NEW YORK (Reuters) – U.S. doctors and teaching hospitals received $3.5 billion from medical device makers and pharmaceutical companies in the last 5 months of 2013, according to the most extensive data trove on such payments ever made public.
The payments, disclosed yesterday by the Centers for Medicare & Medicaid Services, include consulting and speaking fees, travel, meals, entertainment and research grants. The names of the recipients of about 40% of the payments reported by companies were withheld because CMS had concerns about data inconsistencies.
Some 546,000 individual providers including physicians, dentists and osteopaths and 1,360 teaching hospitals received 4.4 million separate payments from healthcare companies. The payments included $30.1 million from Medtronic (NYSE:MDT), according to Bloomberg, which reported $3 million worth of payments to a single, unidentified physician "who was among 6 who individually received more than $500,000 over the 5-month period."
Royalty payments made up 31% of the $976 million in general payments reported in the Open Payments database, according to ProPublica, including $35.9 million in royalties paid out by the DePuy Synthes Sales Inc., a subsidiary of Johnson & Johnson (NYSE:JNJ).
The companies were required by President Barack Obama’s 2010 healthcare reform law to disclose to CMS by March all payments of $10 or more made from August to December 2013. Even payments that physicians requested be sent to a charity were required to be reported.
The American Medical Assn. and other physician groups had asked CMS to delay the release of the data by 6 months, saying that errors could create a false impression about the influence of industry on individual doctors.
The extent of the industry payments, which came to $23 million a day, was in line with years of research. A 2007 study found that 83% of physicians received gifts from drug or device companies, and 28% received payments for consulting or research.
Both Democratic and Republican lawmakers supported the Physician Payments Sunshine provision of Obamacare, arguing that making industry payments public would increase transparency.
When patients are aware of potential financial conflicts of interest, they might question why their doctors are prescribing a drug or device from a manufacturer that pays them, for instance. And doctors will know whether experts who recommend practice guidelines were paid by companies that could benefit from them.
Of the physicians who reported receiving industry money even before the Sunshine provision, 40% had been involved in creating clinical practice guidelines, according to a 2009 report by the Institute of Medicine, an arm of the National Academy of Sciences.
Health insurers have raised concerns that payments from industry cause doctors to overuse expensive drugs and devices.
"These payments, while not nefarious in every case, are a perfect symbol for the misaligned incentives in our health care system," said Brendan Buck, spokesman for America’s Health Insurance Plans. "While most health care stakeholders are working together to find ways to lower costs, drug makers remain focused on strategies to keep them inflated."
Some medical specialty groups have voiced concern that the data release will lead to public shaming of physicians who accept, say, all-expenses-paid trips to exotic locales.
But researchers who have studied industry payments to physicians say it is not clear whether patients care about them, let alone whether payments affect patients’ choice of doctor.
"People might not like their doctors going on these free trips, but some people might see that their doctor is accepting consulting fees from many companies and say, he must be really good," said Genevieve Pham-Kanter, an assistant professor of health policy at Drexel University.
Medical specialty societies and others that issue guidelines have long required such payments be disclosed, but it is not clear how many, if any, verify the self-reported information.
"Bias is absolutely ubiquitous," said orthopedic surgeon F. Todd Wetzel, an official of the North American Spine Society. "Involvement with industry can be a plus; it just has to be done correctly."
CMS, part of the Health & Human Services Dept., made the data available at www.cms.gov/openpayments. Users cannot yet search the website by physician. Several software problems have plagued the program.