Arnold Kling  

Health Care Corruption

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Stephen Cha attacks the pharmaceutical industry's practice of showering gifts on physicians.


Food, trinkets, pens and coffee mugs were being handed out to the whole office staff, about 20 people including med students and doctors -- all courtesy of Merck & Co. And to the physician who was the number one prescriber of Vioxx in the entire region that year, a marketing rep of the company awarded a pair of Philadelphia Eagles season tickets.

My guess is that this gift-giving would probably fall to zero if all drugs could be sold over-the-counter. But somehow, I suspect that the last thing that doctor Cha or his colleagues will suggest is that removing the physician's gatekeeper role is the way to eliminate the source of corruption here.

Speaking of how government corrupts health care, the Washington Post also has this story on Medicare.


In Medicare's upside-down reimbursement system, hospitals and doctors who order unnecessary tests, provide poor care or even injure patients often receive higher payments than those who provide efficient, high-quality medicine.

The article says that Medicare's much-vaunted low overhead is actually a bug, not a feature.

Its oversight system is fragmented, underfunded and marred by conflicts of interest, records and interviews show. For every $1,000 that it pays to hospitals and doctors, it invests just $1 or $2 to oversee and improve patient care.

"The amount we spend on quality is a pittance," said Kenneth W. Kizer, a physician and president of the National Quality Forum, a nonprofit that works with Medicare officials to develop standards of care.


I talked about the challenge of rewarding health care suppliers on the basis of quality in this essay.

UPDATE: See also this New York Times series on Medicaid fraud and abuse.


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COMMENTS (3 to date)
FishEpid writes:

A significant component of what you propose in your essay (selecting the best medical practices) has developed over the last decade and is having a significant impact on medical practice and all the stakeholders:

The Cochrane Collaboration (Preparing, maintaining and promoting the accessibility of systematic reviews of the effects of health care interventions)
http://www.cochrane.org/

Cochrane Reviewer's Handbook http://www.cochrane.org/resources/handbook/index.htm
InformedHealthOnline (consumer review summaries) http://www.informedhealthonline.org/item.aspx
Review production resources
http://www.cochrane.org/resources/revpro.htm
Useful Links
http://www.cochrane.org/docs/weblinks.htm

What Is Evidence-Based Medicine and Why Should It Be Practiced? (dated)
http://www.rcjournal.com/contents/11.01/11.01.1201.asp

Centre for Evidence-Based Medicine (Oxford)
http://www.cebm.net/

Centers for Health Evidence.net "know what to do, do what is known, understand what is done"
http://www.cche.net/

User's Map for Evidence-Based Practice
http://www.cche.net/principles/outline_all.asp
Users' Guides to Evidence-Based Practice
http://www.cche.net/principles/content_all.asp

Searching PubMed http://www.ncbi.nlm.nih.gov/entrez/query.fcgi for "evidence based medicine" yields over 18,000 hits.

If you ignore or are unaware of major aspects of the current situation for selecting best medical practices, your arguments for change are significantly weakened and considerably more easily dismissed by your opponents.

Bernard Yomtov writes:

I don't see why making all drugs over-the-counter would eliminate the incentive to provide gifts to physicians.

After all, many people, maybe most, would still consult physicians for advice as to what medications would be helpful, even if a prescription were not required.

Compare legal matters. There's nothing stopping you from writing your own will, or your own contracts, but when these things get a bit complicated people still want professional assistance.

In fact, I'll go further, many people seek and pay for professional advice in situations where it not only is not required, but actually has negative value. Take a look at mutual fund fees if you don't believe me.

simon writes:

We have discovered why health care is not working - gifts to doctors. Why did we not see this sooner? Seriously, this is a trivial issue.

The real problems with health care are associated with managing patient outcomes and payment of services. Managing a patient outcome is complicated by the fact that diagnosis, treatment efficacy and patient satisfaction are widely variable. That is the distribution around expectations and outcomes have large variances. Payment also contributes to major problems. The lack of true opportunity costs experienced by patients and physicians limits the range of effecient outcomes

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