A couple of months ago, a Baltimore reporter called to get my take on a scandal at St. Joseph’s Hospital in Towson, an upscale suburb.

A rainmaker cardiologist there, Dr. Mark Midei, had been accused of placing more than 500 stents in patients who didn’t need them, justifying the procedures by purposely misreading cath films. In several of the cases, Midei allegedly read a 90 percent coronary stenosis when the actual blockage was trivial – more like 10 percent.

Disgusting, I thought… if the reports are true, they should lock this guy in jail and throw away the key. After all, the victims now have permanent foreign bodies in their vascular beds, and both the stent and the accompanying blood thinners confer a substantial lifetime risk of morbidity and mortality. As I felt my own blood beginning to boil, the reporter asked a question that threw me back on my heels.

“Why didn’t peer review catch this?” he asked.

Hospital peer review is getting better, partly driven by more aggressive accreditation standards for medical staff privileging. In my role as chief of the medical service at UCSF Medical Center, I’m now expected to monitor a series of signals looking for problem doctors: low procedural volumes, unusual numbers of complications, and frequent patient complaints, unexpected deaths, and malpractice suits. When a flashing red light goes off, my next step is to commission a focused review of the physician’s practice. The process remains far from perfect, but it is an improvement over the traditional system, in which docs tapped a couple of their golfing buddies to vouch for their competence.

But cases like Dr. Midei’s don’t trip any alarms. Most of his patients were probably quite content – many had chest pain and a stent undoubtedly seemed like an appropriately aggressive, high-tech cure. “He put two stents in almost immediately,” said one grateful patient. “I felt relief.”

Although this patient, 66-year-old Peggy Lambdin, later received a letter indicating that her coronary artery was less than 50 percent blocked (clinically meaningless and not an indication for stenting), she was unfazed. “No one can ever tell me that I didn’t need that stent,” she told the Baltimore Sun. “I feel like [Dr. Midei] saved my life.”

Moreover, I’m guessing that Dr. Midei’s complication rate was quite low, as it usually is when one does procedures on healthy people. He probably followed all the protocols mandated by accreditors and the relevant specialty societies. (Oh yeah, except for the ones regarding professionalism.)

The problem is this: as long as the cardiologist reading the cath is the one who pulls the trigger on the intervention, we have a potential Fox/Henhouse problem. Every time a respected professional commits egregious fraud (think Jayson Blair or Bernie Madoff), the same question arises: is there any way to pick the few bad apples out of some very large barrels?

Obviously, the Mideis of the world could be caught by requiring that every cath undergo an independent second reading. Some insurers in New Jersey now require such readings before they authorize a stent, and at least one SoCal Kaiser hospital mandates that each cath be presented at a conference before a treatment decision is rendered, analogous to what many tumor boards do for cancers.

Such required peer review might have benefits beyond simply preventing the rare case of fraud. If done well, it might also ensure that other conflicts of interest and non-evidence-based decisions are avoided to the degree possible.

For example, a meta-analysis in last month’s Annals of Internal Medicine illustrates the limited value of percutaneous coronary interventions – whereas older studies found that PCI was more effective than medical therapy in treating angina, more recent studies show that these differences have narrowed or even vanished. I’d guess that, when recommending a treatment for a patient with mild angina and a 60% LAD lesion, a peer review group is more likely to pay attention to this kind of evidence than the average cath jock  – who may not only be staring at his kid’s private school tuition bill but also at a patient whose bias is to see a stent as a more intuitively satisfying solution than “just medications.”

Some will argue that mandating second opinions for every cath is the equivalent of hitting a nail with a sledgehammer, and they might well be right. However, I do favor at least random over-reads of a sample of catheterization studies. Something like this already happens in a few specialties. In many teaching hospitals, a random sample of pathology studies is reviewed by a second provider. In a few forward-thinking practices, radiologists re-read a sample of x-rays, looking for discrepancies.

In response to this case, in fact, St. Joseph’s now requires that 5% of its cath cases undergo a random and blinded re-review. Random audits won’t catch every case of fraud, any more than IRS audits catch every tax scofflaw. But they do help keep people honest, particularly if the audits are coupled with a culture in which the docs welcome feedback and strive for continuous improvement.

Speaking of which, the Midei case made me wonder about the institutional culture at St. Joseph’s. Was Midei a rogue interventionalist working in isolation? Perhaps so – it’s common for no other doc to be looking over the shoulder of a cardiologist and his cath readings. But cardiologists don’t perform caths on desert islands – they are assisted by cath techs and nurses. In my experience, these folks become as adept at reading cath films as any physician. If the allegations against Midei are true, it strains credibility to think that no one in the lab knew that inconsequential lesions were being read as tight stenoses and treated with stents.

And what about the hospital administrators? Stents are big business. When Johnson & Johnson first launched their drug coated Cypher stent in 2003, Dr. Midei told the Baltimore Sun, “This is the hottest thing in cardiology in years.”

And it was: Maryland hospitals chalked up nearly $250 million in stent business in 2009, and St. Joseph’s stent revenues were $38 million, up more than 50% in 5 years. Before the case broke, St. Joseph’s advertised itself as the busiest cath hospital in Maryland, averaging nearly 20 interventional cases daily.

While it is possible that no St. Joe’s leader knew precisely what was happening, I’m guessing that some did but chose to look the other way: the pressure to steer clear of the golden-egg-laying goose must have been intense. Perhaps the fact that the hospital’s CEO and two other senior executives resigned after the case broke provides a clue as to who knew what when.

Cases like this one are terribly troubling, not just because they harm individual patients but because they do violence to the trust that is so fundamental to the physician-patient relationship. Part of the solution must be more robust oversight procedures, such as mandatory second readings of randomly selected cath films.

But these cases also force us to consider the kind of culture that could allow such a fraud to take root and go on for years – a culture that likely prized the hospitals’ and physicians’ financial health over the clinical health of their patients. If the allegations are true, the penalties should be severe, not only for Dr. Midei but also for leaders who knew – or should have known – what was going on, yet remained silent.

Bob Wachter is chair, American Board of Internal Medicine and professor of medicine, University of California, San Francisco. He coined the term “hospitalist” and is one of the nation’s leading experts in health care quality and patient safety. He is author of Understanding Patient Safety, Second Edition, and blogs at Wachter’s World, where this post originally appeared.