Healthcare Analytics – Analyzing the Cookie Jar

Healthcare analytics can be used to identify successful treatments, control costs, and make processes more efficient.  It can also be used to shed light on practices and industry relationships that might not be considered entirely healthy for the industry as a whole.

It is no secret that drug manufacturers make payments or provide services to physicians in an effort to strengthen their relationship with these providers.  Providers have long argued that these practices in no way influence their decision on which drugs they prescribe to their patients.

ProPublica, ( an internet news site, has used this public data to create a database on providers and how much they collect through these payments from drug and medical device manufacturers.  They have made this database available through their site and you can look up the payments reported as paid to your physicians from these vendors.

analytics cookie jar

Some payments are as innocent as paying for a lunch, while others can be up to millions in consulting and advisory fees.

This morning (3/17/16), they released an article that used Medicare Part D payment data to compare the level of payments received by drug companies to the tendency of physicians to describe brand name drugs over generic brands.

Doctor Payments and Brand Name Drugs

According to their study, the industry average from this Medicare payment data is that about 20% of all prescriptions are brand name versus generic drugs.  For physicians receiving $5000 or more in payments in 2014, the average is over 30% of all prescriptions, about two or three times as much as providers receiving no payments from drug companies.

The article goes on to provide statistics on how pervasive these payments are in the industry, according to the article, 9 of 10 cardiologists writing 1000 or more prescriptions per year receive payments from drug manufacturers.

This practice is not illegal or harmful to patients, it simply shows that these relationships increase the cost of healthcare by promoting the use of drugs that are much more expensive than their generic counterparts that often have identical chemical contents.

As we know, patients are rarely educated consumers when it comes to selecting the appropriate medication for their conditions.  They trust their physicians to prescribe the best medication for their illness.  Although this issue is not in question, it seems that doctors don’t always consider the most economical purchasing choice for their patients, all things being equal.  This relationship between these payments and drugs chosen for prescriptions demonstrate that possibly the bond between the drug manufacturer and the physician may be influencing this decision at the expense of the patient.

Whether you believe this or not, healthcare analytics will provide more of these types of revelations in the future as compensation for individuals and organizations is compared against the healthcare decisions they make.

In congress, it is difficult to connect large political donations with the endorsement of specific legislation assisting these contributors since they often benefit others as well.  However, everyone knows that these corporations make these donations because they benefit from them.

The same can be said about payments from drug manufacturers to physicians.  Drug companies would not be making these payments unless they generated more revenue than the associated cost.  As long as this holds true, we can expect this practice to continue.

Analytics can be used to expose these relationships with data that is verifiable and statistically relevant.  We no longer have to rely on anecdotal evidence or rationalized explanations.  In this case, the relationship is clear, payments to physicians influence the rate of brand name prescriptions.  If we decide as a society that this issue requires steps such as increased regulation or scrutiny, the effect of these actions can be measured as well.


By Kalon Mitchell, President MEDTranDirect