Healthcare law and regulations: a new perspective in healthcare marketing

Citation

Mukherjee, A. (2013), "Healthcare law and regulations: a new perspective in healthcare marketing", International Journal of Pharmaceutical and Healthcare Marketing, Vol. 7 No. 1. https://doi.org/10.1108/ijphm.2013.32407aaa.001

Healthcare law and regulations: a new perspective in healthcare marketing

Article Type: Editorial From: International Journal of Pharmaceutical and Healthcare Marketing, Volume 7, Issue 1

Healthcare law and regulations are critical environmental factors that influence healthcare marketing strategies. With the Congressional approval of the Patient Protection and Affordable Care Act and its subsequent upholding by the US Supreme Court followed by the recent re-election of its chief architect President Barack Obama, the healthcare sector in the US will be significantly transformed, bringing with it several legal and regulatory challenges that are worthy of research and introspection. The pharmaceutical industry has also considered legal and regulatory issues as among the most critical factors influencing its evolution and strategic growth. Yet, the attention given to these issues in the healthcare marketing and management literature has been scarce. As we step into the seventh year of publication of the International Journal of Pharmaceutical and Healthcare Marketing, we intend to explore healthcare law and regulation more thoroughly in our published papers – four of the five papers in this journal issue are related to this area. Further, a call for papers for a full special issue in “Healthcare Law” to be guest-edited by Dr Vivek Pande will be announced soon.

The first article of this issue, authored by Vivek Pande and Will Maas, focuses on the national epidemic of physicians’ Medicare and Medicaid fraud. Titled “Physician Medicare fraud: characteristics and consequences,” the purpose of this research paper is to outline the characteristics of physicians who have been convicted of criminal Medicare and/or Medicaid fraud costing taxpayers $60-250 billion annually. It demographically categorizes these doctors by: age; gender; geographic location; medical school attended; and medical specialty, and compares these demographics to the demographics of the medical profession as a whole. The paper then identifies: the specific Medicare fraud these physicians were charged with (e.g. billing for services not provided, up-coding, kickbacks etc.); length of prison sentence and/or probation imposed (if any); amount of fines assessed and/or restitution ordered (if any); and professional sanctions (e.g. medical license suspension, revocation, surrender) imposed (if any). Last, in light of this accumulated data, the paper makes specific recommendations regarding physician training, licensing and discipline, to reduce the amount of Medicare fraud perpetrated by doctors in the future. For the purpose of the research study, the authors gathered the names of convicted physicians from public databases (primarily, the OIG exclusion list). Recognizing the possibility of incompleteness and flaw in the database, they further cross-checked the names and verified with other public records. The authors also obtained details regarding demographics and the particulars of the fraud by searching court documents, media reports, the internet, and records maintained by the American Medical Association and state medical licensing boards. The results of the study showed that physicians convicted of criminal Medicare and/or Medicaid fraud tended to be male (87 percent), older (average age of 58), and international medical graduates (59 percent). Family practitioners and psychiatrists were overrepresented. The amount of fraud averaged $1.4 million per convicted physician. Surprisingly, despite the fact that 40 percent of such fraud compromised patient care and safety, 37 percent of physicians convicted of felony fraud served no jail time, 38 percent of physicians with fraud convictions continued to practice medicine, and 21 percent were not suspended from medical practice for a single day despite their fraud convictions. In the light of these results, the paper makes several practical recommendations to reduce the amount of physician Medicare fraud in the future such as:

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  running as many claims as possible through predictive modeling software to detect fraud before claims are paid;

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  developing metrics on the average rate of diagnoses and procedures by specialty to be used in the predictive modeling software;

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  incorporating the basics of ethical billing and the consequences of fraud convictions into the medical school curriculum and testing this knowledge on the United States Medical Licensing Examination (USMLE);

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  making fraud enforcement and punishment more uniform geographically across the country, and lastly and most importantly; and

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  encouraging and/or pressuring state medical boards to hold physicians more accountable for fraud.

The second article is a research paper by E.M. (Mick) Kolassa, Leigh Ann Bynum, and Erin Holmes with the title “Limitations and potential misinterpretation of the National Disease and Therapeutic Index.” This paper seeks to clarify the use and limitations of the IMS National Disease and Therapeutic Index database, which is frequently used by scholars and legal court proceedings to provide insights into pharmaceutical markets. Specifically, the paper discusses appropriate and inappropriate uses of the data and details the limitations as a means of drawing generalizable conclusions. These limitations result from sampling and design issues, as well as the specific method by which the data are collected and coded. Although IMS is clear and forthright in addressing these limitations, many researchers have apparently chosen not to heed these cautions and have drawn unsupportable conclusions from National Disease and Therapeutic Index (NDTI) data. The authors conclude that the IMS NDTI can provide useful insights into pharmaceutical markets, and also provide indications of potential trends or behaviours, but cannot be relied on for conclusive evidence of such phenomena in the marketplace. They suggest that the implications of drawing inappropriate conclusions from the NDTI database can range from the development of a crucial misunderstanding of the market by pharmaceutical marketers, to the establishment of erroneous theories or assumptions into the literature or even the miscarriage of justice when the data are used as the basis for a legal judgement or claim. Thus, the authors recommend users to be cautious when drawing any conclusions from these data.

The third article by Beth Ann Fiedler, Robert J. Bebber, and Reid M. Oetjen is a conceptual paper with the title “A regulatory clinical trial primer: distribution challenges and policy implications of modern vaccine development”. The article delves into the regulatory aspects of clinical trials. Global health objectives have stimulated changes to the international vaccine market. The authors suggest modern vaccine categories that will aid in the formation of standardized clinical trial processes through the implementation of suggested policy strategies. With this aim, the authors conducted a systematic review of literature for the period of 2000-2010 by searching academic databases of peer-reviewed articles (e.g. MEDLINE, PsychInfo, and Social Science Citation Index) for multiple keywords, such as clinical trial, regulatory standards, vaccine development, vaccine manufacturing, and vaccine distribution. To the authors’ surprise, the search yielded only a few items that were able to provide an adequate baseline of clinical trial processes for fundamental analysis. Consequently, the authors obtained additional material through an exploratory literature review. The method included hand-searching reference lists and tables of contents and search engines (Google Scholar) for national and international clinical trial regulatory processes, global health organizations, and trends in vaccine marketing. The authors conclude that the categorization of modern vaccine development can guide the international formulation of manufacturing and distribution policy strategies to elicit a cross-cultural global delivery system. This study contributes to academic literature threefold:

1. 1.

   categorizes vaccines;

2. 2.

   depicts the fundamental clinical trial phases vital to global health; and

3. 3.

   provides policy options driven by modern vaccine production designations.

The next article of this issue again deals with regulations, albeit from a different perspective. The article is authored by Sudhir Yadav and titled “Building regulatory capabilities for pharmaceutical firms’ internationalization.” The internationalization of pharmaceutical firms faces major barriers in terms of managing regulatory requirements in various international markets. This paper identifies the requirements related to regulations in various markets of the world. It further identifies how firms develop such capabilities, i.e. the processes undertaken by firms to develop regulatory capabilities. This research is exploratory in nature. Case study method is adopted by the author to study the requirements related to regulations in international markets and processes to build regulatory capabilities. The results of the study show that to manage regulatory requirements, firms need knowledge related to plant approval and product registration. Firms have to submit dossiers to the respective country’s regulatory authority to get plant approval and product registration. They can simultaneously apply for both to save time to enter the target market. The requirements for each market are unique in terms of format and content for dossier preparation. The dossiers need data from various departments which calls for good coordination among various functional areas i.e. production, QA and QC, R & D, purchase etc. If the firm has operations in multiple markets and offers multiple products in each market, the regulatory function is separately organized for less regulated, semi-regulated and regulated markets. Firms can use a systematic process to build capabilities for managing regulations. The research offers a process model for firms to build regulatory capabilities for internationalization. This paper is an important addition to the literature since pharmaceutical firms targeting international markets can get insights into the regulatory requirements and the process to be adopted to build regulatory compliance.

The last article in this issue is a research paper by Hardeep Chahal and Shivani Mehta, titled “Modeling patient satisfaction construct in the Indian healthcare context.” The concept of satisfaction and more specifically, patient satisfaction is of increasing interest to both academicians and practitioners. The purpose of the study is to develop a patient satisfaction scale in the Indian setting and examine the factor structure of the patient satisfaction construct. It specifically examines the relationship among items affecting satisfaction and loyalty using six hypothesized models. The data for the study were collected from 528 indoor patients who were seeking treatment from two large teaching and research hospitals in Jammu, India –Government Medical College and Acharya Shri Chandra Medical College and Hospital. Both exploratory and confirmatory factor analyses were used by the authors to verify the scale dimensions. The results revealed that patient satisfaction is a multidimensional construct comprised of four dimensions, namely physical maintenance, physician care, nursing care and internal facilities. Among the six hypothesized models, model 2 depicting the impact of dimensions on satisfaction and model 5 depicting physician care as a reflective indicator of patient satisfaction and loyalty showed good fits while the other models showed average (model 4) and poor (models 1, 3 and 6) fits. The analysis of the models indicates that all dimensions of patient satisfaction construct positively and significantly contribute towards patient satisfaction and establishes patient satisfaction as an important mediating factor between the dimensions and loyalty. Further, the study also demonstrates physician care as a reflective indicator of satisfaction and loyalty rather than a formative indicator.

We conclude with a review by Fadi M. Alkhateeb and Minh-Nguyen Do of the book “Healthcare Relationship Marketing: Strategy, Design, and Measurement” published in 2011 and authored by Ira J. Haimowitz.

I would like to thank all my authors and reviewers for contributing to the academic and research reputation of the journal. A special vote of thanks goes out to the editorial board members who have consistently helped with recruitment of reviewers, solicitation of authors, and providing valuable feedback and new ideas for the journal. I would like to acknowledge the strong editorial assistance of Naz Onel, doctoral researcher at Montclair State University. Finally, I express my sincere appreciation to the outgoing journal publisher, Dr Martyn Lawrence of Emerald, who worked with IJPHM from the very beginning and provided all possible help and support from the publishing team to keep the journal growing. I eagerly look forward to working with the new IJPHM publishing team from Emerald – Megan Beech (Publisher) and Jo Alexander (Managing Editor).

A Happy New Year from IJPHM!

Avinandan Mukherjee