A new Massachusetts law mandating the implementation of healthcare information technology systems and governing consulting deals between medical-products companies and providers is drawing both praise and criticism from industry stakeholders who say the ambitious new rules could test the waters for national legislation on both issues.
I think what we have an opportunity to do is a small test of change to see how this could work, said Jim Conway, senior vice president at the Institute for Healthcare Improvement, a Cambridge, Mass., not-for-profit focused on improving patient care.
The two provisions are part of a sweeping set of healthcare laws promoting cost containment, transparency and quality improvement. Signed last week by Gov. Deval Patrick, the legislation is the latest in a string of state reforms aimed at supporting Massachusetts efforts toward affordable, high-quality universal healthcare.
Under the new law, medical-device makers and drug companies will be required to disclose any consulting fees or in-kind giftssuch as lunches accompanying continuing-education sessionsin excess of $50 provided to physicians. Medical-products companies will also have to issue annual reports disclosing the services provided by each medical consultant. The disclosure provisions, said supporters of the bill, will eliminate phony consulting deals and other gifting practices that pay providers to use certain products. The issue made national headlines last year when five devicemakers agreed to pay $311 million following a federal investigation of whether or not they provided cash inducements, expensive trips and other perks to surgeons under the guise of consulting contracts (Oct. 8, 2007, p. 6).
This legislation requires that companies disclose information about marketing practices that taxpayers are footing the bill for, said Massachusetts state Sen. Mark Montigny, author of the original disclosure bill that was incorporated into the broader legislation.
The new laws IT provisions mandate hospitals and community health centers have physician order-entry systems by 2012 and electronic health-record systems by 2015.
Tom Keefe, senior director of state government relations for the Healthcare Information and Management Systems Society, said in a statement that while hes not certain Massachusetts IT mandates will have a direct effect on mandating nationwide use of EHRs, the legislation is an example of states realizing that healthcare today is an industry characterized by revolutionary technological advances.
The new law also will establish a medical-home demonstration project and will also require the University of Massachusetts Medical School to expand its residency slots for students committed to primary-care medicine and working in underserved communities.
But while some stakeholders are praising the legislation as a bold step toward adopting quality-improvement technology and eliminating unscrupulous industry-gifting practices that drive up costs, others question whether providers will be able to afford the IT mandates and say the consulting-disclosure rules could have a negative impact on medical research and continuing education.
David Smith, senior director of health data analysis and research for the Massachusetts Hospital Association, said that although the MHA supports the IT requirements, it is concerned about costs associated with the mandate. About 15% of Massachusetts hospitals have already implemented computerized physician order-entry systems and another 15% are at a fairly advanced state of implementation, Smith said. But for the remainder, particularly those who are in some financial distress, we have some concern about their ability to meet that ambitious deadline, he added, referring to the 2012 target.
Order-entry systems can cost between $2 million and $4 million to set up and cost $250,000 to $500,000 annually to maintain, said Smith, who believes state health officials may need to consider a funding mechanism such as a stakeholder tax to support the installation mandate.
Critics of the consulting disclosure rules take far greater issue with Massachusetts new healthcare law, however. We think that its over broad and that it threatens providers participation in the development of vital new products, said Chris White, executive vice president and general counsel at the Advanced Medical Technology Association, a Washington-based medical-device lobbying group. White argued that the reporting provisions will ultimately require drug and medical-device companies to disclose proprietary information about research projects and continuing-education efforts, and that it may also set off a chain reaction of states developing their own legislation governing consulting relationships between physicians and industry.
Ken Johnson, senior vice president of the lobbying group Pharmaceutical Research and Manufacturers of America, echoed Whites sentiments. The disclosure requirements subjects all of the physicians, academic institutions and hospitals involved in such trials to publicity in a form that may be difficult to understand and likely will generate unwanted and unnecessary public scrutiny, Johnson said.