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UCSD doctor William Taylor implanted screws into a woman's back, and didn't want to take them out when she complained of constant pain.  Why not?  Some people think it has something to do with the fact that the screws were manufactured by a company that paid him a six-figure income and in which he had invested hundreds of thousands of dollars in stock options.  UCSD ended up paying a $1.75 million settlement to the woman.  

But now consumer advocates are asking why the doctor was not punished for violating the state law and university policy that require doctors to report outside income.

UCSD says the doctor did nothing wrong.

I don't believe that Dr. Taylor intentionally made this woman suffer.  I think he was simply blinded by his financial interest.  He couldn't believe the screws he had implanted (and heavily invested in) could be causing harm.  He had hundreds of thousands of reasons not to believe it.

This does not explain, however, why Dr. Taylor kept his financial interests secret.  I'll take a stab at explaining that.  Perhaps he had confidence in his own ability not to be influenced by his large income from the medical device company and by the possibility that his investment in the company would pay off grandly if the screws proved to be successful in treating patients.  He kept his financial dealings with the company secret because he didn't trust others to have confidence in him.  

And why doesn't UCSD crack down on its doctors who violate law and university policy in this manner?  Perhaps because the doctors who are tasked with enforcing the rules are getting just as much money from outside companies as Dr. Anderson is.

It turns out that there's another reason doctors don't report outside income. Since the University pays doctors to work full time, the University figures that time spent on outside employment means that doctors are spending less time and energy on their main job. So the University takes some of the outside money.

Dr. William Taylor got his medical degree from UCLA, whose medical school seems have particular problems with conflicts of interest.

[A 2010 study involving medical students from UCSD and five other schools showed that only 14% of those students had an opinion about "appropriate interactions between physicians and pharmaceutical companies."  The Atlantic's Lane Wallace asked, "How could 86% of medical students not even have an opinion on such a hot subject?"  See Reprogramming the Ethics of Med Students.]

On May 25, 2014 the Orange County Register published "UC system struggles with professors' outside earnings" by Melody Petersen:

...It took longer to uncover some critical details that Dr. William Taylor, the surgeon, had not told the retired special education teacher or the university: He owned stock options worth hundreds of thousands of dollars in the company selling the spinal devices and had also collected six-figure annual fees from the same firm, the lawsuit said.

Disclosure of such corporate payments is required by state law and university policy.

A lawyer for UCSD said Taylor did nothing wrong and denied that any patients were harmed. But the university last year paid Kitrosser $1.75 million to settle the case.

The controversy over Taylor's undisclosed compensation is not an isolated case. The University of California has repeatedly failed to discipline medical professors who did not disclose payments from drugmakers and medical companies.

Last month, after UCLA paid $10 million to settle a lawsuit filed by a UCLA doctor who had suffered retaliation for complaining about doctors who took money from companies whose products they were researching. Non-profit group Consumer Watchdog asked state Attorney General Kamala Harris to investigate the extent of the problem...

As the business of medicine becomes more and more profitable, many doctors seem to be seeing their patients as part of a profit/loss formula.  

UPDATE July 22, 2014

University of California doctors aren't the only ones collecting questionable payments related to the lucrative spinal-fusion surgery business.

It turns out that other California doctors received tens of millions of dollars to steer business to Pacific Hospital in Long Beach, where counterfeit screws were implanted into patients.  Insurance companies were billed as much as $12,500 for screws that cost only $300 to manufacture.  Lawsuits claim that some of the patients did not even need the surgery.

A California hospital executive pleaded guilty to bribery this past April.  From Hospital Executive Pleads Guilty in Bribes Case by John Carreyrou, Wall Street Journal, Feb. 21, 2014:

Michael Drobot, a hospital executive who built a Southern California business empire centered on workers-compensation patients, pleaded guilty to paying tens of millions of dollars in kickbacks to doctors so they would steer business to his hospital...
A July 7, 2014 story, Lawsuit: Doctors used counterfeit screws by Christina Jewett and Will Evans from The Center for Investigative Reporting, states:
Doctors in Southern California have implanted counterfeit screws and rods, ginned up in a small machine shop, into the backs of thousands of injured workers, according to lawsuits filed throughout the state.

Some doctors who used the bogus hardware took kickbacks including cash and private plane rides, while middlemen and hospitals profited by wildly inflating the cost of the screws, according to one suit filed in Sacramento...

A separate whistleblower lawsuit alleges that many of the patients with fake implants may not have needed the surgery at all. According to that May 2012 suit, they were the collateral damage of a massive scheme to defraud insurers, involving Drobot, former owner of Pacific Hospital of Long Beach.

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