Monday, April 28, 2008
BLOGSCAN - "Regulatory Capture," Heparin and the FDA
On the Hooked: Ethics, Medicine and Pharma blog, Dr Howard Brody discusses the recent case of toxic heparin (see our most recent post here) in terms of "regulatory capture" of the US Food and Drug Administration (FDA). Regulatory capture occurs when a regulatory agency starts to view those whom it is supposed to regulate as clients (rather than viewing the general public as its client). More comments on this issue by Dr James Gaulte can be read on the Retired Doc's Thoughts blog.
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In every business transaction the ultimate question is: Who is the customer? When buying a house, this is the wife. (Sorry guys.) This carries with it the issue of: Who is the decision maker? DTC ads may drive demand, but the doctor is the ultimate customer.
A recent flurry of articles has appeared about a situation at the M.D. Anderson Cancer Center regarding the increased profits and reduced nonpayment due to a "pay first" policy. A tax supported, nonprofit, part of the University of Texas system, this institution takes advantage of it's status to also garner large donations. What we see here, from my perspective, is the institution becoming the ultimate customer, patients are incidental to the operation.
The case in question focuses on the demands of the institution for rather large sums of money, $45,000 for initial test, and then an additional on the spot payment of $60,000 for continued treatment. At one point "a payment representative accompanied the doctor into the exam room...(and) this was an example of a coordinated teamwork approach." (April 28.2008 WSJ Bad Debts Prompt Hospitals to Demand Patients' Cash Upfront)
From the April 4, WSJ Nonprofit Hospitals, Once For the Poor, Strike It Rich we learn that the bulk of the hospitals in the US are nonprofit, they have a higher percentage of hospitals in the black (77% v 61%), and a smaller percentage of it's income is spent on charity care than for-profit hospitals. All the while CEO compensation rivals or surpasses that of for-profit companies.
The ultimate customer in these situations appears to be the institution, not the patient. Payment first, treatment second, places financial gain as the primary driver in these transactions. Staff salaries, perks are the goal, not patient treatment. The April 4, WSJ article points out questionable expenses as part of hospital operations having nothing to do directly with the hospital or patient care. Out of market advertising being but one example.
Much has been made of alternatives for the patients involved. The patient reality is many nonprofit's have used their position to eliminate competition. They are the only service provider in a given geographic area, thus allowing them monopoly status.
Much like the FDA example, the institution itself has become the focus of the operation. We have seen a shift from safety and patient care to a focus on institutional priorities. Dr. Gaulte is correct: "Follow the money."
Steve Lucas
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