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July 19, 2011

Physician Payment Sunshine Provisions of Affordable Care Act: Main Event or Side Show?

 Main event 1 SideShow

Several organizations are speaking out as to the potential side effects of the physician payment sunshine provisions in the Affordable Care Act.

Despite the overwhelming benefits created by physician-industry relationships, such as new drugs and devices, these relationships will soon “be under the microscope because of legislation forcing public revelation of such relationships and any ways they may have affected a doctor’s decisions.”

Under the Physician Payments Sunshine Act (PPSA) included in President Obama’s health care law, manufacturers of drugs, devices, and biological and medical supplies are required to keep a yearly report of all payments to physicians or physician-owned organizations over a cumulative value of $100. These reports will be made available to the public starting in 2013.

The new federal law does not ban gifts—such as research funding, consulting fees, and travel and lodging for conferences—but it will make public the companies’ formerly private interactions with physicians. The federal database will include explanations of services the physicians provided in return for the payments, however it is unclear how detailed these explanations will be (i.e. it could just say “consulting” or “education”).

A recent article from Health Care News discussed how “the battle over reporting of relationships between doctors and device manufacturers and drug companies has been going on for more than two decades,” according to Dr. John Dunn, a policy advisor for the American Council on Science and Health.

Dr. Dunn explained that what the Sunshine Act does “is prevent companies from hiring experts on their drugs from becoming guest lecturers to hype their products.”  He acknowledged that, “most responsible doctors report their conflicts dutifully without such regulation.”

He further asserted that whenever doctors “speak in front of a group or write an article in an academic journal, it’s expected you will declare your conflicts. It’s worthwhile that whenever someone in a white coat gets up and speaks, that we know his conflicts and are able to judge his research based on the merits.”

The problem however with the Sunshine Act is that it will “likely add to bureaucratic and administrative costs for doctors and the industry,” says Devon Herrick, a senior fellow with the National Center for Policy Analysis.

Herrick recognized that the “intent of the Sunshine Act is to create a database that can link the smallest financial considerations between doctors and medical device and drug companies. The intention may be good, but it is not the $100 gift that is going to influence doctors,” says Herrick. “I don’t think it will have the effect that proponents hope.”

Herrick asserted that, “it’s ludicrous to expect doctors and researchers to avoid contact with others in their field” because “it is natural for top doctors and researchers in a given field to collaborate with drug and medical device makers and have research contracts with them.”

Jane Orient, executive director of the Association of American Physicians and Surgeons, agreed with Herrick and noted that the PPSA will just make for higher costs for everybody.

 “It will be a reporting nightmare full of landmines and traps for the drug companies and device manufacturers. This will ultimately just make health care more expensive for everyone. As a physician, it’s a good thing the suppliers are responsible for keeping the paperwork, because if I had to report everything I received, I wouldn’t be able to accept any of it,” Orient says.

Although the PPSA may prevent device manufacturers and drug companies from improperly influencing doctors, Dunn note that it leaves out a major source of conflict of interest, and that is the conflict of interest the government is involved in every time it doles out money.

For instance, Dunn notes, more than $100 million a year in taxpayer funding goes to the American Medical Association (AMA) for a contract for medical coding.  “I think the government basically gave the AMA a franchise [in exchange] for their public support for ObamaCare. The idea that private industry and drug companies are the only ones giving out favors and buying influence is ludicrous,” says Dunn.


For some, PPSA is a way for the Obama Administration to push some of the more ambitious provisions, such as the Independent Payment Advisory Board (IPAB).  For example, Dr. Roger Stark, a physician and health care policy analyst at the Washington Policy Center, note that following the money through PPSA will “lead right to IPAB, an unelected board of 15 officials, is tasked with reining in Medicare’s costs beginning in 2014.

Dr. Stark further elaborate that “the Obama administration has been trying to make medical doctors and pharmaceutical companies  look like the bad guys so it can ride in on a white horse and save the patient by telling him which device he needs or which drugs he can have.” His suspicion is that PPSA and IPAB is all “designed to take the decision-making from the doctors in order to reduce costs.”

Ultimately, as Orient noted, conflict of interest regulations such as PPSA “are a sideshow distracting from the real problems in health care today.”  Orient asserted that, “people should be able to accept a lunch for attending a presentation.”  The idea that small payments for meals and travel is a huge issue is a “trivial problem compared to what else health care is facing right now. There are enormous problems that need solving, and Congress is worried about sandwiches.”

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