Physician pay, medical disclosure rules criticized

The payments and "VIP trips" given to a Maryland cardiologist by Abbott Laboratories for parties and consulting work — disclosed in a federal report released Monday — are just what new legislation and industry guidelines are supposed to curtail, lawmakers said.

But some industry analysts say the revamped rules aren't strong enough.

"There's absolutely no [meaningful] regulation," said Eric G. Campbell, an associate professor at Harvard Medical School who studies health policy. "All of these laws don't say people can't do things, what they do say is what people have to disclose."

Beginning in 2012, drug and medical-device makers must record the payments they make to doctors, and they'll have to publicize them in a database by 2013 as part of federal health care reform. And some states — not Maryland — require similar disclosures or restrict the value of acceptable gifts.

Sen. Chuck Grassley of Iowa, ranking member of the Finance Committee, said in a statement Monday, "For the most part, people scheduled for surgery don't know if there's a financial relationship between the doctor implanting a device and the maker of that device. Starting in 2013, that will change. The public will have access to the financial information. There will be transparency."

But there aren't yet uniform reporting requirements or the means to check the accuracy of disclosures, critics say, adding that it's also unclear what patients should — or could — do with the information. Companies, meanwhile, continue to look to relationships with doctors as a way to share information about their products.

"I have absolutely zero faith in what companies self-report as being accurate or complete," Campbell said. "They just have absolutely no credibility to say that unaudited self-reports of the things they've tried to keep secret for the past 20 years are somehow complete and honest."

Financial relationships between physicians and product manufacturers are getting renewed attention in the wake of a U.S. Senate Finance Committee report released Monday. It questions whether compensation from Abbott "indirectly encouraged" Dr. Mark G. Midei to perform hundreds of unnecessary cardiac procedures, and calls the allegations against him a "clear example of potential fraud, waste and abuse."

Midei was removed from duty at St. Joseph Medical Center in Towson last year and had his privileges suspended after hospital investigators concluded that his "practice of placing stents [which prop open clogged arteries] in patients where not clinically indicated resulted in the substantial likelihood of harm to his patients."

Perquisites have long been a common marketing practice, with some makers of medical devices and drug companies annually spending millions of dollars touting products to physicians in the hopes it might lead to billions in sales.

"It's a long-standing practice that has kind of gone out of favor" as some companies strayed into the kickback zone, said John Mack, editor and publisher of the Pharma Marketing News newsletter, based in Pennsylvania.

Sometimes, the practice has led to serious penalties. Minnesota's Medtronic Inc., for example, spent more than $20,000 to put surgeons on a Mardi Gras float, according to the U.S. Department of Justice, which settled kickback claims against the company in 2006. And joint-replacement businesses in New Jersey, Indiana and Tennessee paid more than $300 million to settle allegations that they gave surgeons hundreds of thousands of dollars in phony consulting contracts.

Mack doesn't believe that all financial interactions between medical-device makers and doctors are negative, however.

"There's really a need for physicians to educate each other on how to use these [products], and I think the industry has a role to play there," Mack said, while acknowledging that the role has been abused in the past.

Companies have "put many more physicians on the payroll than is probably necessary for training purposes," he said. "How to draw that line there is a bit difficult."

That's the situation Senate investigators face in trying to understand whether the relationship between Midei and Abbott was appropriate.

The Chicago-based company identified Midei as a top performer and included his "VIP trips" as part of its business plan in 2008. Abbott also paid about $2,000 for parties that year — including a pig roast — at Midei's home. Later, after Midei was removed from duty, Abbott paid him $30,000 in consulting fees and sent him abroad to market its "Xience V" stent, because publicity was too negative in the United States.

Through his attorney, Midei has said the relationship was appropriate. And both Abbott and St. Joseph said they have policies in place to maintain the integrity of such interactions, with the hospital toughening theirs significantly after investigating the allegations against Midei.

"Policies and procedures were modified … with particular emphasis on conflicts of interest," St. Joseph said in a statement. The hospital hired a compliance officer and now ensures that doctors complete conflict-of-interest disclosure forms, representatives said.

Abbott relies on industry guidelines governing financial transactions with health care providers, as well as state laws like those in Vermont and Massachusetts. In a statement, the company said it "regularly gathers feedback and uses the expertise of physicians and other clinicians in designing, testing and improving its products — in conformance to all applicable pharmaceutical and medical device industry codes."

Mack said the compensation to Midei doesn't rise to the level of fraud in his eyes.

"A pig barbecue in a backyard is not a swank location," he said. The most shocking thing, he added, was the menu: "It's just incredible that a pharmaceutical company would have such a high-cholesterol event for a cardiologist."

Others, however, were incensed.

"If all the reports are true I'm outraged," said Dan K. Morhaim, a physician and Maryland delegate who sits on the Health and Government Operations Committee.

Maryland's General Assembly has explored limiting financial relationships between doctors and drug or device makers, but no laws have come from it, Morhaim said. He added that "it's a continuing topic of interest" and will likely part of next year's legislative discussion.

Laws went into effect last year in Massachusetts, which now requires the disclosure of gifts over $50, and in Vermont, which actually bans some gifts to health care providers within the state. The Vermont ban has many exceptions, though.

And some trade organizations have recently revamped their ethical guidelines, tightening rules regarding payments to health care providers.

The Advanced Medical Technology Association, for example, put a new, voluntary code into place last year that adds "much greater detail and guidance to the industry and also expanded the code's footprint," said Christopher White, general counsel to the group, known as AdvaMed. Among the changes are increased restrictions on providing meals and a ban on providing entertainment and recreation.

White questions the value of more legislation and the "gift bans" in place in some states, however, saying they're too broad and confusing to the public.

"It's inappropriate to group all of these [financial] relationships under gifts," White said, calling the physician/company relationship "undeniably close" for good reasons, particularly training and product improvement.

Some claim that the move toward transparency is enough to lessen inappropriate payments.

Grassley's statement said, "I hope that bringing this information out of the shadows will help rein in the most questionable cases. It's common sense that doctors should choose medical devices because the devices will help their patients, not because the device makers paid the doctors to give a speech about their product."

Others say the disclosure could make questionable practices seem legitimate.

"Doctors who take gifts from the device companies that they're using do threaten public trust in their integrity," said Arthur Caplan, chairman of the Department of Medical Ethics at the University of Pennsylvania. "At the end of the day, it's [typically] not illegal, but it is ethically questionable."

And it's costly, Harvard's Campbell added, particularly to patients receiving unnecessary treatments.

"Politicians need to begin to focus on understanding the extent that these relationships drive unnecessary care, and the costs of unnecessary care," he said. "Patient safety is at stake."

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