Federal “Open Payments” Website Stumbles Out of the Starting Gate

The federal government has launched an intrusive and mischievous Open Payments website, where payments for consulting and similar services provided by doctors to pharmaceutical and medical-device makers are publicized.

Paul Keckley aptly summarizes the recent data dump from the Centers for Medicare & Medicare Services (CMS):

  • In the last five months of 2013, drug manufacturers made 4.4 million payments totaling $3.5B to 546,000 physicians and 1,360 teaching hospitals to encourage acceptance and use of their drugs/devices: $1.49B for research, $1.02B for ownership interests, $380M for speaking/consulting fees, $302M for royalties/licensing, $93M for meals, $74M for travel, and $128M for “other.”
  • Recipients of 40% of these payments were not disclosed due to data problems (data verification/accuracy) per the Center for Medicaid and Medicare Services (CMS). 190,000 of the 4.4 million payments were for investigational drugs not approved for sale, or for drugs pending approval for new uses.
  • 26,000 of the 546,000 physicians were able to review/correct their data before release (physicians and teaching hospitals were given 45 days to review data, correct inaccuracies before the September 30 release).
  • The biggest drug companies had the most interactions with physicians—the Top Five: Pfizer (142,600), Astra Zeneca (111,200), Forest Labs (98,900), Johnson & Johnson (97,000), and Glaxo SmithKline (85,100).

Mr. Keckley also notes that the Open Payments website is not “user friendly.” No kidding! I spent a few minutes noodling around it and got increasingly frustrated. Morning Consult’s polling data tells us that patients are eager to see how much the companies paid their doctors. Fifty-seven percent “strongly agree” or “somewhat agree” that they will look up payments made to their doctor.

Well, good luck to them. I think that few will pay attention to this after the hubbub settles down, and those that do will be sensationalist journalists and “citizen activists” looking to shake down the companies. There is no evidence that this disclosure will improve the quality of care. It might just as likely reduce quality, as doctors fear getting “shamed” and cut back valuable relationships with manufacturers.

Indeed, just a few days after launching the database, the federal government has disclosed more errors, adding up to about $1 billion:

The federal government’s new database of drug and device industry payments to doctors is even more incomplete than has been reported previously.

In a fact sheet posted online, federal officials disclosed that the database, dubbed Open Payments, is missing more than $1 billion in payments made between August and December 2013. These omissions are in addition to information the government has redacted from the payments it has disclosed, citing inconsistencies. (Charles Ornstein, ProPublica)

Open Payments is fundamentally different than Medicare’s recent disclosure of its payments to hospitals and physicians. Medicare payments are taxpayers’ money, and therefore public property. Consulting fees paid to physicians by private businesses are not.

Plenty of researchers receive government grants to propose increased government control of health resources. Is that not a conflict of interest? If we have to have an Open Payments database, those names and amounts should be included, too.

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For the pivotal alternative to Obamacare, please see the Independent Institute’s widely acclaimed book: Priceless: Curing the Healthcare Crisis, by John C. Goodman.

John R. Graham is a former Senior Fellow at the Independent Institute.
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