The New Relationship Dilemma: Evaluating Physician Payment Transparency Regulations


The struggle is real. As an executive in health care, I understand the impact regulation has on our business.  No doubt, physicians and pharmaceutical companies feel it as well: especially given some very significant changes that have transpired over the past 20 months. The Physician Financial Transparency Reports, or Sunshine Act, requires increased reporting of financial relationships between health care providers and pharmaceutical manufacturers and sheds light on potential conflicts of interest. Ultimately, the Act surmises, patients would have a better opportunity to learn about potential conflicts and consider those in the context of their prescribed treatment. But like others, well-intentioned legislations, I sometimes wonder how the Act is working.

As with all law, interpretation can breed divergent practices within an industry.  It may still be too early to understand the impact of this particular law on prescribing practices or even overall spending by manufacturers on their key opinion leaders. However, all parties are acutely aware that dollars spent in compensation for these relationships are made public.  How does this knowledge impact the relationship between Key Opinion Leaders and the pharmaceutical manufacturer? That depends on what is being accurately and honestly reported.

The Open Payments Program, implemented by CMS, requires manufacturers to report annually all funding, gifts, fees, meals, travel and other transfers of value that were made to physicians and teaching hospitals. Physicians then have 45 days to dispute any discrepancies that are reported on a public website.

I understand that for the private practice physicians affiliated with my hospital, like others, they are subject to reporting when speaking on behalf of a manufacturer or even when a manufacturer’s representative brings food to their office. In a busy practice this could certainly be overwhelming. I’m not sure we see this level of oversight in any other industry. This now behooves the physician to keep track of their payments – even, say a manufacturer-delivered deli sandwich – each time one is accepted.

The impact of regulation on commercial marketing is also awkwardly obvious to me in my own daily business dealings.  During the course of normal business, I meet with pharmaceutical manufacturers. Depending upon what we are discussing, certain members of the manufacturers’ team participate while others leave the room because, by policy, they are not allowed to be present in case the conversation strays to unlabeled uses, upon my request.  Perhaps it is time to rethink “how” we interact and build relationships with manufacturers that will benefit patients and not contribute to the growing healthcare financial problem in the United States at the same time. Is it now time for partnerships that align interests in health care and solve universal problems like reduction in readmissions, and in hospital mortality? Also, is it time we partner to keep patients out of the hospital when appropriate and render efficient high quality care when they are?

Recently, our hospital has implemented an “innovations” patient care unit.  This unit is designed to focus on novel patient care models, pathways, and processes in order to pilot practice changes that make health care delivery more efficient and produce higher quality outcomes simultaneously.  Can manufacturers participate in this setting in order to assist in the development of improved practices designed to lower costs while improving clinical outcomes?  Might this be a basis for a new type of relationship? Or will the care practices derived in this unit fall under the scrutiny of CMS and need to be publically reported under these new regulations? Many patients appreciate that their physician is on cutting edge of medical advancement, but will it come at a cost – literally – to the physician?

Like others in the health care arena have voiced, we cannot and will not know the full impact of the Sunshine Act for several more years. Clearly we do not yet know how patients are utilizing this reported information and if relationships are changing – for better or for worse — between physicians and/or academic medical centers and the pharmaceutical industry. Until then, we should continue to contemplate a new paradigm of aligned problem solving in a global health care market.