War on Disclosure: Recent Fronts in Health Care

Corporations are at war with disclosure in many important fields.  Two notable fronts have recently opened in health care:

1) Fracking processes have become highly controversial because secret chemicals may end up compromising water supplies.  Pennsylvania has now limited doctors’ ability to speak about their concerns:

Under a new law, doctors in Pennsylvania can access information about chemicals used in natural gas extraction—but they won’t be able to share it with their patients. . . .Pennsylvania law states that companies must disclose the identity and amount of any chemicals used in fracking fluids to any health professional that requests that information in order to diagnosis or treat a patient that may have been exposed to a hazardous chemical. But the provision in the new bill requires those health professionals to sign a confidentiality agreement stating that they will not disclose that information to anyone else—not even the person they’re trying to treat.

Protection of property rights uber alles appears to be the guiding principle here.  If only the doctors wanted to market drugs, maybe their free speech rights would trump the frackers’ trade secrecy privileges.

2) FDA User-Fee Bills recently approved by the House and Senate could seriously limit access to data about drugs.  The House bill is particularly worrisome:

The Food and Drug Administration Reform Act of 2012, H.R.5651 . . . would keep potentially important health and safety information away from the public. Section 812 would, according to a letter to leaders of the House Oversight and Government Reform Committee penned by several [advocacy] groups, deny the public access to information relating to drugs obtained by the U.S. Food and Drug Administration (FDA) from any government agency — local, state, federal, or foreign — if that agency has requested that the information be kept confidential.

If that House provision survives the conference committee, there will be troubling implications for US patients and research subjects abroad.

Physician Payment Sunshine Act Proposed Regulations Out

CMS has published proposed rules for its implementation of the Physician Payment Sunshine Act (SUNSHINE ACT or Act), which was enacted by Congress as part of the 2010 Patient Protection and Affordable Care Act.  In short, the SUNSHINE ACT requires life science companies to report annually to CMS their conferral of anything of value, whether it be payment for services or a dinner, in connection with a particular product of the paying company.  By requiring CMS to post the information on its website, the Act seeks to ensure that interested patients become aware of physicians’ conflicts of interest that could affect their prescription of a branded drug or choice of a specific medical device.

The SUNSHINE ACT represents another example of the transparency movement, which has had varying degrees of success in either changing the behavior of the parties subject to disclosure, and/or enabling consumers to make better decisions based upon their access to the disclosed information.  It is likely that the SUNSHINE ACT will impact physicians and manufacturers’ behavior more than it will enlighten consumers about conflicts of interest.  Some physicians will simply conclude that accepting certain gifts or benefits from pharmaceutical or medical device companies isn’t worth having their names on the CMS website.  Some companies have already discovered that they haven’t necessarily reaped the value of the costs of gifting many physicians, or that the cost of recording certain activities simply isn’t worth the return on investment.  Unquestionably, certain transactions will continue to be valuable to both physician and company, and will continue.

It is unlikely that most patients will access the information either before or after a physician visit, or know what to do with the information even if they discover that their physician has an equity interest in the knee she plans to use in next week’s surgery – does such a close relationship with the knee manufacturer signal that the physician is great, or that something nefarious is going on?  The information is likely to be used by consumer watchdog groups, as well as hospital formulary committees and medical school deans interested in knowing the sources and amounts of outside income being earned by faculty.  Divorce attorneys are likely to find the information useful if their client’s soon-to-be ex-spouse hasn’t reported significant pharma consulting fees as income.

CMS rulemaking is behind schedule, thereby delaying the SUNSHINE ACT’s implementation.  It is likely, however, that the ultimate rules will still require that 2012 data be submitted, even if not by the deadline originally contemplated by Congress.

The statute requires manufacturers of drugs, devices, biological or medical supplies covered by Medicare, Medicaid or the Children’s Health Insurance Program (CHIP) (“applicable manufacturers”) to report annually to HHS payments or transfers of value to physicians and teaching hospitals (“covered recipients”).  Failure to comply will result in Civil Monetary Penalties.  HHS, in turn, must publish this information on a public web site which is searchable, downloadable and able to be aggregated.  Compliance with the SUNSHINE ACT’s reporting requirements does not exempt applicable manufacturers from application of fraud, waste and abuse laws.

Applicable Manufacturer

The proposed rule merges the SUNSHINE ACT definition of “manufacturer of a covered drug, device, biological, or medical supply”[1] with the statutory section clarifying that the entity covered by the SUNSHINE ACT must be “operating in the United States, or in a territory, possession, or commonwealth of the United States”[2] to define applicable manufacturer as one

(1)    Engaged in the production, preparation, propagation, compounding, or conversion of a covered drug, device, biological, or medical supply for sale or distribution in the United States, or in a territory, possession, or commonwealth of the United States; or

(2)    Under common ownership with an entity in paragraph (1) of this definition, which provides assistance or support to such entity with respect to the production, preparation, propagation, compounding, conversion, marketing, promotion, sale, or distribution of a covered drug, device, biological, or medical supply for the sale or distribution in the United States, or in a territory, possession, or commonwealth of the United States.

The operative activity that invokes statutory coverage, then, is sale of a product in the United States, as opposed to where the product is produced, or where the entity is located or incorporated. Pursuant to the rationale that risks inhere in conflicts of interest irrespective of where the manufacturer is located if the product is sold in the United States, any entity under common ownership with the manufacturer that is involved in the production, distribution or sale of at least one covered product in the United States must report all payments and conferral of value upon covered recipients. Further, as proposed, the product sponsor (i.e., the entity that obtained FDA approval) is subject to the reporting requirement, even if the sponsor is not involved in the manufacture of the covered product.  CMS is considering alternative interpretations of the common ownership concept.

Covered Drug, Device, Biological, or Medical Supply (“covered product”)

The SUNSHINE ACT focuses upon those products for which Medicare, Medicaid and CHIP pay.  This is relatively straightforward in many contexts, but CMS seeks to ensure that it captures situations where such products are part of a composite rate payment, such as the inpatient or outpatient hospital reimbursement, or the end-stage renal disease prospective payment system.  As such, CMS proposes to define “covered drug, device, biological, or medical supply” as:

Any drug, device, biological, or medical supply for which payment is available under Title XVIII of the Act or under a State plan under title XIX or XXI (or a waiver of such plan), either separately, as part of a fee schedule payment, or as part of a composite payment rate (for example, the hospital inpatient prospective payment system or the hospital outpatient prospective payment system).  With respect to a drug or biological, this definition is limited to those drug and biological products that, by law, require a prescription to be dispensed.  With respect to a device or medical supply, this definition is limited to those devices (including medical supplies) that, by law, require premarket approval by or premarket notification to the Food and Drug Administration.

CMS seeks comments on its plan to exclude from the scope of regulation those manufacturers who produce and sell only over the counter (OTC) products.  More specifically, this exemption would not extend to a manufacturer who sells even one prescription product who is otherwise subject to the reporting requirements of the SUNSHINE ACT.  Similarly, CMS seeks to interpret the SUNSHINE ACT to cover only those medical devices that require premarket approval, on the theory that this is the segment of the market most likely to have extensive provider relationships.  If a device manufacturer produces a single product that requires pre-market approval, it would have to report all payments and conferrals of value to covered recipients.

Covered Recipients

The SUNSHINE ACT defines “covered recipients” as (1) a physician, other than a physician who is an employee of an applicable manufacturer; or (2) a teaching hospital.   The term physician includes both doctors of medicine and osteopathy as well as podiatrists, optometrists and licensed chiropractors. CMS interprets the statute to include within its scope those who act on behalf of covered recipients.  Teaching hospital is not defined by the statute; CMS seeks comments on its proposal to identify such entities by virtue of their receipt of Medicare graduate medical education funds. CMS will publish this list annually on its website for manufacturers’ reference.

CMS plans to utilize the National Plan & Provider Enumeration System, which it maintains on its website, to collect the data regarding covered recipients required by the SUNSHINE ACT: covered recipient’s name and business address, and, for physicians, the National Provider Identifier and specialty.

Payments or Other Transfers of Value

The report must also include the date, form (i.e., cash, stock, ownership interest), nature (i.e., education, research, consulting fees, food) and amount of payment, and the market name of the product associated with the payment.  CMS continues to consider how to handle payments made to a single covered recipient related to multiple products.  CMS seeks to generate data in a form most easily understood by consumers.

The statutory definition requires such conferrals to be reported irrespective of whether they were requested by the physician or hospital and includes those made by third parties as long as the applicable manufacturer knows the identity of the covered recipient. CMS proposes that payments made through a group practice be reported under the specific recipient physician’s name.  If a physician requests the conferral to be directed to another physician or entity, the manufacturer should report the conferral under the requesting physician’s name as well as the name of the actual recipient.

Charitable contributions by an applicable manufacturer to, at the request of, or on behalf of a covered recipient are reportable.

The SUNSHINE ACT excludes from its reporting requirement the following payments:

• Transfers of value less than $10, unless the aggregated amount exceeds $100 in a calendar year
• Product samples not intended to be sold that are intended for patient use
• Educational materials that directly benefit patients or are intended for patient use
• The loan of a covered device for a period not to exceed 90 days, to permit evaluation
• Items or services provided under a contractual warranty
• A transfer of value or payment to a covered recipient when that person is receiving the conferral in his/her capacity as a patient
• Discounts, including rebates
• In-kind items used for the provision of charity care
• A dividend or profit distribution from ownership or investment interest in a publicly traded security or mutual fund
• Self-insurance payments to covered employees by an applicable manufacturer
• Non-medical services
• Transfers of value made by third parties where the applicable manufacturer is unaware of the identity of the covered individual

CMS will be moving rapidly to respond to comments and finalize these rules, which will likely involve changes from the discussion here.  State laws that pre-date the Act are pre-empted to the extent that they require reporting of the same information, which leaves them the discretion to retain those reporting requirements that are not redundant.  States seeking to impose as much of a burden on manufacturers as possible are likely to retain their individualized reporting requirements, others may find the costs not worth the benefits now that the feds have finally stepped in.

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[1] Section 1128G(e)(9).

[2] Subsection (e)(2) further clarifies that the entity covered by the SUNSHINE ACT must be “operating in the United States, or in a territory, possession, or commonwealth of the United States.”

Secret Prices: Free Market Triumph or Tragedy?

Can a market work when buyers are kept in the dark about the prices they’ll pay? That’s an increasingly urgent question for fans of consumer directed health care. In vogue during the administration of Bush fils, CDHC is reemerging as Obamacare’s opponents seek a standard to rally around (other than “laissez mourir“). In theory, consumers could force doctors and hospitals to compete by shopping around for services. But when the rubber hits the road, informed consumption is easier said than done, as Josh Barro describes:

Recently, my employer switched to a high-deductible health insurance plan, which means I’m paying at the margin for most of my health care. As a result, I have become more aware of the true cost of the care I receive—and more aware of how difficult it is to figure out that cost. . . . if you ask doctors how much a service costs, they tend not to know. I once had an argument with my doctor, who did not want to give me a blood test for fear that my insurer would deny the claim for the expensive test. I later found out that this test costs all of $9.48 at my insurer’s negotiated rates, despite a list price of $169. When I got orthotics, my podiatrist told me they would cost nearly $600. But that was the list price; the actual insured price was less than $250. . . .

It doesn’t have to be this way. We could legally obligate hospitals and medical practices to disclose their full price lists—both the inflated list prices and the rates negotiated with each insurer that the practice accepts.

A commenter on Barro’s blog retorts:

I’m a little surprised to see a blogger at the [National Review Online] suggest that the government “require” price disclosure from private market participants. This goes well beyond the market interference that some other odious “mandates” require. Why don’t we mandate that everyone disclose exactly what they pay each employee? . . . If you have an HSA or High-deductible policy, I would suggest it’s incumbent on the insurance provider to help you figure it out. If consumers want it enough the system should respond, right? Why not switch to an HDP that is more transparent?

The problem, of course, is that lots of parties have to agree to provide transparency, and there is a great deal of inertia. If all the other insurers aren’t transparent, there’s little reason for one of them to try to distinguish itself if it already has a steady customer base. And when it stirs itself to do so, it will find a wall of resistance from providers, who say “why should we give all this information to you—no one else is demanding it?” (Moreover, the “prices” don’t really exist except on paper on a “chargemaster,” and they’re practically meaningless (except as opportunities to gouge the unlucky). The real price is the negotiated price, and that’s generated out of iterative interactions.) Moreover, many interventions involve multiple providers, as a reader of Andrew Sullivan’s blog explains:
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A Well Placed Question by Professor Mirkay: “Should Medical-Related Charities Increase Disclosure of Their Donors?”

We’ve written a great deal here at HRW about the need for transparency in industry/profession interactions and the elimination of conflicts of interest–the Center for Health & Pharmaceutical Law & Policy here at Seton Hall Law has, in fact, over the course of the last two years, issued two White Papers on the subject–with another on the way. In the last, “Conflicts of Interest in Clinical Trial Recruitment & Enrollment: A Call for Increased Oversight,” the Center proposed legal and policy changes to address conflicts of interest in the relationships between industry and doctors that can create unwarranted risks to trial participants and to the scientific integrity of research. In the Paper prior,  ”Drug and Device Promotion: Charting a Course for Policy Reform,” The Center recommends: (1) making payments by drug and device companies to doctors transparent, with public disclosure by industry and physicians of their financial relationships; (2) adopting federal legislation to ban gifts, meals and other benefits provided to doctors as part of the current marketing model; (3) setting new policies to give FDA the authority to require studies of safety and efficacy of drugs and devices used off-label; and (4) undertaking a fundamental change in funding for continuing medical education to end industry support.

But over at Nonprofit Law Prof Blog, Professor Nicholas A. Mirkay of Widener University School of Law, has a post–and an additional question–well worth considering:

“Should Medical-Related Charities Increase Disclosure of Their Donors?”

Professor Mirkay points to a recent Chronicle of Philanthropy article which raises the issue as the National Alliance of Mental Illness (NAMI) has begun disclosing the names of corps and foundations who (does Citizens United make that “who” correct? Never mind appropriate.) donate more than $5,000. NAMI is said to have done so on the heels of an investigation by Senator Chuck Grassley into their financial relationship with the pharmaceutical industry. Mirkay writes:

NAMI’s actions have given Grassley further impetus to force 33 other nonprofit medical associations to follow NAMI’s lead.  In a related article, the Chronicle reports that Grassley’s inquiry into these other groups represents a “broader effort by the senator and others to expose and curtail corporate influence on the medical field.”  Grassley commented that “[t]hese organizations have a lot of influence over public policy, and people rely on their leadership.  There’s a strong case for disclosure and the accountability that results.”

Professor Mirkay also writes

In December 2009, Grassley sent a letter to 33 such nonprofit associations requesting information on the amount of funds received from pharmaceutical, medical-device and insurance companies from 2006 to 2009, the identity of the donors and how their money was spent by the medical group, and additional information on the outside income earned by the groups’ top executives and board members.

The (partial) results of those queries are not particularly heartening, but are certainly worth considering. Mirkay writes:

The Chronicle acquired more than half of the solicited groups’ responses to Grassley’s letter, finding that such groups receive aggregately more than $100 million annually from medical-related companies via “donations, advertising revenues, exhibit fees, corporate memberships, and support for continuing medical education.”  For some groups, this can represent as much as 78% of their revenue, while for others it only represents a small percentage of their total receipts.

Despite the longings of Elvis Costello, it’s hard to bite the hand that feeds you–and 78% of revenue pretty much constitutes (in)visible means of support. In pushing further with our (or more accurately, the Supreme Court’s) Citizens United “who” conceit, one might think 78% sufficient in some sense to constitute dependent status under the tax code–at least for purposes of context. Having said that, in addition to not biting, it’s not hard to imagine the dependent regularly fed doing that which it may to help assure the continued regularity of that feeding. Especially if the feedings are invisible.

It should also be noted that Mirkay rightly points out that “This effort is further evidence of Grassley’s commitment to increased transparency of tax-exempt nonprofits.” He’s right. And being that Senator Grassley follows HRW on Twitter, and as I have at times been critical of some of his positions in the past regarding other issues, it’s worth noting that the Senator should be roundly applauded for his efforts.

[And if you haven't been over to the Nonprofit Law Prof Blog, you should. It's in our blog roll for good reason-- their work is informative, brief and well written.]

Shine On: Lessons for Disclosure of Industry Payments to Physicians from New Empirical Research on Sarbanes-Oxley’s Conflict of Interest Disclosure Requirement

In Placebo Ethics: A Study in Securities Disclosure Arbitrage, an interesting (and very readable) article published earlier this year in the Virginia Law Review, Usha Rodrigues and Mike Stegemoller present the results of their empirical research into Section 406 of the Sarbanes-Oxley Act of 2002, which “requires companies to disclose their codes of ethics (or explain why they do not have them), and then to disclose any waivers from that code granted to top corporate officers.”  Briefly, Rodrigues and Stegemoller found that “at least for related-party transactions, firms regularly engage in a kind of ‘disclosure arbitrage,’ neglecting to disclose ethics waivers at the time when transactions occur (in violation of Section 406 of Sarbanes-Oxley),” but complying with a regulation requiring disclosure of such transactions in their year-end proxy statements.  Rodrigues and Stegemoller’s observations about Section 406 have relevance beyond securities law including (and of particular interest to readers of this blog) to recent efforts to regulate conflicts of interest in medicine through disclosure of relationships between physicians and the pharmaceutical and medical device industries.

For several years, a small number of states have required drug and device companies to report their relationships with physicians practicing in those states.  Section 6002 of the Patient Protection and Affordable Care Act takes it to the next level, requiring “drug, device, biological, or medical supply” companies to report all of the payments they make to physicians and teaching hospitals in all of the 50 states.  The Secretary of Health and Human Services is required to make the payment information public “through an Internet website,” in a form that is clear, understandable, and searchable, and in a format that is easily aggregated and downloaded.  While drug and device companies do not need to submit their first reports under PPACA until March 31, 2013, those reports are to include all payments made to physicians and teaching hospitals in 2012.  As a result, drug and device companies are hard at work right now putting systems in place to accomplish the information gathering and organizing that nationwide reporting will require.

In a number of important ways, the disclosure regime established by PPACA comports with Rodrigues and Stegemoller’s findings and recommendations.  First, having found that disclosure via company websites (as is allowed under Section 406 of Sarbanes-Oxley) has a number of downsides, they recommend that disclosure be made through EDGAR, the SEC’s consolidated, easy-to-use, indefinitely accessible database.  As Duff Wilson reports here, several companies have begun disclosing the payments they make to physicians on their own websites and downsides similar to those pointed out by Rodrigues and Stegemoller have been noted.  For one, a patient interested in learning more about a given doctor’s relationships with industry would have to search each company’s website individually and then compile the results.  The companies have not made this easy to do; most use formats that make it very difficult to aggregate or analyze the data they report.  PPACA’s HHS-run website will solve these problems.

Relatedly, Rodrigues and Stegemoller found that, given the chance, companies will choose to bury “unsavory related-party transactions” “in the rubble of sundry disclosures.”  This pitfall, too, should be avoided under PPACA’s disclosure regime.  (If anything, the statute is too lean-and-mean, providing that payments be labeled with bare descriptors like “consulting fees” and “gift.”)

Finally, Rodrigues and Stegemoller suggest that one of the problems with Section 406 of Sarbanes-Oxley is that it sets forth a “soft” disclosure requirement; a company is permitted to determine for itself what its code of ethics permits or does not permit and, a fortiori, under what circumstances a (disclosable) waiver of that code will be required.  Predictably, this leads to “companies evad[ing] illegality by watering down their codes to such a degree that they no longer forbid the very Enron-style conflicts of interest that led to the adoption of Section 406.”     Section 6602 of PPACA, by contrast, sets forth a “hard” disclosure requirement.  Companies have to disclose all payments, not just those that they have determined create a conflict of interest.

There is one concern raised by Rodrigues and Stegemoller with regard to Section 406 of Sarbanes-Oxley that may apply to Section 6602 of PPACA — the problem of enforcement (or lack thereof).  They note that “the basic consequence of underenforcement is the imposition of disclosure requirements on paper that are ignored in real life.”  Overlapping disclosure requirements (such as those that Rodrigues and Stegemoller exploited to conduct their research) are one way to determine whether required disclosures are made.  With regard to physician payments, a valuable cross check would be provided by the draft Public Health Service conflict regulations’ requirement that any significant financial interest that (1) is still held by a principal investigator or senior/key person, (2) is related to government-funded research, and (3) is a financial conflict of interest must be disclosed to the public via the world wide web; the disclosures that physician-investigators must make to medical journals will also serve this function.

Finding an Understanding Between Doctors and Patients

A general perception has been that doctors choose their profession over their patients. The perception takes shape as medical professionals sometimes choose to protect their profession over the chance to improve the quality of medical care– whether doctors refusing to report a colleague’s mistake or perhaps even hindering the efforts of a doctor rating system.

So when medical mistakes occur and possible lawsuits are on the horizon, it’s no shock that medical professionals sometimes fail to own up to their mistakes–implementing instead a code of silence about the case to avoid or limit liability.  In a critical time when patients or family members are looking for answers, doctors can be unavailable to provide it for them. It would also not be a shock if, after any such information could be helpful to the patient, doctors did so under the advice of counsel.

However, a study has been recently reported by the NY Times which suggests that perhaps silence may not be the most prudent approach.  According the NY Times,

Since 2001, the University of Michigan Health System has handled patient injuries by initiating discussions with patients and families, conducting internal investigations and offering apologies with offers of compensation should those investigations reveal medical errors. To examine the repercussions of such an open disclosure with compensation policy, researchers analyzed the number of claims and lawsuits filed against the hospital system between 1995 and 2007, comparing data from before and after the policy took effect.

Contrary to fears that such transparency might worsen litigation, the researchers found that there were actually fewer lawsuits and claims after the hospital began its disclosure with compensation program. Moreover, the hospital system’s liability costs for lawsuits, patient compensation and legal fees dropped, and claims in general were resolved faster than ever before.

While it may seem counter-intuitive to admit fault from a litigation standpoint, these efforts at transparency and an acknowledgment have actually decreased the number of lawsuits.  Richard C. Boothman, who devised and carried out the disclosure program, says, “[w]hen you break that paradigm of litigation and give patients the chance to understand the human element of the other side — of the doctor and what they are struggling with — you find that people are far more forgiving and understanding than has been typically assumed.”

It’s an interesting proposition,  disclosure and accountability as both a means to litigation loss reduction and changing negative perceptions of the profession. In revealing the doctor’s ordeal– in disclosing the fault, one may move forward towards greater understanding between patients and doctors.

It’s also worth noting that additional disclosure methods are being studied.  The Wall Street Journal reports a study about a project, known as OpenNotes, where doctors share their notes with their patients electronically.  While doctors do complain that the OpenNotes may be burdensome, there are those who think it it may be worth the additional burden because it shows– perhaps whether or not the handwriting is decipherable–that doctors are willing to take the extra time to attempt to keep them informed.

But of course, it would better if patients actually understood their doctors. But this would be in stark contrast to a recent study we wrote about here on HRW last week. The study showed a woeful lack of communication (and a wide gap in perception) between hospital staff physicians and “their” patients:

• Only 18% of patients knew their main doctor by name.
• Sixty-seven per cent of doctors believed their patients knew them by name.
• Fifty-seven per cent of patients knew their diagnosis.
• Seventy-seven per cent of doctors believed their patients knew their diagnosis.
• Fifty-eight per cent of patients thought that physicians always explained things in a comprehensible way.
• Twenty-one per cent of doctors stated they always provided explanations of some kind.
• Sixty-six per cent of patients reported receiving a new medication in the hospital, 90% noted never being told of any adverse effects of these medications.
• Ninety-eight per cent of doctors stated that they at least sometimes discussed their patients’ fears and anxieties.
• Fifty-four per cent of patients said their doctors never did this.

RFID Tags for Nurses, then Everybody?

The recent City of Ontario v. Quon decision has had a mixed reception among privacy advocates. Though many are disappointed that employees’ privacy rights have once again been narrowed, some have discerned helpful dicta in the case. However, I worry that, whatever the drift of thought among swing justices, economic imperatives and cultural shifts will mean a lot less privacy in the workplace of the future. Health care in particular offers a few interesting bellwethers.

As an opinion piece by Theresa Brown explains, maintaining proper staffing levels in hospitals is becoming increasingly difficult. Surveillance systems are offering one way to address the problem; work can be performed more intensively and efficiently as it is recorded and studied. But such monitoring has many troubling implications, according to Torin Monahan (in his excellent book, Surveillance in a Time of Insecurity):

The tracking of people [via Radio Frequency Identification Tags] represents a . . . mechanism of surveillance and social control in hospital settings. This includes the tagging of patients and hospital staff. . . . When administrators demand the tagging of nurses themselves, the level of surveillance can become oppressive. . . . [because nurses face] labor intensification, job insecurity, undesired scrutiny, and privacy loss. . . . To date, such efforts at top-down micromanagement of staff by means of RFID have met with resistance. . . . One desired feature for nurses and others is an ‘off’ switch on each RFID badge so that they can take breaks without subjecting themselves to remote tracking. (122)

Like the “nannycam” employed by many a wary parent, the nurse-cam may be seen as a way to protect the vulnerable. It may also increase the accuracy of evidence in malpractice cases. On the other hand, inserting a tireless electronic eye to monitor what is already an extremely stressful job may create many unintended consequences, or deter people from going into nursing altogether. Even advocates of pervasive surveillance recognize these difficulties.

The increasing pressure to monitor what happens inside hospitals reminds me of a recent article by Thomas Goetz in Wired (no link yet) on Google co-founder Sergey Brin’s quest to find a cure for Parkinson’s disease. As Goetz describes it, a new form of “high-speed science” depends on rapid accumulation of as much data as possible:

In Brin’s way of thinking, each of our lives is a potential contribution to scientific insight. We all go about our days, making choices, eating things, taking medications, doing things—generating what is inelegantly called data exhaust. . . . With contemporary computing power, that data can be tracked and analyzed. “Any experience that we have or drug that we may take, all those things are individual pieces of information. Individually, they’re worthless, they’re anecdotal. But taken together they can be very powerful.” In computer science, the process of mining such large data sets for useful associations is known as a market-basket analysis.

Goetz has promoted this as a new way to “do science in the petabyte age.”
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Too Much Transparency?

Interesting article in the Wall St. Journal Health blog regarding prospective legislation which would require full pricing disclosure by providers:

Yesterday, a House subcommittee held a hearing on three bills – two sponsored by Republicans, and one by a Democrat – aiming to pull back the veil on prices, the Hill reports. Provisions vary by bill, but include price transparency for hospitals, ambulatory surgical centers, pharmacies and vendors; more complete disclosure by insurance plans and more information on quality.

Here at Health Reform Watch we have written a number of posts calling for transparency, and perhaps most notably the Center for Health & Pharmaceutical Law & Policy has issued two White Papers in the last year calling for such in different aspects of medical relationships. The first White Paper called for broad reforms in the marketing of drugs and devices. Entitled, Drug and Device Promotion: Charting a Course for Policy Reform, the Center proposed legal and policy changes to address conflicts of interest in the relationship of medicine and industry. The Center’s recommendations included “making payments by drug and device companies to doctors transparent, with public disclosure by industry and physicians of their financial relationships.”

In its second White Paper, entitled Conflicts of Interest in Clinical Trial Recruitment & Enrollment: A Call for Increased Oversight, “the Center proposed legal and policy changes to address conflicts of interest in the relationships between industry and doctors that can create unwarranted risks to trial participants and to the scientific integrity of research.” Obviously, transparency here too plays a large role in rooting out such conflicts and apprising potential research subjects of what may amount to vested interests in those who wish to recruit them for such studies.

In a sense, “Transparency” has become somewhat of a mantra. And rightfully so. The prospect of clandestine arrangements in medical care has a nefarious overtone that is well deserved. The ultimate nature of the doctor patient relationship is premised on trust. The doctor, by virtue of his education and profession, is privy to information the vast majority of us do not hold. In a sense, every diagnosis and prescription accepted is an article of faith. It is important to know that the doctor’s information has not been skewed by improprieties in research, and that the doctor’s ultimate diagnosis and prescription has not been skewed by a vested interest.

Generally speaking, except in cases of dire and/or unconscious emergency, the patient must assent to treatment. And assent must be premised on informed consent. A failure of assent, legally speaking, amounts to battery.  Arguably, a failure to disclose vested interests in a particular course of action or procedure can diminish, if not negate, the “informed” aspect of informed consent. Transparency is important.

But the WSJ article raises an issue worth considering as it regards Transparency and pricing: provider competitors in concentrated markets may, in seeing the exact numbers, find the opportunity to raise prices.

What struck us, though, was the concern voiced by Frank Pallone, chairman of the Energy and Commerce health subcommittee. “The concern I guess is about the unintended consequences of too much transparency,” he said, according to the Hill. How could more info on pricing and costs be a problem?

Pallone refers to a 2008 Congressional Budget Office brief on this very issue. It covers the benefits of transparency, but also the chief potential disadvantage: in concentrated markets, providers might look at their competitors’ prices and raise their own to match them. Here’s an excerpt from the prepared remarks of then-CBO Director Peter Orszag (now director of the Office of Management and Budget), discussing the findings before a Senate committee’s health reform summit:

On the consumer side, more than 80 percent of the population is covered by some form of health insurance, which insulates people from the full price of their health care, limiting their incentive to compare prices. Doctors and other health professionals often direct the decisions about what services to buy from whom, as patients may have little information on the care they need or the quality or value of that care. Moreover, for insured and uninsured people alike, awareness of prices will make little difference in emergencies or in the relatively small number of cases that account for a disproportionate share of overall health care spending.

On the provider side, more transparency would make information about the prices that hospitals, physicians, and drug companies charge insurers more visible, but whether such disclosure would lead to higher or lower prices for consumers on average is unclear and depends on the nature of competition in the relevant market. The markets for some health care services are highly concentrated, so increasing transparency in such markets could lead to higher, rather than lower, prices because higher prices are easier to maintain when the prices charged by each provider involved can be observed by all of the others. However, aggregated information or information on average prices would make it more difficult for providers to coordinate higher prices because individual providers’ prices would not be obvious. Whatever the effect on average prices, more transparent prices would probably reduce the range of prices.

In tact as the mantra of Transparency may be in regard to medical relationships, in a marketplace unfettered by fee regulation, Orszag’s  analysis and Frank Pallone’s concern regarding Transparency and pricing gives weight to the counter-intuitive prospect of “Too much Transparency.” We fail to consider such at our own peril.

Further Calls for Increased Oversight on Medical Research & Physician Conflitcs of Interest

The Center for Health & Pharmaceutical Law & Policy has continued to focus on the implications of research funding in patients’ decisions to participate in clinical research, as well as the effects such funding can have on researcher behavior and research results.  In January 2009, the Center recommended that all financial relationships between industry and physicians be publicly disclosed by industry.  And just this month, the Center released its most recent White Paper, “Conflicts of Interest in Clinical Trial Recruitment & Enrollment: A Call for Increased Oversight.”

Similarly, in a November 17 letter to Francis Collins, 100 researchers, academics, and public policy analysts asked the NIH to “fund studies on medical ethics, conflicts of interest in medicine and research, and prescribing behavior” in order to determine the effects of industry-academic relationships on human health.  The letter implores the director of NIH to focus on “the research gap on the effect of conflicts of interest and commercial influence on medical decisionmaking” and to establish a mechanism for funding relevant research.

One of the primary concerns in the researchers’ letter is an issue also identified in a November OIG report, “How Grantees Manage Financial Conflicts of Interest in Research Funded by the National Institutes of Health,” which found that a majority of academic researchers’ conflicts of interest are unreported.   The report flags the potential for extensive conflicts between faculty members and their government-financed research.  In response, the US Senate Finance Committee recently sent letters to several universities requesting such information.  Just yesterday, Northwestern University’s Feinberg School of Medicine, reacting to national concern about physicians’ and researchers’ financial conflicts of interest, began posting external professional and industry relationships for approximately 2000 faculty members — including service on boards of directors, consulting and related activities, ownership or investment interests, royalties and inventor shares, and additional activities such as lectures and participation in scientific advisory boards and professional societies.

Further research is obviously necessary to determine how financial relationships influence — as the authors of the letter to NIH call it — “the beliefs and behaviors of researchers and clinicians, and the effects of industry-academic relationships on the generation and dissemination of medical knowledge.”  In the meantime, increased oversight of physician-industry relationships by the federal government to evaluate and oversee investigator or institutional conflicts of interest, both for research within and without academic medical centers, is necessary.

Seton Hall Law School’s Center for Health & Pharmaceutical Law & Policy Issues White Paper Calling for Major Reforms in the Financing and Oversight of Clinical Research

Seton Hall University School of Law’s Center for Health & Pharmaceutical Law & Policy has called for major substantive reforms in the financing and oversight of clinical research. In a White Paper entitled “Conflicts of Interest in Clinical Trial Recruitment & Enrollment: A Call for Increased Oversight,” the Center proposes legal and policy changes to address conflicts of interest in the relationships between industry and doctors that can create unwarranted risks to trial participants and to the scientific integrity of research.

Kathleen Boozang, a dean who oversees the Law School’s Center, explains that “Some of the ways that drug and device trial sponsors pay the physicians who lead clinical trials can tempt them to recruit individuals for clinical trials who would be better off receiving conventional therapy. This is of particular concern if physicians encourage their own patients to enroll in trials that these same physicians are overseeing.”

Over 60% of testing of experimental drugs and medical devices now occurs in physicians’ private offices; unlike years past, industry funds a much higher percent of clinical trials than government, frequently paying researchers significantly more than government does.  For some physician practices, conducting clinical trials represents a significant portion of their income.

According to Carl Coleman, a Seton Hall Law professor who collaborated on the White Paper, “A different kind of problem arises if people are enrolled in trials who don’t meet the criteria for who should participate – these individuals’ health can be put at risk, and their participation can skew the results of the trial, which is bad for everyone.”

Federal regulations in this area have not kept up with the rapid changes in how research occurs, and even those regulations that exist are poorly enforced, according to recent government studies.  Understanding that the collaboration among industry, government, and medicine in the pursuit of clinical research is critical to driving scientific progress, particularly as industry increasingly replaces the government as the primary source of research funding, the Center’s recommendations include:

1) Establishing a norm of financial neutrality between treatment and research. Ensuring that physicians receive comparable compensation for treatment and research will help ensure that their decisions to conduct research, as well as to recommend that a particular individual participate in a clinical trial, are grounded in reasons unrelated to their personal financial interests. This will be best accomplished, in the first instance through regulations that ban certain kinds of research compensation, and provide examples of acceptable payment methodologies that industry can follow. Reform by prosecution signals what practices government dislikes, but does not provide a clear vision of ideal approaches to managing conflicts of interest related to the conduct of research.

2) Establishing federal guidelines as to the principles or methodology by which to determine fair market value of physician time spent in clinical work. Federal regulations should be promulgated that establish a benchmark formula for determining fair market value of physicians’ time, effort and expenses for clinical research. Such regulations would promote the goal of financial neutrality between treatment and research. Physicians cannot be underpaid for research either – compensation for clinical trial work should therefore include reimbursement for any additional expenses that are unique to the research environment.

3) Banning payments with equity interests; disqualification of investigators who hold direct interests in the outcome of the research. Federal regulations should prohibit compensation for research in the form of an equity interest in the sponsor of a clinical trial. The law should preclude researchers who have investments that give them a direct interest in the outcome of the research from leading clinical trials.  Where absolutely necessary, such individuals might appropriately serve as consultants.

4) Banning payments of finder’s fees and bonuses for recruitment and retention of trial subjects. Certain forms of compensation create conflicts of interest that can incentivize investigators to enroll individuals in a clinical trial who are too healthy or too sick to participate, or to deemphasize information that might discourage individuals from consenting to trial enrollment. Federal law should ban such compensation methods, including finder’s fees and bonuses for meeting recruitment and retention goals.

5) Reforming federal regulations to compel and better guide the evaluation of relationships between industry and would-be physician investigators prior to the commencement of research.   The White Paper includes overlapping but sometimes distinctive recommendations for federal regulation to evaluate and oversee investigator or institutional conflicts of interest, both for research within and without academic medical centers.  Specific to research outside of academic medical centers, federal regulations should spell out clearly the obligation of community-based physicians acting as investigators or institutions acting on their behalf to report information about compensation for research and other financial interests to Institutional Review Boards.

Summarizing the importance of this White Paper, Boozang states, “The pharmaceutical and medical device industries save millions of lives each year with their innovations.  It is imperative that we maintain the integrity of research, and the public’s trust in the process.”

Seton Hall Law School‘s Center for Health & Pharmaceutical Law & Policy. The Center is a think tank that fosters dialogue, scholarship, and policy solutions to critical issues in health and pharmaceutical law. As part of its mission, it convenes policymakers, consumer advocates, the medical profession, industry, and government in the search for concrete solutions to the ethical, legal, and social questions presented in the health and pharmaceutical arenas. The Center also runs a compliance training program covering the state and federal laws governing the development and marketing of drugs and medical devices. The White Paper, “Conflicts of Interest in Clinical Trial Recruitment & Enrollment: A Call for Increased Oversight,” may be found here.

Seton Hall University School of Law, New Jersey’s only private law school and a leading law school in the New York metropolitan area, is dedicated to preparing students for the practice of law through excellence in scholarship and teaching, with a strong focus on clinical education. The Law School’s health law program has been ranked as one of the top programs in the country. Founded in 1951, Seton Hall Law School is located in Newark and offers both day and evening degree programs. For more information visit law.shu.edu.

Communication and Transparency: An Answer to Our Health Care Woes?

This past week, I had the good fortune to attend two fascinating but very different — in terms of content and setting– talks by preeminent health experts.  The first was by Princeton University Professor Uwe Reinhardt at a Woodrow Wilson School of Public & International Affairs alumni event, entitled “The U.S. Economy and Health Care: Implications for Health.”  Professor Reinhardt spoke briefly and generally on health care and insurance reform, touching on the necessary changes on both the “demand side” (insurance reform) and the “supply side” (health care delivery). The second talk was by Dr. Atul Gawande as part of the New Yorker Magazine’s 10th Annual festival, entitled “The Death of the Master Builder: A Story of Risk, Medicine, and Skyscrapers.”  Dr. Gawande’s talk, in which he expounded his 2007 New Yorker article The Checklist, argued for the implementation of a basic 19-item surgical checklist, citing a marked reduction in complications from surgery (the World Health Organization’s 2009 Surgical Safety Checklist, implementation manual, and Guidelines for Safe Surgery are all available online).

Despite addressing very different issues, I took away from these two talks a very important message: little can be accomplished in fixing our broken health care system without communication and transparency, with which come increased accountability and discipline.

While addressing the changes necessary on the health care delivery side in order to fix health care, Professor Reinhardt called for “[g]reater transparency on, and accountability for, the use of resources and outcomes.”  As an example of such transparency, he cited his proposals as chair of the New Jersey Commission on Rationalizing Health Care Resources.  In its January 2008 report, the Commission recommended to Governor Corzine that New Jersey require that nonprofit hospitals’ governance documents– IRS form 990s (including financial reports and submissions), board composition, and meeting minutes– be made available to the public on the entities’ web pages (for-profit hospitals routinely post their annual financial reports and submissions to the SEC on their websites).  Such full transparency would ostensibly lead to increased accountability on the part of managers of non-profit hospitals by allowing the public insight into their finances and economics.

In his talk, Dr. Gawande focused on the fact that one of the most useful aspects of the checklist is the introduction step (“Before skin incision, the entire team (nurses, surgeons, anesthesia professionals, and any others participating in the care of the patient) orally: Confirms that all team members have been introduced by name and role.”).  According to Dr. Gawande, this simple introduction fosters discipline because when everyone knows their roles and fulfills their designated functions, coordination and trust are increased — and both are very important when time is short and the stakes are high.

Of course, these calls for increased communication and transparency are nothing new — and they pervade almost every aspect of health care reform and improved medical delivery.  For example, this summer, Tim Jost espoused the benefits of the public plan, but noted that no research comparable to the data that has emerged from the Dartmouth research group on variations in health care spending “can be done on the under 65 population because private insurers regard whatever data they have to be proprietary.”  He hopes that “a public plan could make anonymized data available to researchers and be open with its subscribers about coverage and utilization policies.”  Likewise, just last week, in his “Principles for the Homestretch” for health reform, Frank Pasquale called for more competition and transparency in insurance markets.  Moreover, appeals for greater communication and transparency, and, in turn, accountability and discipline, is indicative of the larger movement to the medical home model, which “provid[es] comprehensive primary care… that facilitates partnerships between individual patients, and their personal  physicians, and when appropriate, the patient’s family.”  Increased communication and sharing of information across health care providers has been known to reduce adverse drug-drug reactions, lower medical errors, and bring attention to alternative care possibilities.

It is important to note that increased communication and transparency is not a panacea for all of our health care woes — particularly without balancing openness with ways of addressing privacy concerns.  However, as I gleaned from the talks by Professor Reinhardt and Dr. Gawande, the evidence speaks to the value of a policy of openness in many aspects of health care and medical reform.

Consumer Protection in a Reformed Health Care & Insurance System

Implementation is critical to the success of translating universal coverage into access to appropriate health care for all.  Sound follow-through demands the design and execution of well-tailored consumer protection regulations. The first step is a prohibition of underwriting or rating decisions based on preexisting illness.  Insurers have agreed to this reform, as a quid pro quo for the millions of new customers they’ll get from coverage mandates.  Universal coverage and this prohibition of discrimination go together.  Insurers are right that it doesn’t make business sense to ignore preexisting illnesses if consumers can wait for illness to appear before contributing to the insurance pool.  They seem to agree that coverage mandates can adequately do the work of preexisting illness exclusions, rendering them superfluous.

Insurers’ position on non-discrimination would clearly change if folks like Rep. Tom Price (R. Ga.) have their way.  Price objects to mandates because they would allow the government to define “insurance” thereby disadvantaging some forms of currently-marketed coverage, such as bare-bones and HSA-linked consumer-driven products.  But underinsurance has been devastating the American middle class for years; real reform must establish basic levels of fiscal security, as well as medical coverage.  Representative Price’s attack on standards is, then, merely a back door attack on universal coverage.  It is a necessary package deal: either we have universal coverage with an end to preexisting illness exclusions, or markets will continue slicing and dicing “insurance,” leaving huge gaps in coverage. Read more

WaPo, Say it Ain’t So: Publisher Katharine Weymouth said to have offered lobbyists paid access to the Washington Post’s “Health Care Reporting and Editorial Staff”

It doesn’t happen often, but I am bereft of the power of speech. Fortunately, POLITICO is not– and as for what they have written? Res Ipsa Loquitur

POLITICO reports that:

Washington Post publisher Katharine Weymouth said today she was canceling plans for an exclusive “salon” at her home where for as much as $250,000, the Post offered lobbyists and association executives off-the-record access to “those powerful few” – Obama administration officials, members of Congress, and even the paper’s own reporters and editors.

The astonishing offer was detailed in a flier circulated Wednesday to a health care lobbyist, who provided it to a reporter because the lobbyist said he felt it was a conflict for the paper to charge for access to, as the flier says, its “health care reporting and editorial staff.”

With the Post newsroom in an uproar after POLITICO reported the solicitation, Weymouth and Executive Editor Marcus Brauchli both said today that they were not aware of the flier or the specifics of what it offered.

“This should never have happened,” Weymouth told Post media reporter Howard Kurtz. “The fliers got out and weren’t vetted. They didn’t represent at all what we were attempting to do. We’re not going to do any dinners that would impugn the integrity of the newsroom.”

“You cannot buy access to a Washington Post journalist,” Brauchli told POLITICO. Brauchli was named on the flier as one of the salon’s “Hosts and Discussion Leaders.”

Brauchli said in an interview that he understood the business side of the Post planned on holding dinners on policy and was scheduled to attend the July 21 dinner at Weymouth’s Washington home, but he said he had not seen the material promoting it until today. “The flier, and the description of these things, was not at all consistent with the preliminary conversations the newsroom had,” Brauchli said, adding that it was “absolutely impossible” the newsroom would participate in the kind of event described in the solicitation for the event.

“Underwriting Opportunity: An evening with the right people can alter the debate,” says the one-page flier. “Underwrite and participate in this intimate and exclusive Washington Post Salon, an off-the-record dinner and discussion at the home of CEO and Publisher Katharine Weymouth. … Bring your organization’s CEO or executive director literally to the table. Interact with key Obama administration and congressional leaders.”

The flier promised the dinner would be held in an intimate setting with no unseemly conflict between participants. “Spirited? Yes. Confrontational? No,” it said. “The relaxed setting in the home of Katharine Weymouth assures it. What is guaranteed is a collegial evening, with Obama administration officials, Congress members, business leaders, advocacy leaders and other select minds typically on the guest list of 20 or less. …

Brauchli emphasized that the newsroom had given specific parameters to the paper’s business staff that he said were apparently not followed. He said that for newsroom staffers to participate, they would have to be able to ask questions and that he would “reserve the right to allow any information or ideas that emerge from an event to shape or inform our coverage.” That directly contradicts the solicitation to potential sponsors, which billed the dinner as “off-the-record.”

Dr. Kuklo and the Larger Lesson: Transparency in Medical Research

[Ed. note: We are very pleased to welcome Valerie Gutmann, J.D. to the blog today. Valerie joined Seton Hall Law School in 2009 as a Faculty Researcher in the Center for Health & Pharmaceutical Law & Policy. She came to Seton Hall from Kirkland & Ellis LLP after having graduated from Harvard Law School, where she served as an author and Editor-in-Chief of the Recent Developments Section of the Journal on Law, Medicine, and Ethics. Prior to law school, Valerie worked at the National Academy of Sciences, the American Association for the Advancement of Science, and the ABA Coordinating Group on Bioethics & the Law. In 2001 she graduated from the Woodrow Wilson School of International Affairs and Public Policy at Princeton University, magna cum laude, where she was co-president of the Princeton Bioethics Forum.]

In a glaring example of the consequences of less-than full disclosure in research and publication, recent reports have shed light on Dr. Timothy R. Kuklo’s study of Infuse.  Dr. Kuklo’s article on the bone-growth protein manufactured by Medtronic Inc. was published by the British Journal of Bone & Joint Surgery in August 2008, and was retracted in March 2009, after an army investigation found that Dr. Kuklo’s study had misleadingly promoted Infuse as “strikingly” better and more efficacious than conventional bone grafts in repairing severely shattered shin bones of Americans injured in Iraq.  Kuklo has been accused of using “falsified information” that did not match with patient records and forging signatures of four doctors at Walter Reed Army Medical Center who he falsely claimed to be co-authors.  Dr. Kuklo also neglected to disclose his relationship with the company.

Dr. Kuklo, a former army surgeon at Walter Reed, is currently on leave from Washington University School of Medicine in St. Louis, where he was associate professor of orthopaedic surgery, specializing in cervical spine, spinal deformity, spinal tumors, and spine trauma.  From August 2006 through May 2009, Dr. Kuklo was a consultant to Medtronic, who recently announced that Dr. Kuklo’s consultancy contract was being suspended (some accounts controvert the alleged timeline, and Medtronic claims that it had no involvement in the study and did not depend on the study for government regulatory approval). While working for the army, Dr. Kuklo was also paid by Medtronic to speak on the company’s behalf at meetings and to train other doctors, and was a recipient of thousands of dollars worth of trips.  Military officials have stated that there are no records that Dr. Kuklo had sought or received permission to accept money to consult for medical product companies.

Last year, Senator Chuck Grassley (R, Iowa) called for an investigation into Dr. Kuklo’s study.  Senator Grassley requested information from Walter Reed, Washington University, Medtronic, and two medical journals.  He has also publically released a list provided by Medtronic of consultants for the Infuse product, on which Dr. Kuklo had suspiciously not been included.  Spokespeople for Medtronic noted that Dr. Kuklo was not on the list because he was a general consultant to the company, rather than specific to Infuse, although he has spoken on behalf of Infuse in the past.

The Kuklo case is further evidence of the implications of incomplete disclosure, which may lead physicians to make medical decisions without all the information that should be available to them.  As we have noted in the past, the Center for Health and Pharmaceutical Law & Policy has vigorously called for such reform in its 2009 whitepaper:

All those engaged in medical research and publication, including medical professionals and institutions, medical journals, and industry, should undertake reforms to ensure the integrity of the medical literature.  Transparency in the relationship of industry and physicians would be a critical tool in this effort.

PhRMA Shows Its Committment to Transparency With Revised Principles on Conduct of Clinical Trials

The Pharmaceutical Research and Manufacturers of America (PhRMA) Board of Directors announced yesterday their unanimous endorsement of revised principles to increase transparency in medical research through their newly revised PhRMA Principles of Conduct of Clinical Trials and Communication of Clinical Trial Results.  The revised principles are part of an effort to encourage behavior that benefits the healthcare community and the public through objectivity in research and strengthened transparency in medical studies.

PhRMA states that the Principles of Conduct, which are to take effect on October 1, 2009, will:

Fortify our commitment to patients and healthcare professionals by increasing transparency in clinical trials, enhancing standards for medical research authorship and improving disclosure to manage potential conflicts of interest in medical research.

The pharmaceutical and biotech industries have been under recent pressure to become more transparent, specifically concerning the disclosure and publication of clinical trial results, the disclosure of physician payments/reimbursement for conducting clinical trials, and authorship standards.

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