Transparency and the Sunshine Provision – Is This a Good or Bad Thing?

March 17, 2011 · Leave a comment

Industry Insights from Paul Meade, M.Sc., MPH

The Physician Payment Sunshine Provision is a part of the Patient Protection and Affordable Care Act passed by the U. S. Congress in March of last year. The provision will go into effect on January 1, 2012. Many people in the healthcare industry are struggling to determine if this provision is a good thing or a bad one. Truth be told, it is a bit of both—good, in that it ensures complete transparency among health care providers and manufacturers of pharmaceuticals and medical devices, and bad, because it may expose the benefits some healthcare professionals gain from interacting with some manufacturers.

For years, healthcare professionals have been interacting with manufacturers in many ways; when providers offer their professional services, they expect and receive compensation for their time and knowledge, as would experts in any other industry. Every industry has its experts, and healthcare is no exception. There are healthcare experts in a variety of functional areas and in all therapeutic areas. These experts have medical information and knowledge that is valuable to healthcare manufacturers as they develop and commercialize their products and services. Acting as consultants to industry manufacturers, experts offer guidance in the development of new products, from determining unmet medical needs to suggestions on how to price new products.

Is it fair to compensate these experts? Of course it is! Should they be compensated excessively? Of course not! Does the public and those paying for healthcare services have a right to know how much compensation healthcare professionals receive for consulting services? Maybe. Do you know what financial experts get paid for advising the banking industry? Do you know what professional athletes get paid for advising sporting equipment manufacturers?  Do you know what aviation experts get paid for advising the aircraft manufacturing industry? So why are we so concerned with knowing what healthcare professionals get paid for advising healthcare manufacturers?

Perhaps we are more concerned about healthcare professionals violating conflict of interest rules than knowing the exact amount of compensation paid to these medical experts. Do we really care if a world expert in diabetes or asthma makes $100,000 a year advising manufacturers about developing new medicine for unmet medical needs? Would I like to see a medical physician for my disease knowing that she is considered an expert across the globe among her peers? You bet I would!

So, where’s the problem? Perhaps it is about fairness and transparency. Maybe we just want to know that a medical expert is receiving fair compensation for his consultative services in a way that would not bias their judgment. And, in order to have a sense of fairness, perhaps we need a little transparency. But the transparency that is most important to me when receiving medical care from one of these experts is more about disclosure and conflict of interest, than it is about how much compensation that expert makes for advising manufacturers.

So along comes the Physician Payment Sunshine Provision to address the concern over transparency. Starting January 1, 2012, all physicians will need to be transparent with regard to the level of compensation they receive for all levels of services to manufacturers. To be sure, we may be surprised to learn that some individuals provide a high degree of consultative services and are fairly well compensated for these services, but for the most part, who really cares? Yes, it is true that manufacturers will have to keep careful records of who is receiving how much and when, but maybe this is not such a bad thing for the manufacturers to know, so they can gauge the amount of services they receive from any one medical expert. But for most consumers, it might be nice to know which healthcare professionals are actually considered to have sufficient expertise so as to be sought after by manufacturers.

Finally, there are those whose jobs will task them with monitoring the levels of compensation paid to these healthcare experts, in order to develop standards and ensure no expert is unfairly over-compensated for the degree of services provided. Then, we can all rest assured that the whole system of advising and remuneration is a fair and transparent one. What industry do you think “we the people” will go after next?

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