Industry Payments to Academic Physicians: a Comparison of Reporting to Two Government Agencies
The Physician Payments Sunshine Act requires public reporting of payments to physicians by healthcare companies.1 In 2014, the Centers for Medicare & Medicaid Services (CMS) Open Payments database documented over $3 billion in non-research payments from healthcare companies to physicians.2 However, Open Payments relies on company reporting, and its breadth is limited to companies which manufacture federally covered drugs, devices, or medical supplies. While Open Payments marked the first mandatory public reporting of payments specific to physicians, the Securities Exchange Commission (SEC) requires companies to disclose compensation paid to directors.3 Prior research has shown that academic physicians frequently receive significant compensation and stock for serving on company boards of directors.4 Thus, physician-director relationships create a unique opportunity to compare two sets of disclosures—those to CMS and those to the SEC.
We conducted a cross-sectional analysis of payments made by US healthcare companies to academic physicians who served on boards of directors in 2014, comparing payments disclosed through definitive proxy statements submitted to the SEC with payments disclosed to Open Payments. Open Payments requires companies to report all direct and indirect payments (cash, stock, options, and in-kind services) for all activities not made in connection with a research agreement, which may include directorships.2 The SEC requires reporting of all compensation paid for directorship, including cash, stock, and option payments.3 We examined the boards of directors of companies listed on the New York Stock Exchange or NASDAQ and included all academic physician-directors who served the entirety of 2014. We used a previously published approach to identify academic directors in SEC disclosures.4 We focused on academic physicians given their unique duties in education, clinical care, and research.5 For each director identified in SEC disclosures, we searched Open Payments by full name and state for all non-research compensation and stock ownership from the company they directed.2 We compared the frequency and magnitude of disclosures in the SEC and Open Payments databases in 2014.
Company-reported disclosures of payments to academic physician-directors in the SEC and Open Payments, 2014
Reported to SEC
Reported to Open Payments
Physician-directors with any disclosed financial relationship, no. (%)*
Physician-directors with any compensation disclosed, no. (%)†
Physician-directors with any ownership interest disclosed, no. (%)‡
32 physician-directors with compensation reported in both databases, median (IQR) $
24 physician-directors with compensation reported in SEC database only, median (IQR) $
Sum of disclosed compensation to all physician-directors, $
The Open Payments program has yielded important insights into financial relationships between physicians and industry.6 However, our findings highlight two major limitations of Open Payments which researchers and policymakers should recognize. First, three-fifths of physician-director relationships we identified involved healthcare companies not listed in Open Payments. Many companies are exempt from Open Payments reporting including companies with only products in development or clinical trials, companies which manufacture only non-prescription products (such as supplements), and many healthcare services, health insurance, and medical equipment companies. However, financial relationships between exempt companies and physicians may be significant and deserve the same level of scrutiny as companies with marketed products, thus CMS should consider required reporting for all healthcare companies.
Second, we found large discrepancies in the magnitude of payments disclosed to the SEC and to Open Payments, which point to the challenge of unverified reporting but also to a lack of clarity of CMS reporting expectations for board members. CMS should consider revising requirements to mandate specific reporting of physician-director relationships, given the financial magnitude and unique conflicts of interest these relationships pose.5 To meet the Physician Payments Sunshine Act’s goal of developing a greater understanding of financial relationships in healthcare, continued improvement in reporting mechanisms is crucial.
Study concept and design: All authors
Acquisition of data: Anderson
Analysis and interpretation of data: All authors
Drafting of the manuscript: Anderson
Critical revision of the manuscript for important intellectual content: All authors
Statistical analysis: Anderson
Administrative, technical, and material support: Anderson, Good, and Gellad
Study supervision: Good and Gellad
Dr. Anderson was supported by a National Research Service Award training grant (NRSA T32HP19025-14-00), University of California San Francisco. All other authors report receiving no external funding for this work.
Compliance with Ethical Standards
Role of the Sponsor
The funder supported research time for Dr. Anderson and did not fund the study directly; thus, the funder had no role in the design and conduct of the study; collection, management, analysis, and interpretation of the data; or preparation, review, or approval of the manuscript.
Dr. Anderson had full access to all of the data in the study and takes responsibility for the integrity of the data and the accuracy of the data analysis. The contents represent the views of the authors only and not necessarily those of the Department of Veterans Affairs or the US government.
Conflict of Interest
The authors declare that they do not have a conflict of interest.
- 1.Centers for Medicare and Medicaid Services. Medicare, Medicaid, Children’s Health Insurance Programs: transparency reports and reporting of physician ownership or in- vestment interests. Fed Regist 2013;78:9457–528.Google Scholar
- 2.Open Payments. Baltimore, MD: Centers for Medicare & Medicaid Services; 2015. https://openpaymentsdata.cms.gov/summary. Accessed May 11th, 2018.
- 3.US Securities and Exchange Commission. Electronic data gathering, analysis, and retrieval system. http://www.sec.gov/edgar.shtml. Accessed May 11th, 2018.