JAMA: Will physician financial transparency offer Sunshine or shade?

Twitter icon
Facebook icon
LinkedIn icon
e-mail icon
Google icon

As a means to dismember conflicts of interest within medicine, the Centers for Medicare & Medicaid Services (CMS) now requires greater financial transparency between industry and physicians. Thanks to the “Sunshine Act” included as a provision of the Patient Protection and Affordable Care Act (PPACA), industry will be required to divulge payments to physicians and academic medical centers on public websites. Two viewpoints published online Feb. 14 in the  Journal of the American Medical Association questioned the rule’s feasibility and benefit.

“Some financial relationships between physicians and teaching hospitals and the pharmaceutical and medical device industries can benefit patients, primarily those that are related to bona fide basic and clinical research,” wrote Robert Steinbrook, MD, and Joseph S. Ross, MD, MHS, both of the Yale School of Medicine in New Haven, Conn. However, some have argued that these relationships between manufacturers and physicians can lead to conflicts of interest and may affect clinical decision making.

“Public awareness of industry payments to physicians and teaching hospitals in the U.S. is about to markedly increase,” Steinbrook and Ross wrote. This notion is fueled by criteria under the Sunshine Act within PPACA, in which the CMS will require industry leaders to publish transparency reports on public websites by September 2013. The reports will make payments from nearly 1,150 manufacturers to 1,100 academic medical centers public.

The transparency reports will aim to provide a clear view into physician-industry solutions including the amount of payments and what the payment was related to, i.e., either drugs or devices.

However, as with most government proposals, Steinbrook and Ross are worried that the timetable may be delayed. Under the statute, drug manufacturers, device manufacturers, biological or medical supply are covered. Additionally, the rule will cover direct and indirect payments, companies that make payments to third parties (i.e., medical societies, contract research organizations, among others), that are intended for physicians or other recipients covered by the law.

“Disclosing both direct and indirect payments is important to meet the goals of transparency; when money intended for physicians or teaching hospitals is routed through a third party, the actual source of the funds must be clearly identified,” the authors wrote.

The rule will limit industry's role in funding continuing medical educations (CMEs). In 2010, industry support for CME was $830.8 million—37.1 percent of the $2.24 billion of total CME income.

Manufacturers will be required to submit these data each year and failure to report fines will be capped at $150,000 and $1 million for knowingly failing to report data, the authors wrote.

“Transparency reports could shed a bright light on the extensive financial relationships between industry and physicians and teaching hospitals,” Steinbrook and Ross summed. “The CMS should maintain the essential elements of the draft to incorporate constructive suggestions, resist pressure to weaken the regulations, and unveil a state-of-the-art website. The medical profession and the public deserve no less.”

But George Loewenstein, PhD, and colleagues from Carnegie Mellon University in Pittsburgh, questioned whether some conflicts are unavoidable and may actually be “fruitful” for patients. Loewenstein et al also noted that transparency may have adverse effects, including bias.

“Disclosure can lead physicians to offer biased advice,” Loewenstein and colleagues wrote. “Two mechanisms involved are strategic exaggeration (the tendency to provide more biased advice to counteract anticipated discounting) and moral licensing (the often unconscious feeling that biased advice is justifiable because the advisee has been warned).”

Additionally, the authors said disclosure may increase patients’ pressure to comply with physician advice. They said the difficulty will be figuring out how disclosure affects intended consequences.

“Even if disclosure is crafted in a fashion that increases effectiveness and minimizes potentially adverse consequences, it is no panacea. Disclosure is simply not applicable to many serious conflicts of interest affecting medicine in the U.S.,” the authors noted.

“Conflicts of interest, including fee-for-service arrangements, are at the heart of the astronomical increases in healthcare costs in the U.S., and transparency is