Publisher's Letter: The Wrong Kind of March Madness

Edition: March 2012 - Vol 20 Number 03
Article#: 3930
Author: Brian Taylor

Usually each year we feature the NCAA Basketball tournament that takes place this month. It has affectionately become known as March Madness. It has become a phenomenon across the land as brackets are drawn and office pools become the center of attention for three weeks or so. More times than not I have observed that the office pool winner is someone who has virtually no idea of who is playing, who is winning, and wouldn’t know a jump shot from a jump suit or Rick Pitino from Lady Gaga.

However, this year our cover story features a different kind of madness, and one that isn’t nearly as enjoyable as the tourney. We are talking about the “Sunshine rule,” a provision of the Affordable Care Act that basically requires transparency on financial arrangements between manufacturers and physicians and other healthcare institutions. Certainly, providing transparency so that patients can be aware of any financial relationship between manufacturers and their physician is well intended. However, like so many things, the unintended consequences seem to outweigh the potential benefits derived by this legislation. For a number of years, manufacturers, distributors and other groups have written their own codes of conduct to deter what could be deemed as inappropriate behavior. The ACA passed in 2010 now gets the government involved and it has caused quite a stir in the industry that can indeed affect all of us.

At a time when we are supposedly working to reduce the cost of healthcare, a rule like this does just the opposite. Consider that things like consulting fees, gifts, entertainment, meals and investment interests are all included in the proposed legislation. It is fair to expect visibility on relationships between companies that provide products to physicians and hospitals to ensure there isn’t inappropriate behavior that could affect patients. However, much of the innovation and new product development is the direct result of collaboration between providers and manufacturers. A concern is that this rule could stifle that process as doctors and manufacturers shy away from anything that could be deemed inappropriate, like not reporting a $10 pizza lunch provided by a manufacturer at a seminar or in-service.

Moreover, there is no clarity of what effect this will have on distributors. Will they be considered to be a manufacturer if they are supplying private branded products? This rule was to have taken effect Jan. 1, 2012, but fortunately further input is being considered as a result of the protests from the healthcare community about the unwieldiness of the rule. Look for further guidance and recommendations at the end of this month with implementation then to be phased in 90 days after the final guidance has been determined.

Stay tuned!

Brian Taylor