Provision of health care reform requires drug companies to report payments to doctors

A little-noticed provision in the health reform bill will shed significant light on the payments drug and device companies make to doctors and teaching hospitals in California and the rest of the nation.

The section of the law started as the Physician Payment Sunshine Act, a bill introduced by Sens. Herb Kohl, D-Wisc., and Chuck Grassley, R-Iowa. It was tucked into the reform bill signed by the president yesterday and, therefore, has become law.

The Pew Prescription Project provides a handy fact sheet on what the law does:

It fines companies up to $10,000 if they fail to report information, and in cases of willful failures to report, the fines reach $100,000.

Buzz about the law is credited with spurring Eli Lilly, the Indianapolis-based pharmaceutical giant, to release its own database of payments to health practitioners.

A quick search of Lilly’s 2009 posting for “California” reveals that a Northern California Institute for Bone Health received $64,850 for a health care professional program. And the UC Irvine psychiatry department reaped $65,531 for a professional program and for advising the pharmaceutical concern.

A search for “Los Angeles” and a bit of Googling seems to show that a community mental health center director got more than $70,000 for an educational program and a university-affiliated anesthesiologist got nearly $74,000 for 49 health care education sessions.

And so on. The point is, by 2013, patients will be able to take a look at payments to their doctors and perhaps make more informed decisions about the advice they’re getting.

That isn’t the end of the transparency measures in the health reform law. As Ezra Klein notes in the Washington Post, there’s more:

What got lost in this, however, is how much transparency the bill is going to bring to the health-care sector. It’s not that every doctor visit will be televised, or every meeting of insurance executives streamed over the Internet. But hospitals will have to post prices. Insurance products will be presented with standardized information, consumer ratings and quality measures.

The payments physicians take from drug and device companies will be in a public database. There will be independent funding for research on the relative effectiveness of different treatments. Some of these changes are small and some are big, but put together, the system is going to become a lot more visible in the coming years.