Taking Note

Putting the Walls Back on Wall Street

As the story behind the great financial meltdown unfolds, we can also see evidence of deep changes in the culture and practice of Wall Street firms. Greater risks were routinely taken in the pursuit of what had become expected huge returns. Firms drastically increased their trading for their own accounts, often using their regular customers as counter-parties to take the other side of a big trade.

Inevitably, this high rolling broke down some of  the written and unwritten rules of Wall Street that has been widely recognized and respected.  One of them was a sharp separation between proprietary trading and the buying and selling done for customer accounts.  The proverbial Chinese Wall between those two activities was meant to ensure that a firm’s proprietary traders didn’t take advantage of its customers, either by knowing their positions when they might be caught short or when they were about to make large purchases that would move the market. There are a host of such activities from which conflicts of interest could all too easily emerge.

The FDA Resists the Siren Call of Lobbyists

Imagine that you are taking a medication that works well for you. But the monthly co-pay is $75.  This is more than you can afford. A generic is available, and the co-pay is only $10. The FDA says that it is just as good. But when you take it, you’re not sure. It sometimes seems that the pain is worse—or that you are more tired, or more depressed than you were when you were taking the brand-name drug. How can you be certain? When you try to think about how you feel, you realize that your mind is trying to diagnose your mind.  It’s a standoff that leaves you totally flummoxed.

The debate over generic vs. brand-name drugs cannot be easily resolved. Human beings are suggestible creatures, and if we are told that a drug is less expensive, we are inclined to think it might not be as effective.

That said, today most Americans trust generics. This suggests that most patients haven’t felt a difference. As Merrill Goozner of GoozNews fame points out in the April 22 issue of Fiscal Times:  “generic manufacturers’ share of the market surged last year to 75 percent of all prescriptions, up from 57 percent in 2004. Cost-conscious patients increased their purchase of generic prescriptions by 5.9 percent in 2009, while prescriptions for brand name drugs fell 7.6 percent, according to IMS Health.”

A Library for the Ages

The St. Agnes branch of the New York Public Library is located at 444 Amsterdam Avenue, between 81st and 82nd streets. Nearby, on Central Park West, are fancy high-rises. Amsterdam Avenue and the side streets have a less glamorous mix of brownstones and neighborhood shops that, while upgraded some, still have the feel I remember from the 1950s when I would make a weekly visit to St. Agnes for a stack of history books aimed at pre-adolescents, especially Random House’s Landmark series.

St. Agnes opened in 1906, one of the original thirty branches of the New York Public Library funded by Andrew Carnegie, built in the classic design of architects Babb, Cook and Willard. Carnegie’s establishment of the national library system remains one of the great philanthropic gifts in our history. About fifteen years ago, I visited Homestead, Pennsylvania, which had just endured the shutting down of U.S. Steel’s largest foundry. Homestead’s library, funded by Carnegie and built on a hillside in the town center, was practically its last vestige of dignity, because it had an endowment and could serve as a repository of information about welfare and other government programs.

The Tea Party vs. The Public

The so-called Tea Party movement has received a tsunami of publicity lately. But one indisputable fact about this movement has been undercovered in the media: The fact that this group is not by any stretch of the imagination a movement based in the center of the American electorate. It is instead a movement of the conservative right that is very much unrepresentative of the general public’s views.

Findings from a recent New York Times/CBS News poll make this point very clearly. The poll finds that the general public remains stalwart in its support for the Roe v. Wadedecision establishing the right to obtain a legal abortion: 58 percent say this decision was a good thing, compared to just 34 percent who say it was a bad thing. But among Tea Party supporters, sentiment is just the reverse: 53 percent say the decision was a bad idea and only 40 percent say it was a good idea.

The public also shows its progressive colors on the issue of whether the rich should be taxed to help provide health insurance coverage for those who don’t have it. In the same poll, 54 percent say this approach is a good idea, compared to 39 percent who think it’s a bad idea. Among Tea Party supporters, however, an amazing 80 percent term this a bad idea and a mere 17 percent say it’s a good idea.

Public Backs Financial System Reform

The recent passage of the health care reform bill was a huge accomplishment for Congress. But there are other critical issues still to be addressed, such as reforming the regulations governing our financial system. Congress is now in the process of debating this issue with legislative action expected in the near future.

As the debate proceeds, policymakers should note that the public is strongly supportive of moving forward in this area, and they are likely to view those who try to delay or derail action quite unfavorably.

Consider these results from an early March survey conducted by Pew’s Financial Reform Project. The poll asked how important it is to take action now to reform big Wall Street banks. The public was overwhelmingly convinced (79 percent) that it was very (47 percent) or somewhat (32 percent) important to take action, compared to just 18 percent who thought it was not too (9 percent) or not at all (10 percent) important.

The same poll gave the public a short description of the financial reform plan being discussed in Congress. They favored by the plan by a lopsided 69-25 margin.

Our Fear of Cancer

Summary: An exceptional essay in the April issue of Lancet explores why even healthy, asymptomatic people are terrified when they hear the word “cancer.”  Robert Aronowitz, an internist and professor of the history and sociology of science at the University of Pennsylvania, describes “cancerphobia,” a term coined in the 1950s by a Cleveland Clinic surgeon who suggested that our “fear of cancer can cause even more suffering than cancer itself . . . public health campaigns with their constant calls for surveillance and aggressive treatments combine to increase cancer fears, which in turn has led to demands for increasingly aggressive intervention and more surveillance.”  Over-testing leads to over-diagnosis and over-treatment. A study just published in the Journal of the National Cancer Institute offers disturbing numbers on the magnitude of “over-diagnoses,”  defined as “the diagnosis of a ‘cancer’ that would otherwise not go on to cause symptoms or death.”

Even when we are told that tests are ineffective or of little benefit, testing gives many patients a false sense of control over their fears. Meanwhile, cancerphobia has spawned an enormous, lucrative industry.

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The very word “cancer” inspires a degree of fear that “heart attack,” “stroke” or even “kidney failure” do not. Any of these conditions can kill. Even worse, in rare cases, a stroke can leave a patient “locked in” -- conscious and able to think, but unable to speak or move.

Yet, somehow, to many of us, the idea of cancer seems more horrifying.  Perhaps it is because the word calls up an image of something evil invading the body, and then spreading. It is a growing, living thing, crawling inside one’s own body, preying on the tissue.

Myths & Facts About HealthCare Reform: The Impact on Hospital Care

Short-term, at least, hospitals are winners. When it came to negotiating with reformers, they “got into the tent early,” and the reductions in Medicare increases that they accepted will be offset by an influx of paying patients. Granted, government payments to hospitals that take a disproportionate number of uninsured low-income patients will be slashed, but because there will be many fewer uninsured patients, most hospitals will come out ahead. Those that continue to care for larger share of those who can’t pay will receive additional payments.

Fear-mongers fret that cuts in Medicare spending will threaten the financial health of the nation’s hospitals: they argue that hospitals already lose money on Medicare patients. The truth is that, today, more efficient hospitals make money or break even on Medicare beneficiaries. Hospitals that run a tight ship save money and offer better care. Unfortunately, waste remains an enormous problem in many U.S. hospitals, and waste and poor quality care go hand in hand.

Medicaid’s expansion also will help hospitals. True, Medicaid payments to hospital are low, but in the past, hospitals were treating many patients who didn’t qualify for Medicaid, but were too poor to pay their bills. Low payment beats no payment.

The Battle over Letting Nurse Practitioners Provide Primary Care

 Twenty-eight states are now engaged in a heated debate over the difference between a doctor and a nurse: Legislators in these states are considering whether they should let a nurse practitioner (NP) with an advanced degree provide primary care, without having an M.D. looking over her shoulder.  To say that the proposal has upset some physicians would be an understatement. Consider this comment on “Fierce HealthCare”:

 “An NP has mostly on the job training...they NEVER went to a formal hard-to-get into school like medical school,” wrote one doctor. “I have worked with NPs before, and their basic knowledge of medical science is extremely weak. They only have experiential knowledge and very little of the underpinning principles. It would be like allowing flight attendants to land an airplane because pilots are too expensive. HEY NURSIE, IF YOU WANT TO WORK LIKE A DOCTOR...THEN GET YOUR BUTT INTO MEDICAL SCHOOL AND THEN DO RESIDENCY FOR ANOTHER 3-4 YEARS. NO ONE IS PREVENTING YOU IF YOU COULD HACK IT!” [his emphasis]

Net Neutrality Is Not Dead

On April 6, the U.S. Court of Appeals in Washington ruled that the Federal Communications Commission had misused its authority to control traffic on the Internet. To casual observers—I was one—the 3-0 decision by Judge David S. Tatel, a distinguished, progressively minded jurist with seventeen years on the bench, seemed like a serious setback to the concept of "net neutrality," the doctrine that requires Internet service providers to treat all content equally.

Like so many arguments about protocol in the digital era, the layman in this case comes into the middle of a complex debate raging among engineers, business moguls, techie visionaries, populists, politicians, and regulators. With limited knowledge and understanding, an outsider has to choose where virtue resides in determining oversight of the Internet, an unprecedented convergence of communications, commerce, entertainment, and information that is on the way to surpassing telephones, radio, television, and postal mail in the infrastructure of the national economy. A key explanatory sentence in The New York Times story on the opinion said: "The decision will allow Internet service companies to block or slow specific sites and charge video sites like YouTube to deliver their content faster to users."That certainly sounded ominous, and was represented as such in commentary on the decision. A statement from Josh Silver, executive director of Free Press, an admirable group that advocates on behalf of the widest possible access to the Web, was especially alarming: "It is truly remarkable: the government agency that is charged with overseeing the nation's communications infrastructure now has no authority to regulate broadband—the primary communications platform of the 21st century. While this would seem to be a belated April Fool's joke, it's not. It is the result of failed Bush era (de)regulatory policies and a judicial system that is increasingly friendly to industry." In The Washington Post, columnist Steven Pearlstein wrote, "There's a lot of talk these days about how Washington has become dysfunctional. While most of the focus is on Congress...another big culprit is the U.S. Court of Appeals for the District of Columbia Circuit, which over the past decade has intimidated, undermined and demoralized the regulatory apparatus."

DOE vs. DOJ on School Integration

This morning’s Washington Post features a superb front page story on policies in a small Mississippi school district to segregate students – and the efforts of the Obama Administration’s Department of Justice to stop it.  But as I note in a guest blogpost for Washington Post columnist Valerie Strauss’s “The Answer Sheet,” the DOJ’s action to fight de jure segregation stands in stark contrast to Obama’s Education Department’s failure to address the much larger issue of de facto (residential based) school segregation by race and class.