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Another illuminating New York Times article (December 30, 2006) entitled The Spine as Profit Center. The article raises questions about how many of the 500,000 spine operations performed each year actually benefit the patients, and whether the surgeons performing the procedures are influenced by financial conflicts of interest.

It turns out that not only are the surgeons well paid to perform the operations but that many of them are also investor/owners of the companies that provide the expensive hardware used in these operations… The article states that patients and their insurers are charged around $1,000 for a single screw… Which actually costs less than $100 to manufacture. Note that the surgeons decide where the hardware is purchased, not the hospital. In fact, the surgeon-owned companies frequently do not actually make the hardware at all. In many cases they simply buy a screw from industry supplier for $65 to $100 and mark it up to $1,000 before it is “sold” to the surgeon’s patient.

It should be emphasized that a typical back operation needs a lot more than one screw. In one example provided in the article a complete “set” of hardware for the procedure would cost the patient $7,800.

Another example of “soft corruption”… Pretty “hard”, of course, if it is your back that was “screwed” up in an unnecessary and expensive procedure.

I read a brief article… buried in the back of today’s Wall Street Journal (Thursday, December 28, 2006) about our recently resigned Secretary of the Interior, Gale Norton.

I am sure she’s done nothing illegal… After all she is a lawyer and a Washington political appointee… But reading the article did make me a bit queasy.

The reason for the article is that Royal Dutch Shell just announced that they had hired her as their general counsel, presumably for the sort of munificent salary that goes with that sort of job these days.

Now call me cynical but do you think that job offer was in any way related to her role as Secretary of the Interior?

Or the fact that during her tenure the Department of Interior, erh, omitted to bill the oil industry for royalties they owed the US taxpayer? To the tune of, some minor amount…. Oh yes, there it is… $10 billion (according to the General Accounting Office). And yes, Martha, Royal Dutch Shell was one of the biggest beneficiaries.

The general counsel job is, I gather, the Big Oil equivalent of stuffing a few twenties down her cleavage after the lap dance.

This is the sort of “soft corruption” I see as endemic in our government and business elite. Nobody handed Ms. Norton an attache case of hundred dollar bills, they may not have explicitly offered her a job… But she knew she would be “taken care of” after she left office.

UPDATE: In the New York Times (Dec. 30, 2006) Business section there is an article U.S. Official Overseeing Oil Program Faces Inquiry. This is all about, you guessed it, the Department of the Interior again. The Department of Justice is investigating whether the director of the multi-billion dollar oil trading program was being paid by oil companies hoping for contracts under the program. (So maybe the attache cases of cash aren’t so far fetched.)

The director of the program, Gregory W. Smith, and three subordinates are suspected of steering huge oil trading contracts to favored companies. As the article states… If the allegations prove correct, they would constitute a major new blot on the Interior Department’s much-criticized effort to properly collect royalties on vast amounts of oil and gas produced on US land or coastal waters. In other words, once again, the taxpayers are being ripped off and GW’s appointees and the oil industry are benefiting.

The NYT article then goes on to point out that the Department of the Interior’s Minerals Management Service is now the target of multiple investigations by Congress and the Department’s own inspector general.