A new level of transparency is poised to dominate healthcare payment practices, prompting physicians to reevaluate the nature of their financial ties with the life sciences industry according to a recent report conducted by Forbes Insights for Deloitte Touche Tohmatsu Limited (DTTL).
The survey, Physician Payment Sunshine Act: Physicians and life sciences companies coming to terms with transparency?, queried 110 U.S.-based physicians and 223 global life sciences executives about levels of comfort and compliance regarding transparency-based regulations such as the Physician Payment Sunshine Act (PPSA), which is set for full implementation on March 31, 2013.
The PPSA, one prong of the Patient Protection and Affordable Care Act (ACA) proposed by the Centers for Medicare & Medicaid Services, requires all applicable manufacturers in the healthcare industry to submit an annual report to the Secretary of Health & Human Services detailing transfers of value afforded to physicians or teaching hospitals. Reports are required to incorporate information about the amount paid, the date when the transaction occurred, the form of payment and the nature of the payment. Failure to adhere to reporting guidelines will result in civil monetary penalties — $150,000 annually for merely failing to report and $1,000,000 for voluntarily failing to do so.
Despite support from the patient sphere, this new public visibility doesn’t come without vendor and physician concern. Although 54 percent of the physicians who participated in the survey are in favor of providing a public, searchable database documenting physician-industry relationships, their support is administered only on the condition that patients must understand how to interpret the data.
Genevieve Fairbrother, MD, chief of medical and dental staff at Northside Hospital in Atlanta, articulated the crux of the trepidation: “Knowledge is power; incomplete knowledge of what this kind of data is really saying will lead to misrepresentations. In a properly framed context, nobody would have a problem with it.”
Some physician groups are more perturbed by the prospect of public misinterpretation than others, noted Seth Whitelaw, director of health science compliance at DTTL and co-author of the study.
“Perhaps the area that is of greatest interpretative concern involves those physicians who also are researchers,” he said. “In most cases, payments for clinical research are provided to institutions and not individuals. These payments cover a variety of costs including procedure-related costs and institutional overhead. However, under the current CMS proposal, payments for clinical research will be indirectly attributed to principal investigators.“
Select proponents for disclosure don't believe that public access to physician-industry financial correspondence will pose any major threat to accustomed conduct in the immediate future. One such supporter, David J. Rothman, PhD, director of the Center for the Study of Society and Medicine at Columbia University, doubts patients will refer to the database when selecting a physician. “There are lots of databases out there that, for the most part, patients don’t use. Maybe the next generation of patients will use it, but I wouldn’t expect any major use by patients now,” he said.
Whereas physicians are most apprehensive about public comprehension, the life sciences industry is rather preoccupied with production pursuits — the actual aggregation and subsequent reporting of the data. Two-thirds of life sciences companies involved in the study claimed to be either “100 percent ready” or “50 percent done and hoping to be ready in time” to comply with PPSA and other measures of its ilk. When asked about projected investments in HCP transparency-related compliance over the next 2 years, 55 percent believed totals would be “bigger than in 2011,” trumping the second highest bracket, the 41 percent who thought funding would remain the same.
Despite varying levels of uncertainty and different manifestations of struggle, the report and those close to it claim both physicians and life sciences industry executives are taking the necessary steps to accommodate the coming changes.
“The main point to consider is that transparency is going to happen. As the survey showed, physicians should be prepared for the fact that if they are receiving compensation from life sciences companies that fall within the Sunshine Act, their names will be publicly disclosed, as well as those amounts,” Whitelaw said.
A majority of physicians can recognize the conflict of interest elicited by financial interactions between their practices and the life sciences industry, Whitelaw believes but, given the results of the study, most physicians won’t make any remarkable alterations to their conduct with the industry in response to PPSA. “The mere fact that you’re forcing disclosure isn’t going to change the fact that the interactions are still going to occur,” he said.
The central decrees of the survey are as follows:
- Life sciences companies must make obligatory investments in infrastructure and compliance technologies to withstand the demands of PPSA and other transparency-based regulations.
- ACA reporting requirements have yet to provide impetus for either life sciences companies or physicians to drastically modify the ways in which they interact with one another.
- The life sciences industry can capitalize on the opportunity to amend financial incidentals by marketing to the ways in which physicians say they learn best (through industry-sponsored continuing medical education seminars, more so than free samples) and thus, potentially eliminate objections to healthcare provider financial interactions.
- Most physicians do not believe that financial interface with the life sciences industry is pertinent to their comprehensive income.