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Tuesday, Aug. 27, 2013 12:00 am

The profit motive

A year ago I ventured an opinion about one of the chronic ailments suffered by U.S. health care -- expensive, ineffectual or unnecessary treatments that are partly a result of incentives built into our perverse system of paying for such things. (See Just what the doctor ordered, August 23,2012.)

On August 19 Tyler Cowen pointed to a study by the Government Accountability Office that found that urologists referred a substantially higher percentage of their prostate cancer patients to radiation therapy when the doctors themselves owned the equipment or had financial ties to those who provided the treatment. They do this in spite of the fact that alternative treatments may be equally effective and are less expensive for Medicare and for beneficiaries.

The study also found that Medicare patients who underwent the treatments often were unaware that their doctors stood to profit from recommending such treatments.

The study can be read here. The New York Times' Robert Pears examines the patient more closely here.

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