The Tortuous Trek Toward True Transparency

Success is seldom achieved without cost. For many, the price tag is time. For others, it’s companionship or love. And for some, the toll is integrity.

In the medtech world, however, success has a more veritable sticker price of $474.6 million—the total cost of payments surgeons received from medical device and pharmaceutical firms in the last five months of 2013, according to a study conducted by University of California-San Diego School of Medicine researchers and published in early January in Mayo Clinic Proceedings.

Using the Open Payments database managed by the Centers for Medicare and Medicaid Services (CMS), the researchers compared payments and investment interests among various specialties. The database is a by-product of the Affordable Care Act, which under the Physician Payments Sunshine Act requires medical product and pharmaceutical companies to report payments to physicians, including consulting stipends, gifts, speaking fees, meals, travel and research grants. The information is publicly accessible via CMS’ Open Payments database.

UC researchers analyzed 2.4 million physician payments made between Aug. 1 and Dec. 31, 2013. They identified the top three payments to doctors as: compensation for services ($113 million, or 24 percent), royalty and license remittance ($107 million, or 22 percent), and consulting fees ($94 million, or 20 percent). More than 80 percent of the records documented meal payments.
In addition, the study found that thoracic surgeons, cardiologists and urologists receive the highest median general payments ($181, $175 and $169 respectively), while orthopedic surgeons, neurosurgeons and neurologists eclipse their counterparts in mean payment value per physician ($7,114; $3,763; and $2,342 respectively).

“During the last few decades, physicians have become much more engaged in the development of novel drugs and devices, which is critical to bringing innovation to patients,” said Jona Hattangadi-Gluth, M.D., assistant professor at UC-San Diego, and principal investigator of the study. “Certain specialties, like surgery, may require more research and involvement in device development, resulting in higher royalty and license payments. Our study not only identified how industry payments are distributed by specialty, it also helped put those payments in context.”

That context, however, is more than a simple regurgitation of Open Payments statistics. Rather, it provides a comprehensive evaluation of the distributive differences and characteristics of industry-physician financial transactions. It reflects, for example, the disparity among company-paid doctors between specialty types (medical, surgical, other) and specialty within each type (orthopedic, obstetrics/gynecology, etc. in surgical; cardiovascular disease, gastroenterology, etc. in medical). Of the three specialty types, surgical reported the greatest ratio of physicians receiving payments (49 percent) but only the second-highest number of doctors with corporate financial ties (81,444). Medical, on the other hand, outranked both other specialties in the total number of physicians receiving payments (187,354) but lagged behind surgical in the proportion of compensated doctors (45 percent).

While the study shows a significant variation in reported payments among medical and surgical specialties (ranging from a low of $268,380 for oral/maxillofacial surgery to $111.1 million for internal medicine), cardiovascular disease and orthopedic surgery took top honors in many of the categories. The former group, for instance, reported the highest ratio of remunerated physicians (78 percent), while the latter prevailed in total value of general payments ($109.8 million). Orthopedic surgery also bested its categorical brethren in several other areas, including largest general payment ($7.35 million), per-physician mean value of general payments ($7,114), total amount invested ($60.3 million), and total value of interest ($88 million), the study concluded. In addition, orthopedic surgery had one of the highest ratios of doctors with an ownership interest in the corporate client (1.5 percent), though it was handily humbled by neurosurgery (1.9 percent) and urology (5.41 percent).

Such symbiosis is fairly common in the orthopedic sector. And the study’s findings, researchers noted, “are consistent with an analysis showing the broad extent of financial interaction between orthopedic surgery and industry, a field with long-standing financial relationships and a history of recent problematic relationships with device manufacturers influencing the dissemination of research results.”

Although it is considered the most comprehensive analysis (to date) of physician-industry relationships, the study nevertheless has several shortfalls, the most important of which is the omission of 1.7 million records due to researchers’ lack of confidence linking physicians to specific payments. Consequently, the study likely underestimates the proportion of doctors receiving industry payments. Also, investigators said they were unable to assess specialty-level systematic differences in the excluded data.

Still, experts deem the study a significant step toward true transparency in the medical profession. “Physicians across the nation have entered into an era of transparency. This analysis shows the wide variability of industry payments across specialties,” noted Hattangadi-Gluth, chief of the central nervous system tumor service at UC-San Diego Health. “The research sheds light on how physicians are engaging with medical companies, and this information can be used by patients, policymakers, and other stakeholders when making healthcare decisions.”