Do Payment Disclosure Laws Affect Industry-Physician Relationships?

The effect of disclosure laws on what is being disclosed is typically unknown since data on disclosed activity rarely exist in the absence of disclosure laws. We exploit data from legal settlements disclosing $316 million in payments to 316,622 physicians across the U.S. from 2009-2011. Multiple regression analysis of differences-indifferences and LASSO double-selection models were used. States were classified as having strong, weak, or no disclosure based on data reported only to state authorities or being publicly available. One state, Massachusetts, began releasing payment data on the web during our sample period, allowing separate analysis of physician payments while the cost of disclosing data remained fixed for pharmaceutical companies. Strong disclosure law reduced payments among doctors accepting less than $100 and increased payments among doctors accepting greater than $100. Weak disclosure states were indistinguishable from no disclosure states. The behavioral response to mandatory disclosure is likely due to the public visibility of disclosed data.