Medical firms give thousands to S.D. doctors
By Jonathan Ellis
October 11, 2014 – Drug and medical device companies spent more than $1 million on South Dakota doctors in the last part of 2013 on items that included consulting fees, royalties, research grants, travel expenses and food.
More than 1,100 of the state’s doctors received some type of payment from a drug or device manufacturer, but it was a small number of doctors who collected the lion’s share of that money, according to an Argus Leader analysis of the data. Only about 60 received more than $1,000 and of those, a dozen received more than $10,000. The money represented payments companies made to or on behalf of doctors over a five-month period from Aug. 1, 2013, to the end of that year.
The data, made public by the Centers for Medicare and Medicaid Studies last week, were part of a nationwide release that showed industry payments of almost $3.5 billion to 546,000 individual doctors — including dentists and chiropractors — and 1,360 teaching hospitals in five months. The release, mandated by the Affordable Care Act, was the largest ever documenting the ties between industry and health care professionals.
Advocates for transparency in the health industry had hoped the data would shine a light on potential conflicts between companies and doctors — for example, a doctor who prescribes drugs from a manufacturer that also pays the doctor “consulting fees.” Such relationships are thought by experts to inflate health costs through unnecessary prescriptions and surgical procedures.
Allan Coukell, the senior director of drugs and medical devices for The Pew Charitable Trusts, hailed the release for putting “more information in the public domain than we’ve ever had.”
“We know that most physicians have some financial relationship with the industry, and this confirms that,” Coukell said.
Medical and industry groups criticized the release — which amounted to a giant data dump. More than a third of the payments were not linked to specific doctors because of errors in the data. The South Dakota State Medical Association joined other state groups and the American Medical Association in August asking the government to delay the first release until next year, in part because many clinicians were unaware the data was going to be made public.
Practitioners had an opportunity to register and review the accuracy of the data before it went public, but Dr. Mary Milroy, the SDSMA’s president, said the process was cut short. When physicians were allowed to register, it required them to navigate a cumbersome process that took up to 45 minutes. Milroy said many doctors didn’t have the time.
The categories under which physicians allegedly received industry payments also were misleading, Milroy said. Doctors, for example, who took textbooks or other materials for continuing education purposes appeared in the data as though they had taken money from industry companies.
Dr. Scott Lederhaus, a California neurosurgeon and president of the Association for Medical Ethics, had been anxious to see the data. But it proved cumbersome and was not user-friendly when it finally came out.
“I was very disappointed,” he said by email.
Identified South Dakota clinicians were a tiny piece of the $3.5 billion in payments made nationally. Even so, a handful of individuals stood out.
Dr. Allison Tendler, an ophthalmologist who practices at Vance Thompson Vision, led the state with almost $168,000 in payments during the five-month period. Two other doctors at Vance Thompson, including Dr. Thompson and Dr. John Berdahl, were in the top 10.
Matt Jensen, the CEO of Vance Thompson Vision, said Tendler is in a unique situation. For several years, she has been the face of a national advertising campaign for Allergan’s dry-eye drug Restasis. Tendler used the drug herself, Jensen said, and Allergan was looking for a health provider who uses the drug to front the campaign. Tendler replaced a Hollywood actress.
The vast majority of Allergan’s payments to Tendler were listed as a “consulting fee,” with slightly less than $3,000 in the category of travel, lodging and food.
The data credited Berdahl with more than $82,000 in payments. Thompson showed more than $25,000 in payments and almost $80,000 more in research grants from Alcon Research.
“We do an incredible amount of research,” Jensen said. “We tend to be a place that are early adopters of technology. Not only that, but we tend to be early adopters and perfect it for the rest of the country.”
The doctors share their research with others, including in poor countries with limited access to medical care, Jensen said. The data, for example, show that Berdahl took a trip to Armenia. Meanwhile, the clinic’s international reputation routinely attracts patients from around the world.
“I think the community is very aware of our role in the industry,” Jensen said. “We go to national meetings, and they are like heroes there.”
A Rapid City orthopedic surgeon, Dr. Stuart Fromm, received the second highest amount in payments, at more than $127,000. The nature of those payments was listed as royalties made by two companies: DePuy Synthesis and Smith & Nephew, both of which sell orthopedic implants.
Fromm said he receives royalty payments on devices he’s patented. Those payments, he said, are different than the consulting fees that some doctors receive from drug companies, which he called a “gray area” in terms of medical ethics.
“There’s a big distinction between a consulting fee and a royalty,” he said.
A review of patent registrations show that Fromm is a co-inventor on a dozen devices that received patents between 2002 and 2014.
Fromm also said that he receives no royalties from devices he uses, or for devices that any doctor uses in a facility where he practices.
“There’s no way it can bias my decisions,” he said. “There’s no way anybody can claim a kickback.”
Lederhaus said that doctors are not allowed to receive royalty payments for devices they use because it creates a conflict of interest.
Sioux Falls doctors
Two Sanford Health doctors and two Avera McKennan doctors were among the top 10. The federal data showed that Dr. John Palmer, an endocrinologist with Sanford, compiled more than $50,000, while Sanford psychiatrist Rajesh Singh had almost $40,000.
Lois Marshall, Sanford’s chief compliance officer, said the health system’s physicians are not banned from accepting payments from industry companies, but there are safeguards and controls in place to prevent abuse. Doctors are required to have agreements that spell out the terms of their outside work.
“Those agreements have to be in writing,” Marshall said. “They aren’t just fly-by-night payments. They’re legitimate services provided by these physicians on behalf of those companies.”
The data showed that Avera McKennan cancer doctors Ahmed Galal and Kelly McCaul received $70,000 and $42,000, respectively.
Lindsey Meyers, Avera’s spokeswoman, said the health system requires doctors to report outside income to the Internal Revenue Service. Avera also has other policies, although she declined to comment on the specifics.
Meyers said last week’s data release did not help consumers identify which doctor-industry relationships are beneficial and which are not.
“Avera really does feel that transparency is a good thing for patients,” she said. “Transparency with context is a powerful thing.”
Top industry payments to doctors
10 South Dakota clinicians who received the most industry payments between Aug. 1, 2013, and Dec. 31, 2013 (does not include industry research grants)
Allison Tendler $167,857.46
Stuart Fromm $127,115.19
John Berdahl $82,171.69
Ahmed Galal $70,071.89>
John Palmer $50,231.94
Kelly McCaul $41,988.53
Rajesh Singh $39,739.42
Vance Thompson $25,286.81
Chandar Singaram $23,067.36
Matthew Tschetter $12,008.96
10 companies making the most payments to South Dakota clinicians
DePuy Synthes Sales
Bristol-Myers Squibb Co.
Top payments by category
Compensation for services other than consulting, including serving as faculty or as a speaker at a venue other than a continuing education program
Royalty or license
Travel and lodging
Food and beverage
Space rental or facility fees(teaching hospital only)
Compensation for serving as faculty or as a speaker for a nonaccredited and noncertified continuing education program