Payola in Medicine – Insights into the Murky Side of Patient Care

By Chris Centeno, MD /

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payola in medicine

The federal government rolled out its new tool that it hopes will increase transparency of the rampant payola that still plagues medicine. The idea is that they now require all pharma and device companies that take money from Medicare to report the payments they make to doctors. So is this tool a good thing?

The Money Flowing Around Me…

The first thing I did, like any human being would, was to plug in my name. I was paid by big pharma and device companies, the grand total of…wait for it…twelve dollars and sixty three cents! I’m not even sure how it got to be that much, as I avoid drug and device reps in my office like the plague!

What’s really fascinating is plugging in the name of colleagues. What did I find? A surgeon north of me who dabbles in stem cells had a total exceeding $300,000! Most of that came from the value of a company that makes a surgical device that is implanted in spines. A local pain management doctor just a few miles away was at nearly $100K, with most of that coming from a drug company that makes a powerful narcotic. An academic physician that I have great personal respect for was paid $22K by a device company.

Payments and Decision Making

One of my favorite stories of how these payments can impact physician behavior is about an old colleague. He told me one day that a drug company had flown himself and his wife to Aspen for a conference of “thought leaders” on a new drug. I kind of knew this was pharma code for a method to funnel money to doctors to try and buy their loyalty. The doctors there sat around in a fancy hotel while their significant others were skiing and shopping. They were basically led through a script that caused them to conclude, by answering questions, that the company’s fentanyl lollipops were great for post-operative pain management. The company also had numerous fancy studies performed by many fancy university professors to show it. So my colleague did what most doctors do in that situation, he began prescribing these powerful narcotic lollipops to patients after surgery and injection procedures.

What happened next was predictable and awful

For the next year, I kept seeing post operative patients who just couldn’t get off those cute little $20 lollipops. They went from being in pain before their surgery to being in pain after their surgery and hooked on narcotics that looked like candy. I tried in vain many times to wean patients off of this stuff, to no avail. When I approached my anesthesia colleague who had been prescribing these after his Aspen trip, he told me there was research showing that the patient getting addicted to these lollipops was nearly impossible. I told him to tell that to the now 20-30 new drug addicts I had in my practice that were created by another doctor’s pain lollipop prescriptions!

This kind of thing in medicine is common. With each new government rule that tries to prevent payola,  the drug companies get a little sneakier. These days, money can be funneled to orthopedic surgeons for “post marketing surveillance” of knee and hip replacement devices, which means that the doctors fill out a form about complications. A lot of money also changes hands in the way of samples. As an example, the new “amniotic stem cell” companies (who are selling dead tissue and not real stem cells, but that’s another story) can provide a doctor with 10-20 free vials of product that the doctor can then turn around and charge patients for. Another way the payola scene works relates to payments for research. In this case, doctors are paid money to perform studies for a manufacturer.

Who got the distinction of being paid the most (at least in one category)? Orthopedic surgeons were right up there, usually due to payments from device manufacturers. For example, a surgeon is paid money by the manufacturer of a certain hip replacement device and magically, he or she almost always implants that device.

One of my favorite stories was of a spine surgeon who always used one company’s hardware. He had an entire one-half of his building paid for by the company! Spine surgeons these days have found new ways to circumvent rules, for example, by owning part of the company that makes the fusion hardware they implant.

So is this payola a big problem? It can be.There are many stories of doctors who are easily swayed by these payments. But like anything else in life, much of the problem depends on the individual doctor.

The upshot? This is a great tool for patients. Have fun plugging in your doctors name and state and you can be the judge of whether the money he or she is taking from the industry determines what gets prescribed!

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6 thoughts on “Payola in Medicine – Insights into the Murky Side of Patient Care

  1. Mathew

    Why so far the cost of this treatment is not covered by any insurance ?

    1. Regenexx Team Post author

      Matthew,
      A couple of reasons…
      Not too long ago most heart problems were handled with surgery which required stopping the heart and cutting through the sternum. Someone figured out that most of those problems could actually be dealt with through a catheter. Now heart surgery is reserved for what can’t be handled through a catheter with Interventional Cardiology. That’s the same type of paradigm shift we are in the midst of in Orthopedics. At some point, most orthopedic issues will be handled by Interventional Orthopedics, by injection, and orthopedic surgery will be reserved for when no other options exist, so no more meniscus surgery, acl surgery, etc. But the insurance industry takes a long time to catch up with new medical technology. Despite the fact that there is more peer reviwed published research that these types of procedures are effective than the common orthopedic surgeries they replace…the Insurance industry still considers them experimental.

      And…our healthcare system has gone through big changes in the last few years, and the trend is toward “mass care” rather than “patient specific care”. Things like Orthopedic surgery and joint replacements are so entrenched in the system, that the transformation for Orthopedics will take much longer than it did for Cardiology, as the Medical System was very different back then.

  2. Dennis

    This is an interesting blog post; thanks Dr. Centeno. I enjoyed searching the “Open Payments” website for info and payments to my physicians (just as I enjoy searching the “Open Secrets” website to see who’s contributing to forked-tongued politicians). I checked a few of my docs and it seems most of the nature of payments to them is for fairly nominal amounts for “food and beverages.” Correct me if I’m wrong, but I assume this means the sales rep took them to lunch, or my physicians attended a seminar where they were provided lunch, or something like this? To be honest, unless it something blatant (like payments of hundreds of thousands of dollars), it’s difficult for the layman to determine just what exactly is a conflict of interest that’s possibly detrimental to a patient.

    1. Regenexx Team Post author

      Dennis,
      Yes, these small payments are generally logged to the doctor when the sales rep brings lunch and the doctor attends. Obviously not the ones to be concerned about.

  3. Scott Davis

    I have Rep. Fred Upton as my congressman, and he’s pushing for a 21st Century Cures bill that would make available next generation medical care much earlier than the current outdated system of checks and balances. I’m in contact with the congressman, and wondered if you are aware of this proposed bill? If so, your thoughts on it and any changes you would like if you could get them in.
    I’m also trying to save money for my knee to get the stem cell injection and follow up. I’ve had several surgeries to repair two failed spinal surgeries, and I don’t want any more. With C3-6; T7-S1 fusion, I have been through the fire already. I’m ready for a better way, I just don’t have the funds to pay for the procedure for a while. I’ll keep saving money, but I hope the insurance industry sees the great reduction in cost of total replacement v. about ten percent for stem cells therapy soon.

    1. Regenexx Team Post author

      Scott,
      I will share the 21st Century Cures Bill with Dr. Centeno. I have just emailed you re your back issues.

Chris Centeno, MD

Regenexx Founder

Chris Centeno, MD is a specialist in regenerative medicine and the new field of Interventional Orthopedics. Centeno pioneered orthopedic stem cell procedures in 2005 and is responsible for a large amount of the published research on stem cell use for orthopedic applications.
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