as an obstruction to blood flow.

That is why, heart experts say, so many heart attacks are unexpected — a person will be out jogging one day, feeling fine, and struck with a heart attack the next.  If a narrowed artery were the culprit, exercise would have caused severe chest pain.

Heart patients may have hundreds of vulnerable plaques, so preventing heart attacks means going after all their arteries, not one narrowed section, by attacking the disease itself.  That is what happens when patients take drugs to aggressively lower their cholesterol levels, to get their blood pressure under control and to prevent blood clots.

Yet, researchers say, old notions persist.

”There is just this embedded belief that fixing an artery is a good thing,” said Dr. Eric Topol, an interventional cardiologist at the Cleveland Clinic in Ohio.

In particular, Dr. Topol said, more and more people with no symptoms are now getting stents.  According to an analysis by Merrill Lynch, based on sales figures, there will be more than a million stent operations this year, nearly double the number performed five years ago.

Some doctors still adhere to the old model.  Others say that they know it no longer holds but that they sometimes end up opening blocked arteries anyway, even when patients have no symptoms.

Dr. David Hillis, an interventional cardiologist at the University of Texas Southwestern Medical Center in Dallas, explained:  ”If you’re an invasive cardiologist and Joe Smith, the local internist, is sending you patients, and if you tell them they don’t need the procedure, pretty soon Joe Smith doesn’t send patients anymore.  Sometimes you can talk yourself into doing it even though in your heart of hearts you don’t think it’s right.”

Dr. Topol said a patient typically goes to a cardiologist with a vague complaint like indigestion or shortness of breath, or because a scan of the heart indicated calcium deposits — a sign of atherosclerosis, or buildup of plaque.  The cardiologist puts the patient in the cardiac catheterization room, examining the arteries with an angiogram.  Since most people who are middle-aged and older have atherosclerosis, the angiogram will more often than not show a narrowing.  Inevitably, the patient gets a stent.

”It’s this train where you can’t get off at any station along the way,” Dr. Topol said.  ”Once you get on the train, you’re getting the stents.  Once you get in the cath lab, it’s pretty likely that something will get done.”

 

For the full story, see: 

GINA KOLATA.   "New Heart Studies Question the Value of Opening Arteries."  The New York Times   (Sun., March 21, 2004). 


Minimum Wage May Destroy Jobs Overall, In Spite of Card and Krueger

The economists’ consensus about the job-destroying aspect of the minimum wage is less strong than it used to be.  In the late 1970s, 90% of economists surveyed agreed or partly agreed with the statement, "a minimum wage increases unemployment among young and unskilled workers."  By 2003, this percentage had fallen to 73.  Still a strong consensus, but a weaker one than previously. What happened?

The answer:  One major study and a book by economists David Card, now at the University of California, Berkeley, and Alan Krueger of Princeton.  In a 1994 study of the effect of a minimum wage increase in New Jersey, they found higher growth of jobs at fast-food restaurants in New Jersey than in Pennsylvania, whose state government had not increased the minimum wage.  This study convinced a lot of people, including some economists.  It was almost comical to see Sen. Edward Kennedy hype this study when he had never before mentioned any economic studies of the minimum wage.

Based on criticism of their data from David Neumark and economist William Wascher of the Federal Reserve Board, Messrs. Card and Krueger moderated their findings, later concluding that fast-food jobs grew no more slowly, rather than more quickly, in New Jersey than in Pennsylvania.  But they never answered a more fundamental criticism, namely that the standard economists’ minimum-wage analysis makes no predictions about narrowly defined industries.  As Donald Deere and Finis Welch of Texas A&M University, and Kevin M. Murphy of the University of Chicago, pointed out, an increased minimum wage help expand jobs at franchised fast-food outlets by hobbling competition from local pizza places and sandwich shops.

 

For the full commentary, see:

DAVID R. HENDERSON. "If Only Most Americans Understood." The Wall Street Journal (Tues., August 1, 2006): A12.

 

The citation for the article by Deere, Murphy and Welch:

Deere, Donald, Kevin M. Murphy, and Finis Welch. "Sense and Nonsense on the Minimum Wage." Regulation 18, no. 1 (1995).

 

 

French Slow Innovation By Violating Apple’s Intellectual Property Rights

THE French take pride in their revolutions, which are usually hard to miss — mass uprisings, heads rolling and such.  So, with the scent of tear gas in the air this past month from the giant protests against a youth labor law, it was easy to overlook the French National Assembly’s approval of a bill that would require Apple Computer to crack open the software codes of its iTunes music store and let the files work on players other than the iPod.  While seemingly minor, the move is actually rather startling and has left many experts wondering (as ever):  What has possessed the French?

. . .  

If the French gave away the codes, Apple would lose much of its rationale for improving iTunes.  Right now, after the royalty payment to the label (around 65 cents) and the processing fee to the credit card company (as high as 23 cents), not to mention other costs, Apple’s margin on 99-cent music is thin.  Yet it continues to add free features to iTunes because it helps sell iPods.

Opening the codes threatens that link.  Apple would need to pay for iTunes features with profits from iTunes itself.  Prices would rise.  Innovation would slow.

Even worse, sharing the codes could make it easier for hackers to unravel Apple’s FairPlay software.  Without strong copy protection, labels would not supply as much new music.

 

For the full commentary, see:

Austan Goolsbee.  "ECONOMIC SCENE; In iTunes War, France Has Met the Enemy. Perhaps It Is France."  The New York Times  (Thurs., April 27, 2006):  C3.