DTC Marketing: It's Out of Control!

Once upon a time, there was a patient who experienced debilitating back pain (No this isn't about the Wizard of Oz). So after many years of avoiding surgery, the patient decided to visit the Surgeon. The patient came prepared with the latest and greatest internet press releases on Total Disc Arthroplasty, and declared that he knew that he was a viable candidate for a TDA, sometimes this is known as a self-diagnosis.

The surgeon, being an exceptional clinician, worked up the patient using various imaging options to discern that the patient wasn't a candidate for TDA. Unhappy with the surgeon's diagnosis, the patient was intent on finding someone that would be willing to perform the procedure. The patient told the Surgeon, that since it was on the internet, it must be new, it must be true and it will make a difference.

Unfortunately, after seeing three more surgeons, the patient was told that he was only a candidate for a fusion. So what's the moral of the story. It's time the industry gets a grip on the insanity of Direct To Consumer Marketing, aka DTC. Consumer Driven Healthcare will never work, neither will DTC. Yet, let's look at the insanity.

Stryker hires Jack Nicklaus to talk about the his new hip. Are consumers that gullible, that they believe that by going into their surgeon's office and telling them what to use, that the surgeon is going to use a Stryker Ceramic-on-Ceramic Hip when they were trained on a Biomet System? Does the patient believe that they will be a champion golfer like Jack? Or, if it was good for Jack, it must be good for me!

Let's look at Erectile Dysfunction! I realize that this blog isn't about spine, but we do work in a rigid environment. How many Cialis commercials do my kids have to sit through when watching a football game or golf tournament. Are there that many American men that experience ED? Just look at the demographics of these two viewing groups. In all likelihood they fall into the category that has heart disease, have had a recent heart attack, experience high or low blood pressure, have liver or kidney disease, stomach ulcers, are hemophiliacs, have sickle cell anemia, multiple myeloma, retinitis, and penile deformation. I guess this rules out 90-95% of the viewing public. But here's the kicker, if our male readers needed Cialis, would you be sitting there with your girlfriend or wife watching the sunset in separate bath tubs? Not on my life.

So here is my advice to the FDA. When November comes around and you spend two days listening to medical device and pharmaceutical companies lobbying for less restrictions on DTC marketing, line them up in firing squad fashion, and send them home wagging their tales. It was just a few years ago, that Tony Viscogliosi was declaring that the majority of patients getting fusions would create the brave new world of total disc arthroplasty. JP Morgan jumped on the band wagon, and declared, this product segment a future grand slam investment. Those analyses only served the person making those comments. Today, we are still debating reimbursements on total disc arthroplasty. Just imagine having to sit through 500 pedicle screw commercials?

So in closing, all this information makes physicians lives much more difficult when it comes to taking care of their patients. As I have argued in previous blogs, the patient as a healthcare consumer is not like a consumer shopping for a car or buying a rug. The Spine Blogger wants to know what our readers think?

Scient'X: "Ball of Confusion!"

"Evolution, revolution, round 'n' a round 'n' a round we go, where dynamic stabilization is going nobody knows, just a ball of confusion, that's what the spine industry is today, hey! hey!" No readers, it's not the lyrics to the old Temptations song, it's the state of Dynamic Stabilization. On September 28th, Scient'x, aka, Healthpoint Partners LP, announced it was stepping up its strategic position in effecting a "Dynamic Solution"as a "worldwide leader" for both fusion and non-fusion. I'm a bit confused, how does a company that is estimated to generate $58 million in 2009 be considered a worldwide leader?

Today, the industry is delusional when it spends time self-promoting itself so that some "sucker" will bite at acquiring their company. Scient'x has "struggled" for sixteen years, indicative of their sales. Let me count the ways, Corrance, Seese, Intveld, Brown, Ryan, Huggins, DeNicola and Burkhardt. The company has gone through turmoil and has never exhibited real stability ever since its earlier days. What does it say about its investors and board of directors? How unstable are those characters? Today, the company is led by Oliver Burkhardt. Burkhardt is definitely the ultimate front man when he states that, "there is no other company better equipped to apply the concept of Dynamic Fusion." The baton was passed a long time ago to other companies by Scient'x. Besides, I always thought that the purpose behind flexible rods and dynamic stabilization was not to fuse? Or as a modern day Shakespeare once said; "To fuse or not to fuse, that is the question!"

Word on the street has been that ever since the change in management including the new VP of Sales, there has been much discourse on the street. After so many years in the industry, it is quite difficult to figure out what this company is really all about. I guess if you hire enough of consultants and get some visibility from the podium, anything can happen. The Spine Blogger wants to know what its readers think?

Will the PASS LP Pedicle Screw, Pass the Test?

Recently, Medicrea launched their new PASS LP Pedicle Screw Post System. After carefully reviewing this device, it seems that Medicrea has come up with a nice post system. The system was designed with 4.5mm, 5.5mm, 6.5mm, 7.5mm and 8mm Screws, complimented by 5.5mm and 6.0mm straight and contoured rods. In addition, this system offers Regular and Realignment Connectors (not recommended for patience with severe osteoporosis).

It is interesting that Medicrea claims that it will have nearly tripled its U.S. business in fiscal 2009. Based on what was reported in their most recent press release, I have to wonder how they have been able to surpass some of the other early-growth stage companies that have been around for 4-5 years.

So all you independent distributors, if you are reading this post, get on their website and check it out. There is only one caveat, the commissions are conservative. Good luck and let the Spine Blogger know what you think?

Just the Facts M'am, Just the Facts!

No the Spine Blogger is not talking about Sergeant Joe Friday of Dragnet fame. As the device industry accelerates its opposition to the modified Baucus healthcare plan, aka Finance Committee Reform Plan, it will be interesting to watch this shake out over the next few months. This plan includes a $4 billion dollar per year device tax proposal that was initiated by Baucus over the Labor Day weekend. Obviously, our industry does not have the "chutzpah" to stand up to a Senator that has taken in over $2.8 million in insurance lobby money this year. If the answer is AdvaMed, we stand no chance.

Under the proposed plan, each company would be taxed based on their share of total U.S. sales of qualifying devices in the preceding calendar year. So here is how the provisions in the bill would work.

• Your initial $5 million in sales would not be counted toward the calculation
• Sales between $ 5 million and $25 million would be assessed a tax on 50% of that value, Example: if you generate $9 million you would be taxed on $2 million of the $4 million in revenues.
• Class I devices would not be subject to the fee.
• The fees could not be deductible from US income tax

Based on the recent analysis in OTW, the Medical Industrial Complex needs to look at this as an opportunity to increase revenue rather than be punished by a tax. The facts M'am, just the Facts! Legislation that mandates the uninsured and underinsured to acquire coverage makes this a win-win situation for the industry in the long run. So why all the angst and rancor? Simply Put: SHORT-TERM THINKING, GREED and SELFISHNESS! But you know the Spine Blogger's credo; "You have pay to play!"

Physicians and Industry Professionals have spent too much time dissecting unimportant healthcare rhetoric. Since Consumer Driven Healthcare hasn't worked, a single-payer system, with a central payment center to force private insurance to play in a true competitive market would be a bold move. Free markets don't exist when there is collusion amongst the insurance industry. Just look at how they use data to their advantage. Yet, I do not spend my time getting caught up in public discourse when the POTUS makes a statement about physicians. Besides, why are surgeons so thin skinned? Does anybody really care what NASS, AAOS or CNS has to say? Contrary to what these organizations believe, they do not have the same financial power as the insurance lobbying industry because physicians are a divided profession by specialties. The insurance industry has more financial clout, more lobbying power, and until the Anti-Trust Laws are reformed (spend more time on ATL reform), physicians will never have any recourse! Who cares if AdvaMed came out against the bill! It's nothing more than a lame duck organization, sucking money out of device companies to subsidize their own existence. Besides, AdvaMed doesn't have any legal power to keep our industry accountable for their indiscretions.

But the real question is, why should companies that play in the industry be taxed? Let's look at the facts. The Gross Margins in our industry have always made us one of the most, if not the most, lucrative industry to invest in. Where else can you manufacture a screw for $65-$85 dollars and sell it for $1200? Where else can a distributor broker a surgeon, as a consultant, to make more money? Somewhere along the way the industry has lost its moral compass. In 1965 when the Lyndon Johnson enacted Medicare no one complained about government reimbursement. Today, as insurance companies, hospitals, and buying groups attempt to cap pricing, everyone cries foul. We are in a state of inertia. If we are to survive, everyone will need to make concessions for the betterment of our country. I am sure that there are many tax breaks that benefit the Spine Cartel. So, why am I so harsh on the industry?

Let's start off with manufacturing, as more and more companies look to increase shareholder value, it has become in vogue to take manufacturing jobs overseas (thank you MBA's). It started as far back as the late 90's when Stryker went to Ireland, and Medtronic went to Puerto Rico (cheap labor). Today, other company's look towards India, Malaysia, China, and Korea. Why? Cheaper labor, less taxes, more profits for its shareholders! So as companies cry out for better tax benefits, they keep moving jobs overseas, costing working class Americans their livelihood. All because they are more interested in serving their master, Wall Street.

The next group to be effected will be the distributors and sales people. If you think this will never happen, our readers are in for a surprise, because, it has happened in every industry in a free-market economy. Companies have, or are modifying their business models. Recently, one of our sources reported that an early-growth stage company terminated their largest distributor's contract, hired scrub-technicians in their place, and cut commissions, because by eliminating the distributor, they would increase their operating income. Would you want to work for a company like that? The fact remains, companies know that distributors and salespeople are commodity products.

Today, start-up and early-growth stage companies are looking to create their own brand of gainsharing by selling directly to large influential physician groups or physician owned specialty hospitals, radically changing the landscape for distribution models. Regardless of those who don't agree, the fact remains that many companies are evaluating this as a viable prospect for the future.

So as we head into the home stretch of fiscal 2009, it will be interesting to see what really materializes. As the industry continues to drive itself in the hope of creating more emerging technologies, resulting in higher medical costs, the government, insurance companies, and hospitals look to drive the delivery of healthcare down, resulting in two opposite forces working on the same linear path. In the end no one really knows what will happen. The Spine Blogger wants to know what its readers believe?

Stryker Recalls Reflex Hybrid Anterior Cervical Plates

The FDA reported that the mighty Stryker Spine had to initiate a nationwide recall of 38,987 Anterior Cervical Plates and 109,572 Self-Drilling and Self-Tapping Screws for a noted design flaw. The problem was identified when the "All-in-One" Drill Guide did not prevent over angulation of screws in the plate. I guess the almighty Stryker will have to go back to their manufacturing plant and engineering department and flog the little people.

Tim Scannell is finding out that running a Spine Company with mediocre talent is harder than playing pulling guard for Lou Holtz at Notre Dame! Wasn't that a mediocre team?

Sea Spine - California Dreamin'

On Wednesday, September 23rd, one of our readers asked our thoughts on which companies have done things right in the wake of the tsunami that destroyed some of the start-up/early growth stage companies. In retrospect, the last five years have led to an irrational exuberance, a by product of $1.3 billion dollars in artificial disc deals. Everyone wanted to become a millionaire! Unfortunately, the air has been let out of the balloon over the past twelve months, regardless what the analysts say. To quote the Gipper, "it's time to tighten up your belts boys!" Over investment and overvaluations have led to this prolonged insanity.

In retrospect, I had to think long and hard as I went down my list of the Usual Suspects. My criteria was companies generating $50 million or less. Here were the nominees: Allez-Spine, Atlas Spine, Choice Spine, Custom Spine, Eminent Spine, Hydrocision, LDR Spine, Life Spine, Medicrea, Pioneer, Sea Spine, Spine Wave, U.S. Spine, Ulrich, Vertiflex, Vertecor, and X-Spine. As our readers can tell most of these companies have hardware, and most are playing in a zero-sum market with the exception of Hydrocision (Hey Doug, after so many years can you figure out how to get a billing code on your product). Yet, one company does stand out. As Randy Jackson would say, "Dog, you are the bomb!"

In seven years, Sea Spine has developed a business model that should elevate them INXS of $50 million dollars in revenues. So how did they achieve this? The old fashioned way, HARD WORK and FOCUS! First they built a foundation, then framed the house before adding the roof. For those of you that have never worked in construction, that's how it's done. No outside investment capital, a solid core of managers (yes, I do know some of them, but I do not work for them), and a talented CEO who knows about leadership and developing a guiding coalition. I don't expect many of the above companies to agree with my assessment because of the envy that exists in our industry. But let's acknowledge that this company has sustained continuity during some of the most turbulent times in our industry.

As it stands many of the above companies either have incomplete product portfolios, weak management teams and boards, some so old they may not make it to the next board meeting, or they have surrounded themselves with industry insiders, people who cannot think out of the box.

So when you walk by the booth this November at NASS, take a good look at Sea Spine and you may see a reflection of what you can be when you grow up. PS: Always remember what the Spine Blogger says, "there's nothing about a beauty contest on the scorecard!" The Spine Blogger wants to know what its readers think?

Chuckie's in Love

No readers, I'm not talking about the Ricky Lee Jones song! I am talking about our favorite senior, and I mean very senior Senator from the State of Iowa, Chuck Grassley. It seems Senator Grassley, aka Senator Death Panel, is at it again questioning the research that was performed by Dr. David Polly. Hey, Senator can you give Dr. Polly a break? It seems that outside of Polly's temporary memory faux pas back in 2006, he has established the industry standard for documenting consulting hours while being on Medtronic's payroll to the tune of $1.14 million dollars. Just read Walter Eisner's article in OTW.

If Grassley is so concerned about physicians relationships with pharmaceutical and medical device companies, maybe he needs to look into some of the shenanigans that have been, or are implemented by other companies in our industry. You know the ones that are really buying the business. Come on Senator, give Medtronic a break. You've beaten them with such a vengeance, that Bill Hawkins is actually attempting to take the moral high ground by denying that his company had any knowledge of Dr. Polly's intent back in 2006.

Dr. Polly's only fault is that he should not have talked as much as he did, when he stepped up to the plate on behalf of Medtronic. Let's face it, INFUSE was not the only product on the market at that time. It was the only product that he was getting paid for, advocating the BMP clinically and commercially. Dr. Polly's attorney should brush up on the facts when he states that his client wanted to use a product that was commercially available. Unfortunately, he doesn't understand the meaning of a Humanitarian Device Exemption (HDE).

The saga continues and the investigation goes on! What do our readers think?

Hey OTW, Why All the Clinical Marketing?

Recently Orthopedics This Week published Part 2 of their three part series on motion preservation. The point of this series is two fold, to address whether there really is a middle of the road between Disc Arthroplasty and Fusion, and, to pump up the marketing volume on this potential emerging technology. It's obvious that based on the amount of investor capital, this product segment is not going away. The question needs to be asked, is the industry looking for a panacea where one does not exist? The problem that I see with the Stabilimaxx NZ is that it is quite expensive to manufacture and that will cut into the margins when it comes time to commercially market this product.

Yet, I must admit, when one listens to Panajabi, Goel, and the rest of the cast of characters, it makes sense. There are still many questions that remain to be answered especially when it comes to the long-term stability of pedicle screw based systems and the Center of Rotation as it pertains to each individual patient. There have been many alternatives discussed at many of the meetings that the Blogger has attended. Those range from HA coated to Ceramic coated pedicle screws. Yet, school is still out on whether these types of designs will be efficacious in what would be asked of them. Until further testing is performed on these types of screws, it is pure conjecture on any designers part.

In closing, the Blogger must ask one question of the writers at OTW, why the McAfee publicity piece for the Globus Medical Transition System? You take a great article, and taint it with clinical marketing. Oops! I forgot, you have to keep your customers happy. Before any of these articles quote surgeons or medical advisors, it should be explicitly stated that the contributing surgeon is a "paid mouth piece" or consultant for Globus. Outside of that, we look forward to the third part of this series.

Spinal Kinetics the Creme de la Creme of Cervical Disc

It was announced today that Spinal Kinetics the company behind the "M6" Artificial Cervical Disc raised $5.3 million of a $9.5 million dollar round from undisclosed investors. The "M6" is the most innovative "slick disc" that has been designed to date. The rationale behind the design was to reproduce the kinematics and biomechanics of the human disc.

The key components are the Polymer Nucleus and the Fiber Annulus. The Polymer Nucleus allows for axial compression, while the Fiber Annulus allows for controlled range of motion allowing 6 degrees of freedom.

As far as the Spine Blogger can see, this disc is the current winner in design. So listen up investors, if you are really looking for a solid investment, hear is your winner. And don't forget, when you cash out, don't forget the SpineBlogger. We want to know what our readers think?

Looking for a Job as VP of R&D?

The Spine Blogger knows of an opportunity for a VP of R&D. The R&D skill sets are of utmost importance. If you know of anyone, or are personally interested, please send your resume to spineblogger@me.com, and we will gladly forward it to our contact at this search firm. In addition to the R&D skill sets, this company is looking to develop an MIS system. A great opportunity for the right person.

BCBS Cites Lack of Long-Term Evidence in Cervical Artificial Discs

According to a recent assessment by Blue Cross/Blue Shield, long-term data is insufficient to show whether cervical disc arthroplasty improves outcomes in the cervical spine. In addition, current data was insufficient on whether the procedure minimized long-term development of Degenerative Disc Disease (DDD). Up until the advent of Cervical Disc Arthroplasty (CDA), Anterior Cervical Discectomy Fusions (ACDF) was the modality of treatment for Cervical DDD.

The report examined clinical trial data on the Medtronic Prestige ST and the Synthes ProDisc-C. The Bryan Anterior Cervical Disc was excluded from this evaluation. The criteria for the data included; pain, functional disability, neurological status, implant and surgical adverse events and secondary reconstruction.

After two years, both studies showed that CDA's were non-inferior to ACDF's based on the neck disability index score and overall outcomes. Interestingly enough, the Prestige ST trial was found to be of "poor quality" because of systemic differences between patient groups and unclear blinding of neurological assessments. The quality of the ProDisc-C was fair.

The report concludes that both trials were similar with the notable exceptions being secondary reconstructions. The Prestige SF had 9 patients in the ACDF and 3 in the CDA category, while Synthes had 1 in the ACDF group and 0 in the CDA category.

In closing, the report points out that no study has established whether adjacent disc disease (ADD) observed after fusion is a result of altered or abnormal spinal motion patterns, rather than due to normal disease progression. The authors concluded that it cannot be determined whether CDA will reduce ADD.

How to Contact the Spine Blogger

Our readers have asked for a vehicle to communicate industry news directly to the Spine Blogger. By popular demand, the Spine Blogger can be reached via e-mail at spineblogger@me.com. I look forward to your commentary and e-mails! Thanks! PS: Our goal is never to put a marketing spin on any information that you provide. Let your voice be heard!

Is Chinese Titanium Defective?

It was recently reported that makers of titanium implants are turning into Inspector Clouseau investigating the causes and signals of a defect in some of the titanium being imported from the future government of the United States, China.

The defect is known as alloy segregation, which means that the metals were not melded homogenously. If titanium alloys are not melded properly, the metals remain unmixed. The problem was first reported when a devicemaker (unknown) could not get the titanium to process through a machine used to manufacture devices.

The material came from DALIAN SUNNY TITANIUM. The FDA visited the G&S factory about six to eight weeks ago. Unfortunately, the issue with the defective titanium is not going away that easily. A few companies have been forced to initiate preemptive recalls. There is no predication as when this problem will be resolved. Obviously, the problem occurred further down the chain than what the good ol' FDA generally inspects.

Roger Geiser, CEO of G&S said, " the ASTM specs for titanium have room for tightening."

So What's Really Going on at US Spine?

The Spine Blogger received a phone call from a source whom discussed what had been heard on the street regarding US Spine. Our source stated that Paul Sendro is currently working as a consultant with a six month contract. All regional managers were terminated along with the educational people. The only managers left are the East and West Coast Managers. Yet, the scuttlebutt is that the Board attempted to displace Doris Blake as the CEO of the company. I guess they must have failed! Whenever there is internal turmoil, the situation does not bode well for an organization. You know what Maximus Aureleus said in Gladiator before the opening battle scene; "What you do in this life echoes for eternity." The Spine Blogger wants to know what our readers have heard?

The Blogger Wants to Know What Topics Interest Our Readers?

Like our tag line reads, "the peoples blogsite!" After three months of tracking our hit/reader ratio, the Spine Blogger is humbled by your support. I can report that we are averaging over 3,500 readers every week. We would like to know what topics interest our readers. Is it the behind the scenes blog about what goes on in our industry? Is it the "tongue in cheek" blogs about some of the Usual Suspects in our industry? Would you like to know more about some of the companies in our industry? Is it product information? Let your voices be heard! We are always interested in knowing what rings your bell, or tweets your twitter! Let us know, we value everyone's feedback. Once again, thank you for your support!

Hey Early Growth Stage Companies, Any Idea What You're Doing?

The Spine Blogger was talking to a few of his industry sources, when the topic of early-growth stage companies came up. How inexperienced and unrealistic are some of these companies, when it comes down to negotiating distribution agreements.

Early-growth stage companies have trouble distinguishing between a direct sales force versus an independent distribution model. A direct sales force is accountable to the company. By today's standards, most direct sales people are not allowed to market and sell competitive products, even though there are many salespeople that do this at the risk of being terminated. Now let's look at an Independent Distributor. An ID is responsible for themselves and their employees, incur all ancillary expenses associated with running the business (expenses and health insurance if they are legit), and are not legally bound to any one distribution agreement. Very different if you ask me!

Let's look at quotas. First and foremost, most of these companies are not in a position to demand establishing a quota if they have no or limited market penetration. The distributor has to get "their surgeon" to agree to use the product, and then, they need to develop a history of utilization before a determination can be made of the potential revenue stream. In some cases, that will take two to three months. Sometimes, even established distributors must go in front of a product evaluation committee. I could hear some VC or CEO stating that I don't know what I am talking about. Let's look at the facts. What type of distributor are you appealing to? The organization that generates $1-$5 million in sales, or, the $250-$500K distributor? Unless you have 'breakthrough technology," and I am not talking Blackstone/Orthofix here, most large distributors are not interested in reinventing the wheel. Their business has continuity and stability. Of course, unless you are willing to pay 50% on the dollar and your product is competitive there may be a consideration. Unfortunately, many early-growth stage companies believe that their baby is beautiful, even if it is a "me-too" product.

The whole purpose behind a quota is to have a target or objective. The objective is to generate sales. If the surgeon has not seen the product, nor has used it, how can the company expect immediate revenue? What happens if your product has flaws in its design, or the instruments do not work? If any of these "boy wonders" ever sold in our industry, they would understand that there is a ramping up period. Unfortunately, many people have forgotten what it was like to carry a bag. Besides, most of the time a bonus is attached to a quota. How many companies in our industry actually pay bonuses based on sales? How many early-growth stage companies give their distributors exclusivity in their territory?

Most of these small companies that are classified as "The Others" by our industry are so desperate for revenues, that they have unrealistic expectations. So the next time someone provides you with a distribution agreement, take your time, read through it, and don't be afraid to negotiate. And remember, if you don't understand something, go to an attorney. The $300 per hour fee is well worth your time. The Spine Blogger wants to know what experiences its readers have had? Let your voice be heard!

Will Doctors Help in Reforming Healthcare?

Are doctors willing to sacrifice to enact basic reform to the healthcare system, or, are they only interested in incremental change? The medical system in the U.S. is a medical industrial complex based on commercialization more so than a professional service to take care of the sick. This commercialization of medicine does not serve the needs of the patient ( and I am not talking about device companies). It can be argued that medical care is not a commodity market.

The reason most doctors went into medicine was not for the financial rewards. Let's face it, if the only reason they went into medicine was to make money, there are many other professions where they do not have to work half as hard and can make more money. Examples would be Hedge Fund Managers, Stock Brokers, Investment Bankers, Bond Traders, etc., etc., and so on! Unfortunately when medicine became a market commodity, income took precedent over sound medical judgement, witnessed by many of the questionable back surgeries that are performed in this country.

It was recommended in a recent article that Medicare be offered to people at the age of 55. The proposal to extend Medicare coverage to people at age 55 is not a new idea. This has been discussed for a few years. Yet, that is only one solution to the problem. Government is not the only party that wants to bring down the cost of healthcare, it is also big business. Everyone has the right to disagree, but, just look at your reimbursements. They haven't gone up in the last five years, they have decreased, and you work twice as hard to earn a living. In addition, many of you do not even want to take care of certain patients. So who is the culprit? It has always been the private insurance industry's objective to increase profits, and the only way to do this is to offset the cost of healthcare to the patient and the provider. As market forces continue to dominate the system and your decision making process, you will end up employees of some corporation that will determine your lives, direct your activities, and determine your income. The assault on your profession has not been led by the government, it has been led by big business.

If Medicare is extend to those age 55 and over, will this not constitute a "single-payer" system? A single-payer system by itself will not solve the problem of rising cost in healthcare. By directly confronting forces driving medical inflation you can take control of your own destiny. Those forces include excessive use of new technology and drugs, the commercialization of medical care and equitable reimbursements. I remember what some once said to me, "the best way to predict the future is to help shape it." The ball is in your court, the Spine Blogger wants to know what you think?

Dynamic Stabilization, The New, New Thing!

Instability in the lumbar spine associated with mechanical pain is poorly understood. Despite several years of research, no clear relationship exists between low back pain and abnormal movement. Over the years, it has become evident that no one can agree on what magnitude of motion is needed to preserve the "Neutral Zone." Since the Almighty made us in all different shapes and sizes how does the surgeon determine each individual's range of motion?

If instability or abnormal movement is the root cause of back pain, then, spinal fusion would always be successful in relieving back pain. So where does that bring us? It has become quite evident with the rash of recent articles that Dynamic Stabilization is the "New, New Thing!"

It seems that Stem Cells and Dynamic Stabilization are first and foremost on the agenda of our industry. Yet, many surgeons are the first to admit that when it comes to consensus, everyone agrees to disagree on biomechanics when it comes to Dynamic Stabilization.

So the Spine Blogger needed to pose the following questions;

• How much control of motion is desirable?
• How much load should be shared by a system to unload a damaged disc?

Short-term results are not a barometer of an implants efficacy. Long-term concern is about the implant failing in view of constant motion of the stabilized segment, witness by failure in the Dynesys a few years ago. A load-sharing device should be uniform during the entire ROM. A discrepancy in the kinematics between the implant and the motion segment will lead to variability of load-sharing.

So where does that leave us? It leaves us with a host of old and new products that are attempting to answer questions and create a niche market so that surgeons can stage a patient's modality of treatment. Yet, why all the publicity? In all likelihood because there are many early-growth stage companies that have IP on different designs for DSS and they need CAPITAL to execute. The Spine Blogger wants to know what its readers believe?

The Spine Industry - One Year Later

Today marks the one year anniversary of one of the greatest financial events in recent history, the monumental collapse of Lehman Brothers. As the aftershock of Credit Default Swaps and Collateralized Debt Obligations nearly brought our economy to the precipice of another Great Depression, the Spine Blogger thought a postmortem on the past year would benefit our industry. How do we benefit from this procedure?

Within a one year period, the industry eulogized five companies ( IST, Inion, Vertebron, Pegasus, and Archus). Archus and IST combined, raised over $140 million in investment capital. Where did that money go? Vertebron, Pegasus and Inion were on a course for failure regardless of the economy because of greed, stupidity, and the quality of management teams. The death of these companies is attributed to their short-term vision without considering long-term viability, a characteristic bred by Wall Street. Investors became reckless, because they believed that at any given moment the Spine Cartel would swoop in and buy anyone of these start-up/early-growth stage companies. Acquisitions of Charite, ProDisc, and Spine Core created entrepreneurial fever. Anyone with a new idea started to believe that they would become rich overnight. But even though these technologies were suppose to establish a new paradigm in the treatment of degenerative disc disease, it really hasn't panned out to be the windfall that the analysts believed it would be. What does that say about the analysts? Everyone believed that their companies were worth 5X the revenue. Today, many early-growth stage companies are finding out that a valuation is only a formal assessment of what their company is potentially worth. But without a foundation and continuity, your company is only worth what someone is willing to pay for it.

Based on the declining or flat revenues of the so-called "Others" there will be more collateral damage. Up until a few years ago, it was accepted that any company that grew 18%-20% was having a great year. Today, the "wonder kid" analysts talk about 8%-10%.

No one wants to build a company anymore. Everyone wants to be Tony Viscogliosi. As adept as Tony is, he is experiencing difficulties in developing his own portfolio of companies based on the amount of capital that he has "burned" through and the tremendous human attrition rate that exists in his organizations. The art of raising money is quite different than the art of managing people! Can some of these so called "OTHER" companies withstand a category 5 hurricane? In all likelihood, no! Investors are no longer willing to pump more capital into "me-too" products, especially hardware, when the majority of their revenues are being generated by investing surgeons. Who are these companies? Allez-Spine, Choice Spine, Custom Spine, X-Spine, U.S. Spine, and the list goes on! If you were going to invest into any of these entities would you be willing to roll the dice on an organization that generates 70%-99% of their revenues from investing surgeons? Then look at the organization at these companies and you begin to see why some of them are doomed for failure.

So as we reflect upon the past year, let's take a moment of silence for the many hard working people that lost their jobs, and the many investors that lost their money, all because the people running these companies were foot loose and fancy free when it came to managing their money and business. The Spine Blogger wants to know what its readers think?

Is Medtronic interested in acquiring Zimmer?

Recently, the Spine Blogger was speaking with industry professionals and overheard on the street that Medtronic was looking at a potential acquisition of Zimmer Medical Holdings. I know, where do I hear all these rumors? Well, this one came from a pretty good source.

So why would Medtronic look to acquire Zimmer? First of all the biggest factor would be market share, the next factor would be Zimmer's Recon and Trauma business in the U.S., and especially in Europe. This would open many different strategies for the company known as the "Evil Empire!"

Let's look at this for a moment. By acquiring Zimmer, Medtronic would immediately become a player in the THA and TKA markets, and open up greater marketing opportunities for Infuse as "pull through" business in Trauma. Think of the increase in revenue if your reps have BMP's as an adjunct to their trauma products.

But here is the $5 billion dollar question; "Can Medtronic acquire another company and not screw up the integration process? You know what many people on the street always say, "it's one thing to have the capital to buy a company, its a whole different scenario in integrating it!"

The Spine Blogger wants to know what the people on the street have heard?

Integra acquires IST Portfolio in FIRESALE!

It was reported on the "wires" that effective Monday, September 14th, 2009 Integra acquired the IST portfolio for $9.25 million in cash! In effect, is this the closing chapter in the storied and stormy relationship of Scott Schorer, Stephen Hochshuler and IST? The question must be asked, whatever happened to $75 million dollars in investor capital, and all that emerging technology that was being touted by Hochshuler's good friend Robin Young?

Like in any acquisition, the acquiring company through a spokesperson was excited about the contents of the portfolio including the minimally invasive system. Yet, in all likelihood the acquisition probably focused on the IP, if it provides any viable opportunities. With an estimated MIS market value of $678 million, how much and how soon will Integra be able to play in that market?

But let's look at the other products. Integra acquired another cervical plate. Is it new, is it true and will it make a difference? No! It acquired the Paramount Cannulated Screw System. Is it really a cannulated screw? No! It would be classified as a cannulated screw tip. Is it new, is it true and will it make a difference? No! The Axient was IST's version of a Dynamic Stabilization System. Yet, many of the OEM's that we talked to discussed the difficulty and cost in manufacturing this device. So the question must be posed, why the acquisition?

With sales of $2.2million in 2008 it is evident that IST took Integra to the cleaners. Now it's time to payout its attorneys and investors. WOW! A negative return on investment now there's great management. The Spine Blogger wants to know what its readers think?

Medtronic: Caught with Their Hand in the Cookie Jar

On September 10th, Barry Meier of the New York Times reported that recently disclosed internal documents at Medtronic revealed that the company was able to forecast a payback by creating a Global Fellowship Program in Australia. The company estimated that by paying or sponsoring fellowship programs, the company would be able to attain a 200% profit on their investment. Company representatives were sloppy, considering that this information was found on internal slides.

Medtronic was willing to underwrite an 18 surgeon fellowship program at the cost of $1.5 million in order to secure "new business revenue streams," and "nurture support from future customers." The commercialization of medicine has led to unscrupulous practices by companies like Medtronic that claim that they are major proponents of AdvaMed and Staark.

Medtronic advocates ethical standards when its executive management team sits in front of the U.S. Senate defending their past practices (mea culpa), yet, by time they get to the airport, they're laughing at the U.S. Government. A $40 million dollar fine is a slap on the wrist. Senator Grassley if you had any "chutzpah" you would make sure the next fine is $400 million. I suspect Medtronic like other companies in our industry do not consider any of these programs as outright inducements?

How do we establish a level playing field when everyone in the industry doesn't practice what they preach? Free-market must mean that the Spine Cartel has the freedom to do whatever they would like to do because of their financial power. Especially, when you are the market leader! Do the companies act alone, or are the surgeons complicit? This is not the first time that we have heard of a company subsidizing a fellowship program. How about companies providing loans for medical practice start-ups. How about companies funneling capital to surgeons through distributors? How about companies hiring family members? The commercialization of the healthcare system is now aided and abetted by our surgeons. They are no longer healthcare providers, they now look at themselves as medical entrepreneurs. Inducements encourage physicians to use specific companies products in which they have a financial interest, without considering sufficient cost and benefits, or, the availability of alternative products or procedures that may be less expensive or just as good or better when they are involved at this level. The basic purpose of medical care is fundamentally different than that of a business transaction despite the fact that physicians earn a living by providing medical care.

It has become apparent that whenever the Spine Blogger posts discuss how unethical we have become as an industry we fail to get feedback. The Spine Blogger wants to know what you working stiffs think!

Hey U. S. Spine, Why All The Press Releases?

With a sudden epidemic of Press Releases, we would suspect that U.S. Spine is looking to quell "the word on the street" that there's trouble in paradise. Some of our industry sources, aka "the eye in the sky," have speculated that they are looking to provide Paul Sendro with positive publicity considering the company's ridiculous statements when they hired him. You know, "was instrumental in turning Vertebron around, etc., etc., and so on......."

One of our commentator's reported that two more employees have left U.S. Spine and that the company was relocating. Just out of curiosity, it would be interesting to identify how much of their business is medical advisory board or consultant driven, just like any other early-growth stage company's? You know the old adage; "You can't teach an old dog new tricks!" The Spine Blogger wants to know what its readers think?

510(K) Approvals for August 2009

On Thursday, September 10th, the FDA announced 510(k) approvals for medical device products, here is the list:

Allez-Spine: Laguna Size 8 Pedicle Screw System

CardoMedical: Anterior Plating System, (I thought they had the rights to Vertebron?)

Custom Spine: Regent Anterior Cervical Plating System, A ruler or governor, how lame of a name?

EBI: IBEX Spinal System

Globus: Revere 6.35mm Stabilization System (Is this another quarter inch system?)

Globus: Truss Thoracolumbar Plating System

Medical Designs, LLC: Asfora Bullet Cage (No need to elaborate)

Medtronic: Vertex Recon System

Medtronic: Modification to the TSRH

Signus: Monopoly (Easy Money) Pedicle Screw System

As we analyze the ongoing trends in the industry, we continue to see companies glutting the market with more me too products. As the Spine Blogger has opined, the more "me too" products, the more hospitals justify capping pricing per procedure. The Spine Blogger wants to know what you think?

Follow the Spine Blogger on Twitter

The Spine Blogger is pleased to announce that effective today industry professionals can follow our blog on Twitter. So start Tweeting!

Will Gainsharing Ever Work?

Recently it was reported in industry publications that a hospital-physician gainsharing project was piloted in the State of New Jersey. This program offers physicians the incentive to earn extra money by reducing procedure or test volume to meet the statewide standards. The Center for Medicare Services (CMS) announced the inception of the project in an attempt to assess the practice of hospitals providing incentive payments to physicians to implement cost-saving strategies. As of this writing, this program does not include medical devices.

Yet, the question must be asked; Are medical devices far behind? I know everyone thinks this idea is far fetched because as it stands "gainsharing" is illegal under Medicare statutes since it represents an opportunity for physicians to be financially induced to deliver substandard care. The physicians financially induced? The hospital that they practice at? The company that they consult for? Increasingly, policymakers view this practice as a way to reduce the growth rate of Medicare because when paired with controls it ensures quality aligning the physician with the hospital.

Many device manufacturers (the CEO's) have urged caution because they believe that these types of arrangements will inhibit surgeons' to choose the best tools to treat patients and to influence purchasing decisions, especially when it comes orthopedic and spine surgeons. PLEASE!!!!!!! Considering that so many surgeons have consulting agreements who is kidding whom, when our illustrious CEO's frown upon this platform. How many physicians use products from companies that their children or relatives work for? Is that not an inducement? As long as the physicians are involved in the decision making process, including monetary incentives to drive down cost, this has a chance of eventually coming to fruition. As the healthcare delivery model continues to evolve, how many surgeons are becoming employees of the hospital? Let's face it, with modern technology many of the products that we sell are equal in producing results. A pedicle screw is a pedicle screw, a cervical plate is a cervical plate, a TLIF is a TLIF etc, etc..... I know, some of you will argue that it's the instrumentation that makes a system, but how much of a difference does it really make? The Spine Blogger wants to know what you worker bees on the street think?

Has the Spine Industry Rebounded?

Innovation and creativity are important when it comes to advancing medical technology. The objective is to make money. Yet, the goal of emerging technology is to enhance the quality of life for the patient, so that they can live a healthier and more productive life. Recently, the media has had a field day with the spine and general orthopedic industry questioning companies relationships with surgeons, surgeons fiduciary responsibilities to patients and employers, and companies "masking kickbacks" as consulting agreements (distributors are not that far behind the pack).

"Who is responsible for providing oversight, or, policing the industry? The Companies themselves? NASS? AdvaMed? The DOJ? It is apparent that the Spine Industry has come under the watchful eye of the government over the past few years due to our own inabilities to effectively play by an honorable set of rules (is there honor amongst thieves?). Unfortunately, this has resulted in large fines, compliance monitors receiving exorbitant contracts (cronyism witnessed by Chris Christie's actions), former CEO's (Stryker) testifying in front of Congress about our dirty little secrets, and NASS (a lame duck organization) issuing guidelines for more transparency between its members and the companies that its members align themselves with, and last but not least, AdvaMed. The bigger question that must be asked is; does anyone play by the rules anymore?

If you look at our industry, the make-up consists of start-ups (incubator-to-birth), early-growth stage companies, mid-size companies and the Spine Cartel. The last ten years led to a glut of new companies due to a bourgeoning economy and market forces allowing private investors and investment banks to sink their teeth and money into spine. Look at the deals that were transacted, Blackstone, Charite, ProDisc, Kyphon, SpineCore, Biomet, St. Francis Technologies, Cervitech and most recently Osteocel, to name a few. For all the great things that transpired, there were many bad things that began to surface. Promises that were once made to investors based on futures, were in reality much more difficult to achieve. This resulted in a handful of companies closing its doors due to poor management, unrealistic expectations, and a distressed economy. As the economy adjusted itself, sales became a major challenge for smaller hardware companies, de-leveraging became a mandate, and re-organization became tantamount for survival. Just look at the forecasts. Analysts now discuss 8-10% growth as being acceptable when as recently as two years ago 18-20% growth was the norm in the industry. Distributors and direct sales people have found it difficult to compete in this ever expanding zero-sum market. The evolution of sales in our industry has led to distributors and sales people to become"surgeon brokers!" Companies no longer have the patience to build something, they expect immediate results. If it was that easy, we would all succeed. But, why the rush? Is it because of all the promises made that cannot be delivered? Did everyone became addicted to entrepreneurial fever (not everyone can be Tony V)? What ever happened to building a viable and profitable company? Yet, even with the ability to broker one's surgeon, cost constraints are beginning to exhibit themselves in larger markets where hospitals are beginning to cap the cost of "me too" products. These include; lumbar fusions (pedicle screws), cervical fusions (cervical plates), all PEEK products (is there a "me too" product that stands out anymore than PEEK?), and biologics. As recently as five years ago JP Morgan analysts predicted a "boom" in the TDA market. Look at what has happened. Where are those analysts today? Has this market segment ever met their expectations? As the healthcare industry continues to be the centerpiece of our political lives, there will be many changes in store for those of us. The first change will come in major across the board mandates for cheaper pricing. Hospitals are already balking at paying premiums for pedicle screws, cervical plates and PEEK. As hospitals and buying groups share information and negotiating tactics regarding pricing, some members of the Spine Cartel will be willing to walk away from "capped" markets. Smaller companies will be willing to take less to survive but that will call for restructuring commissions. If you're selling pedicle screws for $2,500 - $5,000 per level depending on your region, does anyone believe that companies will compensate sales people at 30-40% commissions? Smaller companies are already re-structuring their commissions and business models by offering less in commissions and terminating large dollar volume distributors. Yes, the industry has rebounded, but by whose standards? The one that we lived by for the last five to ten years or by the new new thing? The Spine Blogger wants to know what its readers think?

Synthes 1 - Medtronic 0

35 USC Section 284:

"Upon finding for the claimant, the court shall award the claimant damages adequate to compensate for the infringement, but in no event less than a reasonable royalty for the use made of the invention by the infringer, together with interest and cost as fixed by the court.

Section 285:

" The court in exceptional cases may award prevailing attorney fees to the prevailing party, in either event the court may award up to three times the amount found or assessed."

On August 26th, 2009, the United States District Court in Memphis, Tennessee ruled on behalf of the claimant's (Synthes) petition permanently enjoining Medtronic from infringing on U.S. Patent No. 6,936,071 covering the Synthes ProDisc-L artificial lumbar disc. The award and damages amounted to $21 million. Based on recent rulings, Medtronic got off easily.

Yet, considering that Synthes overpaid for the ProDisc-L (but what's an additional $50-$100 million for Hansjoerg Wyss) it seems that "the worm has turned" for the Arbeitsgemeinschaft Osteosynthesfragen! Once again, under the "leadership" of "Buffalo Bill" Hawkins, Medtronic has taken another beating, no less on it's home turf. Could they possibly rebound and beat NuVasive? Time will tell. The Spine Blogger wants to know what its readers think?

There's Something Toxic in the Water in Vegas!

Since the Spine Blogger last posted the Medical Mafia article, our crack staff decided to look further into the said allegations regarding "kick backs" paid to surgeons by various distributors and companies in Las Vegas. It is quite evident that members of our "honorable spine medical community" have either lost their minds, let alone ethics, when they decided upon practicing in Las Vegas, aka as the "City of Sin." Could it possibly be something toxic in the water? Or, could it be good old AMERICAN GREED?

Initially, when these rumors surfaced, the good people of Las Vegas were taken aback that such an elaborate scheme not only involved middlemen and medical malpractice attorneys, but also notable spine surgeons, potentially judges, and local distributors. Yet, all of our readers know the old adage; "where there's smoke, there's fire!" The question that the Spine Blogger must ask is; "how long is it going to take the Department of Justice to move forward with their criminal case against the "Three Amigos" and Blackstone Medical? Many people in our industry and the companies involved are laughing at the DOJ and the FBI. Some believe that this case will never come to fruition. Up until a few years ago, the word on the street was, that the FBI were interviewing every former Blackstone employee to find out what they knew about how this elaborate scheme was hatched. Those of us at The Spine Blogger speculate that there would be many people willing to line up to throw a little more gasoline on the fire to finally burn the Three Amigos! How arrogant were these people?

This fall, the DOJ will get their day in court against the alleged middleman, and the main attorney involved in this case. The scenario that potentially may unfold will deliver a blow to our industry that has never been seen before. Surgeons may be whisked off to a federal penitentiary in ORANGE JUMPSUITS, only to be trailed by conspiring distributors. As this on-going investigation had unfolded, the added twist was the arrest of a sub-rep for a distributor in Las Vegas for allegedly molesting his children in concert with his spouse. This sub-rep had well-known ties to a prominent spine surgeon involved in the on-going investigation. Between the so-called Medical Consultant and the Sub-Rep, the Blogger speculates that someone is going to "roll-over" on behalf of the government. Let's face it, if you were in your 60's or even in your 40's and your defense attorney looks over at you and states, "it's time to make a deal," someone is going to start singing like a Rat Pack saloon singer! Besides, who would be willing to spend jail time without having company?

If and when this happens NASS and AdvaMed (what a joke!) can take great pride in their accomplishments as organizations promulgating ethical standards for the industry. The Spine Blogger wants to know what its readers think?

Archus, The Anatomy of a Meltdown

As the news broke that Archus was filing a certificate of dissolution, many questions were running through my head, some that made sense and some that did not. Yet, our readers have to be wondering, how does a company that had the ability to raise $63 million, plus another $2.3 million as recent as this summer, meltdown?

Having had the opportunity to look at this device in detail, I always wondered who was willing to invest in this product, and who would want this product implanted in them? Maybe my later observation is based on the fact that I have never had back problems. The question that needs to be answered is; whom are these investors listening to when they are making their decisions to infuse an incredible amount of capital into a potential emerging technology? A surgeon who had hit a grand slam with a previous product? What ever happened to the X-Stop? A medical device consultant? A certified financial analyst? I know that there are no guarantees, it's a crap shoot! Yet, as investors become conservative from The Spine Industries Roadkill Tour of '09, will they have learned their lessons when it comes to investing in "fools gold!" As it stands, there still are investors willing to take a calculated risk, but the trend seems to be going away from hardware ventures. I would suspect if surgeons resect enough of the structural elements (tricomplex) of the spine and replace them with hardware, they should eliminate pain.

In today's market the average financial outlay for a 450 patient IDE is an estimated $15-18 million dollars, and that's not including associated training cost. So what happened to the other $50 million dollars? Based on what we learned from some of the other meltdowns, it probably resulted in nice offices, beautiful artwork, marketing expenditures, sculptures in the lobby, and senior management paying themselves an incredible salary, smoking Cohiba's, and drinking Cristal, all on pre-revenue dollars! If some of these investors would see the way their money is being managed, they would probably pull the plug themselves on their investments.

So as we wind down The Spine Industries Roadkill Tour of '09 here is our list of headliners:

• VERTEBRON
• INION
• INNOVATIVE SPINE TECHNOLOGIES
• PEGASUS
• ARCHUS

Who will be next? Will it be an Impliant, Facet Solutions, Disc Motion Technologies, Hydrocision, Life Spine, U.S. Spine, Custom Spine? The word on the street is that some of these companies are hemorrhagging cash, and some are using unscrupulous methods to deleverage themselves. Recently, we heard from former employees from some of these companies, informing us that they have terminated distributors and replaced them with scrub technicians and cut commissions. Others are using their consulting surgeons/medical advisors as public relations spokesperson's to generate interest from private equity or investment banking. Do these investors understand that there is a conflict of interest when your medical advisor is the person selling the snakeoil? The problem that we see with our industry, is that many of these companies don't know how to manage themselves and their money conservatively. I am sure Mr. Fitzsimmons is a nice person, unfortunately, he wasn't that good at managing the money. Hopefully, he will be able to sell the product in an auction or fire sale for at least $15 million and repay some of his investors. The Spine Blogger wants to know what its readers think?

Another One Bites the Dust! Archus going, going, gone!

On August 21st, 2009 Archus filed a notice of dissolution in the Office of the Secretary of the State of Delaware. The Certificate become effective that day.

All claims or potential claims must be presented in writing and contain sufficient information to inform Archus (James Fitzsimmons, CEO) of the identity of the claimant and the substance of the claim. All claims must be received by October 28th, 2009. A copy of the claim should be addressed to Archus c/o James Fitzsimmons and Cooley, Godward, Kronish, LLP, Attention J. Michael Kelley, 101 California Street, 5th Floor, San Francisco, CA 94111-5800.

Since the Spine Blogger has been involved with product development, one question must be posed to our readers, how does anyone "burn" through $63 million dollars in eight years? How much of this capital was spent on wasteful pre-revenue marketing? How much was spent on creating the "buzz?" How many people gambled their careers on hitting a grand slam? Is this a sign of things to come for companies like, Disc Motion Technologies? Impliant? Facet Solutions? How many years does it take to realize that your device is being driven up a dead-end street? How many surgeon consultants don't have the nerve to tell the company that the product will not work? Based on recent reports, there are private equity investors willing to invest in medical device companies, unfortunately or fortunately, they are not hardware based. The Spine Blogger wants to know if anyone has heard anything else on the street?

Unhappiness at Medtronic, Trouble in the Sand Box!

Recently one of our loyal and trusty readers linked me to a site that for all intense and purposes is one of the most unprofessional forums in cyberspace. So I proceeded to read some of the posts and gasped at the animus that is directed at Mr. Medtronic himself, Bill Hawkins.

The Spine Blogger is not that far off when he says that so many of our legacy companies have lost their innovation, out-of the box thinking, and moral compass. Even the smaller companies have started to behave that way. Why is that? Could it be that publicly traded companies no longer have people running companies? I know that sounds ridiculous to our readers, but, what happens when you are more concerned with your own personal portfolio and compensation than you are about the present and future of your organization? Non-sense cries out some CEO! Medtronic sounds very much like Stryker when you talk, listen and read what their employees say. You know, drink the kool-aid and remember if any analysts come into the booth just direct them over to PR.

It seems that "Buffalo Bill" has everyones knickers in a spit. Having laid off 1,800 it seems that the Board has taken care of "BB" for nothing more than a mediocre performance, at least by Medtronic standards. The funny thing is that the blood sucking analysts believe all the non-sense that Mr. Bill feeds them. Yes, there has been an exodus of many talented distributors from the organization, some reluctantly, some bought out, and some because they just got tired of working for a publicly held company.

Remember, what I said in a previous blog, once the darling of the industry, today they are the angry child. So who's betting that "Buffalo Bill" will be riding off into the sunset in the near future? Remember when he was quoted as saying that he is looking for innovate leaders, maybe he was talking about replacing himself? The Spine Blogger wants to know what its readers think?

Healthcare and the AAOS, Where Are We Going?

As we approach the home stretch of another beautiful summer, hopefully Congress has re-energized its batteries and read all of the pages of the Healthcare Reform Bill that will dominate the halls of the Capitol this fall. Depending on the architecture of the Bill, the future of our industry and this country lies in the hands of a divided government and its citizens. Not only will this division exact a toll on our lives and careers, it will affect our children and grandchildren's future standard of care. Fortunately, the Spine Blogger does not have to attempt to use scare tactics to persuade its readers that some change needs to be made as major financial fissures have exhibited themselves in the U.S. Healthcare System much longer than we would like to admit. The last three to four weeks has been pictures at an exhibition in mediocrity by both parties. The Democrats fumbling over their inability to convey a Healthcare Reform Bill in simplistic and concise terms, the Republicans behaving like the bogeyman telling grandma and grandpa that they will be put to death (I've already notified grandma that I won't let the government take her). America is a great country, reactionary as it may be, as long as it doesn't ask its people and the medical industrial complex to have to make a sacrifice.

Let us look at healthcare in the U.S. Over the past eight years we have seen an attempt to pass on the cost of medical care to the consumer. The objective was to have consumers make prudent, educated and cost-efficient decisions about their healthcare. People would take ownership. Employers loved it because this platform would offer high-deductible/low premium policies, health savings accounts, therefore, shifting a greater portion of medical bills to the patient, and attempting to create a publicly accessible database that would help patients make their own decisions ( I don't believe this ever materialized). But what this plan failed to address was the behavior of the insurance industry, fee-for-service payment to physicians, the ongoing confusion over hospital reimbursements, nor did it mandate a change in the way healthcare is organized and delivered.

The fact remains that the greatest percentage of healthcare expenditures in the U.S. is for serious diseases. The sickest 10% of the population accounts for about 70-75% of all healthcare expenditures. I am not sure what percentage of that figure includes illegal immigrants (illegals will not be covered under the proposed plan), young people electing not to be insured or underinsured, and those eligible for Medicare. However, there has been a tradeoff. New developments in technology, the increasing number of specialists, the high fees paid for new procedures, and intense market competition to increase revenues for those in the medical industrial complex contribute to the ever rising incentive to provide expensive healthcare. Consumer Driven Healthcare is utopian, yet, what happens if the consumer is seriously injured? I will argue that I have never met a prudent shopper in the emergency room. Usually I have heard, "God, don't let me die!"

Do our readers believe that we can create a price-sensitive and consumer driven industry that would result in competitive pricing? Is health-care another consumer driven business? Does the asymmetrical relationship between healthcare providers and consumers allow for ordinary free-market forces to occur? Should the public be made solely responsible for managing the cost of his or her healthcare? What happens if you lose your job? What kind of information would you need to make potential life threatening decisions? Will pay for performance work? Life or death decisions are always better left to the individual and their physician, yet, has Consumer Driven Healthcare really worked? This commentary does not mean that I believe government should have any say in making a final decision on your life.

So what can we do to make the system efficient. Let's start with a single payer system. I can hear the uproar! This would eliminate the confusion that exists between doctor and insurance company, patient and doctor, hospital and insurance company when it comes down to reimbursement. This would have to be built around a central reimbursement entity. If you believe in the free-market, why shouldn't those who cannot afford insurance have the option to purchase some form of reasonably priced, publicly funded insurance, that would also be available to people that lose their job, have no insurance and become terminally ill (I think it would be called Catastrophic Healthcare, duh)? Has anyone had to pay for COBRA? The cost is criminal! Do you really care that the government would be the gatekeeper for the uninsured or underinsured. As long as you have the option to keep your existing plan, how does this effect your liberties as an American? Besides, if we believe in freedom of choice, who are we to tell those that cannot afford healthcare coverage what is right for them? Is it because we are so arrogant to believe that we know what is best for others? Why can't we overhaul the system? Is it because we are truly afraid of change (remember my comparison to our Puritanical ancestors in a previous blog)? Let's face it, we have failed in an attempt to modify our healthcare system incrementally, it hasn't worked. Most of the previous programs have either increased the cost of delivery, reduced coverage, or reduced the quality of healthcare (read on). As much as we love to deny the facts, whenever the uninsured seek medical care in the emergency room, a tremendous financial burden is place on the current payers into the system in the form of higher costs.

Major reform will require a rational discussion with all parties involved to understand the basic problems with the current healthcare system. Yet, we continue to see hard working, good Americans ranting and raving without knowing the facts. Recently, the AAOS responded to the ongoing healthcare debate as a result of inaccurate remarks that were made by the POTUS. Sometimes its better to leave some things unsaid! The Academy had every right to deliver a response to what is wrong with healthcare, constructive as those remarks were, here are some observations. HIGH ADMINISTRATIVE COST is a by product of the insurance industry taking an estimated 10%-25% off the top for profits, the only remedy for senseless litigation is TORT REFORM, and will that ever happen, an INCREASING SHIFT IN CHRONIC DISEASES is a result of the "bigger is better" mentality that pervades Americans diets, as well as their lifestyles, no need to elaborate on the SHIFTING COST of the uninsured to those of us that are insured because the cost is passed on to us,, and lastly UNNECESSARY PATIENT CARE. My question to the Academy would be, who should share the responsibility of policing unnecessary patient care, the consumer, physician, or the insurance company? Generalities are wonderful, but where's the beef? Who becomes the gatekeeper?

The Academy's position on what policy makers should consider follows; shift responsibility on control of spending dollars to consumers. Hasn't this concept been experimented with and been shown to have flaws? Ensure unencumbered access to specialty care (isn't that what PPO's offer). What does that mean? Make healthcare coverage more affordable. Who is going to absorb the cost, and what does affordability mean? Improve the quality of Care. Basically, the Academy is admitting that the standard of care is "sub-standard" by making that recommendation. If the physician is the gatekeeper, how do you measure quality? Extend coverage to the uninsured (who absorbs the cost) and the underinsured? Where does this money come from? The Chinese? The US Taxpayers? Avoid new unsustainable programs. What does that mean? That sounds quite nebulous. If the current programs aren't working, should we sit back and watch Rome burn?

As heated as the debate has become, all complicit parties do not offer any remedy. They offer a diagnosis. Let's face it, if the U.S. Healthcare System was a patient, right now the patient is on life support and the we cannot find anyone that can agree on the modality of treatment. The Spine Blogger wants to know what its readers think!

Trinity Evolution Is on Backorder!

The Spine Blogger is reporting that the word on the street is that Trinity Evolution is on backorder. For all you cowboys selling Osteocel, DBM or Synthetics this is a golden opportunity to get in on the ground level. The Spine Blogger wants to know what our readers have heard?