Observation Deck: Bad solution looking for a problem?

“It’s a bad solution looking for a problem.” That’s what Thomas P. Stossel, M.D., professor of medicine at Harvard and co-founder of the Association of Clinical Researchers and Educators, was quoted as saying about the “sunshine” provisions in the recently enacted Patient Protection and Affordable Care Act, otherwise known as the healthcare reform law. The provisions demand that beginning Sept. 30, 2013, drugmakers, device makers or other medical industry firms must post on the Web any gifts, payment or other remuneration of $10 or more that they give to a physician. (Even payments or gifts worth less than $10 must be reported, if they add up to $100 or more during a calendar year.) Reporting must begin March 13, 2013 (and on the 90th day of each calendar year after that), with public posting to follow Sept. 30.

Journal of Healthcare Contracting readers may remember the Association of Clinical Researchers and Educators. We spoke with ACRE steering committee member Carey Kimmelstiel, M.D., for our November/December 2009 “Observation Deck.” Kimmelstiel is director of cardiac catheterization laboratory and interventional cardiology, and director of clinical cardiology at Tufts Medical Center in Boston. He is also an associate professor of medicine at the Tufts University School of Medicine.

In a nutshell, ACRE is pushing back against sunshine laws. It was Kimmelstiel who told our editor late last year, “This whole idea that our practice patterns are going to be changed by a pad of Post-It notes is kind of insulting. I have a little bit of a problem with the idea that if I use a pen with a company’s logo on it, it will influence what I buy.”

The new law demands that more than Post-Its be posted on the Web. In fact, the types of payments that must be reported and posted include cash or cash equivalent; in-kind items or services; and stock, stock options, or other ownership interest or dividends. Companies must report the nature of the payment “or other transfer of value,” including consulting fees, honoraria, gifts, entertainment, food, travel, education, research, charitable contributions, royalty or license, grant, or direct compensation for serving as faculty or as a speaker for a medical education program.

Shortly after the healthcare reform law with the “sunshine” provision was passed, the Council of Medical Specialty Societies – representing 32 medical professional societies with a collective membership of more than 650,000 U.S. physicians – passed a voluntary code of ethics, which addresses conflicts of interest, financial disclosure, independent program development and independent leadership. The participating societies have agreed to publicly disclose donations and support received from for-profit companies; to prohibit society leaders from having direct financial relationships with relevant for-profit companies in the healthcare sector; and to develop and publicly post policies and procedures to disclose and manage conflicts of interest among those who participate in society activities.

So, do we have a “bad solution looking for a problem?” I think JHC readers would say “no.” Conflicts of interest can impede an IDN’s efforts to standardize products and negotiate in good faith. In short, they can stymie legitimate cost-control efforts.

With the “sunshine” provisions in place, contracting executives will be able to easily check for conflicts of interest that might affect their IDN’s operations. With these facts on the table, contracting executives and clinicians should be able to engage in frank, honest discussions about the potential impact of these relationships on upcoming negotiations with vendors. These discussions will be uncomfortable. But rising healthcare costs are even more so.

This isn’t all bad news for vendors and clinicians. For now, the solutions presented in the healthcare reform law and the Council of Medical Specialty Societies’ code of ethics call for reporting of gifts, not an outright ban. And that’s a good thing. After all, one has to take into consideration Dr. Kimmelstiel’s arguments that physicians aren’t swayed by promotional items and gifts; that consulting fees and speakers’ fees help physicians spread news of best practices to their peers; and that providers and the scientific community rely on industry support for a great deal of clinical research.

The “sunshine” provisions of the new healthcare law will expose the financial relationships between providers and industry for all to see. Hence the term “sunshine.” So let the discussions begin.

Mark Thill About Mark Thill

Mark Thill is the Editor of The Journal of Healthcare Contracting and has been reporting on healthcare supply chain issues since 1985. He is a graduate of Dominican University in River Forest, Ill., and he received a master's degree in journalism from Northwestern University in Evanston, Ill.

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