Ethics: April 2010 Archives

Yesterday the Council of Medical Specialty Societies, a nonprofit umbrella group of 32 medical groups, announced its guidelines for interacting with industry. There's nothing particularly new here to shake up the established movement that emphasizes independence from pharma influence and the full disclosure of industry ties. For instance (yawn), the code stresses a distinction between certified continuing medical education (CME) activities and non-CME activities and prohibits ghostwritten articles in society journals.

In its entirety, the code, currently endorsed by 13 member societies,* addresses charitable contributions, corporate sponsorships, educational grants, exhibits and advertising, licensing, research grants, and editorial standards for society journals. The other 19 member societies, including CMSS President James Scully's American Psychiatric Association, have until the end of the year to sign on.

* American Academy of Family Physicians (AAFP)
  American Academy of Neurology (AAN)
  American Academy of Ophthalmology (AAO)
  American Academy of Pediatrics (AAP)
  American College of Cardiology (ACC)
  Accreditation Council for Continuing Medical Education (ACCME)
  American College of Emergency Physicians (ACEP)
  American College of Obstetricians and Gynecologists (ACOG)
  American College of Physicians (ACP)
  American College of Preventive Medicine (ACPM)
  American College of Radiology (ACR)
  American Society for Radiation Oncology (ASTRO)
  American Society of Clinical Oncology (ASCO)

A big HT to the DCMB for citing the latest Calvalcade of Risk roundup at Political Contributions. Yesterday's edition provides an intriguing online calculator—based on income and the cost of and need for health insurance—to determine whether it's cheaper to buy coverage or suffer the IRS penalty* for not having it.

The big question answered (sort of): Should I retain or drop health insurance under "ObamaCare"?

Because the new act prohibits insurance companies from denying coverage to anyone with a preexisting illness, an essential loophole is created that allows some citizens to game the system. In these cases, the cheaper option—to purchase insurance or to suffer the tax—can be determined.

For instance, for a person with an annual income of $40,000 who pays $4824 annually for an individual policy and has a 1-in-4 chance of being hospitalized, the formula spits out the following like a carnival fortune teller: "It makes more sense to drop your health insurance, buying it only when you need it, then drop it again if your health allows."

That's because the annual penalty for not being insured,** $1000, is much lower than the likely accumulated savings from dropping coverage over 3 years, $11,472 ([$4824 x 3] – $3000). However, if someone loses the gamble (meaning that she fails to get health insurance and then find that she needs it, the basic cost is $5824—or the tax penalty plus the cost of insurance for 1 year).

Major caveats to the formula must be noted, however. Insurance premiums are based on current rates (eg, the average annual premium for an individual in 2009 was $4824, according to USA Today). The hospitalization odds provided are for Australia (see table below); it is assumed that the odds are similar for Americans. Also the odds of needing outpatient and prescription coverage, which are much more likely than hospitalization, are not considered. Another big caveat: out-of-pocket costs for necessary hospitalization, whether insured or not, are ignored.

According to one report, gaming the system has already occurred in Massachusetts, where a health insurance mandate has been in effect since 2006. The consequence: soaring insurance rates. 

Age, years	Female	Male
<1	1 in 3	1 in 2
1-10	1 in 10	1 in 8
10-20	1 in 9	1 in 10
20-30	1 in 4	1 in 8
30-40	1 in 3	1 in 6
40-50	1 in 4	1 in 4
50-60	1 in 3	1 in 3
60-70	1 in 2	1 in 2
≥70	4 in 5	4 in 5

* Which goes into effect in 2016.

** In that income bracket.

Like GSK, Lilly, and Merck, Pfizer has begun to publicly disclose its payments to US docs for their advising and speaker services, as of yesterday.* However, unlike the other companies, Pfizer is revealing how much money it has given to fund US-based clinical trials (ie, research grants).

During the second half of 2009, the world's biggest drug firm shelled out $19.8 million to 4500 health care professionals ($4400, on average, per HCP) and $15.3 million to 250 academic or other research groups ($61,200, on average, per group). Pfizer provides a friendly graph (below) and also notes that it invests about $7 billion in R&D and spends about $1.3 billion to bring a drug to market.

Individual Pfizer payments are available here, with a database that is browsable and searchable. However, the payment information, like that from other companies, is not easily downloadable, as yesterday's NYT notes.

According to a Pfizer spokesperson, also by way of the NYT, the disclosures (or at least most of them) are mandated by an "integrity agreement" between Pfizer and the federal government. The agreement was struck as part of a settlement in re Pfizer's off-label promotion of drugs (like Wyeth's Neurontin [gabapentin]).

HCP = health care professional (including nurse practitioners and PAs).

* "Meals, business travel expenses and educational items that are greater than or equal to $25 in value, and where the aggregate amount paid to an individual health care professional is greater than or equal to $500 in a calendar year."