Monday, August 31, 2009

Bohner Pleads Guilty!

It was reported today that Richard Bohner, the head of Operations for Synthes USA pled guilty to a misdemeanor of introducing and misbranding Norian across interstate lines. Bohner's sentencing is schedule for November 5th. The other members of the Gang of Four are scheduled for sentencing in October.

Out of curiosity, how do four individuals pull off this entire clinical trial without anyone higher up in the chain of command not knowing what was going on? Something just doesn't jibe! If I was a betting man, I would think that all four will do some time, at least 3-6 months based on federal sentencing guidelines, especially if the maximum is 12 months. If the judge has any conscience, he will sentence them to time, there were three people that died. The Spine Blogger wants to know what its readers think?

is This Really News?

Over the last couple of days various newswires and websites reported that Sanford Health, a Sioux Falls, South Dakota healthcare provider received clearance for a posterior lumbar interbody fusion device. Based on recent marketing data why would someone make such a big deal of another "me too" implant. Aren't posterior lumbar interbody fusion (PLIF) approaches on the decline?

Dave Link, Sanford Health Executive Vice-President has an unusual perspective on what constitutes innovation. How can innovation be a product that represents the culmination of a decade of clinical research? Last time we looked at the market, there were plenty of PLIF devices that can produce the same results as the Asfora device. Unless this device is the "Silver Bullet" and can distract and insert itself, is this truly innovative? The Spine Blogger wants to know what its readers think?

Friday, August 28, 2009

The Medical Mafia - What goes on in Vegas stays in Vegas!

It was reported in various media outlets today, that the federal government won a round in an effort to prosecute a cabal of doctors and lawyers who allegedly conspired and schemed to lie in personal injury cases in order to inflate settlements and rip off clients. The investigation that was launched five years ago has resulted in charges that a former army medic and supposed CIA operative, recruited top spine doctors to serve as expert witnesses and treat injured plaintiffs using his (the former medics) sway over lawyers.

In 2007, the government charged Howard Awand and personal injury lawyer Noel Gage with conspiring to protect two compliant surgeons from a malpractice lawsuit after their patient underwent spine surgery and became a paraplegic. The two spine surgeons named were John Thalgott, who turned government witness, and Mark Kabins who was indicted earlier and is awaiting trial. The "Medical Mafia" dubbed by the conspirators, has more twists and turns than a high speed James Bond movie.

Awand is scheduled to go on trial in the fall and Gage is slated to go on trial in February 2010. In light of the governments victory, it is precisely this type of scheme that results in outrageous settlements, resulting in higher premiums for the public. Yet, this case will produce some interesting twists and turns. So who will crack under pressure when the government gets their day? If I were a gambling man, and that's Las Vegas style, I am betting the house that Awand rolls over if he is looking at spending many years in an orange jumpsuit. City Life reported that in early to mid-2000, Awand recruited Kabins and Thalgott to join his network of doctors and lawyers, in August of 2000, Kabins and Thalgott operate on the plaintiff and because of complications she is paralyzed. The plaintiff hires Noel Gage to sue Thalgott and Kabins for medical malpractice, Awand gets wind that the plaintiff is going to sue two doctors in his stable and meets with Gage to persuade him not to sue Thalgott and Kabins. Gage holds a secret meeting with all of the conspirators and they decide to sue an anesthesiologist, and the rest is history.

So here is the million dollar question, why is Senator Grassley and his band of gypsies chasing surgeons like Dr. Polly and Kuklo when there are potentially bigger fish to fry? The Spine Blogger wants to know what its readers think!

So Where is Medtronic Going?

Medtronic reported that during the first quarter of 2010 they had 7% growth in hardware and a 1% decline in their revenue for INFUSE. The question that the Spine Blogger must pose is how does such a conservative management team work to invigorate and reestablish innovate leadership? The only way to reestablish innovate leadership would be to overhaul the management team, doesn't the word innovate mean to make changes in anything established? As stated in a previous blog, this organization is starting to show its age. Years ago this company was a market leader, today, hospitals, surgeons, and distributors are attempting to distance themselves from an organization that once was well respected, innovative and set the bar for the spine industry.

Obviously, there will be those readers that run to their defense. The company is still the market leader, controlling an estimated 40% of a zero-sum market. Yet, where were they five years ago? Having been involved in various litigation (whistle-blowing and patent infringement) that has resulted in a public relations disaster, this company spends more time in court and defending itself in the press than it does in the research and development arena. Maybe their business model is litigating to recoup the cost of the Michelson litigation? There is nothing innovative about acquisitions, it simply results in buying revenue and hopefully garnering a larger share of the market. Unfortunately, when you are a publicly traded company, yes you are a slave to some analyst, an organization is forced to implement strategies and policies that change the culture and the mystique of a company.

So those of us in the industry are sitting back and monitoring what this once respected company will do next? The Spine Blogger wants to know what its readers think?

Thursday, August 27, 2009

Doctor, Doctor Give Me the News? We've Got a Bad Case of Stem Cell Blues!

On Wednesday, the Spine Blogger posted a blog in response to a reader's question whether I could explain the difference between Osteocel (Plus) and Trinity. Much to my surprise, this is a real hot potato of a topic. Based on the response, the Spine Blogger wants to know whether there are their any surgeons that can provide us with their analysis on whether these products are new? true? and, can they make a difference?

Stem cells have become a phenomenal buzz word in our industry. Yet, what are we marketing when we take cancellous bone chips and mix them with demineralized bone? Stem Cells? Think of what it costs to inventory these products. The hospital has to purchase an expensive refrigerator. The OR has to thaw out the product. And in the end, all you are getting is what was stated earlier, cancellous bone chips with demineralized bone! So is this really technology or pure marketing?

The Spine Blogger wants to know whether there is a Doctor in the House? We need to hear from someone with an M.D..... Otherwise why not use Bone Marrow Aspirate and Synthetic Products? Will someone let us know!

Wednesday, August 26, 2009

Is it a DBM? An Allograft? or a Stem Cell? WHAT IS IT?

On Tuesday August 25th, the Spine Blogger had reported that Dr. Polly had resigned his post as a AAOS board member. Much to our surprise, one of our readers posed the question in the comment section whether I could explain the difference between Osteocel and Trinity. How did that question pop up after reading that blog? I need to know. Like our readers, I believe that I have some understanding about the science behind these products, yet, many questions exist that still have not been answered, not just from the clinical podium, but by the companies that sell these products. Like autograft, aka "the gold standard," both of these products market themselves as osteoinductive, osteoconductive and osteogenic. Meaning that in order for a therapeutic result they must meet certain conditions to be effective. Basically, the product must have the ability to send a signal, recruit the appropriate cells, differentiate, proliferate (multiply) and function properly during the healing process while avoiding harming the patient. Obviously from a marketing perspective it makes it sound like BMP's. These products incorporate the aforementioned "biologic buzz words" necessary to successfully market the product and spark commercial interest.

Osteocel is a bone matrix, (a point of origin), that preserves stem cells found in bone marrow. These cells are harvested from a donor (within the first 72 hours), processed by demineralization and usually combined with a milled femoral head (remember the good old days when surgeons did that in the OR). The controversy surrounding both Trinity and Osteocel, is how many viable stem cells are delivered in each dose? Meaning how many have survived the harvesting process and the cleansing which in itself is an incredible purification process?

Trinity is marketed as an allograft product that has been processed (demineralized), from a deceased donor, resulting in a source of cells. It all starts to sound similar. Allogenic stem cells carry with them all the safety issues of any allograft product. The donors have to be adequately screened, cells must be tested for the presence of any virus or bacteria while the principal safety concern is the risk of tissue mismatch or infection in the recipient. Just like Osteocel, the controversy surrounding Trinity also centers around how many stem cells are viable or alive when delivered in each dose at the point of delivery. If Orthofix/Blackstone claims > 50,000 MSC/cc would that mean that there are 250,000 MSC in a 5cc dose? Are they all alive?????
Are physicians questioning any of these claims?

Marketing is a wonderful art. Unfortunately, when it comes down to these two products it's all show, all dough, and all anyone can say is STEM CELLS. Whenever I hear Osteocel Plus, I always wonder if that is the equivalent of pulling up to the Sunoco station and asking for the Ultra. Are you willing to pay more to get the same performance. The Spine Blogger wants to know what our readers think about these products!

Tuesday, August 25, 2009

Polly Resigns from AAOS

On August 24th, 2009, The Star-Tribune, a Minneapolis, Minnesota newspaper reported that in a letter to the President of the American Academy of Orthopedic Surgeons, Dr. David Polly resigned as a member of the Board of Directors. Dr. Polly cited the ongoing investigation into his consulting activities as a "unnecessary distraction" to the important efforts of the AAOS.

Dr. Polly has defended his compensation vigorously. In an interview with a prominent journalist at Orthopedics This Week, Dr. Polly defends himself by saying his oversight was an honest mistake. He is quoted as saying, "there was no intent to mislead or deceive, but there is a perception that full transparency wasn't achieved."

Dr. Polly goes on to explain that the fix would be for the Government to provide disclosure sheets to people testifying before Congress allowing them (the physicians) appropriate disclosures. Of course at a time when everyone is railing at the Government, in some respects it makes it sound as though Dr. Polly is deflecting his lack of transparency at that moment in time at the Government. If he wasn't such a savvy industry veteran, that defense would probably stand up. Yet, it is obvious as this drama plays out, surgeons like Dr. Polly and Dr Kuklo (what is it about these military doctors?) are the villains, while Senator Grassley is portrayed as the White Knight rescuing the healthcare industry from potential improprieties.

Today, as another page in the ongoing saga turns, lawyers across America are lining up to take advantage of a situation that has itself turned into a lucrative segment of the law. And we expect tort reform? So remember doctor, be transparent, don't be greedy, remember the more companies you represent the better off you will be, and don't forget whom you work for. In the end it is the patient that matters. The only question that the Spine Blogger must ask is, when standing on that podium in front of your peers, do you have the ability to differentiate between clinical marketing and clinical efficacy and that is the million dollar question? The SpineBlogger wants to know.

Friday, August 21, 2009

Three Down and One to Go!

As we enter the final month of the third quarter, the Spine Blogger is monitoring end of year results by the key players in our industry. It has been an arduous year! Unlike Wall Street, many of the start-up, early-growth stage and mid-stage companies have not had access to a TARP. The casualties include, IST, INION, VERTEBRON, and PEGASUS, these companies went down for the ten count (KO'd). Failure can be attributed to poor business models, inability to raise capital (greed), unrealistic expectations, and weak management teams. In addition, ARCHUS is on life support, and attempted to raise $19.5 million and was only able to raise $2.3 million in bridge financing, resulting in layoffs. Even though the markets seem to have stabilized themselves (at least for the time being), the economy is still floundering witnessed by the latest unemployment and mortgage foreclosure reports. We have been watching some of the smaller companies within our industry, and must question how many will have the financial wherewithal to take it to the next level, if they are producing or buying "me too" products. As a potential investor, would any of our readers infuse capital into another "me too" company? Like the revolution in the automobile industry, the spine industry needs to rid itself of these companies. As usual, market forces will take care of that.

But let's look at the bigger picture. If we exclude revenues for BMP's, the Blogger estimates that the US market will finish '09 at $6.9 - $7.1 bn. There will be a shift in the "spine major league standings." Medtronic will continue to be the market leader, yet, with all the bad press that they have received, we see them in a public relations mess. Once the industry darling, they now behave like the angry child as a result of the Michelson litigation. As hospitals look at the outrageous cost of BMP's and alternative technologies, and physicians evaluate their exposure and relationships with a company that has received bad press, we see them losing additional market share in the next three years. We believe that Synthes will become the second leading spine company, and DePuy will become #3. Though Synthes has had its share of problems that have been played out in the press, no one in the industry can compete with the "mystique" of the AO and its educational platform. In addition, Synthes has always walked to its own beat and is not driven by Wall Street. Stryker will sustain itself as the fourth largest spine company because of its ability to bundle total joints, trauma, med-surgical, sports medicine and biologics. Small companies have difficulties in competing with these one-stop shopping organizations. As successful as NuVasive has been, the question must be asked; "How long do they think they can ride the XLIF?" Even though they have been successful this year (congratulations NuVasive!), the word on the street is that if you take this surgical approach and implant out of their portfolio, what else do they have? In addition, we see companies like Synthes and Medtronic recently launching their own versions of an XLIF, with similar products from other competitors coming down the road. NuVasive's most valuable product continues to be Lukianov, who is an expert marketeer and a success story in his own right. We see Zimmer losing ground, and Biomet picking up momentum under Jeff Binder (he is the best thing that ever happened after Dane Miller got rid of the "dead wood" that use to manage EBI). Orthofix has rebounded considering that their stock was down to $9 last year, but, we must question their spine portfolio. The word on the street is that there is no "breakthrough technology." Besides, we still await the potential litigation that could be effected by the DOJ against Blackstone if they ever get their act together.

So who is the real up and comer? Look out for Globus, K2M and Trans1! These companies have been quite successful within their short tenure in the industry. Globus has gotten too big and the only option that we see for this company is to take it public, unless, someone like a GE or Boston Scientific has a need to buy their way into this industry. Trans1 has been on a great ride, but they need to "beef up" their portfolio. And then we have the infamous "Other" category.

Investors are no longer neophytes when it comes to performing due diligence on potential investment opportunities in the spine arena. These professionals are no longer just interested in top and bottom line revenues. They are now looking at business distribution models, what percentage of revenues comes from investing surgeons, who is running the company, how many consultants do you have, and is your technology really emerging. And therein lies the problem for many of the so-called "Other" or early-stage growth companies. What's new, what's true and do any of these technologies make a difference? How many more pedicle screws do we need? And even if someone comes up with a "slicker" design, will it increase the fusion rates? How many more cervical plates do we need? As the healthcare industry places greater focus on cost, will the same margins exist and will distributors and reps be making as much money as hospitals continue to pressure companies in making concessions to capped pricing in large markets?

So in closing, the so-called "Other" companies know who you are. Time will tell whether you had the right formula or whether you had the ability to think out of the box. The SpineBlogger wants to know what its reader think? Until then, Party On!

Wednesday, August 19, 2009

Catch the Wave!

Recently, one of our readers commented on rumors that have been heard about Spine Wave. The reader stated that word on the street is that "The Wave" has stiffed distributors on commissions and bonuses. In addition, the VP of Sales will pull the line without any notice. The Spine Blogger wants to know what those of you on the street are hearing?

Unfortunately, this isn't the first time that this has been rumored. In addition, if this is so, this seems to be a reoccurring theme at many of these early-growth to mid-stage companies. It has also been reported that other companies that are recruiting distributors are looking for immediate revenue. This is a golden opportunity for our readers to discuss some of the policies and procedures that they are faced with on a daily basis. Maybe some of these CEO's and VP's need to pound the concrete to find out the realities of everyday selling. Until then, let your voices be heard!

Kuklo Resigns

The Wall Street Journal reported that on Tuesday, August 18th, Dr. Timothy Kuklo has voluntarily resigned from his teaching position at Washington University. The resignation will become effective September 30th, 2009. During the interim, Dr. Kuklo will have no clinical, research, or educational duties for the University. Real estate records show that Dr. Kuklo had listed his home for sale, asking price was $2.7 million. Hopefully, Dr. Kuklo can find a private practice where he can continue providing patients with the great quality of care that he has been known for. One day the truth will be told how this entire scenario unfolded. We wish him and his family the best in his future endeavours.

FDA Clearances of 510(k)s

The Spine Blogger can report that based on the recent FDA 510(k) clearance report, there were 20 companies within our industry that received approval to launch new products.

Aesculap - Minimally Invasive Lumbar Implant (MILI) System (Original?)
Allez Spine - DelMar Monoaxial Pedicle Screw System (Are they still in business?)
Biomet/EBI- Polaris 5.5mm Pedicle Screw System (Addendum to 1/4" Rod)
Globus - Zyfuse Facet Fixation
LDR - Cervical Interbody Fusion System
Life Spine - Conquest Spinal System (Top Loading Thoracolumbar System)
Medicrea - PASS LP Spinal System (Ultra Low-Profile Polyaxial Screw System)
Meditech Advisors - Talos Interbody Fusion Device
Medtronic - CD Horizon Spinal System
Nuvasive - SpheRx II Pedicle Screw System
Sanacor - Alpine Pedicle Screw System (Located in Pleasant Grove, UT)
Signus - Nubic and Rabea Devices
Spinal Edge - Titan Pedicle Screw System (Rockville, MD based company)
Spinal Elements - Mercury Spinal System (I thought this was launched in 2007?)
Spinal USA - Anterior Lumbar Plate
Synthes Spine - Oracle Plate (Minimally invasive lateral approach device to compete with XLIF)
Ti-Tamed - Ti-Tamed Spinal System
Vertebral Technologies - Modification to Interfuse Interbody Device

So the question that must be asked is who is Ti-Tamed Spinal Systems? Have any of our readers ever heard of this company? They seem to be a european based operation. The most interesting company is Sanacor! Supposedly, they have been around since 2004. Website They have some "cool" and innovative technology. Check out the Pedicle Screw and the gold interbody device, I call it the VerteJack. Anyway it's time to start getting ready to go to work, the sun is starting to rise and I'll be heading down the coast. Have a great day!

Monday, August 17, 2009

FDA Recall: ICON Modular Pedicle Screw System

It was reported in the August 5th, 2009 "Gray Sheet" that the I-CON Modular Pedicle Screw System was being recalled by Blackstone Medical. The firm initiated the recall via e-mails on May 21, 2009 and letters on May 26,209. Isn't this the same system that was recalled a few winters ago? The reason for the recall was noted: "Product marketed without an approved 510(k). The recall number is Z-1655-2009

On December 23rd, 2005, Blackstone Medical (BO, Before Orthofix), initiated a recall because there were reports that the screws were loosening from the screwheads post-op. On January 26, 2007 there was a MAUDE Adverse Event Report, the screws backed out at L5. The surgeon replaced the I-CON with Medtronic Screws. On 3/13/09, Orthofix/Blackstone received a WARNING LETTER from the FDA from the Inspection, Compliance Enforcement, Criminal Investigations unit for violations pertaining to the I-CON. The violations are listed under the warning letter NWE-09-09W. Maybe it's time Orthofix take the I-CON and shelve the product. Considering that many Blackstone employees complained about the original design, it's a wonder this product has lasted this long. The Spine Blogger wants to know what any of you have heard on the street. Sometimes, old news is good news.

Saturday, August 15, 2009

Healthcare Reform, Rounding Third and Heading Home!

Recently, The Spine Blogger published the blog, "The Commercialization of Medicine." We were encouraged by the "pro and con" comments that were elicited by our readers. It was evident that many of you believe in a "free-market" where the price of goods and services are determined by supply and demand. Just like a hot and hazy August, the healthcare debate has heated up. So the question posed to our readers is; "how do we create an affordable, good quality, and equitable healthcare system?

The fact remains that the U.S. spends over $2 trillion per year on healthcare, or $7,000 per person, or an estimated $28,000 per annum for a family of four, for that kind of money, we should be able to obtain universal coverage for those that place a tremendous financial burden on the industry (illegal aliens, uninsured and underinsured, young people, etc). So why is the system failing us, and where does this money go? Experts state that 1/3 to nearly 1/2 of our annual cost are directed at marketing, advertising, unneeded and ineffective medical procedures, management, fraud and abuse in billing practices.

So why are American's upset over reform? Is it because we like to talk about change, yet, when confronted with it we have trouble ridding ourselves of our Puritanical genome. Would it be bad for private insurance to compete with the government (read on)? Does anyone believe that the consumer would be forced to accept a different plan if they were happy with their current healthcare plan? What would happen if you had a better option? The most perplexing aspect of the on-going debate is that up until reform became the focal point for the POTUS, no one complained about government involvement in Medicare and the Veterans Administration. Wouldn't these be considered socialist programs? If its good for the government to provide healthcare for those who serve and protect this country, wouldn't it be good for us? Recently, the Treasury bailed out Wall Street to the tune of billions of dollars, wouldn't you consider this welfare for the banking industry? What happened to the uproar over the bailout? Obviously, Congress did not hold any town hall meetings! It's interesting analyzing the publics' reactions.

Just like the Obama Administration, the Bush Administration tried its hand at managing the rising cost of healthcare. The model that was proposed would be an industry in which the consumer would be responsible for buying and investing in their own services, hence the moniker Consumer Driven Healthcare. This platform included insurance based on type of coverage (high-deductible-low premium/low deductible-high premium), a medical savings account, and the freedom to choose. The premise was that in a free-market, hospitals, diagnostic centers, clinics and physicians would compete for your business based on price and quality of care. The intent was to encourage ownership in how much you spend, and what type of medical treatment you want. Physicians, diagnostic centers, hospitals and clinics would publish a price list, and the consumer would have a choice whether they would want lettuce, tomato, a pickle or ketchup. In simplistic terms, it would be like ordering a sandwich! Yet, the question must be asked, how would you, the consumer, compare price and quality? Can consumers be prudent decision makers when they have no medical education, and little information about the nature of services that they would need?

Think about the current state of healthcare. Unfortunately, the Bush model did not compel a change in the behavior by the insurance industry, it did not change a fee-for-service reimbursement system, or the confusion that lies in hospital billings and insurance reimbursements. Would a consumer driven healthcare industry be chaotic? Consumers may be able to make good decisions in choosing insurance plans, physicians, and hospitals, yet, can they be expected to act as the decision maker? We are curious to know if our readers are willing to endorse a system where you would share the risk, and assume the cost of your healthcare, or does anyone have a better idea? Could it potentially be a co-op? Single Payer? Or, do we continue going down a path that could put us into another teetering economy? Since Congress cannot agree on anything, maybe its up to the people, the Spine Blogger wants to know what you think?

Friday, August 14, 2009

40% of What?

On August 4th, 2009 the SpineBlogger reported that rumor was circulating within the industry that the word on the street was that there was a major purge going on at U.S. Spine. Ironically, on August 13th, 2009, U.S. Spine announced that it had achieved a 40% top line growth in comparison to QI of 2008. Those of us at the SpineBlogger are curious as to definition in the press release of the words 1,600 facet bolts implanted, to date. Does that mean since the product was launched? If memory serves me correctly, wasn't this product launched in QIV of '05 or QI of '06? If 1,600 facet bolts were implanted since the time of the commercial launch, that would be an estimated 533 per year. Not many from a marketing perspective.

It's quite evident that with the addition of Mr. Sendro as Executive VP, the company has added an industry veteran whom has been schooled by "the best" at how to structure the art of the deal, and I am not talking about Donald Trump. Time loves a hero, and I am betting that things aren't as good at US Spine as they claim. I would venture that they are no different than companies like Life Spine, Titan Spine, Custom Spine, and many others that are all trying to figure out how sustain themselves at a time when investors are not going to invest in traditional hardware. We would be curious to know who invested $2 million into this company? Until a potential investor expresses interest in infusing capital into an early-growth stage company, the general public is at the mercy of whatever that organization wishes to say. Remember Vertebron's press release in a Hartford, Connecticut publication which stated that they had their first $1 million dollar month in sales, ever wonder where all that revenue went?

In closing the spine industry public will be watching this company closely. Until then party on!

The Gang of Four Plead Guilty!

The SpineBlogger can report that effective today the final member of the "Gang of Four" pled guilty to charges brought by the government tied to illegal trials of Norian XR that led to the untimely deaths of three patients. It would probably have been better served if Higgins, Huggins, Bohner and Walsh were part of the Chinese Cultural Revolution and charged with crimes of treason. By pleading guilty these individuals acknowledged that they effectively controlled and shipped misbranded Norian XR across state lines. It remains unclear as to which major decisions were made by Mao Zedong (oops!), I meant Hansjoerg Wyss. You know, the guy whom was referred to as a prominent individual only known at the time of the indictment as No.7.

Just like the original Gang of Four, it has been widely speculated within the industry as to whether these individuals conspired on their own, or were working in concert with the powers to be at the Arbeitsgemeinschaft fur Osteosynthesfragen. Regardless of whomever was the ring leader, Synthes awaits its day in court to defend itself against the governments accusations with the intent of vigorously fighting these accusations. In closing the legend of Jiang Qing, Zhang Chunqiao, Yan Wenyuan, and Wang Hongwen lives on in the modern day version of the Great Vertebroplasty Revolution! Viva La Revolucion!

Wednesday, August 12, 2009

The Peoples' Choice Awards

In the spirit of competition, of course this will be interpreted as a preemptive strike, the Spine Blogger is proud to announce "The Peoples' Choice Awards!" These awards will be bestowed upon the spine technologies and companies by the vote of industry professionals that read SpineBlogger via write-in votes. Rather than have a controversial panel that may be potentially biased, the SpineBlogger wants you the people, that work in the trenches, to pick the most innovative products that our industry offers. All we ask is that you cast your vote with a brief commentary as to why this product should be acknowledged. The criteria for the following categories is that these products must be generating revenues, with the exception of some of the artificial discs and dynamic stabilization systems.

Best New Cervical Plate?

Best New Cervical Disc?

Best New Cervical PEEK?

Best New Pedicle Screw (Is there such a thing?):

Best New TLIF Device (And remember XLIF is a procedural approach)?

Best New PLIF Device (Is anyone doing this procedure anymore)?

Best New ALIF Device?

Best New Anterior Lumbar Plating System?

Best New Thoracolumbar Plate?

Best New Lumbar Artificial Disc?

Best New Interspinous Process Device (Fusion)?

Best New Interspinous Process Device (Non-Fusion)?

Best New Dynamic Stabilization System?

Best New Vertebroplasty/Compression Fx System?

Best New Facet Fusion Product?

Early Growth Stage Company Most Likely to Succeed:

Early Growth Stage Company Most Likely to Fail:

Best New Emerging Technology (Why?):

Best CEO (It's like the Leading Man Oscar):

Best New Biologic Product?

Best New Stem Cell Company?

Since the SpineBlogger is a not-for-profit organization, rather than going to the Spine Technology Awards in San Francisco, I would recommend making reservations at either the Zuni Cafe (San Francisco), Chez Panisse (Berkeley) or Tyler Florence's restaurant in the newly renovated Hotel Vertigo (aka the Hotel York, SF). When making your reservation just tell them the SpineBlogger recommended you. In addition the winners will receive the first annual baseball hat, anonymously, of course.

Monday, August 10, 2009

Whose Drawing the Battle Lines? UCLA or OTW

On Monday, August 10th, OTW published an article entitled, "The Anonymous Letter to OTW." The editor stated that the name on the return address on the envelop was Dr. Jeffrey Wang. The author of the letter describes themself as a non-voting observer on the UCLA board. They are quoted as saying that they cannot divulge their identity. Supposedly, the letter goes on to attack the credibility of OTW and Dr. Wang by using various nouns and adjectives to describe Dr. Wang. I must question the validity of the author when stating that Dr. Wang would blackball a resident or a fellow from a spine society, yet, I must admit that this isn't the first time that any of us have heard that a surgeon consultant wanted or demanded that his protege use the product of his choice.

The Spine Blogger must question OTW when the editor states that UCLA suffers from lack of transparency which undermines the legitimacy of their actions. Before OTW attacks this phantom "impartial observer" the question must be asked, who is calling the kettle black? By stating that Dr. Wang failed to fully complete his disclosure forms, OTW makes it sound like he made a slight mistake of omission. If OTW questions whether this fight is about ethics or money and embarrassment, the answer is simple, Dr. Wang's ethics must be questioned. Ethics pertains to rules of conduct recognized in respect to a particular class of human actions, an example would be medical ethics. Yes this is about money and embarrassment but on whose part? Maybe UCLA is looking to do damage control, but the question must be asked who violated the provisions in their employment contract? Does OTW think that UCLA is looking to avoid embarrassment because of potential improprieties at its institution? Maybe, or maybe they feel as though they were duped by their rising star and don't want egg on their face. Maybe UCLA does bear culpability, but as long as there is an ongoing investigation that could potentially lead to Dr. Wang's dismissal, they are not obligated to provide OTW or any other news service information.

Of course, silence is always golden when you are accused of violating your fiduciary responsibility to your employer. I know that those of us in the industry respect and know that Dr. Wang has been a rising star based on his contributions to academia. And, yes the SpineBlogger believes that any physician that works as a consultant is entitled to be compensated. Yet, until Wang sets the record straight or proves that he did not violate the provisions in his employment agreement the jury is out. In closing, it's hard to believe that UCLA was looking to try Dr. Wang in the press, we can only thank Senator Grassley for that. The SpineBlogger wants to know what you think?

The Spine Technology Awards - Wait a Minute!

The August 15th entry deadline is approaching for those entrepreneurs and inventors that want to be considered for the Spine Technology Awards. The Spine Blogger is curious as to what Orthopedics This Week's policy is towards complimentary admission for any one entering this competition, and I don't mean submitting a product. I am sure like the Academy (that's not the AAOS) it behooves OTW to "comp" the entrants. Would Hollywood make Leonardo DiCaprio or Meryl Streep pay to be part of the ceremony? I would suspect that it is time that the powers to be at OTW start giving something back to the industry considering that they are making money off the industry.

The Spine Blogger does have a few observations. Will surgeons or surgeon inventors that have any financial interest, have received stock, or consulting agreements be recused from the judging? How biased will the judging be, if products from companies that have invested capital into OTW are included in these categories? Will the winners have to pay OTW like some have had to pay Frost & Sullivan to have their award posted on their websites? I would suspect that OTW makes a decent profit off of our industry based on the revenue generating platforms that they provide. The Spine Blogger wants to know what you think?

Saturday, August 8, 2009

The Commercialization of Medicine

As Congress breaks for its summer recess, the SpineBlogger decided that it would benefit our readers to revisit and think about how do we effect change in the U.S. healthcare system. The major challenge that we face is not just a divided Congress and country, it's about an uneducated and misinformed American public. Since U.S. expenditures for healthcare exceeds over $2 trillion per annum, affected by 46 million uninsured and underinsured citizens, that with one diagnosis can incur personal bankruptcy, or, add to the ever rising cost of medical care, it is obvious that the American healthcare system is broke. In other words, the high cost of delivering medicine is the crux of our economic problem.

Since the basic purpose of medicine is different than the commercialization of medicine, the U.S. needs to revamp our model. Market forces are now at the center of the debate. Just like JFK had to deal with a military industrial complex that was undermining his efforts at peace, BO is confronted in having to deal with a healthcare industrial complex (HIC) looking to undermine his efforts to salvage healthcare. The composition of the "HIC" includes, private investors, for profit insurance and hospitals, non-profit entities, pharmaceutical and medical device companies, and physicians. Market forces have shaped the current healthcare system.

Income maximization is the only incentive for those of us that collaborate on a day-to-day basis. The question must be asked, "how long will we all hide behind a mantra that opposes government involvement? Just look at the scrutiny that exists in our industry. Ten years ago we never heard of the DOJ investigating our industry practices. Somewhere our industry became like the old Black Sabbath lyrics, "I'm going off the rails like a crazy train."

The 90's gave us HMO's, then the PPO's, so where will the great debate lead us next? With the advent and power of the internet, and the commercialization of medical and pharmaceutical products on television, companies have created a consumer driver healthcare industry. This insanity has physicians becoming slaves to infomercials that fail to educate a patient about the efficacy of a product. If Congress would put aside its ideological differences, and stop placing special interests aside, and explain the nuances of this public healthcare plan, maybe the American public would stop acting irrationally. Isn't it embarrassing when a senior citizen gets up in the South and exhorts that government should stay out of their Medicare?

As one of my foreign readers asked, "why do you spend time politicking about healthcare?" I had to laugh. The answer was simple: "Just like Wall Street almost bankrupted the U.S., the American Healthcare System will bankrupt America!" Look at our industry. How many millions of dollars have been invested into products that investors don't have an inkling as to whether this product is truly an emerging technology, or, is this a product looking for an indication. Isn't it entertaining when you read an investors take on why they just infused millions of dollars into a company, just look at what happened at IST, Vertebron or Inion. These "Captains of Industry" use the right buzz words, yet, if any of us asked a clinical question as to the potential outcomes they wouldn't have a clue as to how to answer it.

So as we wind down to the end of a great summer, the SpineBlogger wants to know what you blokes and blokettes think is going to happen? And remember, don't Glenn Beck me!

Looking for a Job? We'll Prep you for the Interview!

Recently, the SpineBlogger was discussing the current job market in our industry with a panel of tenured professionals. As our conversation evolved, I started noticing a certain style and criteria that is prevalent in start-up and early-growth stage companies. As we started to laugh, I decided to write a blog about what the perception of our industry is, not only by those of us in it, but also by those outside the industry that run successful companies.

Our initial question was; Do the boards or entrepreneurs that hire these CEO's or President's understand the difference between leadership and management? Just look at the people that are continually hired for these positions. What does it say about the search firms that work in our industry? There's talent out there, yet, these firms are not doing a good job at identifying other more talented people that can do the job. But this article is not about them.

It's about leadership, and a leader is someone who is self-defined. Someone that understands how to live in the present moment, while at the same time is a visionary. He or she must have the ability to empower a coalition, in order to execute. That takes a self-deprecating, yet confident personality. Unfortunately, this was the impetus for our blog "Cast of Characters" which exemplified how our industry likes to hire the same people regardless of their failures. Most of those individuals, along with others, lack the ability to inspire, let alone be people oriented. How can some of these people be credible when they have had more CEO positions than Imelda Marcos had shoes? In addition to the above qualities, a leader is organized and courageous. Many of these small companies tend to be monarchs, with one individual making everyone run in twenty different directions. We called this the "Shot-gun" approach to management. But when a leader lacks transparency, they lack openness. Meaning, the reason these people fail, and move on to other jobs is because they resist ideas other than their own, they resist the unknown, taking risks, and breaking the rules. Think of all the negative energy that these people bring along with them. Leaders their not! So remember our number one rule, interview the interviewer. You need to know whom these people are and where they have come from. What have they accomplished?

Our next question was: "Why do these people and companies keep asking for a 30, 60, and 90 day business plan?" Is this being taught at the Harvard or Wharton School of Business? In all the years that some of us have been in this business, the question must be posed: "What can one do in that period of time?" How ridiculous do these people sound when they ask that question? Ever wonder why the onus is placed on the interviewee? In all likelihood, the interviewer themselves do not have an idea where they are going! Ever ask one of these CEO's what their strategic plan is, and how they intend on executing it? The answer is beyond the sublime. The Blogger's question to these people is: "What have you accomplished in your first 90 days at the company?" When someone asks that question, alarms must start going off in your head. It must scream: "short-term thinker!" Yet, at times you have to feel sorry for these people, they have become slaves to the Street, private equity firms, venture capitalists, and angel investors. And we all know that many of those people have never designed a product, do not understand the difference between moving money versus building a company, nor do they understand how difficult it is to get a product into a hospital nowadays. One of our panelists put it best, "just because you made a lot of money doesn't mean you know how to manage a company, doesn't mean you have the ability to identify leadership, doesn't mean you know what you are talking about, because all it means is that you were in the right place at the right time and made a lot of money!" Rule number two: Always ask the interviewer what they accomplished in the first ninety days, and what are their expectations for you.

Our final question was why do these people always asks: "how much business can you bring within a certain period of time?" With hospitals making it difficult to introduce new "me too" products into their facilities, what do some of these people think can be done in a 30, 60, 90 day period? Why don't these people just ask: "how many docs can you bring to the table and do they want a consulting agreement?" Some of these people must have never carried a bag, or, built a business because they would never have asked those questions. Ever ask these companies to see their "IP?" Ever ask these companies to identify their research and development plans? Ever ask these companies for their commercial launch plans? Ever ask them for their revenue expectations? Ever ask them for their revenues? The response is usually "that's confidential." Confidential means that the person that is interviewing you doesn't know themselves where they are going, nor, do they know how they are getting there. So the next time you're in an interview and the person interviewing you starts asking you those questions, remember rule number 3, get up and tell them the interview is over. You'll be doing yourself a favor.

Friday, August 7, 2009

It's Time to Take Off the Gloves!

AT 2:51 EST, Reuters reported that shares of Orthovita fell as much as 33% as a result of the recent NIH funded study questioning the clinical efficacy of vertebroplasty. Management for the company disputed the conclusions in the study and continue to stand by their financial forecast for Cortoss (Kudos to Koblish et al). Sometimes when your back is against the wall one has to dig in their heels and kick some *#$!

One must ask the government, the NIH and Medicare, is their objective to utilize the $1.1 billion that was allocated for research, to invalidate certain medical procedures? Will the government begin rationing healthcare? What bothers the Spine Blogger even more so is how the market reacts to some junior analysts observations. Just because someone questions whether Medicare reimbursements will be effected for vertebroplasty doesn't mean its going to happen. Shame on you Wall Street!

More information is needed before anyone can pass judgement on this procedure. There are reports that they study only had 100 patients involved. If so, the FDA requires four times as many patients in an IDE to validate a product. What gives? Like one of our Spine Doc bloggers stated, this procedure is all about patient profiling. Hopefully, Orthovita stays focused and does not sway from their strategy, like the Phoenix the price of their stock will rise again! The Spine Blogger wants to know what you think?

Thursday, August 6, 2009

Us Against Them!!! Are Doctors Willing to Fight?

As physicians become the target for the escalating cost of healthcare, it's time to turn our focus on the insurance industry. When the POTUS came into office, the insurance industry was quick to extend an olive branch agreeing to abandon some of their controversial practices.

This week, Karen Ignagni, chief lobbyist for the insurance industry struck back at Congress after the industry was labeled "villains." Ms Ignagni has been towing a fine line between convincing the government that the industry is serious about changing their evil ways, yet, still protect her clients financial interests. Considering that the largest insurers earned $13 billion in 2007, can we feel sorry for an industry that increases your premiums on an annual basis regardless if you used your policy or not, has denied coverage to subscribers with pre-existing conditions, has denied coverage to dying patients, has failed to increase reimbursement for medical services provided by physicians in years, has pitted patient against doctor, and has done a pretty good job of painting physicians as the villain in the healthcare debate?

Let's be honest, the insurance industry has forced surgeons to become out-of-network providers, and to identify creative ways to increase their revenues. When you place a cap on reimbursements, one cannot expect surgeons to play by the rules. First and foremost, the mantra at these companies is that they have a responsibility to their shareholders. Did anyone complain when United Healthcare back dated stock options? It took the State of California Public Employees' Retirement System (CalPERS) to file a class action lawsuit to satisfy a complaint that grew out of a 2006 scandal where William McGuire, M.D., CEO of United Healthcare used the backdating as incentive payment. During his tenure, McGuire transformed United making it a $70 billion dollar profit generator returning nearly 30% annually to investors. Pretty impressive, yet, how much of that revenue came from denying coverage, capping physician reimbursements and pitting the general public against doctors, and at whose cost? The patient and the physician. In the end, McGuire agreed to pay $30 million and relinquish stock option rights to settle the suit, while United Healthcare Group paid $895 million. Mr. McGuire went on to say that he was proud of the work that the men and women of United had achieved.

So Doctor, the next time your lobbyist is sitting next to Ms. Ignagni, remind them that underneath all that charm, a piranha is circling the waters. The SpineBlogger wants to know what you think?

Wednesday, August 5, 2009

The Vertebroplasty Debate Heats Up, No Pun Intended!

The WSJ ran an article tonight which highlighted two recent studies, one that was subsidized by the NIH, to qualify whether there was any benefit to Vertebroplasty. Before I get into the meat of the article, this topic was hotly debated about 3 years ago in the NY Times. At that time, the clinical efficacy of Kyphoplasty was questioned. As the government looks for ways to cut the cost of medicine in the U.S., studies like these should begin to appear frequently to justify their intention.

The one study that was funded by the NIH, found that there is no detectable benefit to a vertebroplasty with PMMA when compare to "placebo" surgeries. Jeffrey Jarvik, of the University of Washington, is quoted as saying; "vertebroplasty should not be done any longer!" In addition to being a researcher involved with this study, could Dr. Jarvik be influenced by his position as a senior author on a study that was funded by the NIH? What was the intent of the study?

Dr. Allan Brook, the Director of Interventional Neuroradiology at the Montefiore Medical Center in the Bronx, NY, contends that patients in the study may have been the ones to benefit the most from the surgery, because, most patients that were offered the opportunity to participate declined because they did not want to be in the control group that received the placebo.

As in any study the results indicated that both groups "test" and "control" saw a substantial reduction in pain. The question must be asked: how does one measure pain? Is there such a thing as equal pain? Do some people have 40% pain versus 65% pain? One has to wonder why is the government spending money to negate a procedure that does provide real benefit to the elderly. Allowing senior citizens to ambulate and get out of bed minimizes the potential of other medical complications which drive up the cost of hospitalization. Yes bloggers, I would rather allow my surgeon to make the appropriate decision rather they lay in bed and potentially risk shooting a pulmonary emboli. In addition with the advent of newer and improved products by Orthovita (Cortoss) and Spine Wave (StaXx Fx) who cares about Vertebroplasty with PMMA? With the introduction of newer technologies that have a better modulus of elasticity than cement, the long term prognosis should be better for these patients. The SpineBlogger wants to know what you fellow Orthovita and SpineWavers think?

The Great Hospital Rip Off!

Good morning my spine industry comrades! Workers of the World Unite (I like the way that sounds, since people think BO is socializing medicine)! The SpineBlogger wants to know if any of you are fed up with the following organizations; Rep Trax, Status Blue, Vendor Mate etc., etc., and so on? Have any of you wondered what in modern healthcare's name is going on? Recently, I spoke with a rep whose head started to spin. This rep posed a poignant question; "since when did vendor credentialing become a hospital administration cost?" The SpineBlogger's response was when the hospitals aligned themselves with all these other entities that have an opportunity to make money off of the companies and distributors! And then we wonder why the healthcare industry has run amok.

I know, the hospital needs to protect the patient in the event any one of us may have HIV, Hep C, TB, or may be a criminal. So I starting reflecting upon my own career in the industry and asked myself one question; "Who is protecting us?" Let's be realistic, HIPAA was enacted to protect the privacy of the patient. How many times did you find out after the fact that the patient had some associated medical illness, besides needing spine surgery? Don't we have a right to know?

How many TB tests are we going to have to take? Have many Bloodborne Pathogen Tests are we going to have to read? Don't hospitals understand that most legitimate companies run background and criminal record checks on all new employees? Don't these hospitals know that if we weren't trained we wouldn't know what we were talking about? I mean, we have entered the 21st century. But like most opportunist, there was a way to make money off of the industry and the hospital system decided to act on it. Have any of you ever read the propaganda that is written on some of these websites. Example: "Status Blue encourages communication and will work with the hospital and the vendor to make a strong partnership!" If that isn't a crock of BS, the Blogger doesn't know what is. Of course they encourage communication, the reason being that they could get your annual fees. So as you wake up this morning and put your cowboy boots on, the SpineBlogger wants to know what y'all think about these organizations?

Tuesday, August 4, 2009

U.S. Spine - Is the Ship a Sinking?

Today, the SpineBlogger received a call from an industry source that informed him that there was a purge at U.S. Spine. If this is true, could it be that Paul Sendro brought his famous "rack" when he was hired as the new VP? For those of you not familiar with the "Rack," its what was used in the closing scenes of Braveheart to cleanse William Wallace. So what's going on at U.S. Spine?

From the looks of things, not much. Is the Facet Gun innovation? I'm not quite sure, since most surgeons that I have spoken to are not enamored with this product. Could this be the beginning of another Vertebron scenario? Remember, Sendro grew Vertebron threefold, as reported in the U.S. Spine press release, only to result in Chapter 7 and Chapter 11 bankruptcy. In addition, how many medical advisors can a company of this size have? The Spine Blogger would be surprised if this company generates $12 million in sales per annum. If so, that would be $1 million per medical advisor. The Spine Blogger wants to know what you foot soldiers have heard, could this be the beginning of the end for another spine company?

Sunday, August 2, 2009

Who will win the Oscar?

Sometimes the SpineBlogger believes that we all need some levity in our lives. Recently, Orthopedics This Week announced the 2009 Spine Technology Awards. The intent of the Awards Show is to bring recognition to the engineers, companies, and physician inventors who create breakthrough technology (definitely not Blackstone). By the looks of things, our industry is on a roll!!!! Could this be the next Academy Awards, the Country Music Awards, (God, I love that Carrie Underwood chick) or the American Music Awards, and are we heading for the Kodak Theater on Hollywood Boulevard next year? Could we start seeing engineers and surgeons with Stars on Beale Street in Memphis? Will this ceremony have the potential for a Janet Jackson moment? Can this inaugural festivity have the potential of picking up momentum and becoming an annual Red Carpet extravaganza like Oscar? Will we see James Lipton (The Actors Studio) playing Alexis Lukianov in a documentary on NuVasive in the near future? Will OTW eventually build a Spine Technology Hall of Fame in Warsaw, Indiana, the Orthopedic Capital of the World, where sculptures of engineers and surgeons will be enshrined? Will we have to listen to winners get up on stage and tell us how they would like to thank their fans. How many times will we have to endure someone yelling from the audience, "We love you, Tony!"

How subjective will the judging be when surgeons and clinical research experts will be doing the voting? I mean come on, even Jeopardy has rules! Will Deloitte and Touche be monitoring the voting? I always thought award shows were a venue for the public to acknowledge their stars? All in all, it should be a fun night. So dig deep into your pockets (pony up boys) and be a participant in what could turn out to be an annual classic that is something beautiful. Individual tickets are $850 and a table of eight will run you $7,000. Let the party begin!

Saturday, August 1, 2009

Can Doctors Step Up to become Healthcare Innovators?

Recently, an article in the New Yorker entitled; “The Cost Conundrum” compared the cost of Medicare per enrollee between two Texas towns, McAllen and El Paso. The author, Atul Gawande, M.D. explored the question as to why two border towns of similar demographics would cost Medicare such enormously different amounts of money per enrollee. The bottom line was McAllen cost Medicare fifteen thousand ($15,000) per enrollee, while El Paso, the same size as McAllen, and with similar demographics, spent $7,500, which was half as much.

What the reader will find is a poignant analysis that was not only made by the author, but by physicians that work in the McAllen area. What concerned me was the comment that was made by a veteran physician in observing that even though the medical community has more technology, “young doctors do not think anymore.” Not only was this a frightening statement, it made me wonder whether physicians whom are supposed to be smarter than most, are really no different than us, in that they are likely to believe that more is better. Nothing in medicine is without risk. In recent years surgeons have markedly increase surgical procedures. In 2006, it was reported that sixty million procedures were performed, what amounted to one for every five Americans. The question posed was; “are we any better off for it?” It was reported that 100,000 people die each year from surgery related complications. That is far more than die in automobile accidents. Unless we control cost, will we be better off?

So I started to think about our industry and asked myself is McAllen a microcosm of the Spine Industry? How many needless spine procedures and tests are performed annually in our industry? I could already hear the uproar, who does theSpine Blogger think he is? Unlike most industry professionals, I know my place, but I also know what I’ve seen during my tenure in the industry. Let’s face facts, like any other profession, there are those surgeons that are craftsmen, and then there are those that want to be businessmen. Unfortunately, the waters can become murky when you are both. How many MRI’s are performed that are not really needed, or, how many bone density test are performed because it is a revenue generator? When does an individual draw the line between what is really needed, and what is padding one’s pocket? Greed is part of human nature. When the head of a physician owned hospital was questioned about the high cost of healthcare at his hospital, he was quick to point a finger at the other facilities and the federal government. When it comes down to understanding the cost of healthcare, most physicians are not evasive, when it comes to understanding the truth, they really just don’t understand the entire picture. How many understand the new Healthcare Bill, let alone have read it? Even then I am not sure one would understand all the nuances of it. Just leave it to the lawyers and the media talking heads to represent individual special interests.

But let’s look at the anatomy of a surgeon. He has the freedom to own a strip mall, real estate, imaging center, surgery center, or he may be a partner in a physician owned hospital. This is America. There are innovative ways to increase revenue in patient care. As one doctor in McAllen stated, “it’s a machine, my friend.” Many physicians have a difficult time in understanding the financial implications that their decisions make. There are those that only see their practice solely as a revenue stream. The reality is that maybe physicians need a course that teaches the ethics of medicine and business.

There is an underlying subculture in the spine industry. Just look at the physicians that represent special interests on the dais. I don’t need to name them, since we all know the Usual Suspects. But how much of an advantage does a company have when they hire these individuals? The day of champion surgeons are over, it’s a thing of the past. Just like our industry, surgeons have become a commodity product. All you have to look at is disclaimer after disclaimer when you attend a scientific and clinical symposium. Are these companies hoping that these champions steer their residents and fellows towards their products? Absolutely.! It’s scary when some of their peers view them no different than sub-prime mortgage lenders treating their patients as profit centers.

Just because doctors make a lot of money, doesn’t mean each and every one of them is a good businessman or a good doctor. By rooting out problems like poor preventive practices, unnecessary back operations and unusual hospital complication rates, maybe quality of care would go up. But Dr. Gawande makes an interesting observation, “are we witnessing a battle for the soul of American medicine?” I will paraphrase his comment; ”somewhere in the US at this moment, is a patient with some type of medical condition, and the damning question that must be asked is whether the doctor is set up to meet the patient’s need or his he looking to maximize his revenue?” As one surgeon in McAllen observed; “we took a wrong turn when doctors stopped being doctors and became businessmen.” So how do we solve our healthcare dilemma? Could it be that until we collaborate as a society on quality of care, over and under treatment, and sheer profiteering do we stand a chance? Someone needs to be in charge, because at the present moment no one is, and the result is a wasteful and less sustainable healthcare system. The Spine Blogger wants to know what you think?