My Early Experience with the Medical Racket

These medical racket writings are more than research and theory.  I was exposed to another aspect of the racket in California when Dennis Lee was in jail the first time.  I began working at a medical lab in Los Angeles the week before Christmas, in December 1988, which was my life’s blackest month.  I would finally be in a stable corporate environment, not the cliffhanging that was my daily life with Dennis.  I was in for a surprise.  The lab was the nation’s largest privately owned medical lab, owned by a black pathologist who was about America’s richest black man, worth about two hundred million dollars at the time.  He took an interest in me because we were both vegetarians, as even in Los Angeles in the 1980s, vegetarians were rare, especially in the business world. 

The week after I began work, federal investigators came to the lab.  They were engaging in an unprecedented investigation, as part of a politician's crusade.  A Pap test for one of his family members had been misread.  Our lab had one of the nation’s largest Pap labs, reading about three thousand specimens each night.  

Pap smear reading is more of an art than a science.  In America, a technician called a cytologist, who is specially trained to read Pap slides, reads nearly all Pap smears.  I have been out of the business for many years, but in reading up on the current state of the Pap industry, it has changed only slightly.  Then, as now, a pathologist would reread 10% of the slides, checking the cytologist's work.  There were five categories of results for reading the Pap smear.  A result flagged as class one meant that all was well.  A reading of class two meant that the patient should get another Pap smear in six months.  A reading of class three was serious, and the suggested response was having a biopsy performed.  A reading of class five meant that the patient had cervical cancer.  The Pap specimen was read by looking for cellular abnormalities, mainly known as dysplasia.  If enough sample cells showed abnormalities, the rating would rise, anywhere from category two to five. 

Although Papanicolaou published his results for fifteen years before he got anybody's attention, and there are much better ways to test for cancer, the Pap test was an advance over previous methods.  It is considered the best early cancer detection technique in existence today.  It is not, not compared to Naessens' methods and others, but it is better than any other mainstream technique.  It is still an art, however.  Five experts can look at the same sample and derive five different diagnoses. 

During the 1980s, the federal government sent out class five Pap samples to many labs, seeing how well the labs diagnosed them.  About seven percent of the time, the lab gave the specimen a class one rating.  That was for class fives.  Today, the statistics show that about twenty percent of the Paps read are given what is known as a "false negative."  That means there were abnormalities in the specimen, but the cytologist did not note them.  There can be hundreds of thousands of cells in a specimen.  A cytologist does not look at every one of thousands of cells in a specimen, because only a few minutes are devoted to looking at each one.  A sampling is made.  Finding a few strange cells can move the sample from a class one to a class two.  Yet, "strange cells" are subject to interpretation.  Again, it is an art, subject to a wide range of interpretation and error. 

In addition, cytologists’ pay practices were not ideal, which is unfortunately standard throughout the capitalistic world.  The cytologists were largely paid by the slide.  In an eight-hour shift, a cytologist would typically read about eighty slides.  Even today, cytologists can read up to a hundred in a shift.  Being paid by the slide encourages them not to read them as thoroughly as they might otherwise.  A number of our cytologists moonlighted for our competitors, as they were in great demand.  Cytologists in the medical lab field were like specialists anywhere.  They were all trained in the same institutions, and often played the medical lab merry-go-round, going to whichever lab gave them the best deal.  We were just one player in a highly competitive environment. 

Because our lab was one of the nation's largest Pap labs (the Pap lab only made up a few percent of the company's revenues, however), we were one of the first labs to undergo an unprecedented investigation by the federal government.  Federal investigators came in and reread our Pap slides, giving them their own rating.  They read more than a thousand slides.  In the Pap business, well more than 90% of the slides are assigned a class one result.  It was like that across the nation.  The investigators, however, felt that about two hundred slides from their sample should have been assigned a class two.  That cannot really be called an error.  The difference between a class one and a class two is on the level of quibbling.  Those two hundred slides corresponded exactly to the data today of a twenty percent "false negative" rate.  There were a dozen specimens that the federal investigators thought should be class three, that we had called class one or two.  For those dozen, it was still a matter of opinion.  The entire investigation was an unprecedented act by the federal government.  Our lab was one of two in Los Angeles selected for the investigation, the first of its kind in U.S. history. 

The investigators produced their results and met with our company’s management.  Their investigation had virtually no legal status.  It was a fishing expedition.  They had nothing at all to try measuring our results against, because they had never done it before.  There were no procedures for determining what their findings meant.  By the statistics in the industry then and even today, they discovered that we were an "average" lab.  Some data today suggests that there can be up to a fifty-percent false negative rate.  It does not mean that cervical cancer is going up; it means that the procedures are getting better at detecting "abnormalities."  Being the bureaucrats that they were, the federal investigators called their differences "errors."  They played investigator, policeman, prosecutor and judge, in a type of court that had never been convened before.  They were critical of our lab.  Frankly, some of their criticisms were understandable, as it was run in a mom-and-pop style, with plenty of "homegrown" talent working there, meaning the chief programmer used to be a specimen courier, as was the personnel director.  That is common in privately held companies.  There are good things and bad things about that phenomenon, and one downside is that the staff is not as professionally trained as in a more standard corporate environment.  That did not apply to the cytologists, however, or the pathologist who ran the lab.  Some of their criticism was well founded, but we were singled out, from the entire United States, for that investigation.  How much of the attention we were getting was because we were the largest privately owned lab and not part of a corporate conglomerate as all the other big labs were, and how much was because the owner was black? 

My boss, the controller, challenged their right to even be making the investigation, much less trying to be critical of the company.  He was probably right, but telling a bureaucrat he has no power is not a good idea.  Those bureaucrats did the only thing they had power to do, and even then it was unprecedented.  They revoked the Pap lab's Medicare reimbursement status.  The lab could have fought that decision.  It did not hurt the company much, as Medicare is not that big a part of the Pap lab revenues, since women more than sixty-five years old are not exactly the big Pap market, even though they make up a disproportionately large percent of women who die from cervical cancer.  Because they were bureaucrats, they would inflict their vengeance on our impudent company that dared challenge their authority.  They attacked us through the media.  The same tactic has been used against Dennis in Seattle and other places.  Media power can quickly destroy a company. 

I had been at the lab for only a month when it was splashed across the papers and evening news.  Then the federal bureaucrats did what they could; they sicced the state authorities on us.  The state health authorities came in and did their own unprecedented audit, just as the feds did.  Their results were virtually identical: about two hundred class-one/class-two disagreements, and about a dozen others.  They never found a class five that we missed, which would have been an instance of really making an error.  Two unprecedented audits, and they never found one harmful diagnostic error. 

Next, the California State equivalent of the Surgeon General, who, like so many "health" authorities was an obese man, made a theatrical announcement to the Los Angeles media.  We were a "Pap dungeon" with a twenty-percent error rate.  Most other labs had the same rate, but we were made an example.  The news stations in Los Angeles made us the leading story.  We were splashed across the media for weeks.  They were even telling women who had a Pap reading done in the past year to call their doctor to see if our lab did the diagnosis.  If so, they should get another reading, because the "Pap dungeon" could not find their cytology backside with both hands.  The media was inciting hysteria among the women of Los Angeles for no good reason.  It was one of the most unconscionable things I have ever seen the media do.  An attack like that can put a company out of business, quickly.  In the wake of that onslaught, we closed down the Pap lab.  If it had just affected the Pap lab, that would have been one thing, but the entire lab's revenues declined by about thirty percent in a month.  Many companies would have been driven out of business by a falloff in business that sharp, with the entire organization unraveling.  The owner was rich, however, and weathered the immediate storm, but he wanted out.

The owner had built the company from nothing to a hundred-million-dollar-per-year lab business in a generation.  He was one of the most successful black entrepreneurs in American history.  He treated his loyal employees very well.  He sold out to a major corporation a few months later for more than a hundred million dollars and retired.  The lab’s employees, in the meantime, were frantic.  I have seen numerous corporate slaughters, and that was a classic one.  The people around me were panicking, people who had worked at the lab for more than twenty years.  With all I had been through with Dennis, the mayhem there seemed to possess a pastoral calm, although I sympathized with people who watched their careers disintegrate.  After the large corporation took over, the blood flowed fast and furiously.  A year after I began there, I was the highest-ranking person in administration to survive the takeover. 

The California equivalent of the Surgeon General was a spiritual cousin of Morris Fishbein.  Again, legally he did nothing, nor could he do anything.  He led an unprecedented state audit on the heels of an unprecedented federal audit, and their findings would have been duplicated at most labs they would have audited.  He was merely carving a notch on his belt, as a "tough protector of the public interest," whipping up hysteria among the women of Los Angeles and putting a head on a platter.  He blindsided us one day by holding a press conference on our front steps, without warning.  He announced that he would investigate other labs in California in light of the dungeon he had discovered, to see if the problem was widespread and if reform was needed.  About a month later, he quietly announced that they investigated other labs, and their error rate was only about one to two percent, which was what he expected to find.  That was a Big Lie of the Goebbels variety.  Undoubtedly the one percent "error rate" for those "investigations" was the same one percent that the audits disclosed at our lab: class three versus class one or two disagreements.  The labs they audited had some of the same cytologists working for them who worked for us.  Somehow, our error rate was ten times as high.  That happened before I really began investigating the medical racket.