Medical chip implant given FDA approval

By Barnaby J. Feder and Tom Zeller Jr.NEW YORK TIMES NEWS SERVICE

October 14, 2004 The Food and Drug Administration has cleared the way for a Florida company to market implantable microchips that would provide easy access to individual medical records.
The approval, which the company announced yesterday, is expected to take the lid off a simmering debate over a technology that has evoked Orwellian overtones for privacy advocates and fueled fears of widespread tracking of people with implanted radio frequency tags, even though that capability does not yet exist.

Applied Digital Solutions of Delray Beach, Fla., said that its devices, which it calls VeriChips, could save lives and limit injuries from errors in medical treatment. It hopes such medical uses will accelerate acceptance of under-the-skin ID chips as security and access-control devices.
Scott Silverman, chairman and chief executive of Applied Digital, said the FDA approval should help the company overcome "the creepy factor" of implanted tags that has stirred widespread suspicion. "We believe there are far fewer people resisting this today," Silverman said. But whether implanted identification tags can overcome opposition from those who fear new levels of personal surveillance and fundamentalist religious groups who believe the tags may be the "mark of the beast" referred to in the Bible's book of Revelation is far from clear. In Applied Digital's vision, patients implanted with the chips could receive more effective care because doctors, emergency room personnel and even ambulance crews equipped with Applied Digital's handheld radio scanners would be able to read a 16-digit number on the chip. The chip does not contain any records, but with the number, the care provider would be able to retrieve medical information about blood type, drug histories and other critical data stored on computers. The medical records could be easily updated on the computers. Tiny radio frequency identification tags similar to VeriChip have been embedded in livestock and pets by the millions in recent years as a more secure form of identification than external tags. Animals, of course, have no say in whether they "get chipped," as the promoters of the technology call the simple insertion process. But no device maker has yet been able to create a market for human implantable tags such as VeriChip, which would be inserted just under the skin of the arm or hand with a syringe. Applied Digital's distributors overseas have achieved some highly publicized, if limited, successes. This summer, Mexico's attorney general announced that he and scores of his subordinates received implanted chips that control access to a secure room and documents considered vital in Mexico's war with drug cartels. And the Mexican company Solusat, the distributor of VeriChip in that country, says that about 1,000 Mexicans have received the implants, which allow a link to a database holding their medical records. In March, the Baja Beach Club in Barcelona, Spain, began offering VeriChips to regular patrons who want to dispense with traditional identification and credit cards. About 50 "VIPs" have received the chip so far, according to a company spokesman, which allows them to link their identities to a payment system. The program was expanded last Tuesday to a club in Rotterdam, Netherlands, also owned by Baja, and about 35 people there have signed up for the implants, the company said. VeriChip announced last week that it had signed a distribution agreement with the British company Surge IT Solutions, which intends to use the technology to control access to government facilities. And Antonia Giorgio Antonucci, an Italian physician, is leading a study using VeriChip at the National Institute for Infectious Diseases Lazzaro Spallanzani in Rome. "We want to see if the doctors think the device is practical or not," Antonucci said. Applied Digital has been free to sell VeriChip in the United States for nonmedical applications, but lack of acceptance of the technology made FDA approval for medical uses a high priority. "I've believed all along that the medical application was the best, followed by security and financial applications," Silverman said. Still, the science-fiction specter of a nation of drones tagged with subdermal bar codes may be a difficult image for the company to combat in selling its technology. Online conspiracy theorists, for example, often attach capabilities to the technology that do not exist, like the ability to track individuals via satellite. Even so, real privacy concerns have emerged. "At the point you place the chip beneath the skin, you're saying you will not have the ability to remove the ID tracking device," said Marc Rotenberg, the executive director of the Electronic Privacy Information Center, a public interest advocacy group in Washington. "I think, increasingly, if this takes off – and it's still not clear that it will – the real social debate begins around prisoners and parolees, and perhaps even visitors to the U.S.," Rotenberg said. "That's where the interest in being able to identify and track people is." Indeed, the debate over civil liberties and privacy has made discussing any practical benefits of a technology like VeriChip more difficult. "The fact that we're engaged in such a deep, fundamental privacy debate really does complicate the prospect for this kind of technology," said Clyde Wayne Crews Jr., the director of technology studies at the Competitive Enterprise Institute, a regulatory research group in Washington. "We haven't even sorted out the appropriateness of an RFID tag that goes on a pallet of tomatoes, much less one that can go under a person's skin." Applied Digital has tried to counter concerns about the privacy implications of the technology by arguing that the implantation of chips is voluntary and the only records linked to a VeriChip will be those authorized by the person with the chip. Critics say that if the technology gains a foothold, employers, government authorities and others with power over individuals could dictate how the technology is used. For instance, if chips were to replace dog tags as military identification, the decision would not be up to the discretion of individual soldiers. The evolution of radio identification technology also concerns some critics. Passive tags such as VeriChip do not broadcast radio waves and cannot be used to track a person's movements. Scanners cannot read the passive chip from more than a few feet away. But design advances or the addition of a separate power source to the chip could expand those ranges and make tracking possible. Silverman has said the chip being marketed now could help managers of high-security facilities such as nuclear power plants locate people in the building because scanners in doorways should be able to track who enters and leaves a room.

Private Jails in the United States

Private jails, prisons and detention centers have a long history in the U.S., as far back as 1852 when San Quentin was the first for-profit prison in the U.S. (it is currently state-owned). A more recent resurgence in private prisons came in the wake of wide-spread privatization that took place during the 1980s. Prior to the 1980s, some aspects of prison management had been privatized (services), but overall management had still been held by federal and state authorities. Currently there are over 150 private jails, prisons and detention centers in the U.S.

Why Private Jails Became an Attractive Option

In combination with an overall privatization push by President Reagan, prison populations soared during the "war on drugs" and prison overcrowding and rising costs became a contentious political issue. Private business stepped in to offer a solution, and the era of privately run prisons began. Privately run prisons promised increased, business-like efficiency, which would result in cost savings and an overall decrease in the amount that government would have to spend on the prison system while still provided the same service. It was also theorized that privately run prisons would be held more accountable, because they could be fined or fired, unlike traditional prisons (although the counter point is that privately run prisons are not subject to the same constitutional constraints that state-run prisons are).

Major Players in the Private Jail Business

Private prisons are big business, with annual budgets in the billions, and there are several large players in the private prison business such as Corrections Corporation of America, the GEO Group (formerly known as Wackenhut Securities), and Cornell Companies. Corrections Corporation of America alone owns more than 65 correctional facilities in the U.S. and houses over 100,000 inmates.

The Benefits of Private Jails

While the benefit provided by privately run jails may not match the rhetoric that came with them in the 1980s, there have been benefits associated with turning control of prisons over to private companies. In a study conducted by James Blumstein, director of the Health Policy Center at the Vanderbilt Institute for Public Policy Studies, the study found that states that used private prisons could save up to $15 million a year. The U.S. Department of Justice's National Institute of Justice found that private prisons had a higher quality of services than traditional prisons.

The Criticisms of Private Jails

One of the most perverse incentives in a privately run prison system is that the more prisoners a company houses, the more it gets paid. This leads to a conflict of interest on the part of privately run prisons where they, in theory, are incentivized to not rehabilitate prisoners. If private prisons worked to reduce the number of repeat offenders, they would be in effect reducing the supply of profit-producing inmates.
While some studies have demonstrated that private prisons may save governments money, other studies have found just the opposite. A study by the U.S. Bureau of Justice Statistics found no such cost-savings when it compared public and private prisons. This is in part because simple numbers don't tell the whole story. For instance, privately run prisons can refuse to accept certain expensive prisoners, and they regularly do. This has the effect of artificially deflating the costs associated with running a private jail.
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