Drug and Device Makers Find Receptive Audience at For-profit, Southern Hospitals

Analysis shows that where a hospital is located and who owns it make a big difference in what share of its doctors take industry payments.

This article first appeared June 29, 2016 on the ProPublica website.

by Charles Ornstein and Ryann Grochowski Jones

Where a hospital is located and who owns it make a big difference in how many of its doctors take meals, consulting and promotional payments from pharmaceutical and medical device companies, a new ProPublica analysis shows.

A higher percentage of doctors affiliated with hospitals in the South have received such payments than doctors in other regions of the country, our analysis found. And a greater share of doctors at for-profit hospitals have taken them than at nonprofit and government facilities.

Doctors in New Jersey, home to many of the largest drug companies, led the country in industry interactions: Nearly eight in 10 doctors working at New Jersey hospitals took payments in 2014, the most recent year for which data is available. Nationally, the rate was 66 percent. (Look up your hospital using our new tool.)

For the past six years, ProPublica has tracked industry payments to doctors, finding that some earn hundreds of thousands of dollars or more each year working with drug and device companies. We've reported how the drugs most aggressively promoted to doctors typically aren't cures or even big medical breakthroughs.

And we recently found an association between payments and higher rates of brand-name prescribing, on average. Accepting even one inexpensive meal from a company was associated with a higher rate of prescribing the product to which the meal was linked, another study showed.

This analysis shows profound differences among hospitals, but it's uncertain why that is. It could be that hospitals play a role in shaping affiliated doctors' acceptance of payments or that like-minded physicians congregate at particular hospitals.

Those who support limits on such payments say patients may want to know how prevalent industry money is at a hospital before choosing it for care. "Maybe they're prescribing or treating you as a patient not based on evidence but rather based on markets or industry gain or personal gain," said Dr. Kelly Thibert, president of the American Medical Student Association, which grades medical schools and teaching hospitals on their conflict-of-interest policies. Patients, she said, "need to be aware that this could potentially be an issue and they need to speak up for themselves and their loved ones who may be in those hospitals."

ProPublica matched data on company payments to physicians in 2014 with data kept by Medicare on the hospitals with which physicians were affiliated at the time. We only looked at each doctor's primary hospital affiliation and only at doctors eligible to receive payments in the 100 most common medical specialties. The payments included speaking, consulting, meals, travel, gifts and royalties, but not research.

To be sure, the data is not perfect. Companies must report their payments to the federal government, and some doctors have found errors in what's been attributed to them. Companies can face fines for errors, and doctors have a chance each year to contest information reported about them. Also, Medicare's physician data may not capture doctors who do not participate in the program and it may not accurately reflect the status of doctors who have moved. (Read more about how we conducted our analysis.)

As might be expected, hospitals with tougher rules, such as banning industry reps from walking their halls and bringing lunch, tended to have lower payments rates. For example, at Kaiser Permanente, a giant California-based health insurer that runs 38 hospitals, fewer than three in 10 doctors took a payment in 2014. Since 2004, the system has banned staff from taking anything of value from a vendor.

"Our intent was to disrupt the strategy of using what industry calls 'food, friendship and flattery' to develop relationships with prescribers and influence the choice of drugs, the choice of devices, implants, things like that," said Dr. Sharon Levine, an executive vice president of the Permanente Federation, which represents the doctor arm of Kaiser Permanente. "Passing a policy alone doesn't make anything happen. There's a fair amount of surround-sound in the organization around reminding people about this and reminding them why we took this step."

Levine said she believes many of the payments attributed to Kaiser doctors were for meals and snacks at professional meetings, even if they didn't eat them.

ProPublica's analysis found distinct regional differences in comparing where industry payments were most concentrated.

After New Jersey, the states with the highest rates of hospital-affiliated doctors taking payments were all in the South: Louisiana, Mississippi, Florida, South Carolina and Alabama had rates above 76 percent. At the other end of the spectrum, Vermont had the lowest rate of industry interactions (19 percent), followed by Minnesota (30 percent). Maine, Wisconsin and Massachusetts had rates below 46 percent. Some of these states had laws requiring public disclosure of payments to doctors that predated the federal government's.

There were also major differences between hospitals based upon who owned them. For-profit hospitals had the highest rate of payments to doctors, 75 percent, followed by nonprofit hospitals at 66 percent. Federally owned hospitals had the lowest rates at 29 percent, followed by other government hospitals at 61 percent. Hospitals operated by the U.S. Department of Veterans Affairs were not included in our analysis.