How much are docs paid from insurance?


First Posted: 10/6/2014

OCT. 3, 2014 — The federal Physician Payment Sunshine Act requires health care companies to disclose the payments they make to doctors who use or help to develop their products. This was a valuable provision in the Affordable Care Act. Patients should know if docs who prescribe a certain drug, order a certain test or implant a certain device have a financial interest that could influence their decisions.

The Obama administration last week launched its Open Payments online database, which is supposed to enable the public to follow the medical money. You’ll find it at http://cms.gov/openpayments.

It works like a charm — if you’re a software engineer with time on your hands. For anyone else, it’s pretty much an impenetrable maze.

There’s no button, for instance, to “find your doctor.” Before you click on “explore the data,” you had better pack a lunch.

The site lists payments only from the last five months of 2013, and fails to include all the payments made in that period. Many payment records submitted by companies apparently were left out for technical reasons.

Some of the information on the site isn’t accurate or complete. A surgeon in Baltimore was surprised to discover that, according to the database, health care companies had given him $78,200 in food and beverages. The amount is in the ballpark for the consulting work he did, the doc explained to The Wall Street Journal, but it was misclassified.

This debut isn’t a fiasco on the order of last year’s launch of HealthCare.gov, the site for health-insurance coverage under Obamacare. But it’s a huge disappointment. Complaints are piling up. The administration has conceded that the site is not the comprehensive and accessible source of information it needs to be.

Despite its serious flaws, Open Payments provides enough information to show that more disclosure of the financial links between doctors and health care companies is sorely needed.

Practitioners and teaching hospitals received at least $3.5 billion in payments in the last five months of 2013, the database shows. Speaking and consulting fees accounted for roughly $380 million. Some physicians took home more than $500,000. Those eye-popping amounts confirm the potential for serious ethical conflicts.

Payments to physicians and researchers can be legitimate — even very large sums. A doctor who develops a successful new product that advances medicine deserves to receive royalties. A doctor who travels widely to educate colleagues in new techniques legitimately earns compensation. The trick is to separate legitimate compensation from the wink-wink practice of showering money on providers to induce them to prescribe certain drugs, and even overlook the risks and exaggerate the benefits of new drugs and treatments.

Sunshine makes a difference. Even before the new rules went into effect, and long before the government website limped into existence this week, some leading health care companies voluntarily disclosed the compensation they pay.

Many have adopted stricter ethics rules, developed higher standards for collaborating with practitioners and eliminated some questionable but routine freebies such as the pizzas and sandwiches that pharmaceutical sales teams routinely delivered to doctors’ offices and hospitals.

The Open Payments database could become a powerful tool to improve and control the costs of health care. A similar government database showing Medicare payments to physicians revealed suspicious billing anomalies. That database, unveiled earlier this year, has helped to make the government health-insurance program more honest and efficient by highlighting possible abuses.

The potential is still there for Open Payments, if the administration can get it right.