Monday, August 2, 2010

Like in Spine, It's Okay to Lie, Steal and Cheat, Just Don't Get Caught

To those readers that exhibit less intelligence than Lonnie, the creepy banjo kid in the movie Deliverance, please refrain from writing incoherent, let alone vulgar comments on the blog. The mentally handicapped banjo kid exhibited more linguistic skills in his movie role, than some of the tourette's style rants that are occasionally written. With that said, TSB thought it would be of interest to report that on July 29th, 2010, a challenge to the complaint that was filed in Los Angeles alleging medical malpractice, conspiracy to commit fraud, and fraud against St. Jude and a Tarzana cardiologist and internist, Dr. Michael Burnam, and Dr. Burnam's son, L'il Brad was overruled by Honorable Michael Harwin of the Los Angeles Superior Court, Northwest Division. So why is TSB writing about an entirely different medical device industry? Well, if you continue to read the post you will find many similarities that exist within our industry.

The Case Albert Israel vs. Michael Burnam, M.D., Brad Burnam, and St. Jude (Case #LC085694) alleges that Dr. Burnam cut a backdoor deal with St. Jude to hire his son as a medical device salesman. What a coincidence? Could there be parallels between our industry and what goes on in that invasive cardiology industry? The alleged deal involved Dr. Burnam prescribing the St. Jude's defibrillator for his patients as a quid pro quo for his son's employment. We have never heard of anything like this existing in our industry, have we? TSB is sure if the DOJ really wanted to clean up one aspect of the spine and general orthopedic industry they wouldn't have to look any further. At least if the DOJ doesn't have the cohonies to throw some CEO's or ex-CEO's in jail, this could be a start. Burnam would receive commission points with a guarantee floor of $200,000 per year. The doctor would receive compensation for speaking engagements and "so-called" research products. Hmmmmmm, sounds familiar?

Unfortunately for Dr. Burnam, things got ugly when an amendment was filed with the court to amend the original complaint, asking for punitive damages when Dr. B prescribed the procedure that nearly killed Mr. Israel. The complaint alleges that Dr. B placed his own financial interest above the health and well-being of his patients. We've never heard of that in spine? How irresponsible was Dr. B? His own son was in the operating room during Mr. Israel's procedure.

What will hurt Dr. B is that a St. Jude sales rep, Mark House, was deposed and testified that St. Jude had complete knowledge of this fraud. Originally, St. Jude refused to hire L'il Brad Burnam for ethical reasons, and a conflict of interest. When Brad was hired by Boston Scientific, Dr. B stopped referring patients to St. Jude (never have had that happen) and funneled his patients to BS. In May of 2007, St. Jude began negotiating with Dr. B to hire L'il Brad away from BS in order to regain his business. The impetus for this decision was based on Dr. B's large pool of patients and particularly his involvement with the Los Angeles Jewish Home for the aging.

In order to hide the conflict, the contract did not include commission points for referrals by Dr. B. Instead, L'il Brad received commission points for the implanting surgeons regularly used by Dr. B, including Mr. Israel's surgeon. Upon hiring L'il Brad, it was reported that St. Jude realized a 40% increase in business in High Voltage products, including defibs. After Mr. Israel's near death, St. Jude transferred L'il Brad to a San Diego territory. Dr. B then threatened to hold back his business until L'il Brad was allowed to come back home to Mom and Dad in the San Fernando Valley. But it gets better, when Dr. B contacted Mark House, he asked him to lie by saying he (House), and not L'il Brad, was in the operating room when Mr. Israel almost died.

In retrospect, it can't get any better than this. The adjudication of this case could establish a future precedent for hiring surgeons children. Conflict of interest? TSB will let our readers decide. Not only do distributors broker surgeons, surgeons have long been brokering their business in exchange for companies hiring their children. You know what they say it's okay to lie, cheat and steal just don't get caught with your fingers in the cookie jar. TSB wants to know what our readers think?


62 comments:

  1. Children, brothers, nieces, nephews. Not sure how it is going to change but I have always said I wish my dad was a surgeon and I could take advantage of that sweet perk.

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  2. amazing story. I hope they get what they deserve. Sad but true, this type of nepotism is all over spine. I'm sure it won't be long before we hear a similar story within the spine community.

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  3. This stuff needs to be stopped so we can clean up spine.

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  4. Globus just hired a local orthopedic surgeon's son here in MI. he didnt use much globus b4, so we will see now. doesnt seem worth the hassle to the surgeon, the son, and the company. we'll see

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  5. Wasn't there a surgeon in the Baltimore area bragging about Globus hiring his son? Nothing surprises me about that company.

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  6. Alphatec anyone??

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  7. Alphatec where?

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  8. yeah no shit...that show's coming to an end real soon. Just wait until the beans are spilled on these guys in the coming months.

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  9. I hear the Jersey Shore is a great show and more people should watch that one closely!!

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  10. STL is filled with this shit. (Sons, Son in laws, Brother in laws, Nephew)

    Synthes,Globus and Nuvasive are all guilty. I cant wait to see it hit the fan. You never know who or when they will all be turned in.

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  11. Oh you guys are so cute. That's right; the big bad dishonest people will get caught... because that's what happens in Disney movies!
    This has been going on for DECADES in the medical device industry and very few people have ever faced the consequences, and those who do get a slap on the wrist. Besides do you really expect a government agency to crack down on nepotism?
    I've talked to reps whose doctors will not use their products unless the rep gives a percentage of their commission. In some cases it is the first time that rep has talked with the surgeon. Then you have the doctors who tell you what rep your company has to use, otherwise they will not use your products. Or the distributors who ask about making a doctor who has never even seen your product a "consultant". Face it, spine is a pay to play industry.
    If the DOJ goes after anyone they need to go after the hospitals that require you to give free product in order to be allowed to sell there, but still charge the patient for the product. Go after the doctors who are billing $100k and up for a single level ACDF (or similarly extravagant/creative billing). Let’s get rid of the straight up fraud before we go after the inappropriate relationships. Most of the comments sound more like sour grapes than any real fraud.
    We all know companies out there that have made millions off of paying out for years, and they will continue for many more.

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  12. How about the surgeons live in girlfriend who is a LANX rep. How about if she became his wife? How does that hold up in court??

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  13. This will never stop. You can get $175,000 minimum guaranteed from Stryker in some southern states if you have a GED and a relative that is a hip and knee surgeon. Bottom line is the government, OIG, and DOJ just don't give a damn.

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  14. From what Ive seen, this is a civil malpractice suit brought by the injured patient, not the DOJ. This is a very different animal from a DOJ action. There does not need to be evidence of a crime, just evidence of negligence.

    When the patient's atty discovered the conflict of interest, it was added to the case. Take note, company risk managers: Even if a COI doesn't rise to the level of a crime in the eyes of the DOJ, it can still come back to bite you if there is a malpractice claim under these situations.

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  15. Anonymous 5:41 am. Nothing about this holds up in court, don't bother. Trust me on this.
    Anonymous 6:13 am. You are right, OIG and DOJ don't give a damn. Trust me on this.

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  16. shake and bake baby!!!!!!!! this article is hilarious. i am a big republican but this blog reminds me of the big bad scare tactics that republicans sometimes use in media. get over it people!!! this is the game you are in-

    do you guys actually think nuvasive or globus came onto the scene because of their innovation?? hell no.... it was bc they pay and now the surgeons play.

    could you imagine though..IF..and only IF sons and daughters couldnt be reps... those kids would have to actually do something for themselves....

    That should be a reality tv series.

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  17. Anonymous 8:31pm is right. We have a doc in town where the son works for one spine company and the son-in-law works for another. I bet that makes for an interesting Thanksgiving dinner!

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  18. Same is true in my part of town ... multiple docs using their live-in girlfriends as their sole-source reps. Shame.

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  19. Agreed. Questioning a physician’s relationship with his device representative and whether/how it impacts his practice is essential to patient safety and preserving what’s left of our industry’s integrity. I say that assuming there are still a few people out there who are in this game for the long haul and care about making the right decisions for the right reasons. These kinds of arrangements are what land us in the media spotlight and earn us valid criticism from the people we want as allies. I’m glad TSB has addressed this issue because (and I think everyone will agree) it is increasingly prevalent.

    Unfortunately, the powers that be have larger problems to address first. There are bigger fish to fry as AUGUST 2, 2010 10:39 PM points out. The downright fraudulent abuse of Medicare and Work Comp is staggering and sham consulting agreements abound. Know, however, there will come a time when these people will be held accountable.

    IN THE MEANTIME LET'S NOT PUT HOLES IN OUR OWN BOAT. LET'S NOT MAKE OURSELVES CHOOSE BETWEEN SINKING AND SWIMMING. LET'S KEEP SAILING. I LIKE THE WATER AND I KNOW YOU DO TOO.

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  20. It's amazing what a little Putang will do to a man. I guess after you've been a book worm and a nerd all your life, a little power stimulates your senses. Unfortunately, it's at the wrong head.

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  21. You people crack me up. Sofamor-Danek was, is, and always will be the leaders and kings of this type of strategy. They have employed it for years from the top down, and upper management didn't care if the son couldn't spell cat, when spotted the c and the t.

    You guys that talk about cleaning up the surgeons problems before addressing the industry problems, are the problem. Until we can show that there is integrity, honesty, and people getting business cleanly, then we should be, and will be, under the spotlight. I keep waiting for the DOJ and OIG to start going after some of you scum. And, no, I am plenty successful for those of you who might be thinking otherwise, but I never have to worry when I go to bed at night, as to whether the government is going to be knocking on my door.

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  22. ditto 712.they are the worst!

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  23. The Globus guys in MI are a piece of shit and have always operated that way. For those the operate in an ethical and professional way, we just have to deal with turds like that and hope that they get what they have coming to them soon enough.

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  24. Unfortunately most are turds and the senior mgt are worthless! I've heard certain senior levels justify it by "everyone is doing it." The federalis have too many cases and potatoes too small in spine at the current moment. Bigger fish to fry in other sectors. When surgeons are blatant in violation of stark/stark II and get away with it we are getting closer... Happy fishing - hunting season just around the corner. Keep up the dialog maybe some interested eyes...

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  25. anonymous 3:38 Sour grapes?? Probably a rep that could not handle the high pressure of spine sales. Get a life!

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  26. Heard that Globus dumped L5 Surgical, if so, who else have they rid themselves of, if true, they are looking to position the company for an IPO? The same way LANX is attempting to build a direct sales forces, K2M is right there behind them. They have gotten rid of some big distributor and also setting distributors up for failure so they could cut them loose. It's a wonderful time to be in the industry.

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  27. I'm so tired of you guys that bitch about the filth in the spine industry anonymously, how about getting the balls to speak up. When someone with a badge comes knocking on your door, why do you clam up and have nothing to say? GROW SOME!

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  28. Anonymous 6:30 you first little man

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  29. Speaking of balls, lots of hypocrites on here. Always easier to post anonymously and call out others

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  30. Wow, a guy by screen name Anonymous posts about how no one has balls because they all post anonymously. Is anyone else confused here?

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  31. Ok ill start. My name is Richard Head and im a senior manager in Carlsbad.

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  32. Nice one Dickhead

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  33. Thx for my morning chuckle.

    This is funnier than Comedy Central

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  34. churn and burn. on to the next one.
    i want a good article muscularskeletal venture man.

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  35. Cape Girardeau, MO! L1-S1, two PLIF's at every level, crosslink at every level. Nice case for the fiance.

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  36. Wisconsin and Illinois it is very popular! Send them to jail!

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  37. Bottom line, isn't there a limited window before manufacturers sell directly to hospitals and cut out distributors/reps altogether? Welcome to "new world order" due to Obamacare!

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  38. Send them to jail and let them have cake.

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  39. tar and feather their asses

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  40. Down goes ATEC tomorrow! Nice numbers-not!

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  41. ATEC financials looked good. Growth for the year and significant growth over Q2 from last year.

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  42. small companies growing, big dogs suffering.

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  43. see you all at red lobster!

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  44. financials looked good!! LMAO!! R U kidding me!! running out of surgeon relatives to hire. Did you see the insider dump by berk and foster, et. al. Close to 250million shares sold recently. LMAO FOC

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  45. The boys in San Diego use this hiring practice all the time, look no further than the midwest. There are examples after examples, the local distributorship in one area has 3 "for hire" individuals.

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  46. Talk about scum....

    http://bacterin.com/index.asp?p=Opportunities&n=healthcare-professionals

    They have 28 "Advisors" and are blatantly seeking new consultants on their website.

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  47. Not sure why everyone has such hatred for Globus, Alphatec and NuVasive. Is it that you believe they are doing sonething that Medtronic, Depuy, Styker and Synthes have not done or continue to do? Or is it that they these upstarts continue to gain market share at their expense? Take any big company I mentioned and they all do the same things. The postings that suggest otherwise are people who do not understand the industry or are trying to point fingers because they cannot compete with the smaller aggressive nature of Globus, NuVasive and the Alphatec's of the world. Advamed was a Depuy & Medtronic idea because they got caught with their hands in the cookie jar and didn't want others to do it so they came up with this "plan" to act as the good guys of the industry and get some policing of it. However, they still break most of the rules with surgeon champions, consultants, royalty guys,etc. They now act holier than thou about it and try and say the other guys are the bad ones. The best is all the Depuy consultants from Philly to UMDNJ! Its a game everyone is playing. So please accept the facts of what we do and navigate the waters that are sure to get rougher over the next few years folks.

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  48. User 6:10am,

    The reason for the hatred is upstarts don't innovate by there own divine design, the stand on the backs of the major players. Globus has had 3 major ip lawsuits and lost them all. The fact is they invest more money in patent attorneys and find ways to skirt the rules. They did not do the work themselves, did not evolve the playing field. On the contrary these upstarts have contaminated and/or diluted the product lines and fields so much that its not about innovation, its about just sheer sales numbers.

    The fact is condoning behavior for small upstarts and having people look the other way while these small mosquitoes make there money. The ultimate result is that we end up with the mess we have today. Poor products, poor business practices, inflated financial messes for the end user.

    The end user is the patient, when all we see the dollars and not what it does in the long run, we do not help the matter. The fact is we forgot about personal responsibility so long ago it is ending up biting us in the ass.

    All the poor business ethics have alerted the powers that be to enact the worse healthcare reform package, the likes of which any one is ever going to benefit from. This reminds of me of saying, "boys will be boys" well boys are not men. Men work hard made modern medical devices what they are today. Boys have just played a little loose and drank too much of the kool-aid to forget what the right thing is to do.

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  49. So when it was your game alone to do what you pleased that was OK. You got to charge what you wanted, pay who you wanted, and corner the market. That was cool right?! Now these mosquitos as you call them come and start eating your lunch and you want to call foul beacause they aren't innovative! Come on, you can come up with a better argument than that one. I am not condoning what was done in the past and what is being done now. Far from it. I am just stating that it is the way our game is played. Don't hate the players. Finally, just as the Yankees helped Boston become a better team by keeping the pressure on them all these years, these small companies are making you work that much harder to keep market share. You are going to have to be more creative because competition forces things to either get better or fall behind. Start innovating like you all did with infuse instead of coming up with slick hospital contracts that box out cometition and keep your prices elevated. Nice job there.....thank the mosquitos....

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  50. Allow me to cut/paste from a previous posting from MM. See below paragraph. Anonymous 6:10am and 6:20pm please read. I believe you are the same person. I'm a bit puzzled by your comments on "not condoning" what was done in the past and what is being done now. Your bullshit may happen-I am hopeful that others still "do the right thing." This is not how the "game is played." If you have children what would you tell them to do. Market dynamics will eventually take care of this problem and/or the Law. Your fancy "eat your lunch", clever sales call, etc. are long gone. How are you really getting "it" done. Your a POS!!

    "Selling on features and benefits went the way of the Edsel. How many different ways can you slice and dice a pedicle screw? A cervical plate? A piece of PEEK? A synthetic biologic? How many people even know what they are talking about when they present a biologic? Today, all anyone wants to know is how many surgeons can you bring to the table, and how does that equate to revenue. That's not selling, that's brokering. That is a by product of Wall Streets and private equities influence on our business. Everything is short-term. Some distributors change companies like others change their socks, or, carry multiple product lines, behaving like WalMart or Target. Let's get serious, if your products were that unique, you wouldn't be asking those questions. You wouldn't be complaining that market dynamics are affecting pricing and profitability. You would be confident that with the quality of your product, great planning by the salesperson, exceptional time management, a timely response and support by the company and its management team salespeople would be able to sell your me-too products. Can we still make $300-$400K per year? Absolutely! But you better have something unique or 3-4 surgeons that cut anything and everything that breathes."
    AUGUST 2, 2010 7:04 PM

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  51. Remember, the hospital's routinely look the other way and are co-conspirators for all the fraud and abuse.
    Increasingly, instead of looking out for their patient's best interest, all they care about is the cost of the device.

    Where was the hospital in the above case? Does anyone believe they didn't know and weren't complicit in this?

    In the O.R., everybody knows who's bedding who. It's worse than high school. And I'm sure it was common knowledge that the rep was the surgeon's son.

    If hospitals start getting named as co-defendants, perhaps they will start policing these inappropriate relationships...

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  52. The majors do not innovate. Start-ups innovate. Everyone else is a sardine in a can selling me-too products.

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  53. "Today, all anyone wants to know is how many surgeons can you bring to the table, and how does that equate to revenue. That's not selling, that's brokering. That is a by product of Wall Streets and private equities influence on our business. Everything is short-term."

    COULDN'T HAVE SAID IT ANY BETTER! GET OFF THE CONFERENCE CALLS AND COUNTING YOUR NUMBERS AND DOLLARS AND GO SELL SOMETHING AND SUPPORT YOUR SALES FORCE! MEDICAL BROKERS!!

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  54. Since when is brokering considered taboo. Surely you Medtronic guys don't think your beloved Koolaid supplier doesn't engage in it? You guys are too much trying to claim the moral high road all the time. Medtronic invented and mastered just about every tactic that you condemn on this blog, but somehow it only registers as nefarious when someone else does it. And then when I take some of your business, you automatically think I paid your doctor off with some consulting agreement. It is more likely that I am just a better rep than you and the doc appreciates the fact that I don't feel entitled to his business. In fact, I hope you keep up with the arrogance because more and more docs won't do business with you simply because you work for Big Blue.

    Medtronic likes to throw around the R and D number they spend every year, but what have they really developed in-house lately? Most new tech they have, they bought from (gasp) "ankle biters" or "mosquitoes". Sounds to me like they are brokering innovation.

    In case any of you forgot, all businesses are in it for the money and the stock value. No spine company is out there strictly selling on features and benefits of bread and butter products. They use whatever tactics they have access to, and some of them cross the line. Big and small, none are immune.

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  55. I am very curious how the first doc that is part of a POD will act when he is sued for using a device he is directly compensated for and bills for the procedure after the patient is injured or dies.
    We have all seen a few examples of docs standing up for someone else, but when their nuts are on the chopping block....watch out. They will do anything to protect their 30 year investment in schooling and precious reputations.

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  56. Is this why my mother got the cheapest pacemaker when it was ordered from the JHA in Tarzana and she had the best insurance money could buy

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  57. The nepotism is very clear and lots of jokeying by big Daddy but I don't see why this should be in court. Did I miss something in the case?

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  58. What's interesting about all this is that most hospitals and hospital systems have policies against nepotism. Check out your customer facilities ethics policies and I bet you will find that they do not allow staffers in product decision making positions to use a device or company that will directly benefit a direct, or indirect family member.

    Enforcement! Now that is a different issue. They cover their butts with written policy because it sounds and looks good, but they never enforce for fear of pissing off the cash cow physician thats bringing in the bacon while lining the pockets of his son or daughter.

    Hospital administrators have the power and ability to change the entire landscape of this practice. The issue is that they have NO BACKBONE. Administrators are all about cash flow and bottom line. Ethics only come into play when someone is really watching. DOJ, OIG - where are you guys?

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