The ACP Advocate Blog

by Bob Doherty

Thursday, August 25, 2011

A Medical-Industrial Complex?, Part 2

Follow the money.

Earlier this week, I blogged about the growing economic relationships and even mutual dependency between medical device manufactures and physicians, citing a pre-emptive strike against an Institute of Medicine report that recommended closer regulation of medical devices before and after they enter the market. Such ties, though, are only one part of a broader medical-industrial complex that has enormous impact on public policy in the United States.

A 2009 White Paper by the Seton Hall’s Center for Health & Pharmaceutical Law& Policy reported that “ drug and medical device companies fund up to 80% to 90% of all clinical trials; in 2005, and that by 2004, three-quarters of all of the clinical trials paid for by industry were in private physician practices or for-profit research centers.” The paper’s authors argue that such trials “create potential conflicts of interest that possibly jeopardize the rights and well-being of research participants as well as the integrity of research results” and that “the goal for public policy should be to structure physician-investigator payment to achieve financial neutrality between treatment and research.””

A recent web posting by a medical billing company unabashedly crows about the extra income doctors can make from clinical trials. “A single study can pay $70,000; doing 3 or more at once — which is typical — can bring in significant income” the site claims. Only after discussing the potential income boost did the site talk about other potential benefits to physicians, such as staying involved in the academic side of medicine. Oh, and “additionally, patients may benefit from new or experimental treatments.”

Then there are seeding trials, which critics call industry-funded sham research masquerading as research. Writing in the New York Times, Carl Elliott, a bioethicist at the University of Minnesota, explains how it works. “A pharmaceutical company will identify several hundred doctors and invite them to take part in a research study. Often the doctors are paid for each subject they recruit. As the trial proceeds, the doctors gradually get to know the drug, making them more likely to prescribe it later. “The purpose of seeding trials” he says “is not to advance research but to make doctors familiar with a new drug.”

Legitimate industry-funded clinical research, including trials done in physician’s offices can bring important benefits to patients, but they are“fraught with potential conflicts” as explained in ACP’s Ethics Manual. The manual counsels physicians to “avoid situations in which they are rewarded for particular outcomes. Moreover, physicians who enroll their own patients in office-based research have an ethical obligation to disclose whether they have financial ties to sponsors. Giving or accepting finder's fees for referring patients to a research study generates an unethical conflict of interest for physicians. Compensation for the actual time, effort, and expense involved in research or recruiting patients is acceptable; any compensation above that level represents a profit and constitutes or can be perceived as an unethical conflict of interest”.

Yesterday, the federal government released a final rule on preventing conflicts of interest in clinical research. The rule requires investigators to disclose to their institutions all of their significant financial interests related to their institutional responsibilities and lowers the monetary threshold at which significant financial interests require disclosure, generally from $10,000 to $5,000, among other changes. .The rule applies only to researchers who receive federal grant support, such as NIH researchers.

Disclosure will help, but is that enough to prevent conflicts of interest? The broader issue is that over time, the medical profession and pharmaceutical and drug manufacturers have developed multiple and complex interlocking economic relationships that are fraught with potential conflicts of interest. The profession has recognized and responded to potential conflicts by putting forward policies to govern physician-industry relations, and the government has stepped in by requiring more transparency. Yet critics argue that more needs to be done to rein in a medical-industrial complex that has undue influence over public policy and patient care. I would love to hear from internists who have accepted drug industry funding for clinical trials in your offices, and the reasons, benefits and risks you have found in such arrangements.

Today’s questions: Do you think industry-funding of clinical trials in doctors’ office is fraught with conflict of interest? What is the role of the profession and government in minimizing such conflicts?

Monday, August 22, 2011

A Medical-Industrial Complex? (Part I)

“This conjunction of an immense [medical] establishment and a large [drug and medical device] industry is new in the American experience. The total influence -- economic, political, even spiritual -- is felt in every city, every State house, every office of the Federal government. We recognize the imperative need for this development. Yet we must not fail to comprehend its grave implications. . .

"In the councils of government, we must guard against the acquisition of unwarranted influence, whether sought or unsought, by the [medical] industrial complex. The potential for the disastrous rise of misplaced power exists and will persist . .

". . . in holding scientific research and discovery in respect, as we should, we must also be alert to the equal and opposite danger that public policy could itself become the captive of a scientifictechnological elite.

"It is the task of statesmanship to mold, to balance, and to integrate these and other forces, new and old, within the principles of our democratic system -- ever aiming toward the supreme goals of our free society.”

The above quote is my adaption of President Dwight Eisenhower’s famous farewell address to the country, warning about the influence of a military-industrial complex. I took the liberty of replacing the word “military” with “medical”—to raise the question of whether close ties between the medical profession and the manufacturers of drugs and medical devices have also resulted in “unwarranted influence” over public policy.

Eisenhower was concerned about the implications of military spending on the economy; today, rising costs of health care pose the gravest threat to the economic health of the country. We know that without changes, Medicare and Medicaid spending will consume so much of national resources there will be little left for other needs. It will be impossible to reduce the deficit and debt without getting health care spending under control.

We can’t get health care spending under control without getting control of medical technology costs. A 2009 ACP position paper, Controlling Health Care Costs While Promoting The Best Possible Health Outcomes, observed that “Technological progress has been seen as accounting for as much as 75% of the increase in U.S. health care expenditures over time.” To address the costs of health care technology, ACP proposed that:

“A coordinated, independent, and evidence-based assessment process should be created to analyze the costs and clinical benefits of new medical technology before it enters the market, including comparisons with existing technologies. Such information should be incorporated into approval, coverage, payment, and plan benefit decisions. The assessment process should balance the need to inform decisions on coverage and resource planning and allocation with the need to ensure that such research does not limit the development and diffusion of new technology of value to patients and clinicians or stifle innovation by making it too difficult for new technologies to gain approval.”

But the flap over a new IOM report on regulation of implantable medical devices shows that even a modest effort to assess the benefits of technology before and after it gets to market will run right into intense opposition by manufacturers and some physicians. The IOM recommended that the FDA no longer automatically grant approval to implantable medical devices, in the absence of clinical trials, based only on a showing that they have “substantial equivalence” to an existing device.

According to a supportive editorial by Drs. Gregory Curfman and Rita Redberg in the NEJM, the IOM found that it is “impossible for such clearance to assure safety and effectiveness, because it assesses neither, instead establishing only ‘substantial equivalence’ to an existing device. The report therefore recommended that [such] clearance be eliminated. In addition, it recommended monitoring medical devices throughout their life cycle, especially during the postmarketing period.”

Yet what Drs. Curfman and Redberg call an “insightful, judicious, sensible, and long overdue” report was subject to a “highly unusual . . . preemptive strike” by industry opponents, reports the New York Times. “That attack began even before the study panel finished its review, and has intensified in recent weeks.” According to the Times, a preemptive legal challenge to the IOM report was filed in court by a pro-industry legal foundation, with the implied support of at least some orthopedic surgeons. An orthopedics trade publication, Orthopedics This Week, labeled the IOM report as a “stink bomb,” citing a statement by AdvaMed, the medical device trade association, that it was undeserving of “serious consideration.

The IOM’s report was focused on harm to patients of the current approval process, not the cost of medical technology You can imagine then the even greater furor that would result if it called for assessing “the the costs and clinical benefits of new medical technology before it enters the market, including comparisons with existing technologies” (as proposed by ACP)!

I am sure that there are two sides to this story, and I encourage critics of the IOM report, and particularly orthopedic surgeons, to post comments to this blog. And by no means do I want to suggest the concern about physician-industry influence over public policy is limited to one specialty or one trade group. I plan to examine the issue of drug industry sponsorship of clinical trials in the same light in a future post.

The larger question is whether the close ties between drug and device manufacturers, and physicians who benefit from the products made by them, have created a medical-industrial complex with “unwarranted influence” over “every city, every State house, every office of the Federal government.”—today’s health care version of Eisenhower’s prescient warning about the military-industrial complex.

Today’s questions: Do you think there is a medical-industrial complex that has unwarranted influence over public policy? And what is your take on the specific controversy over the IOM report on medical device regulation?

Tuesday, August 16, 2011

Want less paperwork? Move to Canada.

If you ask internists and their patients what makes them bonkers about the U.S. health care system, paperwork will top the list. Many will point to the federal government as the culprit, citing the many forms, RAC audits, pre-and post-payment reviews, documentation and coding guidelines, HIPAA privacy rules, quality measurement and reporting, Part D drug formularies, and HIT meaningful use requirements imposed by Medicare and other federal programs. (Some put more of the blame on private insurers and pharmacy benefit managers.)

But if paperwork is associated with the degree of government involvement in health care, then Canada--a single payer system--should have more of it than the United States, right? Think again.

A new Health Affairs survey of U.S. physicians and practice administrators found that U.S. physicians spend almost ten times more interacting with health plans than their Ontario counterparts spend on interactions with Canada’s single-payer plan. The Ontario physicians and administrators spent "$22,205 per physician per year interacting with Canada's single-payer agency--just 27 percent of the $82,975 per physician per year spent in the United States. U.S. nursing staff, including medical assistants, spent 20.6 hours per physician per week interacting with health plans--nearly ten times that of their Ontario counterparts. If U.S. physicians had administrative costs similar to those of Ontario physicians, the total savings would be approximately $27.6 billion per year." (The complete study is available on a subscription or pay-for-reprint basis).

Why do U.S. doctors spend so much more time and money on health plan interactions? "The notable difference between the United States and Ontario is that non-physician staff members in the United States spend larger amounts of time on billing and obtaining prior authorizations" than their Canadian counterparts. In the United States' "each health plan offers many different insurance products to consumers, and each may have its own formulary (or list of approved drugs); prior authorization requirements; and rules for billing, submitting claims, and adjudication. In contrast, Canadian physicians generally interact with a single payer that offers a single product, and they are subject to fewer managed care requirements." The authors acknowledge that there are "possible benefits" generated by having more payers and the associated higher administrative tasks in the U.S. system-- "for example, benefits that may arise from competition, innovation, and choice among insurance products."

The U.S. is not likely to adopt the Canadian system, and there is much that can be done to streamline and reduce paperwork while still preserving a pluralistic, multiple payer system of health insurance. (For all of the hyperbole about Obama's Affordable Care Act being "socialized medicine," it actually props up and subsidizes a pluralistic system of private and public health insurance, even as it requires insurers to standardize many of their administrative transactions.)

The Health Affairs study belies the notion that more government automatically leads to more paperwork and administrative costs, or the contrary narrative that less government leads to less paperwork. Our Canadian neighbors show us that it is possible to have a government-run health care system with far lower administrative costs and far less paperwork than the United States has with its multiple payers. (Although, if the U.S. were to adopt a single payer system, it might still impose more paperwork on physicians than Canada does--as the U.S. Medicare program already does in managing its drug benefit.)

It is also possible to imagine a system that expands the role of government and maintains a pluralistic choice of private and public health insurance options, but with administrative transactions standardized and automated--as the ACA promises to do.

Today's question: What do you think the Health Affairs study says about the argument that the answer to the paperwork pandemic is to get government out of health care?

Monday, August 1, 2011

The debt deal . . . by popular song!

You probably were expecting me to write a serious blog today about the debt deal reached last night. I will give you a few initial observations, but since I am leaving this morning to vacation in Cape Cod (I can’t wait to get out of Washington and its stifling climate—political and meteorological!) I can’t bring myself to get too serious. So instead, I am going to ask for your help if finding a popular song that best describes the gruesome political theater that led to the debt deal. But first, I will offer a few serious words about it.

As I have written in previous blogs, I think a default would have had terrible consequences for the country, and especially for the millions of people who rely on Medicare and other government health and public safety programs. It could have led to suspension of Medicare and Medicaid payments to physicians, and an almost total shut-down of the FDA, CDC, and NIH. So the fact that default appears likely to be averted (Congress still has to pass the deal) is a good thing.

But the almost $1 trillion in cuts (over the next 10 years) in discretionary programs required under the agreement may end up defunding programs that ACP believes are critical to expanding coverage, improving quality, and ensuring an adequate physician workforce. And the agreement also puts in place a process where a “Super-committee” of Congress will make recommendations for more than another $1.5 trillion in cuts including Medicare, Medicaid and other entitlement programs. Congress will either approve or disapprove the Super-committee’s recommendations by the end of the year on an up or down vote. And, if it doesn’t approve the Super-committee’s recommendations, or the committee itself deadlocks, the deal calls for across the board cuts in defense and domestic programs, including cuts in Medicare payments to “providers.” We won’t know for months how all of this will play out, but you have to be concerned that it could lead to more cuts in Medicare payments to physicians (as if the SGR wasn’t enough!) and GME programs, and who knows what else. (You can learn more about the debt deal at ACP’s advocacy web page, www.acponline.org/advocacy.)

Now, for what I hope will be the more fun part. Yesterday, a friend sent me this You Tube rap song about the debt ceiling. It’s a hoot, and you don’t have to be a rap fan to enjoy it. This got me thinking . . . what popular song would you use to describe how Washington went about getting a debt deal? Here are my suggestions:

“I’m a Loser” (Beatles), I’ll leave it to you do decide if this describes Boehner or Obama more!

“I Can’t Get No Satisfaction!” (Rolling Stones), Obama, for sure.

“I Did it My Way” (Sinatra), Boehner, of course.

“We can work it out” (Beatles), especially the part “Why don’t you see it my way . . .”, everyone involved.

“Time Is on My Side” (Rolling Stones), surely describes the GOP negotiating strategy.

“Taxman” (Beatles), could have been written by Grover Norquist.

“Play with Fire” (Rolling Stones), the words “but don’t you play with me, you’re playing with fire” could be used to describe Boehner or Obama, or maybe the Tea Party.

“You Say You Want a Revolution” (Beatles), surely dedicated to the Tea Party caucus, especially the words “we all want to see the plan.”

“It’s the End of the World as We Know It” (REM), how Timothy Geitner describes default.

“I Won’t Back Down” (Tom Petty), Tea party caucus again, especially the S.C. delegation.

“Fool on the Hill” (Beatles), you choose, Reid, McConnell, Boehner, or Michelle Bachmann?

“Stuck in the middle with you (Stealer’s Wheel), especially the words “Joker to the left of me clowns to the right, here I am stuck in the middle with you” to describe the dwindling ranks of congressional centrists.

That’s it for now, but let me hear your ideas for the songs and lyrics that best describe the debt deal/debacle and who they most apply to.

One more thing, I won’t be doing much blogging (if any) while on vacation, so you can look forward to what I am sure is a much welcome break from having to hear from me, until I return the week of August 15. Enjoy!

Today’s question: What popular songs best describe the debt debate/debacle?

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About the Author

Bob Doherty is Senior Vice President, American College of Physicians Government Affairs and Public Policy; Author of the ACP Advocate Blog

Email Bob Doherty: TheACPAdvocateblog@acponline.org.

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