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Conflict of Interest and Moral Hazard

Public and private partnership
There was a time when the public was a partner in medical school education and medical research. Under President Jimmy Carter shortly after his inauguration the capitation payments to medical schools for student tuition and support for medical research from the NIH were cut back drastically. Typical medical school tuitions increased 10x. The argument was that the medical profession was a commercial interest that was capable of doing quite well commercially without taking money from the public. The immediate result was that medical school tuition skyrocketed and that research institutions and hospitals were forced to partner with big business. This changed the culture of Medicine drastically. We basically said, fine, if we are really just a business we will act like one and pay closer attention to our bottom line. At the same time this was happening Medicare was switching to DRG payments from cost plus to hospitals and decreasing payments with the intent to close 30% of all hospital beds in the country. It succeeded in closing many very fine hospitals. This put enormous pressure on institutions to find sources of revenue elsewhere.

There was also a time when the private sector was heavily involved in medical charity. Half of the hospitals in which I trained were Catholic Charity Hospitals where no one was ever turned away for any reason, such as Saint Mary’s and Saint Elizabeth’s hospitals in Chicago. The culture at these institutions was inspiring to a young physician in training. Generous payments from some patients supported the charity care for other patients. It worked and everyone felt good about it. The nuns taught everybody to be frugal because we had a responsibility to save so that we would have the resources to take care of the poor.

Forcing medical teaching institutions, research institutions, hospitals and doctors into the hands of big business has not been good for medicine.

Since releasing the genie from the bottle the Government has been busy trying to push it back in. We now have Federal anti-kickback laws and regulatory safe harbors. These address conflicts of interest directly related to patient care. Also the government has mandated the reporting of payments to doctors and teaching hospitals by business. This data is publically available at This effort is an attempt to address a more insidious form of conflict of interest, the influence of money on medical research, publication and opinion. Big business has paid over 8 billion dollars a year to doctors and teaching hospitals every year for the past 5 years.

The OpenPayments database for the year 2017 has 10 million payment records of payments by industry made to doctors and teaching hospitals. There are 1 million physicians in the US and industry has paid 600,000 physicians a total of $2.8 billion. That is an average of more than $4,600.00 to more than half of all physicians in the US. 167 physicians each received more than $1 million in payments from industry who designates these physicians as “Opinion Leaders”. That is powerful influence.

Moral Hazard
As physicians we have earned the privilege and accepted the responsibility to provide medical care and above all else to do no harm to our patients. There are risks to all surgery and medical treatment so the do no harm responsibility means that the patient needs to be well informed and participate in the decision because he has to have knowledge of and accept the risks. Physicians make judgements of the risk versus the benefit. Physicians are expected to know better than anybody else what this calculation comes to. Now consider conflict of interest and moral hazard.

The Utilitarianism of Jeremy Bentham and John Stuart Mill from the 19th century in its simplicity assumes that the “Greatest good for the greatest number” will harm nobody. But where risk is inherent, what is really at stake is Moral Hazard. In our culture we believe that the individual has the right to make choices that affect the unique course of their lives. Choices are made based on reliable and trustworthy information.

If a patient relies on a physician to know this information who has a conflict of interest and does not disclose it fully, honestly with consideration of alternatives, there is a moral hazard and there is a chance that the patient will be harmed in an immoral way.

What is a moral hazard? Economist Paul Krugman described moral hazard as “any situation in which one person makes the decision about how much risk to take, while someone else bears the cost if things should go badly.”

The Standard of Care is a moral hazard. If a physician performs within the standard of care, he is legally protected from any risk. “I am sorry that things did not turn out well, but I did the standard of care!” Also the mesh manufacturing industry is at least partially protected from the risk of responsibility for personal injury because it is the Standard of Care but the industry has been often in US courts and found irresponsible and ordered to pay damages amounting to millions. They continue to make large profits in spite of the losses occasioned by the court decisions. We are capable of better. And we have a moral obligation to do so.

In our culture the greatest good for most does not justify harm to any individual by a moral hazard. It is not necessary. If the patient has the information that he should have, his choice is not subject to a moral hazard.

In Hernia Surgery Mesh is the Standard of Care
This is a classic moral hazard. 20% of patients are needlessly harmed by mesh. The surgeon is exposed to no risk. Supposedly this risk is warranted because non-mesh repairs have a high failure rate. That is an exaggeration but also a miscalculation. What is worse? A doctor will answer this differently than a patient. Let’s give patients the information so that their consent is a fully and duly informed one. Disavow the notion of the standard of care, especially as the International Guidelines have come under severe criticism as posted online in The Hernia Letter!

One of the more disturbing and disappointing consequence of COI and the Standard of Care is that it is promoting institutional denial that hernia mesh pain is a common problem that is seriously affecting the lives of great numbers of patients. An area of particular interest to me is the treatment of patients with mesh inguinodynia. Every patient I have talked with or operated on has seen several surgeons and other doctors who dismiss their complaints and say it is not possible that that their hernia mesh is causing their pain. They offer no treatment other than to send the patient to pain management clinics. A few doctors will acknowledge the possibility that their hernia mesh is causing the inguinodynia but say it is impossible to safely remove mesh with good results. In my experience mesh removal cures or makes the pain much better in 72% of cases and has low risk of adverse consequences.

The American Hernia Society exists and functions today only because of the ongoing support of the mesh manufacturing industry and they would have no meetings if not supported by industry. Is it any wonder that so many members of the Americas Hernia Society endorse and promulgate the notion that Mesh is the Standard of Care in Hernia Surgery?

But it is something to think about. The hernia mesh industry designates certain surgeons as Opinion Leaders and pays them millions of dollars in consulting fees, travel and lodging, honorarium, food and beverage. These are the doctors who are telling the rest of us that mesh for hernia repair is the standard of care.

Since 2013 the Government has mandated and maintained a database of payment records made to physicians and teaching hospitals by medical device manufacturers and pharmaceutical companies. During this time industry has paid about $8 billion a year to Doctors and hospitals. Many of these doctors are designated and promoted by industry as opinion leaders. They teach, they endorse, they publish and they occupy editorial boards of major medical journals. They are supposed to disclose their payment by industry as potential COI. Why do we use the euphemism “Potential”? The influence of money alone is self-evident and egregious. There are many other ways industry influences physicians’ practice and opinion. But many fail to disclose this COI with publications and during lectures. This is a moral hazard.

Boston Medical paid for influence and support of their business interests $171 million in the past five years. Ethicon paid $66 million. Medtronic paid $500 million.

It is not just an issue of money. Collaborative doctors get ego boosts, prestige and free advertising. They also get support for their salary through donations to their hospitals. And how nice it is to have an attractive rep come to your office every week and tell you how brilliant you are.

Medical journals and scientific meetings now require a statement of disclosure of conflicts of interest. But unfortunately there are no standards for this and so COI can be denied based on flimsy rationalizations. Europe has no such requirements for reporting.

COI is defended as inherent and unavoidable as physicians partner with industry to develop drugs and medical devices. This is not true. Also Moral hazard should be absolutely avoided and can be with honest and proper disclosure of COI where it exists. If a physician is rewarded in any way for supporting the economic interests of industry, there is COI.

As Dan Ariely states, we must acknowledge that “The most difficult thing is to recognize that sometimes we too are blinded by our own incentives. Because we don’t see how our conflicts of interest work on us.”

The medical device, mesh and pharmaceutical industry likely understands the psychology of influence. They very masterfully exploit it. We should be sensitive to that fact. Robert B. Cialdini in his book Influence – The Psychology of Persuasion points out the principle of social proof where we blindly accept what everybody else believes is true. For the sake of our patients we cannot take this shortcut. There are a few among us who can challenge the Standard of Care and they should be heard and not robotically dismissed.

There are surgeons who have no COI tied to industry. It is all of our responsibility to stand up to and force disclosure of COI and Moral Hazard. It is also all of our responsibility to preserve and promote the tradition of successful non-mesh hernia repair. Billions of dollars and endless perks have bought control of our profession to advance industry’s economic interests. Patients are suffering the consequences in an immoral way. We need to take back our profession and call on the industry if and only when we need it!


  1. Steven Goldstein on December 22, 2018 at 1:20 am

    While I totally agree that industry has too much influence in our lives and in medicine, I do not agree with your inference that mesh is bad. I have repaired thousands of hernias with mesh and taken out less than 10 meshes, at least half of those mesh removals did nothing for the patients’ pain. If the tissues were born with were strong enough, we wouldn’t get hernias. Studies have shown that non-mesh repairs cause more pain and have more recurrences than mesh repairs. What’s really important is that you find a surgeon that knows what they’re doing.

    • THL4dm1n on December 27, 2018 at 9:07 pm

      “You have the same response as most surgeons who really do not follow closely all their patients. A lot of them end up in pain clinics whom you may have discarded early or simply went to see another doctor as 1in 4 does!. The world literature tells us it is from 3-68% depending on your definition. The EHS-Hernia Surge “International Guidelines” tells us it is 11-12%, with a follow-up statement of 15% in Clinical Therapeutic Review; 34:145–150, (Visc Med. March 26-2018) signed by F. Köckerling and Maarten Simons, the leads in charge of Herniamed and Hernia Surge respectively. Herniamed is the largest registry in Europe (over 400 000 cases) and works closely with the German Hernia Society. I am not inferring that mesh is bad, I am inferring that it has been abused and with it comes the increase in incidence of complications. It is indicated in femoral hernias, some direct hernias and the rare inguinofemoral hernia. The Shouldice Hospital uses mesh in 1.5% of cases and has a better result than most institutions (see the reports authored by David Urbach group of 236 000 cases followed for 16 years in the CJS and the Mayo study on over 300 000 cases, both referenced in the text.

      With mesh… 3.1%-4% develop dysejaculation, this is an 80-fold increase compared to Pure Tissue Repairs, another 10.9% of patients report groin and testicular pain during sexual activity (Bischoff J et al. Dysejaculation after laparoscopic inguinal herniorrhaphy. Surgical Endoscopy 2012 Apr; 26(4): 979-83). The same applies to open mesh repairs which are far more common. Combined with the conservative incidence of chronic post-operative inguinodynia of 10-12% as recorded in the International Guidelines and with the recurrence rate (6-13%) as reported by the sizeable series (of 317 636 patients) from the Mayo Clinic, totalling a complication rate of 30 to 40%! Of some serious complications, there would hardly seem to be any advantages to the use of mesh! Reality can be harsh! RB.”

      • Kevin Petersen on January 2, 2019 at 11:59 pm

        Thanks for your support RB. I have explanted hundreds of mesh implants causing disabling pain and have talked to thousands of patients with hernia mesh pain. It has been astounding to me the universal amount of denial and dismissal that these patients have received from their surgeons and the amount of useless medical imaging that they have been subjected to and the end only to be sent for pain management. Could treatment of these patients be any worse. There clearly is a systemic problem with our esteemed profession’s ability to recognize hernia mesh pain. In my experience hernia mesh removal cures or makes much better more than 70% of patients. KP

  2. Kevin C. Petersen, M.D. on January 4, 2019 at 3:04 am

    RB and Dr. Goldstein thank you for your comments which I greatly appreciate. You both have very valid points. Like RB I do not feel that mesh is bad. I use it in select cases. I take a lot more out than I put in. I have never had to remove mesh that I have put in. I have done a lot of hernia repairs. My recurrance rate is low. I know because I follow up my patients for years. I have seen no patients with severe chronic pain. I have seen 4 patients with moderate chronic pain. Dr. Goldstein you say that mesh removal has only helped 50% of your explant patients. I think you way under appreciate the value of your accomplishment. The patients who you helped were otherwise doomed.

    What I see being in the trenches is that large numbers of patients with mesh pain are being ignored or dismissed or just sent to pain management.

    Dr Goldstein, call all of the patients you have done in the past two years and ask them if they have pain. I do. Don’t rely on the medical literature.

    RB I wish you could tell me what the true incidence of chronic pain is. 6% to 60% leaves me uneasy. Why shouldn’t Dr Goldstein protest.

    My own professional experience has lead me to believe that the value of non-mesh repairs has been denigrated and that the value of mesh repairs have been inflated do to economic interests of big business.

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