Archive for September 30th, 2008

Mayo Care for Wyoming Miners

September 30th, 2008 | No Comments | Source: Bloomberg

In 2001, Foundation Coal Holdings Inc. and Peabody Energy Corp. asked retired surgeon Derrell Crowder to help reduce their health care expenditures.

Crowder set out to negotiate price reductions with local providers in Wyoming, where most employees lived. He figured the providers would listen to a pitch from two companies that employed nearly 20% of the population in their towns.

The providers blew him off. They thought they had a monopoly on medical services in the area.

Crowder was unfazed. “Even if I got a discount” he told Bloomberg, “Bad care at a discount is still bad care and it’ll be more expensive in the long run” due to costs associated with avoidable complications, unnecessary tests and longer hospital stays.

Crowder then prepared a list of the top hospitals based on national quality indicators and determined how they stacked up on costs. He found among other things that the Mayo Clinic received very high quality ratings and charged approximately $67,000 for coronary bypass surgery, whereas the coal companies’ local hospital received low ratings and charged $98,000 for the same.

Now mine workers at the two companies can choose to undergo certain elective procedures at a national center of excellence. Their employers pay all travel and lodging costs, and reduce co-payments as well.

In the 3 years since the mining companies instituted Crowder’s plan, their health care costs have dropped 5% per year. Nationally, corporate spending on health rose 7% per year during the same period.


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Cell Phone Study Flaws

September 30th, 2008 | No Comments | Source: Economist

No one knows whether cell phones cause brain cancer, and it may be awhile before anyone does.

Many had hoped the Interphone Study would answer the question. Interphone enrolled 14,000 people from 13 countries. It began in 2000, involved 50 scientists and cost $30 million.

Unfortunately, Interphone scientists are now struggling to interpret its data, which has been badly compromised by flaws in study design. The acrimony has pushed back the release date for the final paper from this month to next year.

It hasn’t helped that some Interphone scientists have already published preliminary studies that are based on samples of the Interphone data. Some of these studies contain bizarre conclusions such as a protective effect against certain brain cancers for mobile cell phone users.

The study design flaws are gaping. For example “regular mobile-phone use” was defined to include people who use a phone once each week as well as heavy users. This assures that any moderate adverse effect of regular mobile phone use will be masked.  As well, its retrospective design forces participants to recall specifics of their cell phone 10 years earlier. Do you recall how much you used your phone in 1998?

It remains to be seen whether the data scrubbers can make sense of it all. Meanwhile in the absence of clarity, Interphone scientists have staked out every conceivable position on the matter.


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China’s Poisonous Milk

September 30th, 2008 | No Comments | Source: CNN, Economist

Tainted milk produced in China has sickened 53,000 children and tarnished the nation’s reputation as a food exporter. And the scandal isn’t going away soon.

Toxic melamine, a nitrogen-rich product used to make plastics and by scoundrels to drive up apparent protein concentrations in watered-down milk, has now been detected in yogurt, cake and sweets. Several countries in Africa and Asia have banned diary imports from China after receiving shipments of affected milk. European chocolate-maker Cadbury recalled its China-produced products as well.

A month ago, China’s government did an abrupt about-face on the matter. In the run-up to the Olympics, government-controlled Internet portals squelched stories about the scandal. After the Olympics, the government made a showy effort to get out front. It detained the chairwoman of Sanlu, one of the dairy concerns at the heart of the scandal.  It arrested some milk distributers and detained others. The mayor and local Communist Party leader of Sanlu’s home city have resigned, as has the head of China’s national quality control bureau.

It’s unlikely these steps will fix China’s food-processing systems. Local party leaders are responsible for quality control, and many enjoy cozy relations with food producers.

Foreign companies have known the Chinese system was suspect. Unilever ended joint ventures with local producers years ago. McDonald’s developed a closed supply chain for its signature offerings, and Coca-Cola monitors suppliers with enormous vigor.


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