Saturday, September 12, 2009

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!


  1. This may be a bit overkill – some might even say that we’re in the midst of a modern day witchhunt targeting the larger med companies. Healthcare is currently of particular interest in the public eye today and any suggestion that excess profits are being had at the expense of patients and the media has a field day. It's given that publically traded medical companies exist to grow market share and gain profit for their shareholders. Even ones that are not-for-profit or otherwise "exist for the betterment of patient care" cannot operate indefinitely at a profit loss.

    On the flip side, there should certainly be a limit to what is ethically allowed in revenued medical companies, and knowing human nature it is very appropriate to have controls in place to protect patients. The question is however, how far do we go to limit the “incentive” factor for the surgeon? Obviously direct payment for product use skews optimal patient care, but what about the surgeon who simply likes a particular rep’s personality more than the other? It may not be considered kosher to give grants to residency programs for return favor of business, however what about the benefit of furthering education that the grant money provides? How do we police the surgeon who has intimate relations or is married to a med device rep – the hospital?

  2. If the incentive to use one company's products is predicated on a consulting agreement, grants for a fellowship program because the Professor is a consulting surgeon, or subsidizing a resident's start-up practice, is this or isn't this an inducement? How many times have reps heard the expression when you are attempting to sell, I have a consulting agreement? My brother works for the company that I use. Obviously, it is in the best interest of companies to continually improve medical technology since it is suppose to enhance the publics quality of life, but the bottom line is the new technology that sometimes doesn't make a difference is driving up the cost of healthcare. There are many examples with the current state of the art. Do we honestly believe that there is this nefarious conspiracy by the government to regulate our industry or is this scrutinization a by product of our flagrant behavior?