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The Medicare Rip-Off As Free Market Principle

The Wall Street Journal has a great investigative story about how one company enlisted some doctors to expand the use of wildly expensive spinal fusion surgery:

Alexander Vaccaro, a spine surgeon at Thomas Jefferson University Hospital in Philadelphia, disclosed receiving between $415,000 and $2.03 million in royalties from six device makers in 2009, and between $165,000 and $666,000 in consulting fees from nine device makers. Dr. Vaccaro also disclosed owning stock in 28 companies, mostly medical-device makers. ...
Two former Medtronic employees have alleged in separate whistleblower lawsuits that the royalty agreements are intended to disguise the fact that the payments the company makes to surgeons are really kickbacks for using Medtronic devices.[...]
One of the suits was filed in U.S. District Court in Memphis, Tenn., in 2002 by a former counsel at Medtronic's spine division. After the Justice Department joined the suit, Medtronic settled the case for $40 million in 2006 while denying wrongdoing. The other suit was subsequently dismissed.
Most of the settled suit remains sealed, but the Journal reviewed an unredacted copy. It says the five surgeons at Kentucky's Norton Hospital became Medtronic's biggest spine client after they signed consulting and royalty deals with the company in early 2001. 

But -- surprise! -- the procedure turns out to be of very questionable effectiveness:

You can easily put $30,000 worth of hardware in a person during a fusion surgery," says Charles Rosen, a spine surgeon at the University of California, Irvine School of Medicine who created a group called the Association for Medical Ethics to combat what it sees as conflicts of interest in spine surgery.
Some recent studies have suggested poor outcomes for spinal fusion. A study published in the Journal of the American Medical Association, or JAMA, in April found that Medicare patients with a condition called spinal stenosis who had more than two vertebrae fused, a procedure known as a complex fusion, were nearly three times more likely to have life-threatening complications than patients who had a less invasive procedure known as a decompression.
Spinal stenosis is a narrowing of the spine which puts pressure on the spinal cord or spinal nerves.
Another study of workers' compensation cases published this year in the online edition of the journal Spine showed that patients who had a spinal fusion were much less likely to return to work within two years after their surgery than a group of patients with similar conditions who didn't have surgery, and that 27% of them had to be re-operated on. Their rate of permanent disability was more than five times as high as the patients whose spines weren't fused, and their daily intake of powerful narcotic painkillers increased by 41% after surgery. 

The amazing thing is that opposition to this phenomenon has been coded in American politics as "liberal." A left-of-center Democratic administration decided to try to impose some degree of evidence-based criteria upon Medicare, and conservatives decided this constituted "socialism." So now we live in a bizarre world in which the conservative position is that our single-payer health insurance program for the elderly must not employ research to determine which procedures to fund. Of course this odd position has the handy benefit of lining up perfectly with the financial interests of a large chunk of the medical industry.