Physician-Industry Relationships Debated on AC360

Here's an excerpt of an exchange between a reporter from ProPublica (of recent repute for spearheading the initiative to consolidate data on payments to physicians), a former pharmaceutical sales representative who became a whistle-blower and Dr. Tom Stossel from Harvard Medical School / Brigham & Women's Hospital.  


Interesting exchange ... be sure to vote after viewing the video!

Who won the debate?

Put Doctors on Salary, Part 2

The previous post generated some consternation among several readers (for good reason). Here's a (somewhat) related article published in Fierce Health which highlights that independent practices earn more than their hospital owned counterparts. No wonder policy wonks, more likely to be from academia and academic hospitals, suggest everyone should be on salary: They can better control costs (aka your income) and preserve critical services (aka their income).

Clearly we're setting up for a significant power struggle in MA since ~60% of physicians are part of small independent practices yet legislators have decided that more consolidation in the form of ACOs is the solution to controlling costs. 

There's more money in independent practices...sort of

October 29, 2010 — 11:35am ET | By Dan Bowman

Apparently it pays--quite literally--to be part of an independent physician practice as opposed to a hospital-owned practice. According to a Medical Group Management Association survey presented at the group's annual conference in New Orleans earlier this week, the median total revenue at independent practices per full time physician in 2009 was just over $780,000, vs. roughly $448,000 for hospital or integrated delivery system-owned practices, a 44 percent difference reports Medscape Medical News.

But those numbers don't necessarily indicate that independent practices are more lucrative than their hospital/IDS-owned counterparts. Rather, hospital/IDS-owned practices tend to "reallocate income and costs," say the authors of the Cost Survey for Integrated Delivery System Practices: 2010 Report Based on 2009 Data.

"Everyone talks about how hospitals lose money on their own practices," MGMA president and CEO William Jessee said at a press conference. "And yes, they have lower revenue than non-hospital-owned practices, but a lot of this comes from how they account for the revenue. For example, a non-hospital-owned practice may account differently for the ancillaries they purchase, so there are some accounting differences."

In terms of compensation, doctors working in independent practices earned close to 20 percent more than those in hospital/IDS-owned practices. On average, hospital/IDS-owned doctors took home $294,984, compared with $353,549 for non-hospital/IDS-owned docs.

The survey reports statistics from 1,003 practices nationwide.

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Put Doctors on Salary, Survey (by Commonwealth Fund) Says

Here's an interesting article that will surprise few that follow the Commonwealth Fund's work. For the unfamiliar, the Fund does extensive health policy research and is regularly commissioned by the states to support their policy development efforts. Familiar or unfamiliar, the article is worth reading since it gives a glimpse into an idea that, for better or worse, is gaining steam: End the independent physician practice and put everyone on salary.

The NY Times ran a story which mirrors this theme earlier this year and highlighted that "an increasing share of young physicians, burdened by medical school debts and seeking regular hours, are deciding against opening private practices. Instead, they are accepting salaries at hospitalsand health systems. And a growing number of older doctors — facing rising costs and fearing they will not be able to recruit junior partners — are selling their practices and moving into salaried jobs, too."

Apparently, the Commonwealth Fund decided to put some numbers behind the anecdotes. Note they do not list independent physicians on their list of groups surveyed. Makes you wonder...

Put Doctors on Salary, Survey Says
October 26, 2010

The healthcare system would be much improved if physicians were all on salary, according to results from a survey by the Commonwealth Fund.

"The way we currently pay for healthcare leads to unnecessary confusion and wide variation, and sometimes borders on chaotic," said Commonwealth Fund president Karen Davis, PhD.

"Experts agree that if private payers and public programs could come together and agree to pay the same way, and the same amount, we can improve the efficiency of our healthcare system, eliminate administrative waste, and create better experiences for patients," Davis said.

The Commonwealth Fund, a left-leaning think tank, and Modern Healthcare magazine commissioned Harris Interactive to survey healthcare academics and researchers; leaders in healthcare delivery, business, insurance, and other health industries; and key players in government, labor, and advocacy groups.

A total of 190 experts participated in the survey, which was conducted between Sept. 7 and Oct. 6. The results were summarized in a brief written by Kristof Stremikis, MPP, Stuart Guterman, MA, and Davis. All three authors work for the fund.

When asked whether they supported salaried medical practice with "appropriate rewards for quality and prudent use of resources," only 11% said they did not.

Nearly three-quarters (73%) said they supported salaried practice with rewards for both quality and resource use. The remaining 16% supported salaried practice with rewards for quality, "but not connected to prudent use of resources," the authors noted.

Nearly half of respondents (49%) agreed that it was "important or very important" for patients to choose services and providers on the basis of cost.

Respondents also agreed that the reimbursement system needs to be simplified.

"Currently, public and private health insurers engage in a complex and continuous process of negotiations with multiple healthcare providers to establish reimbursement rates for services," the authors noted. "This increases administrative expenses among payers and providers and leads to wide variation in prices."

Related to that, 56% of survey respondents said they supported replacing the current system with either all- payer payment rate setting or a single system of payment rate negotiation on behalf of all payers.

Another 23% of respondents supported letting each provider set its own prices, where insurers would pay the lowest price and patients would pay the difference in cost for seeing higher-priced providers.

Just 9% of respondents supported keeping the current system.

Survey respondents also supported several other changes to the reimbursement system, including "value- based benefit design," in which cost- sharing for individual services varies based on the established effectiveness and potential benefit of the treatment or service; and "reference pricing," in which insurers and public programs pay for a drug, device, or service based on the lowest price of equally effective treatments.

Just over half of respondents (53%) of also supported using tiered networks, in which premiums for enrollees would vary based on the level of spending by the hospitals, physicians, and other providers they used.

The survey also asked respondents about transparency in healthcare pricing. Nine out of 10 respondents agreed that it was important for the public to have information on clinical quality, prices, and patient experiences.

"Such information could be used to encourage physicians to meet local and regional benchmarks, allow public and private payers to become more prudent purchasers of care, and to empower patients to identify and receive care from high quality providers," according to a statement from the Commonwealth Fund, which also noted that the new healthcare reform law, the Affordable Care Act, contains provisions aimed at increasing transparency.

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The Happy Health Reform Cartoon

Via the Kaiser Family Foundation ... 10 minute animation devoted to helping average Americans understand health reform.  Interesting, but mostly a PR pitch for reform.  Lots of happy cartoon Americans tossing little coins in different directions (mostly at Uncle Sam) makes redistribution seem more fun. (It's also worth noting how rapidly Medicare cuts, a looming political and sustainability problem, are covered.) ... Nonetheless, the video's worth viewing:

Guest Post: Industry Funding of CME

The last post highlighted a Boston Globe article regarding the role of industry funding in continuing medical education ... in response to the Globe article, I receive this hypothetical interaction between a CME instructor and an attendee that I couldn't resist sharing:

CME REGISTRANT: "What are your credentials to teach this session?"

INSTRUCTOR: "I am a board-certified cardiologist and I have no financial conflicts to report"

CME REGISTRANT: "What will I be learning today?"

INSTRUCTOR: "Evidence-based best practices to open a clogged coronary artery. Let's begin. First, you hold the flint in your dominant hand and strike it sharply with the iron chisel until a sharp edge is fashioned. Be careful with the sparks and stone chips. This technique has been around a long time and is very well described....."

CME REGISTRANT: "What about angioplasty?"

INSTRUCTOR: "Ah, I see the catheter rep has paid you a visit. Angioplasty is a relatively new procedure and the risks are not yet fully understood, nor the long term outcomes. We have much more extensive experience with flint-making. The angioplasty companies are disease mongerers and by using the classical technique, you make a powerful statement that you cannot be bought."

CME REGISTRANT: "Please excuse me, I'm downloading intravascular ultrasound images on my iPhone for a case tomorow......"

INSTRUCTOR: "Please be sure to attend this afternoon's session where I will give an engrossing lecture, 'Fire: Going Beyond Sterilization', you won't want to miss it".

CME REGISTRANT: "Thank you...."

-Anonymous Guest

People Who Have The Most Expertise ... Are the People Who Work With Industry - Steven Nissen, Cleveland Clinc

The debate over the role of industry funding in continuing medical education (CME) continues on the pages of the Boston Globe this week.  

The article highlights a new company, Lighthouse Learning, that was formed by Dr. Martin Samuels, a neurologist from the Brigham & Women's Hospital and Harvard Medical School, who has a little experience in the field.  In fact, the article highlights that he was the medical director of M/C Communications until last year "when he said he decided that commercial support created an unacceptable conflict."


The curriculum will be developed by 11 specialists, many from Harvard, who will not be allowed to teach other courses funded by drug companies, "to further insulate them from industry influence."  


And the company's advisory board will also help them keep influence peddling in check. The board includes reputable names such as Dr. Joseph Martin, former Dean of Harvard Medical School, who will review the curriculum directors' other relationships with industry.  


(Note: Dr. Martin was also highlighted in a provocative NY Times article earlier this year which highlighted that under the new conflict of interest rules implemented at Partners HealthCare, Inc., he will no longer be able to accept the >$200,000 per year compensation for serving on the Board of Directors at Baxter International.  Interesting, that he will be watching over relationships at Lighthouse).


Non-MD, Dr. Eric Campbell, a vocal critic of industry, noted that Lighthouse may find it more difficult to separate themselves from industry influence than they expect.  He suggests "that companies can offer to pay doctors' tuition to attend certain courses, thereby exerting influence that way."



Oddly, in the article Non-MD-Campbell is noted for "specializing in conflict of interest" but seems unaware of the pharmaceutical industry's own conflict of interest policy, which states that:


"Financial support should not be offered for the costs of travel, lodging, or other personal expenses of non-faculty healthcare professionals attending CME, either directly to the individuals participating in the event or indirectly to the event’s sponsor (except as set out in Section 9 below). Similarly, funding should not be offered to compensate for the time spent by healthcare professionals participating in the CME event."

The final quote from Dr. Steve Nissen, who needs no introduction, sums up the issue quite accurately:


"The biggest name people, the people who have the most expertise and are going to draw an audience -- they are the people who work with industry."

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Banning Industry Sales Reps Increases Cost of Every Prescription by $5.18

Medpage Today puts an interesting spin on findings from a study about to be published in the Annals of Family Medicine.  Despite the headline, "Barring Drug Samples Boosts Use of Other Meds", which suggests a straight-forward response -- ban industry and get results -- the study actually tells a very different and more interesting story...

Study Results
After banning sales representatives and medication samples from their clinic, they found:

• That "aggregate levels of brand-name drug use didn't change significantly"
• A non-significant trend toward "reduced prescribing of branded anti-hypertensives and lipid-lowering drugs"
• That "branded drugs for respiratory disease declined significantly, by 11.34%"
• That "overall cost of prescription drugs were not reduced.  In fact, they increased by $5.18 per prescription per month immediately after the policy was introduced."

They speculate that the increase in overall cost of prescriptions was likely due to the loss of samples in the clinic, but go on to highlight that the cost of "lipid-lowering drugs were significantly reduced, by $0.70, per prescription per month."  It seems that the differential -- $5.18 increase vs. $0.70 decrease -- is sufficient to conclude that the policy hurt patients more than it helped them.

So, in short, the authors of th study found that the policy achieved one thing: It increase cost for patients.  The question that they did not address is "what impact did the policy have on patients?"  How well are the respiratory patients doing following the 11% drop in prescriptions for branded agents.  That's the interesting question given the push towards efficiency and quality moving forward.

References

Kristina Fiore, Staff Writer. MedPage Today. Barring drug samples boosts use of other meds. September 13, 2010.

Hartung DM, et al "Effect of drug sample removal on prescribing in a family practice clinic"Ann Fam Med 2010; 8: 402-409.

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Paul Levy (CEO, BIDMC): Commentary on Payment Reform

Re-post: Interesting blog post from Paul Levy, CEO of Beth Israel Deaconess Hospital in Boston, on payment reform being considered in the Commonwealth. As usual, worth the time to read Paul's perspective...

Unanswered questions on payment reform

from Running a hospital by Paul Levy

Here is a story by Robert Gavin in the Boston Globe about the deteriorating financial condition of Massachusetts hospitals. This is another in the now all-too-familiar type of story about layoffs of health care workers in our state, something some of us predicted several months ago.

While there are some who suggest that a move from fee-for-service to global, or capitated,* payments is the key element in solving rising health care costs, some questions need to be answered as part of the payment reform movement in Massachusetts. If the wrong answers are given, the movement will result in a simple transfer of risk and finances between and among insurers and hospitals, and between and among hospitals. This will aggravate the problem noted above and, with the creation of Accountable Care Organizations, may also lead to greater market concentration in the state.

1) Given the underpayment to hospitals and doctors by Medicare and Medicaid, what margin would private payers need to be pay to provide hospitals with an operating margin consistent with maintaining and renewing physical plant and equipment and with providing proper levels of clinical staffing? (Medicare is the largest single payer for most hospitals, and the percentage of patients it covers in hospitals is growing as the baby boomers age.)

2) How is that needed margin consistent with the current actions by the state's insurers to impose rate increases on hospitals and doctors below the rate of inflation -- actions that are based in part on the decision by the state to require insurers to undercharge for small business and individual premiums?

3) As insurers move to capitated rates, do they have any intention of equalizing rates among provider groups in the state to reflect population-based characteristics as opposed to the relative market power of providers? If so, what is their timetable for doing so?

4) As insurers move to capitated rates, shifting actuarial risk to providers, will there be a commensurate reduction in capitalization requirements for those companies? Will there be a reduction in the remarkably constant 10% of premiums that goes to paying administrative costs for those companies? How and when will those savings be passed along to consumers?

5) How will the body politic deal with the inconsistency in payment models between capitated-limited network plans offered by private payers and the open choice (i.e., PPO) model offered by Medicare?

As an economist, I recognize the merits of capitation. But, if it is done with incomplete consideration of these questions, we will have traded one set of problems for another.

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Who's Has More Control Over Prescribing -- Pharmaceutical Companies or Insurers?

Here's an article from MedPage Today about a Consumer Reports telephone survey assessing perceptions of physician-industry relationships.  It starkly contrasts a recent article in their blog (MedPage Today's KevinMD), which highlights the influence of insurers on prescribing.


It's worth (re-)reading the article on the influence of insurers first, then comparing it the one below ... you be the judge of who is wielding the most influence.


1. Insurer influence on prescribing, Read more...


2. Industry influence on prescribing ...

	Patients Wary of Doctors' Relationships By Kristina Fiore, Staff Writer, MedPage Today Reviewed by August 24, 2010 Review Many patients taking prescription drugs believe that pharmaceutical companies have too much influence over their physicians' prescribing practices, according to a new survey. A telephone survey of more than 2,000 U.S. adults by Consumer Reports found that the majority of those currently taking medications -- 69% -- had such concerns. About half of the medication-users believed that their doctors were too eager to write a prescription when other nonpharmacological options are available. "On the one-to-one level, many patients trust their physicians," Lee Green, MD, MPH, of the University of Michigan, told MedPage Today. "But I see a lot of skepticism out there and it's well-founded." Jerome Kassirer, MD, professor of medicine at Tufts University in Boston and former editor of the New England Journal of Medicine, said trust between a doctor and a patient "is absolutely essential in getting patients to believe what their doctors are telling them. ... Any kind of loss of trust between doctor and patient is deleterious." That could mean patients don't heed instructions about taking their medications, according to physicians interviewed by MedPage Today. The findings come from a telephone survey of 2,022 patients in the U.S., with the final analysis based on 1,154 responses from those adults currently taking prescription drugs. On average, those patients reported routinely taking four different medications. Almost half of the patients taking medications who were surveyed (47%) thought that gifts from pharmaceutical companies influenced their doctor's choice of drugs. Most of them (81%) were concerned that physicians engaged in practices that resulted in being rewarded by pharmaceutical companies for writing lots of prescriptions for the company's drugs -- a practice that is illegal, according to Randy Wexler, MD, MPH, of the Ohio State University. "Unfortunately, I have found this fear expressed in my own research," he told MedPage Today. But Green said this practice is more likely to occur among specialists because their smaller numbers make it easier to keep track of the drugs and devices they prescribe. Surveyed patients were also worried about their physicians acting as paid spokespersons for drug companies (72%), speaking at industry conferences (61%), and getting free meals (58%). Their fears may not be unfounded -- given that pharmaceutical companies are increasingly targeting primary care doctors rather than high-profile academicians to spread the word about their drugs. (See On the Stump: When Academics Are Out of the Picture). Green said pharmaceutical companies are increasingly turning to eloquent community physicians, partly because academic doctors "are asking too many questions." Many academic institutions have also set new rules against such conflicts of interest (See Conflict-of-Interest Policies: A Detailed Look) Kassirer said the physician "who works in the community may not be as informed about the drugs and might be more willing to follow the line of the pharmaceutical company in telling others how to use those drugs." Indeed, 66% of patients reported receiving free samples of prescription medications, and 41% felt their doctors prescribed newer and more expensive drugs over proven generics. Eroding trust, especially combined with rising costs of medications, could spur compliance issues, researchers say. The survey found that monthly out-of-pocket patient spending is around $68 -- and 14% of patients spend more than $100 of their own money every month on prescription drugs. In the past year, 27% of patients said they failed to fully comply with their medication regimens, most commonly skipping a prescription fill (16%), taking expired medication (12%), skipping a dose (12%), cutting pills in half (8%), or sharing pills ($4). This combination of circumstances "provides some with the ability to rationalize why a specific medication does not have to be taken," said Wexler. "That can be very dangerous in the setting of many chronic diseases such as diabetes, high blood pressure, hypertension, and high cholesterol." More than half of patients feel that their doctors don't consider their ability to pay when they prescribe. In fact, 64% of survey respondents didn't learn how much the prescription would cost them until they picked it up at the pharmacy. Only 6% were informed of the costs of prescription drugs while in their doctor's office. Physicians are hardly the lone party at fault. About 20% of patients reported asking their doctor for a drug they saw advertised on television. And physicians complied with those requests 59% of the time. Still, physicians should take steps to make it clear to patients that they're free of conflicts of interest, Green said. Kassirer said physicians can avoid being on speakers' bureaus, and discourage pharmaceutical representatives from coming into offices bearing free lunches and free samples. They should also "eliminate all evidence of pharma largess from their offices -- no pens, no pads, none of that." He also cautioned that it's up to patients "to be alert to these things." Wexler added that it's "reasonable for patients to ask their physicians what, if any, arrangements they have with outside vendors, and what that relationship is." "If the physician will not discuss it," Wexler said, "then it is time to find another physician." This article was developed in collaboration with ABC News.

Comparative Effectiveness: Cleveland Clinic CEO Weighs-In

WSJ BLOGS

Health Blog 

The CEO of Cleveland Clinic weighed-in on the impact comparative effectiveness research (CER) may have on innovation.  More specifically, his concern is whether, "manufacturers and investors would still be willing to make financial bets on unproven devices and drugs. He used the example of a heart valve, saying it now takes two decades to bring a new valve product to market and then assess the effectiveness" and what insurers and the government will do with CER study results.

His concerns mirror those expressed by others from both industry and academia and this question -- how will CER results be used? -- will have significant implications for both patient care and research and development as health care reform regulations roll out.  With the intense focus on health care cost-containment in the US, there are legitimate worries that rather than being used as an educational tool, CER will be used as a tool to justify care decisions.  


Given the limitations of even well-designed studies and the time course over which knowledge is accrued, it would be short-sighted to support care decisions based on these data.  And in the long-run, the clinical benefits and applications that are often generated in post-approval studies, and from real-world use, will likely suffer.


Related Blog Post from KevinMD: "Comparative Effectiveness Could Impede Cancer Research."  Read more ...

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