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PHYSICIANS AND DECEPTIVE ADVERTISING: HOW SHOULD FEDERAL AND STATE REGULATORS RESPOND?

Introduction

In an era when health providers have begun to market their services aggressively, deceptive health care advertising poses significant risks to the public. Fraudulent claims may entice consumers to undergo costly, ineffective, and even more importantly, dangerous medical procedures. The Federal Trade Commission (FTC) is committed to eradicating deceptive health care advertising, but it cannot do so entirely by itself. This brief explains exactly what kinds of health care advertising claims the FTC considers deceptive and suggests ways state medical boards and the FTC can work together to identify and eliminate fraud and deception in the promotion of health care services. Some people have asked whether the principles of federal anti-trust laws or the First Amendment to the U.S. Constitution constitute a bar to state medical board action against deceptive advertising. The short answer is they do not. It’s important to keep the health care services market free of overbroad restraints that chill the flow of truthful information to consumers. However, the anti-trust laws do not inhibit a board’s ability to police false and deceptive advertising. They simply require medical boards, like any staffer at the FTC, to make a reasonable effort to distinguish truthful claims from those that deceive and injure consumers. In fact, that is the substance of the proviso to the Commission’s American Medical Association (AMA) order, which permits the AMA to adopt and enforce rules preventing false or deceptive advertising.2 Similarly, the First Amendment’s protection against incursions on free speech does not pose an obstacle to challenges by the FTC or state medical boards against deceptive advertising. Although the U.S. Supreme Court has established the principle that certain truthful, commercial speech is protected under the First Amendment, there is no Constitutional protection for commercial speech that is false and deceptive.3 If that were the case, the Federal Trade Commission would be out of business. This said, what types of health care services advertising does the FTC consider deceptive, and what kinds of remedies does it seek? Examining specific ads that have been the subject of eight FTC actions involving physicians perhaps would be most instructive. Those actions, which involved the marketing of medical services by individual physicians or medical clinics, should help clarify how the FTC monitors advertisements for potentially deceptive claims. The ads - which deal with infertility services, diet programs provided through hospitals or physicians’ offices, and cosmetic surgery - concern objective claims about the safety and efficacy of the advertised services as well as the qualifications of the provider. In fact, the Commission’s health care investigations generally focus on these three major areas. Remember, however, the FTC cannot answer questions about the actual quality of care provided. Advertising regulation is not a substitute for action by the regulatory health boards to assure practicing physicians meet standards of competence consistent with the need to protect public health and safety.

Infertility Services

The ads for infertility services targeted by the FTC involved alleged misrepresentations of success rates by two of the largest providers of in vitro fertilization services. These ads claimed that: (1) 28% of patients who complete a treatment cycle are becoming pregnant, and a patient who completes four cycles has a 50% chance of giving birth; and (2) Our success rate is 30% (or one in three), well above the national average. The FTC alleged the 28% and 50% success rate claims overstated the actual success rate, because the company failed to disclose that a significant number of unsuccessful outcomes (failed embryo transfers) were not included in the calculation used to determine success. The FTC also alleged the company who made the 30% claim failed to have a reasonable basis for that claim, because it based its determination of pregnancy solely on an "HCG" (human chorionic gonadotropin) chemical test, without ultrasound confirmation, which experts and the United States IVF-ET Registry consider necessary. Under the consent orders the FTC obtained, the companies cannot make success rate claims unless:

  • they have a reasonable basis for them, including industry-recognized tests;
  • the success rate percentage claimed in the ad accounts for all patients who began the program; or
  • the basis used to compute the percentage rate is clearly and prominently disclosed. 

The FTC also obtained a permanent injunction in settlement of another infertility case, this one filed in federal district court against a Virginia physician. The FTC charged the physician gave women repeated injections of a hormone known to cause positive pregnancy readings on urinary pregnancy tests when there was, in fact, no pregnancy. The complaint charged he then told the women they were pregnant and sonograms or ultrasound tests had confirmed this. Eventually, the doctor reported the women's pregnancies had terminated, and the fetuses had been "resorbed," or absorbed back into the women's bodies. The doctor agreed to pay $250,000 in restitution for certain former patients, to stop making a variety of false representations, and not to represent the likelihood of the success of his treatments without substantiation. The Virginia State Medical Board also investigated this physician and eventually revoked his license.

Diet Programs

The next cases involve alleged misrepresentations of the safety, long-term efficacy, and qualifications of physician staff of three very-low-calorie-diet ("VLCD") programs comprising about 70% of the VLCD market. The major advertising themes of concern in these cases were:

  • You will lose the weight and keep it off;
  • Our program has no serious health risks; and
  • Our physicians are "certified." 

The complaints charged the companies’ safety, efficacy and other claims were false or not substantiated, and the companies, when they made safety claims, failed to disclose the material fact that physician monitoring is necessary to minimize the potential for health risks. Consent agreements signed by these three diet firms contain, among other things, prohibitions against misrepresentations of the likelihood of regaining lost weight and any unsubstantiated claims about the success of clients in achieving or maintaining weight loss. The agreements also set out detailed requirements for substantiation and disclosure when weight-loss and weight-loss maintenance success claims are made. Furthermore, one of the agreements contains a prohibition against false claims that physicians associated with the diet program are certified in the treatment of obesity. The company claiming their associated physicians were "certified" had simply asked the doctors to sign a "certification form" pledging they had read the diet program materials provided by the company or had attended a company-sponsored training course. Another case the FTC brought in federal district court alleged fraudulent misrepresentations of the safety and ability of a multi-state diet clinic chain's program to: (1) adjust consumers' metabolism through the use of an amino acid tablet supplement known as Growth Hormone Releaser (GHR) and, in some cases, the prescription drug Synthroid, a thyroid hormone; and (2) enable consumers to lose up to a pound-and-a-half a day without exercise or strict dieting. The California State Medical Board conducted a simultaneous investigation of the individual doctors working for the clinic. The complaint charged the defendants’ program did not produce metabolic adjustment sufficient to produce significant weight loss, which occurred from the program’s caloric restriction, and that GHR does not reduce fat tissue. Furthermore, the claim stating the program was safe and effective was falsified by the U.S. Food and Drug Administration's required warning that Synthroid should not be used for the treatment of obesity. The FTC reached settlement with one individual defendant and recently won a $21 million judgment and permanent injunction against the company and the other individual defendant.

Cosmetic Surgery

The final case involves alleged misrepresentations by a physician who claimed liposuction is a low-risk procedure with typical results and recovery time better than it really is. The case did not concern the quality of the cosmetic surgery services provided. The FTC charged the results depicted in the before-and-after photos used in the ad were not typical results, and the advertiser had no scientific evidence they were typical. The FTC also alleged the ads implied liposuction is a minor medical procedure with no risk of serious adverse complications, significant discomfort, or lengthy healing period, all contrary to fact. The consent order the FTC obtained against this physician: (1) prohibits misrepresentations of the typical results of cosmetic surgery or the likelihood of serious complications associated with any such procedure; (2) requires scientific evidence in substantiation of actual cosmetic surgery results; (3) requires disclosure of the risk of adverse medical complications for any safety claim; and (4) requires disclosure of the typical recovery time for any claim that improvements can be achieved through surgery in a specified time period.

Increased Federal and State Cooperation is Needed

As the preceding examples illustrate, the FTC is most interested in express or implied objective claims about the safety and efficacy of health care services or procedures made by multi-state marketers (franchised or licensed operations) or "primary sources" - providers who may be providing deceptive marketing materials to others around the country to sell a certain product or service. The FTC does not have the resources to challenge local providers, so we look to pool resources with state agencies to get the most "bang for the buck." This process already has produced rewarding results in joint FTC-State Attorney General projects in the hypnosis, weight loss, and refractive eye care services area. In addition, FTC staff has developed a working relationship with state medical boards through its participation as consultant to the Federation of State Medical Boards' Special Committee on Healthcare Fraud. To achieve increased cooperation between individual boards and FTC staff, both parties must continue to work together. To that end, I have a few suggestions I hope will lead to a permanent relationship of information sharing and mutual support between us:

  • I propose health care regulatory bodies establish a means of separately identifying and reporting to the FTC or its representatives board actions involving deceptive advertising claims. I ask you to consider ways of making this information available to help eliminate fraud and deception in the marketing of medical services.
  • Boards should call the FTC physician advertising "hotline" (202-326-3291) to obtain assistance in evaluating potentially deceptive advertising claims for health care services. Furthermore, the FTC can provide copies of its actions to individual state boards.

Together, these actions would increase boards' understanding of what claims the FTC views as deceptive, as well as helping the FTC identify instances of deceit.

Conclusion

The FTC’s message is this: deceptive advertising by physicians, just as by any other marketers of goods and services, is unacceptable and must be detected and challenged. Promoters of medical services who choose to misrepresent their success, or to deceive consumers about the safety or efficacy of the services they provide, need to understand such actions place them at substantial risk for challenge in court. The Commission, state attorneys general, state medical boards, and professional associations all share in the responsibility of eliminating deceptive health care advertising. The FTC applauds states for the actions they have taken to date; however, if we build on the working relationships developed so far, we can more effectively monitor and challenge instances of deception by practitioners and carry out our shared mandate to protect the public from deception.

Please direct your comments and questions to: Bureau of Consumer Protection Federal Trade Commission Washington, D.C. 20580

Notes
  1. Matthew Daynard is Program Advisor for Professional Services, Service Industry Practices, Bureau of Consumer Protection, Federal Trade Commission, Washington, D.C. 20508. This brief is based on a speech he presented at the annual meeting of Administrators in Medicine (AIM), Cambridge, Massachusetts, on April 22, 1992. The views expressed in the brief are his own and do not necessarily represent the views of the FTC or any individual Commissioner.
  2. American Medical Association, 94 F.T.C. 701, 1029 (1979), aff’d, 638 F.2d (2d Cir. 1980), aff’d mem. by an equally divided Court, 455 U.S. 676 (1982).
  3. See, Bates v. State Board of Arizona, 433 U.S. 350 (1977) (striking down a state-imposed ban on advertising of prices for routine legal services).

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