Device Manufacturer Payments to Physicians May Influence Hospitals’ Purchasing Decisions - New Research Insights

Medical device costs are a large component of health care spending and the industry makes substantial payments to physicians. These device payments are larger than pharmaceutical industry payments and most hospitals have affiliated physicians receiving device payments. Medical device technology is essential to the prevention, diagnosis, and treatment of illness and disease, so it is important to know how device purchase decisions are made.

A new study by Alon Bergman, PhD, University of Pennsylvania, Matthew Grennan, PhD, University of California, and Ashley Swanson, PhD, Columbia University, investigates the complex world of medical device industry payments to physicians. Key points from the study include:

• Device manufacturer payments made to physicians are associated with hospitals’ procurement decisions favoring the device firms making the payments.
• Certain types of payments are more heavily associated with increased device spending.
• When a hospital’s physicians receive a large increase in device payments, a large increase in the hospitals’ purchases of the paying firm’s products follows.

On the all-important question of quality, this research explores how payments to physicians may be associated with hospital procurement of suboptimal quality devices.

This study was funded in part by NIHCM Foundation through the Research Grant Program. Research Insights summarize outstanding health services research.

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