Saturday, May 2, 2015

How Does The IOM Ignore The Single Most Important Conflict of Interest?

Another free 28 minutes of work for corporate America on their prior authorization procedure.  I won't type out the dialogue and arbitrary holds along the way.  This time I was referred by the pharmacy to one of the major Pharmacy Benefit Managers (PBMs) and after negotiating their queue and listening to about 15 minutes of pure nonsense (privacy notifications for veterans, Medicare programs, etc) I reached a human being.  At that point he advised me that the PBM was not responsible for this particular prescription and I had to contact their insurance company.  He gave me the number and connected me, but of course it involved a queue that had similar recorded messages and then had a difficult time understanding my voice saying: "I am a provider."  I eventually spoke with a human being who had to look up the circumstances that would allow her to approve the prior authorization.  She had no apparent medical training and the criteria that she was reading out of a book could have been applied as easily on the front end by a pharmacist to save me from 28 minutes of free work for a PBM.  And keep in mind this was one prescription that the patient had already been taking.

There is really no excuse at all for this ongoing charade.  At the same time professional groups like the AMA are not able to take any action that would alleviate this burden.  Managed care companies have institutionalized these rules in most states for decades at this point.  It was shocking when I first discovered that.  Look at the state statues and realize that rules stacked against you and your patients are the law.  The law mandates that you need to do all of this work for free for a managed care company.

Today,  I came up with a new idea.  Attorney Generals in the State of Minnesota have a record of activism against health care companies and unfair practices.  I decided to send a letter of my most recent experience with a PBM to the Attorney General's Office along with a copy of a letter I wrote as an opinion piece the Minnesota Medicine a few months ago.  That letter details how these practices disproportionately affect psychiatrists and patients with mental illnesses.  The proposed solution to the problem is a very simple one.  Instead of expecting physicians or their surrogates to endure a 28 minute telephone gauntlet in order to speak to a non professional who is unsteadily reading approval instructions out of manual - give that manual directly to the retail pharmacist.  The 28 minute call would evaporate into a 2 minute call or less.  Better yet, take the physician out of the loop entirely.  There is no way that a physician should collude with a business decision to make money for a managed care company.   If the company refuses the physician order, it should clearly be documented and the next choice should be made (if possible) and designated as not the optimal choice by the physician.

That brings me to the all important issue of conflict of interest.  You can read blogs all over the internet that discuss the issue of pharmaceutical company influence ad nauseum.  The Pharmascolds remain preoccupied with this issue and are apparently unable to see that businesses run according to business ethics (whatever that might be),  clinical trials of practically all drugs are imperfect and no matter how many repeat studies the Cochrane Collaboration wants that basic fact will not change,  and that the FDA is a flawed politically biased agency rather than the guarantor of drug safety.  These are some of the common fallacies that I see played out each day across a number of settings.  At any rate,  just based on the frequency of enraged posts any casual reader would think that this is a daily crisis.  The only significant variant is that physicians and psychiatrists in particular are blamed for the ethical shortcomings of both American businesses and government.

But when you get right down to it - what is conflict of interest?  It is probably useful to use existing definitions rather than my direct observations for the purpose of this post.  There is no more respected body than the Institute of Medicine.  They routinely publish books on health care policy that are widely quoted and their definitions carry some weight.  I don't like their entire conflict of interest policy because they equate the appearance of conflict of interest with conflict of interest.  Congress would probably also have an issue with that definition.  Their basic introductory definition from the reference at the bottom of this page is included in the table below:

To keep it simple let's consider the primary interest in this case to be the welfare of patients.  The secondary interests in this case are defined as:  ".... financial gain but also the desire for professional advancement, recognition for personal achievement and favors to friends and family or to students and colleagues.." (p. 47).  They qualify this by saying that financial gain is not necessarily bad and that policies reasonably focus on financial gains but:  "When a secondary interest has inappropriate weight in a decision and distorts the pursuit of a primary interest, it is exerting undue influence."  They go on to define the conflict as any set of circumstances that arises that does not necessarily compromise the primary interest of patient welfare but that merely creates a risk for doing so.

How does this apply to prior authorization?  Prior authorization certainly sets up a secondary interest.  In this case the interest is the financial well being of the managed care company or PBM and in the case of publicly held companies - their shareholders.  From the perspective of the physician the secondary interest is maintaining employment which is the worst case scenario of "professional advancement."  Most employers and insurance companies stipulate that in order to stay employed you have to actively participate in all managed care prior authorizations and utilization review.  I am sure that astute politicians will claim that these surrogates are necessary to control runaway health care costs.  That does not explain how one could come up with a new sets of businesses worth tens of billions of dollars that make their money strictly from rationing pharmaceuticals.  These are companies that arise out of thin air based on the questionable theories of politicians and business people.  It does not explain why they are currently in the business of rationing very inexpensive generic drugs.  It certainly does not explain how there is a direct correlation between managed care rationing and an over 300% increase in health care administrators in the industry.  And most importantly it does not explain the complete failure of the managed care industry to contain health care costs.  In short, anyone espousing the need for expensive administrator heavy systems to control runaway prescribing does not have a leg to stand on.  The secondary interest in this case is clear.  Prior authorization is there to make money for companies and make a lot of it and physicians are forced to participate.      

The second issue here is an interesting and important one.  Physicians don't have to be convinced by flashy ads, salespeople, free samples, or financial inducements.  They are simply coerced.  When their patients are standing in a Walgreens or CVS, they don't have the luxury of saying no or even putting it off until the next day.  A patient who they have seen and assessed needs a medication and something has to be done.  They have to jump through a managed care hoop in order to get the medication that they have already prescribed - paid for.  The only question is: "How high is that hoop?"    

When people talk to me about all of the pharmaceutical company influence and evil marketing practices I don't even blink an eye.  I would like to know how the systematic coercion of the professional judgment of physicians by for profit companies on a national scale is not a far bigger problem than trinkets and pizza from the pharmaceutical industry?  There is no risk of compromising the primary interest of patient welfare.  Patient welfare is always secondary to financial interest of the company involved.  The only case where it is not is if the company agrees with the prescriber, but even then they have created strong disincentives (the gauntlet-like telephone queue) to the accomplishment of the primary goal of prescribing what the physicians considers the best possible medication.

I would like to know how the Institute of Medicine can ignore this?           

George Dawson, MD, DFAPA


IOM (Institute of Medicine). Conflict of Interest in Medical Research, Education, and Practice. Washington, DC: The National Academies Press; 2009.

Supplementary 1:  I consider the quotes from the IOM reference to be fair use under the US Copyright Law.


  1. I don't think managed care horrors and disease mongering by pharmaceutical companies are mutually exclusive.

  2. I don't think managed care horrors are even in anybody's radar as a conflict of interest. Disease mongering can be ignored. An MCO interfering with your treatment plan through institutionalized coercion can not.

  3. Physicians have, and are held to, higher standards of professional ethics. Beverage companies sell stuff that promotes diabetes, supplement hucksters make dubious health claims, insurance companies run feel-good ads that obscure their cost-containment mandate. These are all huge "conflicts of interest" from a physician's point of view. But COI doesn't apply the same way to entities with less stringent professional ethics. Only in extreme cases does the government step in, e.g., limit tobacco and alcohol ads.

    Yes, this makes our burden harder. For the most part, it isn't up to pharmaceutical companies to avoid biasing us with their promotional efforts. It's up to us. Likewise, no one will force PBMs to sideline their economic interests. It's not a COI for a business to maximize return for its shareholders; it's the major reason they exist. Indeed, a concern for patient welfare might be criticized, e.g., at a shareholder meeting, as a COI that impedes this primary aim.

    Doctors are held to standards that would be absurd in virtually any other business. But these higher ethical standards give us a special status in society, and allow our patients to trust us. The corporatization of medicine invites physicians to trade this away: "if you can't beat 'em, join 'em." I fear for both our profession and the public as this happens.

    None of this invalidates your frustration, which I share, with PBMs. While we're busy maintaining our ethics and watching out for COI, other "stakeholders" in health care make money hand over fist at our expense. It's maddening. Personally, I've tried to insulate myself from this in my practice, but there's trade-offs there too. No perfect solution.

  4. It seems to me that we have no material disagreements. We have the same view of businesses in a capitalistic society and who is responsible for ignoring advertising. What I see you doing however is explaining away the coerced conflict of interest involved when physician judgment is routinely compromised in order for health care companies to make money. This is not the equivalent of applying professional standards to the business world. That is using your professional credibility to what amounts to a decision by an MBA. Knowing that I consider ethics to be little more than politics in many cases. this is basically a manipulation of the ethical landscape by politicians and the business world and collusion by every affected physician.

    I would also dispute the "special status" argument that is commonly used to place any number of demands on physicians. How do I have "special status" if a high school graduate decides if I can prescribe duloxetine or keep a suicidal patient in a hospital? How does the special status mean anything when academics and outstanding clinicians are replaced by MBAs? How does "special status" work when treatment guidelines are based on whatever the MBAs think rather than any scientific evidence? Where does "special status" fit when the entire system for treating severe mental illness has been decimated in the past 30 years by the same companies who we are now proxies for?

    This is more than my frustration, this is the destruction and replacement of an entire profession that is supposed to be focused on patient welfare and professional competence. Being focused on Big Pharma as a source of that completely misses the mark.

    1. I guess you see me as a "pharmascold". I don't mean to antagonize you, and will spare you further commentary on your blog if I irritate you. The truth is, you raise some good issues... I liked your recent post about bicycling too. This post of yours, and my first comment, triggered a post of my own I'm writing today.

      I confess I don't get your point about COI. PBMs don't have a COI by putting profits first, nor does the IOM typically make pronouncements about other institutions or facets of society that affect health. The only COI argument I see here is whether doctors should do business with entities like PBMs that distort medical practice. Again, the onus is on us to be principled. I grapple with this myself; as mentioned I try to insulate myself, by not being on insurance panels etc, in order to practice in a more principled and medically appropriate way. But then I'm denying care to other patients, being elitist, etc. Honestly, I'm open to any thoughts or suggestions.

      The special status of physicians has eroded mightily in recent decades, your examples are very apt. You wrote: "I would like to know how the systematized coercion of the professional judgment of physicians by for profit companies on a national scale is not a far bigger problem..." Even a pharmascold like me agrees it's a MUCH bigger problem. The question is how to address it — it's much easier to caution my colleagues and the public about Pharma than to change the basic reality of corporate America. Maybe your letter to the Attorney General's Office will help. Maybe taking the profit out health care on a national scale is the ultimate answer. Beleaguered physicians disagree violently over this, as it soon reduces to left/right politics. If physicians (and patients) could find common cause enough to refrain from internecine squabbling, we might get the ship pointed in the right direction. It's a huge challenge.

    2. I am not irritated or antagonized. In fact, I thank you for your post.

      Once again we are in basic agreement and I now understand that all of the time and energy expended on Big Pharma is simply because we are completely ineffective against the elements of corporate American that are truly destructive. Big Pharma is targeted as the low hanging fruit.

      That is the first time I have seen anyone (except myself of course) make that statement.

      I am glad to hear that I am not in a parallel universe.



    3. PBMs are a much bigger problem than Big Pharma. I've read the prospectuses of some Big Pharma and I didn't see anywhere that they had a fiduciary duty to physicians over shareholders. Their principal obligation is to the shareholders and anyone who imagined differently is being naive. So expect them to be promotional and biased. For that reason I am not really a pharmascold (which ultimately is a position of hostile dependency for a psychiatrist if you think about it) but a KOL-APA scold. As I have mentioned elsewhere, I kind of expected the KOLs to be the superego to the ego and id of pharma, but they have failed in that task. APA through diagnostic inflation allowed them to essentially medicate situations and Axis 4 issues. And BTW psychiatry isn't the worst example. That would fall on the pain management fiascoes of the 1990s leading to pain as the fifth vital sign.

      Getting back to PBMs, they are useless middlemen and essentially trolls who just waste everyone's time. I'm off the grid with them except for one situation I can deal with.

  5. Low hanging fruit? Interesting.

    I've always seen it as more of the same kind of fruit but they do make a rather simple target.

    Much easier to understand physicians taking trips on drug company money than to understand how non-medical personnel at a specialty benefit management company could keep an eye doctor on the phone for over three hours so they could turn around and approve two MRIs that were not valid tests for Horner's syndrome without telling him. Then, after finding out their mistake, having the insurance company refuse to pay for the correct MRI protocol.

    So, they saved a lot of money by paying out over $2,000 to discover that someone had cervical DDD. Outstanding.

    And, speaking of easier targets, it sounds remarkably similar to the attacks on all psychiatrists as the face of evil by using examples of some really bad ones vs. tackling the hydra created by society's lack of understanding and near total disregard for the mentally ill and mental health in general.

    1. Agree RB,

      Big Pharma is an easy target for many reasons. You can have a field day just focusing on their marketing efforts and business behaviors and you will always be able to maintain a smug posture. But let's face it - you can do the same thing critiquing the very shaky science of clinical trials. There does seem to be a bit of silence when the FDA gets into the mix and suddenly approves the drug for the market on the basis of those trials or (even better) overrules their own scientific committee to get the drug out into the marketplace. Sure you can keep critiquing Big Pharma at that point, but it's all politics folks. Politics and a regulatory agency attitude that puts imperfect drugs in the market and waits to see what happens.

      Your example about the MRI prior authorization is a good one that I have seen played out thousands of times. Obstruct the physicians who know what they are doing with non-physician employees who do not know what they are doing. And of course manage those employees with a raft of MBAs studying some ridiculous guidelines put together by non-medical consultants. Standard managed care hospital administration these days involves a whole silo of non-physicians telling the doctors what to do and who to discharge.

      I think the attacks on psychiatry have been the leading edge of disenfranchising physicians in general. The business types and politicians have engineered a selective ethical environment to confuse and manipulate people. They are counting on the fact that all physicians will eventually take a dive "with their ethics on".

      Makes me glad we have bloggers to keep psychiatrists "honest" - - - - not!

  6. I personally think the same ethics apply to physicians not agreeing to accept malware from managed care as it is to employ critical thinking about pharma and device marketing. I've been dealing with managed care since it started in California in the early 80's where I was then practicing, and it helps to know all their tricks and their weeknesses.

    I refuse to spend more than a few minutes on the phone with reviewers, and if I have problems with them I tell them they they don't know what they are talking about, but they are welcome to kick me off their provider panel if they don't like what I'm doing. I also get the number of the reviewer and am quite willing to tell them they can explain their denial to the patient - who will call them personally - and if my recommendations are not approved, I will also recommend to the patients that they complain to their employer about their coverage (I've rarely had to go to the last step).It may help that I'm a professor of psychiatry, but I doubt it.

    1. In general what you say is accurate but I think there are some important differences. I think the distinctions are important because without them it creates the illusion that Big Pharma is the main problem and that something can be done about those problems. Neither of those statements is true. Physicians are also implicated in the Big Pharma problem and that implies that physicians need to be controlled by businesses and governments. The differences are:

      1. Advertising versus coercion: If I prescribe some new medication and I am ill-informed or I use a high risk medication for a condition that can be better treated by something else – that’s on me. I am an expert and I should know those things and furthermore I should be able to apply more than fast food critical thinking to the situation. That is certainly contrary to Pharmascold hyperbole, but I have not really met physicians who were incapable of this.

      2. The ethical environment versus professional ethics: It is evident to me that the healthcare industry and governments everywhere are engineering an ethical environment against physicians. I saw this originally with the implementation of managed care in general since the 1980s. In the early days all it took was a few federal and state regulations that were managed care friendly and the marketing slogan straw man: “Things have changed doctor. You are no longer in charge.” The AMA, APA, and every physician professional group and association caved into that strategy. It was bolstered by quasi-research, basically spread sheet exercises to show that managed care was more cost effective and produced the same result as fee-for-service. The marketers started to use “fee-for-service” pejoratively. They have recently hauled out the same playbook for collaborative care. Physicians remain ignorant of the end game and the exceptions to their ethics. In doing so they put the entire profession at risk.

      The end game here is quite simply to bring all medical decisions under the control of businesses and governments. No more mandarin-like role for physicians. Physicians will be agents of governments and businesses. There is the illusion that a small number of private practitioners might be viable. They will be totally powerless in that environment.

      That is the real cost of a disproportionate focus on Big Pharma and as far as I can tell no focus on managed care and their coercive techniques.

      I agree that being a professor does not confer any business privileges. In fact, I am aware of many situations where professors who were excellent teachers, researchers, and role models were the first to go when managed care took over. They needed to be replaced by more “managed care friendly” physicians. That equates to removing anyone who is a critical thinker because by definition they are insubordinate. I also learned recently that in some of these systems that physicians qualified to be department heads would only qualify if they also had an MBA degree.

      That says it all.

    2. I think we need to focus on both, as I do in my blog, but I agree with you that managed care is not getting nearly enough attention.

      We have more power than we think, since we are a shortage specialty. I don't know of a single psychiatrist who quit a physician-unfriendly job and is now starving. Private patients often can't get in to see someone for many many weeks. The problem is, most psychiatrists are a bunch of wusses who go with the flow, and the leaders of the AMA and APA are a bunch of professional cavers,

      (Unlike you, while I know a lot of good psychiatrists like the kind you speak of, I also do know quite a number of psychiatrists who diagnose after a 15 minute interview and label any moody person as "bipolar." It's very common here in Memphis, where Akiskal did his original work on what I call "bipolar, my ass, disorder").

    3. I had one final association to this thread. My first job as a psychiatrist was as a Medical Director of a CMHC. In that capacity I supervised a team of case managers and we met every morning in a team meeting. They were curious about why I had eliminated the word "manipulative" from my vocabulary in describing some patients where they frequently used the word.

      I told them: "You only have to use to word 'manipulative' if you are really worried about being manipulated."

      I suspect that emotional reasoning is a lot of what drives Big Pharma hyperbole and for that matter anti-psychiatry hyperbole as well.

    4. May I implore you to run for APA President instead of the usual milquetoasts? Love the attitude.

    5. I did try to run a few years ago. I think my name was in front of the nominating committee with 2 others. They picked the other 2 and told me if I wanted to be on the ballot, I had to get hundreds of members signatures in the month or two before the election (I don't recall the exact number).

    6. So basically that tends to exclude any psychiatrist who is busy with patients and favors those who have a position where they are not. And free to run around collecting signatures. Which would be academicians.

  7. George, thanks for directing me to this blog. As I mentioned to you, I explored these ethical issues in depth 20 or so years ago in my book The Ethical Way: Challenges & Solutions for Managed Behavioral Healthcare. For better or worse, the book is not outdated and was recently re-reviewed in Psychiatric Services. The ethical issues are quite complex, including how do we improve quality of care? Numerous studies indicate that a third of care is unnecessary and another third poor. I was just in Israel and informed of a new study that indicated EHR computer guidelines for accepted best practices improved physician decisions dramatically (although of course each patient is an individual). You don't hear about managed care so much because it is so ingrained and now even increased under the guise of Affordable Healthcare, which avoided a not-for-profit public option. As long as Pharma and ACAs are for-profit and complement each other, things will get worse. -Steve Moffic, M.D.