A Window to $36MM: Industry Payments to Health Providers in MA

Author: Sean McCarthy

Last week it was reported that Massachusetts became the first state to report all detailed payments made by pharma/med device companies including totals for individual hospitals and healthcare providers—hospitals, physicians, nurses, dentists etc.   The $36MM figure is for six (6) months ending December 2009 and includes over $16MM that went directly to physicians.The detailed database can be accessed here.

Massachusetts and California have long been bellwethers for regulations in the healthcare arena. If this is enacted throughout the nation, what can you expect? The MA Code of Conduct aims to do two main things:

1.       Limit Sales and Marketing Activities between manufacturers and health care providers

2.       Increase Transparency to industry interaction with health care providers and administrators

Digging deeper, it requires that any company doing business in MA must report any fee, payment, subsidy or economic benefit of $50 or more.  The lists can be sorted from the raw data but are also broken down into simpler reports of Top 20 Manufacturers payouts or Top 50 Physician’s payments. Some payments reach the $2MM range to entities, and some physicians are pulling in almost $200,000. In our current economic environment, this will certainly raise some eyebrows even if it is legitimate, as many of these transactions seem. But how will this affect the everyday interactions between physicians and industry?

Sales should expect more scrutiny and questions around:

  • Meals constitute much of the spending under $150, but your doctors may not want their name in this database for a $100 meal.
  • Trips to educational programs or headquarters to discuss a new product in development.
  • Speaking engagements are under particular scrutiny.
  • If a physician is doing it for one company they better do it for others as well to appear unbiased.

All of this leads to more work for the hospitals, physicians and companies to file the proper paperwork and make sure every activity is legitimized. I can’t help but think the physicians will just stay away from these activities all together.  It may become too much of a headache, but the unintended consequences may be a stifling of growth in new products or design changes as the interactions between physician and industry dwindles in order to create a perception of virtuousness.

Either way, get ready for the increased scrutiny of your everyday customer activities.  And, when the wind does change in your state, make sure your reps are conducting legitimate business and reporting any expense over $50. There would be no quicker way to kill your business then to get your customer in hot water with the Department of Health and Human Services, even at the state level.

BTW, if there is anyone out there in Massachusetts we’d love to hear your take on these regulations and how they affect your business interactions.

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Related Articles

Mass. posts industry payments to health care providers (Boston Globe)

MA Posts Payments to Health Providers (ProPublica)

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