Tuesday, August 24, 2010

A New Precedent, or Just Another Witch Hunt?


On July 8th, 2010, the HHS Office of Inspector General (OIG) announced settlement of a civil monetary penalty and Medicare exclusion case with United Shockwave Services, LLC, United Prostate Centers, LLC, and United Urology Centers, LLC, a group of physician owned companies. The companies collectively agreed to pay $ 7,359,000 to settle this case. So why is TSB writing about a case that involved physician owned urological companies? Because this case could establish a precedent for future investigations and litigations that the OIG and DOJ pursue. which could include physician owned distributorships, especially when it comes to spine and orthopaedics.

The OIG believed that the conduct by the above mentioned parties violated laws by "leveraging patient referrals to obtain contract business from hospitals." The language in this settlement indicates an increased interest in fraud and abuse risks posed by other types of Physician Owned Companies. Kickback concerns exist when companies link investment opportunities to the ability to generate business, and offer return on investment that are disproportionate to business risk. These concerns seem particularly applicable to the business model employed by Physician Owned Implant Companies.

Whether organized as sellers or distributors of manufactured products, group purchasing organizations, or, commissioned sales agents (physician owned distributorships), the concern that the OIG has, is that these business models leverage referrals of physician-owners/investors into contracts with hospitals where the physicians perform their procedures to implant devices in turn receiving profits for their relationship with a company or distributor. So the question must be posed to our readers;

Are physician-owned intermediaries shell entities with no real infrastructure, or capital investment, a legitimate business model?

Is this behavior unlawful, whereas, physicians are controlling the selection of implants based on financial remuneration for their decisions?

Does this behavior/business model violate anti-kickback laws?

Does this business model distort a physician's ability to make prudent clinical decisions?

Do these business models actually keep cost down?

Does this business model have a negative effect on competition?

These are questions that are being asked within many legal circles, considering, that many of these models have played a significant role in companies developing new business. In addition, it seems many of the legacy companies are viewing this business model with disdain, considering that they are under a much larger microscope than an early-growth stage company. TSB wants to know what our readers think?


  1. You are comparing apples and oranges here. This doesn't have anything to do with PODs. The key to these sort of Stark violations is the magic word "referral."

    This case appeared to hinge upon the refferal of patients to physician-owned centers. In a POD, a "referral" in the traditional sense does not take place, since the POD does not perform patient care or bill Medicare.

    The fact is that PODs are here to stay, at least for now.

    Disclaimer: I'm not a lawyer, but I play one on the interwebs.

  2. That's okay, you can play lawyer as long as you're not giving legal advice. The POD has now become part of the larger picture as the OIG and DOJ ramp up investigations into medical devices. I did not want to inundate our readers with all the legal minutiae.

  3. I'm more interested in what volume of business these guys were doing, and does this fine really hurt them that much. How many companies out there have received a fine substantial enought to stop their practices? Products being marketed off label get fines that equal what, 1 or 2 months of sales. Hell the company probably paid out more in bonuses.

    All that ever happens is the companies figure out better ways to get around the rules and in 5yrs when they get caught, pay a fine that is less than 1% of the profit that they have made.

    My vote is: Witch hunt with a slap on the writst.

  4. Where does all this money the the DOJ and OIG has collected from big and small businesses ultimately end up? It has been interesting to see over the past several years in our industry, as well as other specialties, that the government would so call "investigate" the illegal payments and forms of fraud that have plagued our industry right to the point of....."And it will cost you Xmm dollars to continue your deceptive practices while we look the other way.". If this continues to be the governments role in curbing such blatant crimes, when will the financial penalty be enough to stop these criminal organizations all together?! It is obvious that while the DOJ and OIG may wear the hat of 'Good Cop', ultimately their group is benefiting along WITH the same organizations that they prosecute! The ultimate losers here are the patients(at times) and those of us that simply wish to have an even playing field to sell on!

    In parting...who has paid the biggest settlement to the government to look the other way?.....Was it Danek? or the Total joint guys? Zimmer/Stryker etc.? Just curious, but when has a fine, let alone criminal charges, put a serious dent in any of these companies ability to function?!

  5. Put the CEO's and Vp's in Jail for 5-10 years and start holding companies decision makers accountable. Until then the fines with be budgeted for and expected and the big dogs with keep making money and bonuses.

    Phygen anyone?

    Too little too late with that business model!

  6. The POD model isn't so much a referral of patient violation as it is an anti competitive issue. If one of the Non POD companies undercut the price to the hospital and the physicians didn't move product usage due to their financial gain, then there is a case to be made...then we would see if the POD model was really about cutting healthcare costs or not.....I think we already know the answer to that one though...

  7. will everyone quit playing the price game... everyone will drop their pants for business to keep it... so stop. sell correctly.

    woody paige

  8. PODS are a sham and surgeons involved should be ashamed at their involvement. Just because there is a loop-hole in the code doesn't mean that it is OK for surgeons to feed their greed. These are the same guys who sell themselves out for sham consulting agreements. Its just wrong man!

    Surgeons should deliver patient care which should be done in the most ethical manner. POD ownership represents a clear and distinct conflict of interest that compromises their Hippocratic oath. - It isn't "Do no harm.. unless, of course you can make a buck..."

    If it smells like shit, taste like shit...its shit. PODS are shit.

    Too many surgeons are corrupt. My exposure over the years has made me very distrustful of MDs. Too many of you are doing this for all the wrong reasons. Shame on you dirtbags! The DOJ needs to make an example of both john and the pimp who corrupt the market!

  9. I have to agree with the previous post. It is sad that you always question the motives of a doc and whether or not the hippocratic oath still rings true. I guess it is the capitalistic way where docs coming out of med school look for the best way to make a buck and not necessarily help people as so many claim

  10. Can someone please start addressing the business practices of Globus Medical. It is hard to believe that this company constantly stays out of the radar of the DOJ. It is time that someone starts cracking down on these companies.

  11. Like Anonymous 9:18 said, they are here to stay. However, I do see the problem from and having 2 sides. First and foremost, I like anonymous 11:14, feel very distrustful of M.D.s and have made it a point to ask when I (or my family) is a patient specifically what products they use, why, and if they have a relationship with that company.

    However, we may not be in this mess if the federal government did not continue to cut reimbursement to M.D.s (and not just in spine but across the board). With the reduction in payment from the govt and insurance, how can you blame them for wanting a piece of the pie?These folks have a particular skill and knowledge base that most of us do not. They should be paid appropriately for that knowledge and skill. Instead, CEO's, managers, and reps without this specialized knowledge have gotten wealthy beyond practicality off of the M.D.s knowledge and skill. A recent article in the Harvard Business Review recently made this direct comparison of managers and CEO's to M.D.s and other "professionals". Now their point was that management is not a "professional" skill and thus perhaps unworthy of such high compensation. Here I draw the comparison to highlight the disparity in skill and compensation. As hard as we all think we work, and occasionally do, there is no justification for a rep or manager to make as much as a fellowship trained spine surgeon. Take a look in the mirror, if you were in their shoes, most of you would do the exact same thing.

    The second side of the coin to me is the fact that most fellowship trained spine surgeons probably pull in at least $300-500K in a "normal" practice environment. Last time I checked that was not a bad gig. It is the deeds of their "mentors" coupled with the "gotta get mine" attitude that has fueled the expectation for the old days of big money, hookers and blow at NASS, Wednesday's on the golf course, etc. They need to wake up and face the fact that medicine has changed and the "revenge of the nerds" reward that M.D.s used to enjoy is gone. Deal with it.

    Now that that has been laid out there and before I get slammed, I am disgusted with the POD's/Allez/Globus/ATEC models and practices which is why I am taking my money and getting out. I just think that greed is greed and none of us are immune to it.

    "Pigs get fat, hogs get slaughtered"

  12. woo hooo!!!!!!!!!!! nice post 3:31

  13. yeah its me dumb ass

  14. Maybe if America would take a look at Holland and see how much they charge for medical school we wouldn't have this problem. Instead we bankrupt these people throughout their schooling and when they finally get out they are buried in loans. How many minds are wasted because going to med school is not a financial option for them. In Holland it costs very little to go to med school. Theory is, if the mind is smart enough to contribute medically to society why would they want to charge them astronomical amounts to develop it!

  15. POD is not here to stay! Just wait until people start turning these guys in and blowing the whistle on the surgeons, hospitals, and companies involved and they will all go down!

    Anybody see Phygen's contract they are offering distributors??

    Here are two products we "manufacture" and here is a list of 12 companies we distribute for that you can sell! Oh by the way, doesn't matter if some of those companies have exclusive distributors in place. Don't worry about the law suit coming your way Mr. Dell Webb!

  16. POD's are legit and a legal way of doing things if structured the proper way. Why shouldn't a surgeon benefit, where is writen that they are not entitled to this. If continue to provide good clinical care, save the hospital money, they should be able to make a little extra. They worked there ass off every day and assume all the risk

  17. Some very good points made above.
    However, greed kills.
    So, a rep should be able to make as much as possible. That's the name of the game. If you can sell it... you get to share in the reward. It's that simple.
    Is it fair? Maybe not... but then again, a doctor will always be a doctor... a business person/rep will always have to find other avenues if the 'well' runs dry.
    So, the well is running dry as industry is changing: prices dropping, massive competition, commoditization and yes, doctors selling/POD's.
    So, let it run... indeed, the doctors can take their share of the pie. Why not. It's a free country. (or use to be)
    But, beware, greed kills. Your service will be shit and there will be no one to blame other than yourselves for a serious breakdown in the O.R.

    It's all fine and dandy until you realize 'good reps' do provide a value.

    Good luck... and good night.

  18. http://spineblogger.blogspot.com/2010/02/seizing-control-or-are-we-spinning-out.html

    and their website


    doesn't look like anyone's slowing them down or their consulting "expertise".....

  19. Jackie Chiles JD would love to sue every one of you greedy MDs. Can you imagine being on the stand being asked, Doctor why did you use the aspen, a facet wedge, screws, crosslink’s at every level, 500cc's of DBM, and let’s not forget about the spinal pain catheter, our witness claims that the fusion should be a one level how do you justify 10 levels. You are a POD member no matter what your opinion letter from some attorney that got his JD Degree online writes ultimately you are financially benifiting from using the products and the more you use the more you make.

    Hospitals pay for products 100, 200, 300 days post op. Claiming we lose money on every spine case, after becoming spine centers of excellence, recruiting spine surgeons, marketing how good they are.

    If they are losing so much money how in the hell is every hospital in my area in the middle of Billion dollar expansions, putting plasma TVs in every patients room, and advertising 24/7 on TV.

    Could it be the rebates that the Big Companies are paying for compliance? The real question is how do they separate Medicare from private insurance with these rebates.

  20. POD's are going to get regulated in the near future. More of these are popping up everywhere and requiring investment by the surgeons. It is a house of cards ready to fall, just a matter of when. The guys in early did good, last ones in will get screwed. Like the condo market.

    It will be interesting to see as the assault on these POD's gets ratcheted up. There are things in the works such as investigative reports in home town newspapers. OIG is looking to shut them down. The best is a couple of big companies are going in and slashing prices, undercutting the POD's are charging by 50% or more. There goes the profit. If a screw is a screw as they think, it will be hard for them to justify to the hospital to use their own stuff, especially when the purpose is to line their own pockets. One can only hope it happens to some surgeons right after they invest a bunch of cash. Nothing like another bunch of wise business decisions by surgeons:)

  21. I have seen some business plans at the private equity level that are directly targeting the premium pricing of "brand-name" commodity products in orthopedics across the board. I expect at least one to pop with even more capital than CareFusion did recently, to go national all at once with generic versions of the high volume stuff.

    Their pricing will be hard to turn down.

    Whoever buys from these companies will reduce the costs significantly at their hospitals. If they sell to a POD, who will complain? The physicians aren't going to be owners or investors in these companies, just customers.

  22. Have to agree with the previous posts critical of POD's, and I'm actually not distrustful of MD's at all. There are a few bad apples, but most are legit and trying to do right by patients and the public. Many view POD's as a way to keep costs down by eliminating "unnecessary" (in their view) services in the distribution channel.

    But it remains a conflict of interest, pure and simple. We don't let defense department officials also own the defense department contractor.

    So as long as docs are working with public dollars (e.g. Medicare, and our insurance premiums, in a way), the decision maker can't also be the profit maker.

    And the irony is that it's not even starting as an ethical endeavor. If some doctors really just wanted to enter the lucrative spinal products distribution business, they could easily go out and develop a distributorship to serve customers OTHER THAN THEMSELVES AND THEIR HOSPITALS! Nobody would question it. But when the both the demand and the supply for publicly funded services are controlled by the same person, it's corruption - third world style.

  23. "We don't let defense department officials also own the defense department contractor."

    hahaha, yeah but we let Dick Cheney be our VP...what's the difference anymore?

  24. Can you imagine ... A doctor pulling his short ass T-Rex arms out to pick-up the tab on a business dinner. Wow, that would be good. Better yet his own lap-dance at the strip club he dragged you to! Don't forget about the consultant agreement for another corrupt surgeon who shakes him down for his product usage. Oh yeah, you'll have to do that doc to grow your POD business outside your own practice. You know - quota attainment. Bring me lunch and for 25 other people and we can discuss how you can do it. Surgeons praying on surgeons its a beautiful concept.

    Industry people do well because we have to deal with these disloyal jerk-offs and cow-toe to them, even though they are still the same nerds we knew in high school. Business requires strong emotional I.Q. and people skills, and a high tolerance to deal with assholes with MD at the end of your name. Let's face it, most MDs just don't have those skills. Sorry doc.

  25. When is it in a surgeons career it no longer about the patient and it changes into a want to be Donald Trump. Only a few surgeons actually understand how important a quality rep is and let these POD bottom feeders have a issue in surgery, who is going to solve it? Can they call the person that set the POD up that refers them as A dear dear friend?
    Ultimately he could careless about the legal issues he is creating and more about his 5% rider from pimping products for 80 companies.

  26. Everyone is worried/disgusted with POD's....yet it's okay for a manufacturer to produce an implant at a cost of $150 and sell it for $4000+. MD's are businessmen nowadays, EVERY one of you typing an opinion would love to have as much $$ as possible. Why not? Money allows you to do what you want and retire!! It's the only reason we work...MONEY! So why can't a physician be entitled to make as much as he/she wants? It would be different if the doc was implanting plastic/cardboard/etc in order to make some extra $$. The fact is, 90% of products in the market will suffice for a surgery to be successful. Now, if a doc was cutting on every patient (which happens with or without POD's) or fusing 8 levels instead of 2 (which happens with or without POD's) then maybe an investigation is warranted. But come on people, if you're half smart and possess an IQ, YOU WANT TO MAKE MONEY IN YOUR LIFETIME! Just because a POD exists does not mean an ethical line is being crossed...wake up!

    From a sales rep that has nothing to do with a POD!!!!

  27. One of the reasons why implants are so expensive is because surgeons and hospitals want all the equipment for free. there is a tremendous opportunity cost to supply inplants because we have to supply the implants, the instruments, the discectomy tools, retractors and the whole kit and kaboodle. The hospital marks the implants up 200 to 300% with $0 cost.

    There is a ethical issue with PODS and a conflict of interest. Shame on any manufacturer that takes the easy route to building sales. Anything that comes easily can go just as easily.

    Build businesses to last and resist avarice!

  28. Great topic that obviously touches a nerve with a lot of people! I'm glad i found this blog, very smart people involved that know this business. Thanks guys and gals!

  29. what happens when you sleep with the enemy?

  30. Too bad the doc's don't realize how vilified they are. It is actually kind of comical. However, I do believe that they have a thought that they are invincible.

    A quote in last weeks episode of the HBO show hung by the prominent MD to the jock & ex-husband of his wife summed it up well, "...you ignored me in high school, but now it is people like me that rule the world!"

    I like what was said earlier, pigs get fat hogs get slaughtered.

    "May Doc have mercy on your soul..."

  31. To anon 7:49-It is not that anyone would not like to make money, or make more money if given the opportunity. However, while it may not be illegal, for me, the argument crosses an ethical/moral boundary. We go to doctors because they can help us and we believe that their ultimate motivation is to help people, not to get rich. Although that is a nice benefit. I think that it is human nature to protect what is ours, and that includes investments.

    To say that a surgeon would not change their approach or implanting habits after becoming involved in a surgeon owned entity, be it distributor, manufacturer, or consultant, is not realistic. Perhaps there are a few that view the endeavor as a pure play investment, but my experience has lead me to believe that they will protect that investment and try to contribute to it"s growth. Again it is simply the way of our society, why would you think they are immune?

    Lastly, I do not buy the excuse that they have huge debt as a result of med school and thus that is justification for the entrance into these ventures. Again my experience has shown me that the majority of these folks come from privilege or at least upper middle class backgrounds and thus their debt is minimal if not non-existent. In fact as I think about all the surgeons I have gotten to know over the years, it was those that paid their full way that are aligned with the altruism of medicine and are against all of the "business models" to help them gain more money out of the OR.

    Either way you slice it, it is not going away. And just because it is not illegal doesn't mean it's right.

  32. weekend question for TSB and the rest of the bloggers.. every surgeon who goes out to San Diego for a NUVA visit , raves about it. They come back enchanted. Every single surgeon. What goes on out there that does not happen at all the other corporate visits( Medtronic, Synthes, Depuy, Stryker)
    What does a corporate visit or training visit to NUVA consist of?

  33. While I have never been and do/have not worked for NuVasive, I have heard from several surgeons that it is their ability to make the surgeon feel like he/she is now a part of the family. They do a tremendous job of embracing the surgeon.

  34. #1) Hot Asian chicks will inherit the earth! It's a fact! Look it up!!

    #2) POD's are completely unethical and new legislation will make them illegal very soon!

  35. I have a different view of surgeons motivations. I don't think it is all about the money. I think the companies were the ones that started throwing the money at them. I think many surgeons would have done what the do for very little money. I think more important than money is ego, and wanting to be heard and teach. Surgeons are being beat up from all sides; legal, financial, hospital pressure, etc. The NUVA model that makes them feel like they are part of a family is probably a bigger motivator than the money. I have been in this and related business for 35 years, and it used to be I couldn't even buy the leading surgeons dinner. They paid. They did not want to be seen as having their decisions based on anything other than what was best for their patients. I know there are still surgeons out there like that, because I know some of them. The large companies like Medtronic started this crap and changed the entire market. I think that very few surgeons would use an inferior product on their patients just because some company was paying them a royalty or consulting fees. Most of them have consulting fees with a number of different companies, and again, I am not sure it is money motivating them more that being part of something, helping make products better, and just plain old ego. Just my opinion.

  36. I am a practicing witch in the Spine industry. I would appreciate some sensitivity to people's religious paths when titling your blogs. Thank you

  37. Would love to see a surgeon comment here...we know you read this blog...step up and chime in...

  38. Anonymous 5:45 -
    "The large companies like Medtronic started this crap and changed the entire market" ...... A majority of NUVA's executive team were Medtronic (Danek) employees ... they have really fine tuned their talents.

  39. a surgeon told me after he got back from a NUVA visit he could not get this tune out of his head....

    Nobody does it better
    Makes me feel sad for the rest
    Nobody does it half as good as you
    Baby, you're the best

    I wasn't lookin' but somehow you found me
    It tried to hide from your love light
    But like heaven above me
    The spy who loved me
    Is keepin' all my secrets safe tonight

    And nobody does it better
    Though sometimes I wish someone could
    Nobody does it quite the way you do
    NUVA; Why'd you have to be so good?

  40. Okay, so from a surgeon...to the post that distrusts MDs, I distrust reps. They approach me with their bleached smiles and spout the company script telling me that their crap is the best and everyone else's is shit. Then, 6 months later, they approach me again now working for another company and spout the new script and tell me their crap is the best and the stuff from the company they used to work for was really shit after all. In truth, most of the stuff is equivalent and all of it is over-priced.

  41. i do not think most reps distrust MD's. I think the large percentage respect what the surgeons do and are honored to play a role in the care of their patients. There are some miserable reps, in proportion to the percentage of population of miserable people in general, that grumble about surgeons. There are propably the same proportion of greedy shifty MD's as there are in general population. However, most MD's are benevolent and trustworthy. The few bad apples in reps and docs make a bad name for all..

  42. Doctor:

    Thank you for your honesty. As much as I have taken an adversarial role to physician owned distributorships, i concur with your feelings and observations about reps. Unfortunately, somewhere, some time ago the industry changed. I can understand it when you say that reps change companies every six months and then attempt to sell you their bullshit that their current product is better than the one they sold you previously. So why does this exist? Could it be a by product of no company loyalty? Could it be that the market is over saturated with spinal implant companies selling the same propaganda, it"s newer, it"s better, we"ll make you a paid consultant? How does one sell on features and benefits when the playing field has been leveled? You are absolutely correct when you say that these products are over priced, yet who is cashing out? At times it may be the reps, but most of the time it"s executive management. As for surgeon behavior, you too have become a by product of the system. No longer do your peers want to be doctors, today they want to be entrepreneurs. Medicine is no longer their only viable options. Maybe if everyone just focused on their responsibilities or profession the world would be different, unfortunately, everyone wants to multiple-task, and when you do, you find out that you"re not really good but only mediocre at your job. Thanks for the comment

  43. Amen MM...well said...Doc's should stick to cutting, banging, and fixing, and reps should stick to selling and service.

    Ahhhh, but my BMW 750 payment is due along with my ski house payment and Nu-Lan-bus is throwing me a $300K "true-up" if I can get my surgeon, I mean legit best friend to use their stuff...I think I can if they will put him on their "educational board" and develop the really cool game changing peek threaded cage he wants to patent...gotta take it...old company is crap, go new company!

    Damn where is the wire brush and power washer when you need it.

  44. MM....your post was going places, but the last few sentences just confirms that you don't get it. We can still be surgeons doing what we are professionally trained to do. You just need a sharper fortune teller to show you where it's going. Your words show you need to bag the old news and invest in the here and now. The old line of doctors should stick to "cutting, banging and fixing" like the industry "owns" them is becoming the old schtick. Maybe the spine reps of America should have a revival on Washington, like Sharpton did this weekend, saying reps own the SPINE DREAM money pit. You reps own the ability to rape the system. Maybe the surgeons, who want to change the nightmare system, will unite for the betterment of the system; not listen to this mumbling, bumbling, and grumbling. Reps, please worry a little more about the short pay on your BMW 750 and Ski House payments!! Ta-ta!

  45. It"s America, and you are absolutely correct when you say you can do whatever you would like to do, even if you do it half-assed, or provide a disservice to your patients. But to attack spine reps is a contradiction of your free-market principles. Doctors never make enough of money, they are the only one"s that work hard, and assume all the risk. I guess you never thought of that when you went to med school? Remember that you are also complicit and an accessory in contributing to a nightmare of a system, or should we grant you absolution? Pointing fingers at everyone else has become an American pastime. Why should you be held accountable, you"re a doctor. Let"s face facts, doctors are the most divisive profession, and that"s why the insurance industry pushes all of you around. TSB is at least honest when saying that reps are just as much of the problem as all the other players in the game. But, we do not make the rules, we just have to figure out how
    to play by them. In closing, I sleep with a clear conscience, have no BMW payments, and haven"t got caught in a margin call. Thanks for your comment and remember that the only difference between truth and fiction is that fiction only has to make sense and that a man may meet his destiny on a road that he didn't want to travel.

  46. NUVA is flat-out crooked. Just recently had to fire a Midwest "manager" for POD-type activities, except in this case they involved a NUVA loser that was on the NUVA payroll with a side-deal with his surgeon buddy - having his cake and eating it too. Hopefully the whistleblowers bring the rep and doc down. This type of stuff ruins it for those playing the game fairly.


  48. Who needs consulting agreements? When Nuva can use the $$ they make off of the $2k they charge for the so-called "monitoring" to line the surgeons' pockets! They ARE the smart ones here. Now they get the hospitals to pay their consulting fees for them!!
    And we all wonder why the docs are all so happy coming from the NUVA visit!

  49. There is no question that some surgeons are unethical, though I'm not sure what percent. I think we can be pretty sure that the percent will increase with time. If it's <1% now in five years it might be 10% - or maybe the numbers are greater already.

    I know it's not an apples to apples comparison, but Sears automotive centers got sued several years ago becuase the service technicians got paid a commission on the parts they sold. What happened - parts that weren't needed got put in cars so the tech could make more money. Did every tech do it? No, but Sears was forced to change the policy becuase of a few bad apples.

    If a surgeon can be disciplined enough to not let money drive the decision making process for his implants - then why not? I just think that in the end human nature (a.k.a. greed) will corrupt the decision process for some and therefore the good pay the price for the bad - that is to say there should be legislation in place to prevent it.

    I don't think that I would want to be a surgeon sitting in a witness box having to explain why an implant was needed and that my making commission on it had no effect on my decision making process. I think most people in a jury pool would be skeptical.

  50. but looks arnt everything

  51. Doc 8:40:

    I had a dream, I dreamt that doctors would be paid what spine reps are paid because we make so much more than you do. Of course spine reps are the problem. I dreamed that your arms would become longer so the next time you ask whether we would like to go to dinner, you picked up the check. I had a dream that you would take the time to learn the instrumentation so that I didn't have to listen to you rant and rave at everyone except yourself in the operating room, because you do not take the time to learn how to use them properly. I had a dream that this was all a dream and I woke up and I was in the shower.

  52. Golden shower I suppose. If so many people who are "in the know" have a problem with surgeons benefiting from the specific implants they use, then why is there not more of a public appeal for disclosure? Why isn't it standard ops for a (potential) patient to ask a doc if he/she financially benefits from the products they use? Pretty simple really. If the doc says "YES" then the patient can either walk away or proceed; at least all would be on the table. Or is that too much to ask?

  53. 4:19 Are all Docs that forthcoming? The answer is no! Is there some amount of deceit going on by the Doc who is somehow profiting, direct or indirectly, by the use of implants in a patient by not disclosing this to the patient? The answer is absolutely yes! I think that if there were some rules made up for the surgeons, such as they all need so send patients for 2 second opinions to competitor and a code was made that the competitor would not steal the patient which would never happen anyway, to keep everyone in check we might be able to have a fail safe program. then who cares what products the Doc uses if we have a consensus of 3 or 2 out of 3. This ADVAMED and rep credentialing is a bunch of BS that we don't need. Doesn't anyone realize that ADVAMED was created by the big companies so that the little companies have to stay out of their hair since the biggies already have all the business so why entertain. It doesn't effect if the Doc is going to do the right or wrong thing it only allows the biggies to keep on keeping on with less of a barrier.

  54. Lets answer the questions:

    Is there a conflict of interest? Yes, it is impossible for there not to be.

    Does it stifle competition? Absolutely. When a doc signs on with a POD, you might as well have him taken out of your territory so your quota may come down. Has anyone ever heard of a doc joining a POD and then using any products outside the POD distributed products? I didn't think so. And how hard was it to convert that doc to a new product BEFORE he signed on to the POD? Damn hard. So what could possibly make him do a wholesale conversion of every product overnight? I am certain it is his desire to drive costs down for the system, right.

    Does this violate anti-kickback laws? Yes. If you google "physician owned distribution" ALL of the articles and opinions from attorneys and OIG suggest serious problems and great potential for fraud and abuse. The only opinions otherwise are from the POD's.

    Are POD's shell entities? Yes. They hire a single coverage rep, usually a failed rep that has been thru training with a major spine company. They "invest" in the company because the company needs to purchase inventory to resell. The reason they buy and resell is to create a need for capital so the surgeons can invest. We all know that normal distributors don't buy and resell inventory. No capital is required to start up a distributorship, no investors are needed in the real world.

    Does it affect physician decision making? Yes. But so does the fee for service payment schedule. Procedures in a given market grow proportionately with the number of surgeons doing the procedure, not by the number of patients who actually need the procedure (take a look at imaging services in the past few years since every surgeon now owns an MRI/CT). The reason is that people can justify anything they do that is approaching the line of impropriety. We all do it, but we expect more from doctors, and we shouldn't. I admire an entrepreneurial spirit, but they are easily influenced by money. Another example would be the surgeon assist fee. We have all seen docs come in to a room and do nothing just to collect the assist fee. Insurance companies let them do it, so they do it. We all have heard docs bragging about how another surgeon was going to do a bigger operation than the patient needed and they rescued them from that fate. Trouble is, we hear other surgeons say the same thing about them. Docs are smart, they develop a sales pitch that always sounds GREAT to the unwitting patient and they could talk anybody with a primary disc into a PLIF in a matter of 1 minute. Some of them do it routinely, others don't. My point is that they make decisions based on money all of the time and often they fail to do the right thing. This POD model presents an undeniable conflict, much more egregious than the overused MRI or the loosened indications for the PLIF.

  55. For those who want to know why there is not a huge public outcry to expose these dirty surgeons I would give this example. I have a friend working in the fraud and abuse office who explained to me that these payments to physicians are low on the totem pole because they are to busy tracking down DME companies bilking the medicare system for billions of dollars in adult diapers.

  56. Sounds like they are on the trail of a real crappy scheme . There's a shitty investigation to be involved in.

  57. 7:01 best post of all time on this site. well done!!!!!!!!!!!

  58. Why do surgeon go to the original doctor after 2nd and third opinions?

    Because unlike the people that are involved in the medical device industry they have no clue to all the shady business practices of certain surgeons.

    They trust doctors because of the title, tons of people used to trust priest but look at what has surfaced in the last 5 years. Hell investors trusted atec but look what is happening now.

  59. In general, who are the greediest surgeons? Fellowships in the mid-late 90's or fellowship since 9/11?
    Or how about the old guys (the ones that can recognize a sublaminar wire)?
    Or does anyone see any pattern? How about type of fellowship training? Neuro vs Ortho?
    Just wondering. Any comments?