Ethics
Taking time to assess hospitals’ conflict-of-interest policies
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| More and more, both doctors and the vendors with whom they have relationships have come under scrutiny not only by hospitals, but also by the federal government. Several orthopedic vendors are now required to provide full financial disclosure, many have done so on their Web sites. Such accessible information is a valuable resource for materials managers. They can immediately discern which doctors, if any, are financially involved with a vendor and can then assess whether the situation is a conflict of interest. |
“I have never been bought, I cannot be bought. I am an icon, and I have a reputation for honesty and integrity, and let the chips fall where they may. It is true that there are people in my situation who could not receive a million-dollar grant and stay objective, but I do.”
—C. Everett Koop, M.D., defending a grant from Schering-Plough to the Koop Foundation
Dr. Koop personally lobbied members of Congress on behalf of Schering-Plough Corp. to help it obtain a patent extension without disclosing that his not-for-profit organization had received $1 million from the company.
Schering-Plough was expected to financially profit $6 billion over the next five years with the assistance of Koop, according to a 1999 New York Times article. And almost 10 years later, not much has changed in the health care industry with regard to conflicts of interest.
Receiving gifts of any size can effectively align a physician’s interest with those in the industry, and not necessarily with a patient’s best interest in mind. It is imperative that hospitals take a serious look at their financial relationships with health care companies.
The first step is to create an unbiased, ethical conduct and gift policy for health care providers. However, the implementation, monitoring and compliance of the policy are really the critical components of a successful program.
To ensure unbiased, ethical care, hospitals should adopt clear and concise conflict-of-interest policies for staff members. Stricter policies should decrease, if not eliminate, potential sources of unwarranted influence.
Each hospital has a decision to make whether to play a powerful leadership role in setting new standards for the profession or wait for legislation to be enacted.
Numbers and actions
Despite national and state legislation proposals and hospital policies, conflicts of interest may still remain in some health care settings. A refusal to acknowledge the issue does not eliminate the problem, it only allows it to grow out of control.
In 2006, the pharmaceutical industry spent more than $25 million marketing to physicians. However, many health care providers do not believe that a donut, a slice of pizza or other marketing ploy can sway their opinions.
According to the United States Department of Health & Human Services, from 2002 to 2006, leading orthopedic hip and knee implant makers paid more than $800 million in speaking fees, consulting arrangements, royalties and other payments to orthopedic surgeons.
“A National Survey of Physician-Industry Relationships” was published in the November 2007 issue of the New England Journal of Medicine. This article describes a national survey of 3,167 physicians in six different specialties (anesthesiology, cardiology, family practice, general surgery, internal medicine and pediatrics) in 2003 and 2004 (see chart below).
The majority of physicians reported some type of relationship with the pharmaceutical industry and most relationships included receiving: food in the workplace, pharmaceutical samples, reimbursement for professional meetings costs and money for consulting or giving lectures or for enrolling patients in clinical trials.
Each person may have a different level of influence, which is why it is crucial to eliminate all gifts. By accepting a gift, a relationship is created, which can create an obligation to reciprocate the favor.
In November 2007, the University of Arkansas for Medical Sciences (UAMS) in Little Rock, instituted a new policy on ethical conduct and gifts signed by Chancellor I. Dodd Wilson, M.D.
The new policy applies to every UAMS employee. Public service is a public trust, requiring employees to place loyalty to the laws and ethical principles above private gain.
The policy specifically states that employees shall not solicit or accept any gift or other item of monetary value. The definition of a gift “includes everything of monetary value from meals and travel to promotional items such as pens, coffee mugs and notepads.”
Transparency
In August 2008, CNN aired a story called “Don’t become a victim of medical marketing.” The story was about a woman who had back surgery performed by a surgeon who had financial ties to an orthopedics device company. The woman stated in the interview that if she had known that her surgeon had financial ties to the implant company, she would have solicited a second opinion.
Acknowledging the problem and eliminating it are two different approaches to stopping any proprietary interest. Avoidance is clearly the best approach and in the best interest of patients.
Federal law prohibits offering, soliciting, paying or receiving remuneration to induce or reward referrals for goods or services paid for under Medicare or Medicaid. The Anti-Kickback Statute states that certain benefits offered to providers (e.g., travel, dinners and entertainment) may violate the Federal Anti-Kickback Statute when they involve a person or people in a position to potentially influence the purchase of prescription drugs or other medical devices, and these benefits must be scrutinized.
“This industry routinely violated anti-kickback statutes by paying physicians for the purpose of exclusively using their products,” said Christopher J. Christie, the U.S. attorney for the District of New Jersey. “Prior to our investigation, many orthopedic surgeons in this country made decisions predicated on how much money they could make choosing which device to implant by going to the highest bidder.”
In 2007, according to orthopedic manufacturer Web sites (see sidebar on page 28), approximately 50 physicians were paid more than $1 million each for conference tuition, travel, lodging, airfare and other services. One physician from Boston, was paid between $6.67 million and $6.7 million by a company in 2007.
While these orthopedic companies are required to publish their contributions, Eli Lilly, a pharmaceutical company that isn’t required to do so, has voluntarily posted contributions. This year Eli Lilly began posting all of its educational grants and all other monetary contributions on its Web site (www.lillygrantoffice.com/grant_registry.jsp), making Eli Lilly the first pharmaceutical company to provide this type of disclosure.
Legislative action
Last year, Iowa Sen. Charles E. Grassley introduced the Physician Payment Sunshine Act, which proposes a national database or registry of payments from health care industry representatives to physicians who bill Medicaid or Medicare. Unfortunately, this act is not expected to be law until 2011. Nine states and the District of Columbia have adopted laws or resolutions affecting pharmaceutical marketing. These new laws have the pharmaceutical industry evaluating their financial contributions to physicians. Several pharmaceutical companies have placed their policies for obtaining grants on their Web sites. Only July 10, the Pharmaceutical Researchers and Manufacturers of America issued a revised voluntary code on “Interactions with Healthcare Professionals.” One example of the voluntary code is having an annual cap on individual speaker fees. For other recommendations, visit www.prescriptionproject.org. These states include California, Florida, Maine, Minnesota, New Hampshire, South Carolina, Vermont, West Virginia, Massachusetts and the District of Columbia. While each state has written different laws or resolutions, a couple of the laws are detailed below:
Massachusetts—On Aug. 10, Massachusetts passed an act to promote cost containment, transparency and efficiency in the delivery of quality health care (Chapter 305 Acts of 2008, Section 14). Signed by the governor, this new law restricts pharmaceutical and medical device industry marketing.
The new law requires corporations to disclose payments to physicians and other health care providers valued at $50 or more; establish a $5,000 penalty per violation for companies, granting enforcement to the attorney general and a few other restrictions.
Minnesota—Minnesota law requires pharmaceutical companies to disclose their payments on their Web sites. See the following link for Minnesota disclosures: www.phcybrd.state.mn.us/Payments/index_of_payments2007temp.htm.
Information is power
These new laws and resolutions give materials managers confidential financial information that can help with negotiations. The financial information is very powerful when sitting down with physicians, the vendor and the value analysis committee because it allows materials management to encourage physicians to assist with negotiations. When a physician is paid by a vendor, the committee needs to know the clinical reasons for keeping specific products from that company.
Knowing what the vendor is paying the physician is compelling information because it allows materials management to negotiate better pricing for the hospital. Having all conflicts of interest made public is in the best interest of the patient, ensuring any potential bias is eliminated. Health care industry representatives have relationships with many different departments, so it is crucial to have all those parties at the table to discuss concerns.
Based on our conflict-of-interest policy, it is recommended that you involve the president/chief executive officer, chief medical officer, supply chain officer, surgery medical director, materials management director, pharmacy director, clinical engineering, attorney, compliance officer, patient safety officer, value analysis director and a few others. It is important that you have your legal department review the conflict-of-interest form and support the organization in the request for information.
At UAMS, all physicians are required to submit an annual conflict-of-interest form. Semiannually, our health care industry representatives are required to submit all financial contributions made to individuals and departments. Creating policies on conflicts of interest without a good documentation and compliance program could make the policy very difficult to monitor and enforce.
In January 2008, UAMS selected a Web-based vendor management solution from RepTrax, Lewisville, Texas, that stores, monitors and documents compliance of all health care industry representatives doing business with UAMS.
UAMS uploaded the ethical conduct/gift policy and other vendor policies into the vendor management system to electronically monitor health care industry representatives. The health care industry representatives use an electronic signature to accept different UAMS policies.
The health care industry representatives have required mandatory reviews that include financial disclosures of all kinds to UAMS employees. Any health care industry representative who does not submit this information will be denied access to UAMS. Semiannually, these financial disclosures are completed and turned in to UAMS. There has been a significant amount of pushback from some companies that did not want to disclose financial contributions. Some of these were corporations we have strategic alliances with, spending million of dollars a year on their products for over a decade. Using the vendor management system has allowed us to easily document any compliance issues.
This has become a very important tool in implementing successful policy changes. There are several vendor management systems, each having different features. It is helpful to implement the same vendor management system in your geographical region.
UAMS discussed the system of choice with surrounding hospitals. Several hospitals use the same vendor management system, which allows each hospital to receive more data on the health care industry representative. It also makes it easier on sales representatives when there is a primary vendor management system in place.
Sales representatives have an important role in education, new technology and the economic value of their products. However, hospitals need a better process for this interaction to avoid any unnecessary bias. We want vendors to be strategic partners, but we must manage that relationship in a fiduciary manner.
At UAMS, we have regular meetings with several of our implant representatives and share any concerns we have over cost and reimbursement.
Most representatives can provide a reimbursement specialist to the hospital. Compliance monitoring and enforcement rules must be outlined to alleviate any discrepancies in interpretation of the policy.
Passing grade
The American Medical Student Association graded participating hospitals on conflicts of interest. Only eight of 150 medical schools and academic medical centers received an “A” (www.amsascore card.org/executive-summary). The scorecard evaluates policies related to:
- Acceptance of gifts and meals from industry health care representatives
- Consulting relationships, speaking relationships, disclosure of financial conflicts and pharmaceutical samples
- Individuals with financial conflicts participating in university purchasing decisions
- Financial support for educational events (on and off campus)
- Industry support for scholarships and trainee funds
- Access of industry sales personnel to the medical school or hospital and inclusion of education about conflict of interest within the academic curriculum.
Health care policies
Several hospitals have adopted conflict-of-interest policies and stronger vendor management policies. A few policies to consider replicating include:
- Henry Ford Medical Center, Detroit, www.henryford.com
- University of Arkansas for Medical Sciences, Little Rock, www.uams.edu
- University of Pittsburg Medical Center, www.upmc.com
- Stanford (Calif.) University, http://fingate.stanford.edu/suppliers/dobusiness/policy_initiative.html#gift_policy
- Loyola University Health System, Maywood, Ill., www.loyolamedicine.org/Learn_About_Us/Vendor_Policies/index.cfm
Health care providers and patients have a very unique relationship. Stanford University Medical Center implemented a new policy in 2006 prohibiting physicians from accepting all gifts.
Stanford also banned health care industry representatives from patient care areas and the college of medicine except for product sessions related to training.
A new 2008 standard severely restricts the financing that is received for doctor’s continuing education. Previously, drug companies sponsored this continuing education, often mentioning their products during the training.
Now, all funds will be placed into a schoolwide educational fund that can be used by any class, and will not mention the manufacturer’s products.
Administrators from SMDC Health System in Duluth, Minn., in January 2008 collected 20 shopping carts full of vendor giveaways (e.g., pens, clocks, mugs, surgical caps, calculators, tape dispensers, etc.) and donated them to a hospital in Cameroon, Africa. The “Clean Sweep” initiative is part of their new policy to limit the interaction between medical personnel and health care industry representatives. SMDC no longer allows any health care manufacturer logos in their health care center.
By eliminating almost 20,000 items, SMDC hopes to send a message to their patients that SMDC staff is not influenced by free gifts and other incentives. SMDC wants their medical personnel to learn from unbiased sources.
The organization also prohibits doctors and other medical personnel from receiving any direct payments for speaking and consulting engagements, which could be perceived as a “legal” bribe.
Health care companies can still participate in educating SMDC doctors and patients, but materials and all messages must be approved through the organization’s education specialists. This will limit direct contact and give specialists the opportunity to check information against other sources, eliminating any biased information.
Means to an end
While national guidelines are being developed, many states have adopted their own legislation. Several hospitals have already written policies that can help guide your organization. We encourage each hospital to develop their own standards on ethics and gifts; do not wait on legislation. If your hospital has a problem, you should be the one to resolve it, not Congress. Anticipate resistance from some pharmaceutical and device manufacturing organizations that won’t want to comply with your policies.
Other companies that have already adopted high ethical standards will have no problem in following new policies on ethics, gifts and financial disclosures. Our ultimate goal is to provide the best clinical evidence-based drugs and devices for our patients, not the drugs or devices with the best marketing campaigns.
As evident by recent reports of abuse, self-regulation has been insufficient. Conflict of interest, real or perceived, is of concern to health care providers and patients. The perception of health care providers taking money from pharmaceutical or device companies can be perceived as compromising patient care, increasing the cost of patient care or eroding public trust.
Our priority should be to make sure our health care industry is free of conflicts of interest and that decisions are based upon clinical evidence and research. Ask yourself, what is the cost of a free lunch?
| Physician Payments Sunshine Act (S. 2029) specifications |
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• Annual electronic reporting, beginning March 31, 2011, by drug, device and medical supply companies of payments or other transfers of value to any physician or medical practice. Physician ownership or investment interests in manufacturers, group purchasing organizations or distributors also reported. • The term “physician” includes doctors of medicine and osteopathy, dentists, podiatrists, optometrists and chiropractors. • Disclosure of name of recipient, city and state, value and date of payment or other transfer of value and the form (e.g., cash, stock or stock option) and reason (such as consulting fee, education, research, royalty or license, honorarium, gift, entertainment, food, travel or charitable contribution).
• Reporting required if aggregate amount paid or transferred exceeds $500 in a calendar year. Exclusions include anything below $25 in value, product samples intended for patients, certain educational materials and direct training and items used for providing charity care. • State reporting requirements preempted. Delayed reporting of payments made pursuant to product-development agreements or clinical investigations for two years or until approval of a product by the Food and Drug Administration, whichever is first. • Penalties of $1,000 to $5,000 for each failure to report, with an annual cap of $50,000, and $5,000 to $50,000 for every instance of knowledge of failure to report, with an annual cap of $250,000. • Payments to physicians who are full-time employees of manufacturers excluded. Information is from the Senate Finance Committee as of July 2008. A bill similar to the Senate bill has been introduced in the House (H.R. 5605). Source: New England Journal of Medicine, Vol. 359, No. 6 |
• Public availability no later than Sept. 30, 2011, and on June 30 of each subsequent year, of information for the previous calendar year on a searchable, “clear and understandable” government Web site. Background information and overall context can be provided. Appeal and correction process established.| Money talks |
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Several orthopedic companies are required to post their financial disclosures on their Web sites according to the deferred prosecution agreements. If you have not investigated your orthopedic connections to these companies, you can view their respective Web sites: |
This article first appeared in the October 2008 issue of Materials Management in Health Care.
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