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things in medicine. I myself stay out of any other businesses. One business is enough, and if medicine was a poorly paid profession, if I were starving and any other physician in the United States were starving, I could understand it, but the fact is that in this country the physician group, dentist group and the medical profession group is very fortunate. They do reasonably well financially, and there is no reason for them to be trying to earn extra money on the health care business. We should be trying to improve it.

Senator Moss. I particularly noted in your testimony that you pointed out the other health care services that also offer a conflict of interest situation, such as ownership in a laboratory or interest in a laboratory, and hospitals, and nursing homes.

Dr. BRENT. Well, the hospital is actually the most treacherous, because it puts the physician in a position he should never allow himself to get into. And I would say the most ethical, moral physican, having been put in the position where solvency is concerned (the hospital has a low occupancy, and the patient comes in and he has to decide wither to work that patient up as an out-patient or put him in the hospital) how can he legitimately make a rational decision at that instance? He can't. And furthermore, if we decided that hospitals should close and we can take care of patients in another fashion, how can he make a decision of closing a hospital he owns?

So if we are going to be innovative and creative in the health care industry, our (physicians) only interest should be in the delivery of health care, and not have an investment in bricks and mortar.

Senator Moss. Dr. Brent, I certainly appreciate your testimony. I think you have given us a very good insight into the view of the physicians and the profession, and I think what you have said is valid.

I think the vast majority of practicing medical doctors are so busy practicing they are not even aware of the kind of thing we are talking about, so we are talking about a rather small segment; but those certainly ought to be, some way or other, compelled to observe the rules of avoidance of conflict of interest.

Dr. BRENT. There are two other points-one is, I would be interested if the representatives from the American Pharmaceutical Association. would comment on what type of pharmacist-since he is a registered pharmacist goes into such an arrangement with the group of physicians as they described, and why haven't they ostracized that pharmacist. In other words, they expect the AMA to put controls on the doctors. I would ask them the same question, why do they support a pharmacist who goes into such an arrangement of paying $40 a square foot? Is he still a member of their organization?

Secondly, with regard to conflict of interest, you haven't asked me about any other areas of conflict of interest which I think it could affect. the medical industry directly.

We have two major areas that involve the health care industry, which involve specifically the legal profession, and these are tragic problems to me because many of our legislators are lawyers, could improve this problem very quickly.

Malpractice insurance will reach about $500 million soon. And you know, in malpractice insurance, about 70 to 80 percent of the cost, the premiums of malpractice insurance, go to the legal profession.

49-480-70- 8

doesn't damn the pharmaceutical profession because of one dishonest pharmacist, and it is not a cause for legislation.

But the principle of high standards, and that's what we want all people to attain is a basis for this legislation. In fact, the previous presentors bring up a good point with regard to the fact that samples are a problem, and should we allow samples to be distributed. Physicians get tremendous numbers of samples.

Physicians get samples and some sell them as pharmaceuticals, and so do some pharmacists get samples and sell them. I just wonder if this is something the committee ought to look into because one of the reasons why a physician could even think about making a profit is that he does get a substantial number of drugs free, and put that together with a little bit he buys from drug firms we might eliminate the beginnings of a business. This legislation could eliminate the business totally.

But they made a good point about the purchase of pharmaceuticals by physicians from these large-I guess you would call them jobberswho will sell you drugs at low cost that you aren't certain about the quality of the drugs.

Senator Moss. I suppose those samples are sent out by proprietary drug companies hoping the physician, by handing out the samples, could carry on, and therefore prescribe them thereafter for his patients?

Dr. BRENT. I can be honest with you-being in a pediatric clinic, we depend on samples, but we give them away. There are many patients, because of State laws, who will get complete pharmaceutical support in a certain income group, and as soon as they go $20 beyond that income group, they have to buy their own drugs. So that group of patients is in a tight spot, and we save them medication costs with samples.

Many physicians give away samples for nothing, but that is not a responsible way, and I am sure the APhA would rather see all patients go to the drugstore and if they can't afford it, they can get proper financial aid from insurance or government.

There are a lot of points that I made and that the APhA made that are peripheral to this legislation, but in order to make this legislation work these other suggestions might be implemented.

Senator Moss. That's a very good point. You indicated, of course, the feeling of physicians that perhaps they are being targeted by this bill. Do you have any estimates of how many of them generally would support the provisions of this bill and how many, perhaps out of resentment or for other reasons, would resist the bill?

Dr. BRENT. I think it would go by age and place. I can't imagine a physician at one of the 100 university medical centers in the United States even thinking about this bill one way or the other.

In fact, most of them would say, I don't understand what you need it for. Most good doctors are so busy reading and trying to be good doctors, they can't get involved in other businesses.

If you talk to the man who is doing it, it is easy to build up a defense mechanism-he's doing good, saving the patient a trip, all kinds of plusses.

But again, I don't like to go on percentages that we guess at, and anecdotes. The bill is good in principle and reflects the ethical standards we expect from the physician. It is impossible to learn all the

things in medicine. I myself stay out of any other businesses. One business is enough, and if medicine was a poorly paid profession, if I were starving and any other physician in the United States were starving, I could understand it, but the fact is that in this country the physician group, dentist group and the medical profession group is very fortunate. They do reasonably well financially, and there is no reason for them to be trying to earn extra money on the health care business. We should be trying to improve it.

Senator Moss. I particularly noted in your testimony that you pointed out the other health care services that also offer a conflict of interest situation, such as ownership in a laboratory or interest in a laboratory, and hospitals, and nursing homes.

Dr. BRENT. Well, the hospital is actually the most treacherous, because it puts the physician in a position he should never allow himself to get into. And I would say the most ethical, moral physican, having been put in the position where solvency is concerned (the hospital has a low occupancy, and the patient comes in and he has to decide wither to work that patient up as an out-patient or put him in the hospital) how can he legitimately make a rational decision at that instance? He can't. And furthermore, if we decided that hospitals should close and we can take care of patients in another fashion, how can he make a decision of closing a hospital he owns?

So if we are going to be innovative and creative in the health care industry, our (physicians) only interest should be in the delivery of health care, and not have an investment in bricks and mortar.

Senator Moss. Dr. Brent, I certainly appreciate your testimony. I think you have given us a very good insight into the view of the physicians and the profession, and I think what you have said is valid.

I think the vast majority of practicing medical doctors are so busy practicing they are not even aware of the kind of thing we are talking about, so we are talking about a rather small segment; but those certainly ought to be, some way or other, compelled to observe the rules of avoidance of conflict of interest.

Dr. BRENT. There are two other points-one is, I would be interested if the representatives from the American Pharmaceutical Association would comment on what type of pharmacist-since he is a registered pharmacist goes into such an arrangement with the group of physicians as they described, and why haven't they ostracized that pharmacist. In other words, they expect the AMA to put controls on the doctors. I would ask them the same question, why do they support a pharmacist who goes into such an arrangement of paying $40 a square foot? Is he still a member of their organization?

Secondly, with regard to conflict of interest, you haven't asked me about any other areas of conflict of interest which I think it could affect the medical industry directly.

We have two major areas that involve the health care industry, which involve specifically the legal profession, and these are tragic problems to me because many of our legislators are lawyers, could improve this problem very quickly.

Malpractice insurance will reach about $500 million soon. And as you know, in malpractice insurance, about 70 to 80 percent of the cost, the premiums of malpractice insurance, go to the legal profession.

49-480-70— -8

doesn't damn the pharmaceutical profession because of one dishonest pharmacist, and it is not a cause for legislation.

But the principle of high standards, and that's what we want all people to attain is a basis for this legislation. In fact, the previous presentors bring up a good point with regard to the fact that samples are a problem, and should we allow samples to be distributed. Physicians get tremendous numbers of samples.

Physicians get samples and some sell them as pharmaceuticals, and so do some pharmacists get samples and sell them. I just wonder if this is something the committee ought to look into because one of the reasons why a physician could even think about making a profit is that he does get a substantial number of drugs free, and put that together with a little bit he buys from drug firms we might eliminate the beginnings of a business. This legislation could eliminate the business totally.

But they made a good point about the purchase of pharmaceuticals by physicians from these large-I guess you would call them jobberswho will sell you drugs at low cost that you aren't certain about the quality of the drugs.

Senator Moss. I suppose those samples are sent out by proprietary drug companies hoping the physician, by handing out the samples, could carry on, and therefore prescribe them thereafter for his patients?

Dr. BRENT. I can be honest with you-being in a pediatric clinic, we depend on samples, but we give them away. There are many patients, because of State laws, who will get complete pharmaceutical support in a certain income group, and as soon as they go $20 beyond that income group, they have to buy their own drugs. So that group of patients is in a tight spot, and we save them medication costs with samples.

Many physicians give away samples for nothing, but that is not a responsible way, and I am sure the APhA would rather see all patients go to the drugstore and if they can't afford it, they can get proper financial aid from insurance or government.

There are a lot of points that I made and that the APhA made that are peripheral to this legislation, but in order to make this legislation work these other suggestions might be implemented.

Senator Moss. That's a very good point. You indicated, of course, the feeling of physicians that perhaps they are being targeted by this bill. Do you have any estimates of how many of them generally would support the provisions of this bill and how many, perhaps out of resentment or for other reasons, would resist the bill?

Dr. BRENT. I think it would go by age and place. I can't imagine a physician at one of the 100 university medical centers in the United States even thinking about this bill one way or the other.

In fact, most of them would say, I don't understand what you need it for. Most good doctors are so busy reading and trying to be good doctors, they can't get involved in other businesses.

If you talk to the man who is doing it, it is easy to build up a defense mechanism-he's doing good, saving the patient a trip, all kinds of plusses.

But again, I don't like to go on percentages that we guess at, and anecdotes. The bill is good in principle and reflects the ethical standards we expect from the physician. It is impossible to learn all the

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109

things in medicine. I myself stay out of any other businesses. One
siness is enough, and if medicine was a poorly paid profession, if
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