Follow the Money: The Unexpected Economics of CME

[00:00:00] Introduction: The Art of Hustling Pool and CME

[00:00:00] Imagine this. Smokey pool hall, the click of billiard balls and a young protege learning from a seasoned veteran . In the Color of Money Paul Newman's character Fast Eddie Filson teaches a young Tom cruise, the art of hustling pool, blending, grits, ambition, and strategy to turn raw potential into mastery, their mantra. Follow the money. Today, we're stepping out of the pool hall and into The multi-billion dollar world of continuing medical education where following the money is the game. Whether you're navigating grant proposals, commercial funding, or private equities growing stake in the field this episode will help you hustle smarter, not harder in the ever evolving economics of CME. I'm your host, Alex Howson and this is Write Medicine.

[00:01:32] The Complex Financial Side of CME

[00:01:32] So I still remember the first time I realized how complex the financial side of continuing medical education or continuing education for health professionals really is.

[00:01:42] I was writing a proposal for a grant funded initiative and stumbled into a web of regulations, funding, sources, and terminology that made my head spin. But I also realized something important. Understanding the economics of continuing education wasn't just about me getting paid. It was about understanding the forces, shaping the content itself.

[00:02:06] Evolution of CME Funding

[00:02:06] Let's rewind to the 1950s and sixties when continuing education continuing medical education in particular was primarily funded by universities, medical schools, and professional organizations. And these groups typically hosted cME often as part of society meetings or academic conferences. Some might say the landscape was simpler back then.

[00:02:31] Participant fees covered most costs and commercial support was minimal. But as the healthcare landscape grew more complex. So did continuing education.

[00:02:42] Pharmaceutical Influence and Regulations

[00:02:42] In the 1970s, the food and drug administration made a decision that would reshape the entire field. The agency required pharmaceutical companies to provide educational programs about their products to healthcare professionals. The pharmaceutical industry's [00:03:00] involvement in funding continuing medical education grew substantially in the 1980s. Manufacturers could collaborate with accreditation council for continuing medical education, accredited education providers. That's AC CME. E accredited education providers. These were professional societies, medical schools are one of the many large for-profit medical education and communication companies to present or develop the content for a session as a medical society or a specialist association meeting. These for-profit companies became key players in the continuing education space. And some physicians were critical of this arrangements between commercial interests and accredited continuing education providers because they felt continuing education providers funded by pharmaceutical companies were incentivized to favorably present the funder products. This perception was further fueled by studies in the 1980s, that suggested industry funding of education had the potential to introduce commercial bias into educational content and influence prescribing behaviors.

[00:04:14] There's a couple of studies from that time that make interesting reading, and I'll be sure to put links in the show notes. So you can take a deeper dive at your leisure.

[00:04:24] Despite these criticisms by the early two thousands medical education companies, professional societies and university, continuing education providers derived between 50 to 65% of their funding from pharmaceutical companies. We're talking well over a billion dollars here. But with great funding comes great scrutiny.

[00:04:50] The year, 2006 wasn't just about peak funding. It was also a critical turning point in the field. The medical community was asking tough questions about the relationship between education and promotion. And if you've been in the field long enough, you'll remember when the Senate finance committee launched an investigation into pharmaceutical funding of CME. The finance committee subsequently urged the ACC.

[00:05:17] I. To improve its oversight of continuing education and establish mechanisms to ensure the independence of education from commercial interests referred to in ACCME's 2020 standards as ineligible companies. In 2006 and again, in 2020 ACCME introduced new guidelines that have fundamentally changed how we approach commercial support in CME.

[00:05:47] The Impact of Compliance and Regulatory Codes

[00:05:47] This has led to the introduction of multiple layers of compliance and regulatory codes designed to protect continuing education from commercial influence and

[00:05:58] established the concept of the [00:06:00] firewall, which means essentially stronger barriers between funding and program planning, processes and separating educational content from promotional influence, ensuring that continuing education programs remain unbiased. For grant funded programs this has been a game changer. The landscape shifted from unrestricted funding to highly regulated, meticulously monitored support. These standards, aren't just guidelines.

[00:06:32] They're our industry's commitment to maintaining the firewall between education and promotion. And in practice this firewall establishes restrictions for speakers with substantial industry support. The prohibition of industry prepared materials in continuing education. And impeccable attention to documentation.

[00:06:55] The impact of this movement to transparency and independence in continuing education for health professionals was immediate and lasting.

[00:07:06] Current CME Funding Landscape

[00:07:06] By 2018 commercial support had dropped to a byte 25% of total CME funding. And in 2023, the most recent year, for which figures are available, commercial support accounted for about 24% of CME funding.

[00:07:24] While CME funding is diverse, for instance, 54% actually comes from registration fees.

[00:07:31] 19% comes from advertising, an exhibitor fees and the rest comes from government grants, private donations, and probably some institutional support too commercial funding remains important. But acquiring commercial funding is challenging. Commercial support typically comes from medical affairs departments, discretionary spending.

[00:07:53] This means it can be vulnerable to budget changes within the pharmaceutical and biomedical device industry and vulnerable to changes and how medical affairs sees its strategic role in independent medical education. And you can read more about this role evolution in medical affairs, in recent McKinsey reports that I'll link to in the show notes.

[00:08:16] But there's another funding shift in CME and continuing education more generally.

[00:08:21] Private Equity in CME

[00:08:21] And that's private equity. During the COVID-19 pandemic early years, something interesting happened. While many sectors struggled cME remained relatively stable. And private equity firms took notice. In the last few years several majors CME players were acquired by private equity firms. We've seen acquisitions, mergers, and consolidations

[00:08:48] as these firms look to capitalize on the demand for high quality, scalable CME. Why? Because CME providers have something incredibly valuable. Direct access [00:09:00] to healthcare professionals and their practices.

[00:09:03] Private equity and CME is part of a bigger story of private equity in healthcare. From 2013 to 2016 private equity firms acquired over 350 specialty medical groups comprising almost 6,000 physicians across more than 1400 sites. We're witnessing what experts call the financialization of healthcare, where financial markets, motives and strategies increasingly drive decisions in healthcare. My guess is you're no stranger to that and you've probably been on the receiving end of some of those decisions yourself.

[00:09:42] This financialization has driven decisions in graduate medical education too. For instance, the acquisition of two university hospital systems in Pennsylvania displaced thousands of employees orphaned almost 600 physician trainees

[00:09:59] and led to faculty layoffs.

[00:10:01] Here's the thing. This financialization might also drive decisions in continuing education. While private equity investment brings resources, technology, and sometimes innovation to the CME field private equity acquisition can also lead to rapid organizational changes including staff layoffs program disruption potential standardization of educational approaches and fewer independent CME providers. The focus on short term financial returns can also conflict with longterm educational mission with content driven by profitability rather than educational value with pressure to increase efficiency and scalability.

[00:10:48] Challenges and Questions for CME Professionals

[00:10:48] So as CME professionals, I think we're at an interesting crossroads that raise important questions.

[00:10:55] How do we maintain educational quality while meeting business objectives? How do we ensure our content serves healthcare professionals and patients first. Even as financial pressures mount. And what do these changes mean for us as CME professionals?

[00:11:11] I don't have answers. I'm just in the middle of living the questions as the German poet Rilke puts it. When we started this episode, I talked about the transformation of CME funding from a primarily university funded model in the 1960s to today's multi-billion dollar industry. But the color of money, isn't just about the numbers. It's about understanding the forces that shape our educational landscape. Private equity's entrance into CME brings both opportunities and challenges

[00:11:44] that can have profound effects on educational quality programs stability, and ultimately patient care. I'm keenly aware that stability isn't guaranteed. Companies can be acquired merged or simply [00:12:00] restructured overnight. That client or partner you're working with today, they might be part of a different organization tomorrow.

[00:12:08] Conclusion: Ensuring Educational Quality

[00:12:08] I think for CME professionals, success in this landscape requires three key things. First a clear understanding of funding sources and their implications. Second strong systems to maintain educational independence. And third the agility to adapt while preserving educational quality.

[00:12:31] The goal isn't just to follow the money. It's to ensure that every dollar spent serves our ultimate purpose. Creating impactful learning experiences that improve patient care . In the end that's the only color that truly matters. What do you think? How has the incursion of private equity affected your work in continuing education? And what are some of the things you're seeing that you want to have answers to.

[00:13:01] That's it for this episode of Write Medicine. If you find today's episode helpful subscribe and leave a review on the show's website.

[00:13:09] And don't forget to check out our show notes for more resources on the economics of CME.

[00:13:15] Until next time . Keep learning, keep living the questions and follow the money.