If you are already familiar with the potential ways that financial conflicts of interest can influence healthcare, feel free to scroll to the bottom of this post to review my list of disclosures. Otherwise, allow me to introduce the topic to you:
A financial conflict of interest arises when a financial interest compromises professional judgement. For doctors, financial conflicts of interest could take various forms, including:
- kickbacks and fee splitting.
- money received from companies in the form of gifts, honoraria, consulting fees, or research grants.
- overutilization in a fee-for-service healthcare model.
- underutilization in a capitation healthcare model.
- financial investment in the same services/devices/drugs recommended.
The kickback is the more easily understood, because it happens all the time outside of medical care. You might have been offered a gift certificate for each new person you recommend to a service who ends up signing up for the service. A salesperson in a retail store might receive an extra commission for selling a product line, from the company that makes that product line. An insurance company is likely to pay a broker a commission for each plan that broker sells. If one company pays that broker more money per plan sold, will that broker develop a tendency to sell more plans from that company? Maybe, maybe not.
Fortunately for patients, there are extra federal protections against physician self-referral, receipt of kickbacks, and the practice of splitting fees. The Stark Law and the federal anti-kickback law are the most prominent of those protections, and you can learn more about them at http://starklaw.org/. There are growing efforts to better extend these patient protections into the practices all non-physician health providers and into less-regulated medical products such as supplements.
Having legislation in place does not mean it will always be followed, of course. The biggest fraud case within the US pharmaceutical industry was settled this past year when GlaxoSmithKline was ordered to pay $3 billion for a long list of charges that included giving kickbacks to doctors, including holiday junkets and tickets to Madonna concerts!
Still, I firmly believe kickbacks are rarer in medicine than in most other professions.
Money received from companies, in the form of gifts, honoraria, consulting fees, or research grants. The majority of my lunches as a medical student at Stanford and as a resident at the University of Washington were catered by pharmaceutical companies. Nothing fancy, usual box lunches or pizza set out next to a pile of pens with pharmaceutical logos and selected manuscripts that invariably supported that company’s drug or the class of drugs that their drug belonged to. As a self-righteous medical student, I would tape over the drug logo on my pens to avoid being influenced. When it came to free climbing gear though, I too had my price. I attended a catered dinner at REI as an intern, hosted by a drug company, because I had been told that any MD who showed up would receive a $75 gift certificate at REI. I put the money toward a new rock climbing rope. Behavioral research has shown us that even small gifts can influence objectivity and thus clinical judgement. You should be proud of the University of Washington system for its having put a stop to all drug company sponsored lunches for residents and medical students about the time I finished my internal medicine residency there.
Honoraria, consulting fees, and research grants provided to physicians by private companies are less straightforward to take a position on. After all, collaboration works, and you want these companies to have access to bright medical minds as they develop tomorrow’s cures. I do too. But I also want to know about any financial ties a physician has when I interact with him or her. Here too, we have made progress. If you publish something in a major medical journal today, you have to submit a list of financial disclosures which will show up in the article or in the online appendix to the article. If you give a talk at a conference, you are expected to have a slide to list any potential conflicts of interest. In the course of a busy day in the clinic, one can argue there is little time for the doctor to list off potential conflicts of interest, let alone describe what a conflict of interest is. I think a webpage for every doctor dedicated to potential financial conflicts of interest is a good place to start. Hence, this page.
Overutilization in a fee-for-service healthcare model. This is the potential problem of the fee-for-service model: The more the doctor/hospital/group practice does, the more money is made. Overutilization has been particularly newsworthy when it come to lucrative medical procedures. Here’s a memorable example published in the New York Times a couple years ago. http://www.nytimes.com/2010/12/06/health/06stent.html?pagewanted=all&_r=0 (…along with a great example of what I would consider a kickback: “Two days later, an Abbott sales representative spent $2,159 to buy a whole, slow-smoked pig, peach cobbler and other fixings for a barbecue dinner at Dr. Midei’s home, according to a report being released Monday by the Senate.”). The biggest problem with overutilization is that it tends to be unhealthy for the patient, through risks related to procedures or other adverse consequences of “overdiagnosis”. Secondly, it costs a lot. Here’s an article from Forbes about how patient satisfaction ratings can lead to overutilization: http://www.forbes.com/sites/kaifalkenberg/2013/01/02/why-rating-your-doctor-is-bad-for-your-health/ . My only criticism of this article is that it sells the public a bit short. I know plenty of patients who expressly don’t want to be over-tested!
Underutilization in a capitation healthcare model. This is the opposite problem as I just described. A capitation model of healthcare is basically one where the patient pays an annual fee to the “system” in return for all necessary medical care. Think Group Health and Kaiser Permanente. Here, the potential problem becomes: The less the doctor/hospital/group practice does, the more money is made – because more of the patient’s fee is retained by the system. You don’t have to treat what you don’t test for.
So is overutilization or underutilization more dangerous for the patient? The answer is “both”, and neither problem will go away soon so don’t hold your breath. Even without incentives it is a major intellectual challenge to optimally utilize medicines and medical technologies. I also don’t recommend paranoia to you. Just try maintain your awareness and try to visualize all of the different incentives that might be in play as you navigate the care and maintenance of what is arguably your most important asset: your body. Ask questions, and advocate for transparency.
Physician financial investment in the same services/devices/drugs that s/he recommends to patients. The Stark Law and federal anti-kickback law I referred to above cover a lot of this, so the patient has some quality protections. However, contentions remain on topics such as non-physician practitioners selling the same supplements and herbs they recommend as cures, physician ownership in imaging equipment and outpatient surgery centers, and financial incentives provided to salaried physicians based on productivity. Again, the most important check and balance will be public demands for transparency. Who owns what? Where are the financial ties?
Enough preamble, Dr. Warren, what are Wise Patient’s potential financial conflicts of interest?
I was just getting to that!
Wise Patient’s Potential Financial Conflicts of Interest:
Here is a list of potential financial conflicts of interest, from July 2011 when I first took out a state business license for Wise Patient Internal Medicine to present:
Paid consultant work:
2012: Dr. Warren has served as a paid consultant to Verathon Inc, a company based in Bothell that develops, manufactures, and distributes medical devices used by healthcare providers. http://verathon.com. None of Verathon’s devices is of the nature to be sold directly to patients.
Reimbursement for travel expenses:
2007-2011: Dr. Warren was a volunteer member of the Research Task Force, American Heart Association Get With The Guidelines – Resuscitation. Necessary travel expenses were reimbursed.
Ownership of publicly traded stocks:
Dr. Warren does not own individual stocks in pharmaceutical companies or medical device companies. He does own mutual funds recommended to him by a financial advisor that he figures surely must contain some companies that are healthcare related though he has not researched exactly which companies those are.
Financial relationships related to products Dr. Warren may recommend to his patients, including books, websites, medications, self-help techniques, exercise strategies, nutrition and weight loss strategies, or other health programs. None to date.