• act as promotional speakers or writers on behalf of companies; or

• have a financial interest in a medical product company whose products they prescribe, use, or recommend.

In addition, conflicts of interest arise from the ways in which physicians are paid for their services. These conflicts are inherent in any payment system, although each payment method raises different concerns. Physician ownership of health care facilities and self-referral practices also present important and widespread conflicts of interest that have challenged government in its efforts to manage, limit, or eliminate them.

This chapter begins with a brief discussion of physician payment and facility ownership interests as parts of the broader context of medical practice. As planned by the Institute of Medicine, this study was not intended to consider recommendations on physician payment; that is a primary charge of the Medicare Payment Advisory Commission (MedPAC; a body that advises the U.S. Congress). The committee also was not constituted to consider physician ownership and self-referral issues, which would have involved the in-depth examination of a complex regulatory and commercial environment. Therefore, the discussion of these topics is only brief.

The chapter then examines industry promotional activities aimed at practicing physicians and also reviews the responses to concerns about physician financial relationships with industry from private organizations and public agencies. Because the committee considered financial relationships with industry in the context of physicians’ professional obligations, the chapter includes a discussion of professional codes of conduct and statements on conflicts of interest in medical practice from professional societies. The chapter concludes with recommendations for the physician community; health care providers; and pharmaceutical, medical device, and biotechnology companies.

The environment of medical practice has changed significantly in recent decades. Physicians providing patient care have experienced reduced autonomy, increased administrative burdens, and declining incomes. As shown in Figure 6-1, the real income of physicians from medical practice declined about 7 percent from 1995 to 2003, a pattern that contrasts with that for other professional and technical workers. Flat or declining fees from public and private payers appear to be a major contributor to the trend (Tu and Ginsburg, 2006). Although the committee did not locate a