Payments to Doctors by Product Manufacturers

By May 11, 2017Commentary

The product side of health care includes drug and medical device manufacturers, as well as durable medical equipment and supplies.  While a smaller portion of spending than health services, the product category has experienced more rapid spending growth, has high unit prices and profit margins and often has dubious proven value.  Most of these items require a physician’s prescription to get used, so guess what, the industry spends a lot of effort trying to influence prescribing behavior.  A study published in the Journal of the American Medical Association looks at how much was spent in 2015 in direct payments or delivery of items of value to doctors.   (JAMA Study)   The federal government created a national database of such payments and data from that database for 2015 was used to compare with physicians in the CMS database.  The payments were lumped into three broad categories–general payments, research-related ones and ownership interests.  48% of doctors received some kind of payment from medical product manufacturers in 2015, with a total of $2.4 billion being disbursed, $1.8 billion of which represented general payments and only $75 million for research payments, which seems like the most legitimate value transfer.  89% of payments were in the form of food or beverage, but they represented a small portion of value.  The most value, $484 million, was for royalty and license payments, followed by $472 million for services, like lectures.  Physicians who do procedures, like surgeons and interventional cardiologists, received the most payments and value.  75% of cardiologists and 72% of gastroenterologists received payments.  Surgeons got the majority of ownership interest payments.  A higher percent of male physicians received a payment and the average amount received was higher than for female ones.  And of course none of these payments in any manner was intended to, and almost certainly did not, influence physician use of the companies’ products.  (LOL)

Kevin Roche

Author Kevin Roche

The Healthy Skeptic is a website about the health care system, and is written by Kevin Roche, who has many years of experience working in the health industry through Roche Consulting, LLC. Mr. Roche is available to assist health care companies through consulting arrangements and may be reached at khroche@healthy-skeptic.com.

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