Interview: Don Light and Adam Reich

In what ways can economic sociology inform medical sociology, or the study of medical organizations and institutions? What might be some potential areas of research for those interested in studying at the intersections of these two subfields?
Adam: There’s been lots of great work that straddles the fields of economic and medical sociology (Kieran Healy’s Last Best Gifts comes immediately to mind, as does the work of Donald Light, W. Richard Scott, and Rachel Best). Since medical spending makes up more than 17% of U.S. GDP, it would be surprising if economic sociology did not have a contribution to make here!

Don: Medical sociology divides roughly into two parts: sociological patterns and trends in health and illness, and sociological studies of health care organizations. Economic sociology can inform patterns of health and illness in terms of gender and the ethnic economy, the key role markets play in promoting either health-damaging or health-improving products or services, and the ways in which pharmaceutical markets persuade patients and doctors to prescribe new drugs that 90 percent of the time are found little or no better by independent review teams, yet pose substantial risks of harm. How do markets for controlled painkillers like Oxycodone differ from markets for heroin? Deaths from the former exceed deaths from the latter, and profit margins are probably higher.

On the provider and organizational side of delivering services, health care services are a major part of the economy and growing rapidly. They pose deep challenges to assumptions in economics and economic sociology. Theoretically and practically, they do not fit prevailing models of markets and competition, especially in the United States, which ironically believes market forces should drive medical decision-making. Yet health care least meets the requisites for beneficial competition. Buyers do not know the cost or value of many services. Market signals are vague and delayed. What economists call “market failure” is pervasive; yet it’s not so much failure as pernicious competition, where sellers exploit the vulnerabilities of end user (i.e. patients), who are often not buyers.

Market relations are layered, with sellers’ middlemen (“managed care”) and patients’ middlemen (their insurers) claiming to make clinical services more cost-effective and efficient. Why is it then that they have produced the most costly, segmented health care among affluent nations, with the worst outcomes? Why is theory so at odds with reality? Why does “moral hazard” apply more to providers than to patients? Bilateral oligopolies and monopolies prevail – all claiming on TV and billboards that they offer “the best” care. Uncertainty and fear play large roles, as Parsons originally noted. So there are fascinating studies of economic sociology in health care waiting to be done.

In economic sociology, there has been an effort to reject the notion that economic interests/money necessarily corrupt personal relations and social realms. Do you think this applies to medicine? Can there be a market for health care or are market forces completely incompatible with the provision of health care?
Adam: An important insight within recent economic sociology is that markets do not necessarily debase moral values—that market exchange can be constitutive of social life rather than threatening to it. This is a tremendously useful idea, but I think there are a couple of limitations with it. One is that it tends to focus on the way people and organizations make sense of market processes rather than on the material consequences of these processes. Perhaps wealthy people love Downtown Abbey in part because it helps them feel comfortable with our country’s tremendous economic inequality. But if the market can make a morality in its own image, then observing the coincidence of morals and markets only gets us so far! A second is that the moralized markets school tends to privilege cases in which morals and markets are successfully reconciled, rather than cases of failure or disruption (Catherine Turco’s excellent work on failed moralization attempts has been important to my own work).

Don: For the first half of the 20th century, leading economists consistently explained why markets do not work in clinical medical services because they fail to meet basic criteria for normal, beneficial price competition. Then a new generation of conservative economists asserted that markets would make medicine more efficient, without addressing the previous reasons why they would not. With exceptions where a service can be routinized, costed, and compared, applying markets to medicine leads to pernicious competition. Even when they can, like prescription drugs, the sellers control testing and produce biased results. They repeatedly hide harmful side effects and hire ghost-writing teams of unnamed science writers to shape the medical literature, and they negotiate confidential price contracts. How does a market with secret prices work? Yet billions are spent in such markets.

Regarding the first claim that economic interests do not “necessarily corrupt personal relations and social realms”; in medicine, many studies have shown that physicians confidently claim that taking favors or being paid by drug companies does not affect their hard-earned, board-certified clinical judgment. Yet many studies document it does. Drug companies track the pay-back for the billions they spend to alter what physicians do compared to colleagues not on the take.

Adam, based on your fieldwork in hospitals, how important do you consider money and financial incentives for creating successful organizational cultures and for motivating professionals to give good care? How does money interact with other sources of motivation for healthcare professionals?
Adam: I’m skeptical that financial incentives alone can create the organizational cultures that deliver quality care. It just seems too easy for physicians and other health care practitioners to game the financial incentives in place (either over-treating or undertreating depending on what is more highly compensated). But I do think that health professionals are quite sensitive to social pressure, and that this has been used as a very effective tool to create and sustain quality care. Doctors have long been expected to review (and be reviewed by) their peers. The rise of electronic medical records might be able to make this sort of peer-review more rigorous.

In the book, you implied that a “fee-for-service” financial structure may promote overtreatment; however, the emphasis on cost reduction/effectiveness in the standardization of care was also described as potentially producing undertreatment. Is it possible to avoid both overtreatment or undertreatment in the current US medical market?
Adam: In the case of the U.S. at this point in time, overtreatment seems like a much more glaring problem than undertreatment, except where access to care is concerned. But what’s the best model to avoid both overtreatment and undertreatment? This is the million, or rather trillion, dollar question. I think pre-paid group care organizations like Kaiser Permanente and Intermountain Health are on the right track. The problem is that because they have to compete with organizations providing too much care, they cannot be entirely up front about how they ration it. Rationing is a dirty word in U.S. health care, but resource allocation has to happen one way or another. This is one of the many interesting tensions between mission and market in the health care field.

Don, you are a lifelong critic of the pharmaceutical industry and its practices in the US; however, the concerns and problems you describe are persisting. What organizational policies should be implemented in order to build a patient-oriented pharmaceutical industry? How can we overcome pharmaceutical industry resistance in the US since they are so powerful as an actor?
Don: I’m not a critic. I just describe what companies do and they keep producing examples of misleading research and testing and promotion. Chances of getting companies in the US to stop biased research, testing and promotion are practically nil; but consider what the team of sociologists, political scientists and others of us at the Safra Center for Ethics at Harvard found. The industry retains twice as many lobbyists as members of Congress to “help” them write legislation that, for example, prevents the FDA from requiring evidence that new drugs are clinically better than existing ones for patients, or from giving “safety” (the going term for serious clinical harms like liver damage) much priority. Congress prohibits Medicare from doing what all other affluent nations do: negotiate prices based on added value. Instead, laws allow companies to set whatever price they want for new drugs and mandates that taxpayers pay for them without question. Companies can also raise their high prices further in subsequent years. We call this dynamic “market spiral pricing.” (see http://www.pharmamyths.net/_market_spiral_pricing_of_cancer_drugs__120860.htm)

Research finds that the current rules and practices reward companies to produce mostly minor variations that can warrant a new patent and monopoly pricing. These drugs bear substantial risks of harmful side effects, and prescription drugs have become a major health hazard – the 4th leading cause of death. The probability of serious harm exceeds the probability of benefit. Yet all are approved as “better” by the FDA, where reviewers are paid by the company submitting the drug in a bold conflict of interest. In order to build a patient-oriented system, rather than a patent-driven system, for researching better drugs, one would have to de-commercialize it. A patient-oriented health care system would start by identifying the greatest unmet patient needs and then funding research to seek effective drugs or other interventions. Then one would have competitive grants based on blinded reviews, and the research teams would use practices developed by the Mario Negri Institute to minimize corporate influences that now so widely compromise science and bias medical knowledge. Promising compounds would be tested for clinical superiority so that patients and their doctors would know the probabilities of benefits and harms. Over 90 percent of all clinical trials today are incapable by design to provide such information. This R&D process costs a fraction of current corporate practices and is fully funded so that once approved, drugs could be cheap as well as more effective than so-called innovative drugs now.

You raise a controversial idea that eliminating the profit motive does not negatively affect creativity and innovation. What can replace profits and patents as engines for scientific progress?
Don: Patents do not promote creativity and innovation. The explosion of patenting after the Bayh-Dole Act in 1980 has not produced more new drugs or more clinically superior drugs – the two definitions for “innovation.” (see http://papers.ssrn.com/sol3/Papers.cfm?abstract_id=2282014)

Most of the important medical advances occur out of the same motives that drive first-class economic sociologists: an intense curiosity, a drive to solve a problem, a desire to do something important, a passion for making the world a better place. Like medical researchers up to the current, commercialized era, they received a salary and often worked from grant to grant. Why is it controversial to say that most medical and pharmaceutical advances have not been driven by profits?

When I drew on NSF data, I found that more than four-fifths of global funding for basic drug research to discover new molecules (only half of which improve patient health) comes from non-commercial sources. This is obscured by companies taking over the end of the development pipeline and final application so that we read “Merck has developed a new…” when often the company did not develop it but bought in after discovery and even early development. For playing this role, companies set prices at 50-100 times ex-factory costs, and then we think we cannot live without them!

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