Pharma Paid Physicians $6.5B in 2014 – Looking Into The Open Payments Dataset

My friend Jesse introduced me the Open Payments Dataset, which tracks the details of all payments made by “applicable” healthcare manufacturers (like pharmaceutical companies, medical device manufacturers) to any doctor they work with. A federal program maintains this database, which is a product of the Sunshine Act, part of the Affordable Care Act.

Why does this database exist? Basically because of the incentives created by industry being able to pay doctors to work on things that will ultimately help industry–like new drugs or medical devices. The hope is that more transparency will reduce any harmful influence that industry could have on medical research, education, and clinical decision making. In the words of Senator Grassley, co-author of the Sunshine Act:

Disclosure brings about accountability, and accountability will strengthen the credibility of medical research, the marketing of ideas and, ultimately, the practice of medicine. The lack of transparency regarding payments made by the pharmaceutical and medical device community to physicians has created a culture that this law should begin to change substantially. The reform represented in the Grassley-Kohl Sunshine Law is in patients’ best interest.

The healthcare industry pays physicians a lot, almost $6.5B in 2014 alone. What is being paid for though (or, what does industry report the payments are for)? Who’s getting paid, and how much? I decided to do a quick analysis to start answering these questions and to see if there was anything interesting at a high level.

Most top paid physicians get paid royalties or license fees

The most a single physician got paid in 2014 was almost $44M. The interesting thing is that for this physician and several other top paid physicians, almost the entire total came from payments that were categorized is this unhelpfully-named category, “Compensation for services other than consulting, including serving as faculty or as a speaker at a venue other than a continuing education program” (orange).

A large majority of the other of the top paid physicians got paid primarily from “Royalty or License” (green), which makes sense: a surgeon may invent a new surgical technique and license it to a medical device company.

Another interesting phenomenon is that a handful of doctors in the top 100 earners were paid by industry solely for their research (purple). The status quo of industry having all the money and thus paying/funding research–sometimes both the design of and execution of the research–can create incentives with negative consequences for the validity of the results.

You can play around with the charts like the one below by zooming, mousing over data points to see their values, and showing/hiding different data series by clicking on each one in the legend. Physician names have been replaced with numbers for anonymity.

Chart embedded below, or link

Orthopedic surgeons received the most industry payments, followed cardiovascular physicians

Orthopedic surgeons received the most money from industry, almost twice the amount that cardiovascular physicians received, in 2014. Interestingly, most of payments to orthopedic surgeons, and other types of surgeons, were for royalties or licenses (green), whereas most payments for physicians–cardiovascular and otherwise–were for “Compensation for services other than consulting” (orange), “Research” (purple), and “Consulting” (purple).

Click to show interactive chart (some labels are crazy long so embedding didn’t look good. “A&O” stands for “Allopathic & Osteopathic Physicians”):
Payment Received by Physician Specialty in 2014 (Top 50)

The healthcare industry pays a lot of money for research

Out of the $6.5B total payments to physicians in 2014, $3.2B, or almost half, of those payments were for research. We can see this when aggregating the payments by the name of the drug or device manufacturer: companies like Genentech, Pfizer, and Novartis dominate the dollar amount of payments made to physicians, and most of their payments are for “Research” (brown). Further down the line, you can see medical device manufacturers like Stryker and Medtronic paying physicians mostly for “Royalty and License” (green).

Click to show interactive chart:

Payment Sources in 2014 (Top 50)

Physicians in CA received, by far, the most amount of money from industry.

The graph below shows how much money physicians received for research and “general” payments (any payment that isn’t classified as “Research”), grouped by the state they work in; the size of each bubble represents the number of physicians in that state.

CA had significantly more physicians receive payments (8081) than the runner-up state, NY (5981), and thus the physicians that worked in CA received a lot more money from industry, in aggregate.

Payments Received by State
Though drilling into state by state differences in the data (e.g. the dominant “purpose” CA physicians vs. physicians in other states get paid for) is an exercise for another time, we get a hint for why this phenomenon might exist by looking at the teaching hospitals that were affiliated with the physicians who got paid by industry the most.

Click to show interactive chart:

Payment Sources in 2014 (Top 50)

Physicians affiliated with the City of Hope National Medical Center in Los Angeles received the most industry payments, by far, and almost all if it from royalties or license fees (green). Genentech has been known to pay massive royalties for the drugs developed at City of Hope, including the crazy expensive cancer treatments Herceptin and Avastin.

Do physicians get rewarded with fancy dinners and extravagant trips?

By looking at the data, we can find which physicians got paid the most for “Entertainment”, “Food and Beverage”, and “Travel and Lodging”. But we won’t know for sure, because remember, all this payment data is reported by the healthcare industry themselves, and while there are some financial penalties for inaccurate reports, I don’t see an easy way for the government to verify the validity of the data.

The “worst offenders” were essentially given, by industry, $60 meals three meals a day for every day of the year, went on $590 per day trips, and spent $43 a day (about $300 a week) for entertainment and fun. Sounds like the life (except a little more on the entertainment and fun please).

Conclusion

There’s a lot of money being transferred from the healthcare industry to physicians, which means a ton of data since all of this has to be reported now. In fact, I didn’t even touch another part of the dataset, how much ownership each physician has in a particular drug or device manufacturer, which could give even more color on misaligned incentives. Also, without aggregation of some of the data fields, the raw, transaction/payment level data took up close to 6GB of space, and I didn’t want to spin up a Spark cluster or something. Luckily, the Open Payments site provides a web service that allowed me to aggregate and filter the raw data, dramatically reducing the dataset’s size.

With the Sunshine Act being first introduced in 2007, then shot down, then enacted as part of the ACA in 2010, and with the Centers for Medicare and Medicaid Services (CMS) now responsible for collecting this data on top of everything else it does, hopefully we find some useful applications for the Open Payments dataset.

This analysis and post were done pretty quickly, many thanks to Carol for giving me some immediate ideas and feedback! And to iPython Notebook, and the pandas and plotly libraries.

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