A recent $3 billion settlement between drug giant GlaxoSmithKline and the FDA really got me thinking. On one hand, it’s a breathtakingly huge number, breaking the old record of $2.3 billion set by Pfizer a couple years back. And there are some initial indications that the pharmas may be cleaning up their act a bit, expanding their compliance departments and reining in their sales forces in order to avoid paying such fines in the future. So maybe this is a success story, and the FDA should increase their oversight of other areas of medicine (notably devices) to improve safety and quality in healthcare. Or maybe not.
There’s a great story in the book Freakonomics about an Israeli daycare. The daycare staff were frustrated with parents who were late in picking up their children, and so they instituted a system to charge parents $3 per incident. The rate of late pickups promptly increased rather than decreased. Why?
In our society, good behavior is enforced at multiple levels. The legal system is simply one of those levels. For example, most of us don’t really struggle with the decision about whether to go rob convenience stores. We have been so indoctrinated by our culture that we wouldn’t think about it. And if we did think about it, the social consequences of getting caught (lost reputation, damaged personal relationships, potentially lost job) would bring us quickly back to reality. The legal consequences (jail time, fines) are actually small in comparison. Not that society doesn’t need legal consequences, but they’re better thought of a last defense than the primary deterrent.
What happened in that Israeli daycare is that the $3 daily fine converted tardiness from a socially regulated misdeed into a quasi-legally regulated misdeed. And $3 turned out to be less burdensome than the formerly guilty conscience from knowing the daycare staff were watching your kid overtime for free.
Is there a healthcare industry analog here? I believe so. When we rely on the FDA and other regulatory/legal mechanisms as the primary means of enforcing good medical industry behavior, fines become simply the cost of doing business. And that encourages companies to push their behavior right up to the limits of the law and occasionally a bit beyond it.
What we really need are stronger mechanisms for healthcare entities to hold each other accountable for good behavior. Healthcare can learn a lot from emerging trend in corporate social responsibility (CSR) of how this can work. Just to give one example, purchasing departments from large health systems could refuse to do business with vendors who engage in questionable sales/marketing practices. Particularly given that healthcare has a disproportionate share of nonprofit and faith-based/value-based companies compared other industries, this ought to be doable. Then the FDA and other regulators can focus on being the police for those cases that slip through.
Brian R. Jackson is Associate Professor of Pathology (Clinical) at the University of Utah, and Medical Director of Informatics at ARUP Laboratories. He blogs at Future of Diagnostics.
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