The opinions that many of you conveyed over the last week in response to our Spine Survey was overwhelming. Your commentary exemplifies that this industry has been taken hostage by a lingering disease that has affected America's psyche. If last weekend's shooting in Arizona is not a wake up call, then what is? Whether you believe it or not, this "us against them" rhetoric will slowly bring this country to its knees, and, it will bring this industry to its knees. POD's will become 2011's lightning rod. TSB is not Robin Young pandering to some surgeon, tossing"softball questions" (would we expect otherwise) regarding this business model. Sales people are not the reason that the cost of delivering healthcare in the U.S. has become a runaway train. It takes more than one spoke to turn a wheel.
There is a fundamental balance to life, some call it Karma. Living life is and always will be your teacher. You either find it, or, go through most of your life sleep walking until some untimely event abruptly awakens you from your sleep. The anger, frustration, and cynicism that many of you expressed is justifiable. In addition to these emotions and distrust, as America continues to become a shameless society, you break down the value system, the same way that the sanctity of the nuclear family has been destroyed. As intelligent of a society that we claim to be, our tendency is to do things the hard way. The lack of accountability and greed on the part of corporations and physicians is at an all time high. If you were ever in the military, you understand that the grunt's do the dirty work, they do not make the rules. The reason regulations exist is because it keeps order and discipline. For many years, spine had been given a pass by the insurance industry. Pain took precedence over denials. Will the industry have the ability to change, or, will it continue to do things as it has, expecting different results? Will we self-immolate? We cannot hide behind the mantra that, " it's always someone else's fault. " Those in leadership positions fail to understand what real leaders do. Many of them resemble the same old tired generals that make up the Pentagon, adhering to the same old principles and culture that has existed over the last ten years. Our leaders are too conventional.
The increasing emergence of POD's on a national level will drive a wedge between sales people and surgeons, and between companies and surgeons. POD's are a growing trend for early-growth stage companies for the obvious reasons. Entry into this market is cheap and they are using every creative resource legally available to them. They are out to undermine the legacy companies way of doing business. They argue that this is not an anti-competitive model, that it will not affect the quality of care that physicians deliver, and that over utilization will never exist, like over utilization has never existed in our industry. Barring any regulation or oversight, this model poses many legal questions that need to be addressed, regardless what Dr. Steinmann thinks. The reality is that many surgeons do not have a healthy detachment from their bank accounts and rightfully so. Their financial excess and success defines whom they believe they are. Their sense of self-worth is morbidly wrapped up in how much money they make, and believe they deserve it. This is not a generalization, this is part of being the entitlement generation and society. Entitlement is not limited to class. It is not a rich or a poor thing, it is part of man's nature. Surgeons don't see themselves as a component of healthcare, they believe that they are the engine that drives it. Unfortunately, their best friend the insurance industry has become an evil gatekeeper. Their gravitas is like a cheap cologne. So, why are surgeons and certain companies hiding behind this model? The answer is simple. Greed breeds contempt. When you commoditize the market, POD's are an incentive to broker products based on rebates or is that really "kickbacks" in comparison to selling on features and benefits. Have you ever met a company that leads their discussion by saying to a surgeon, "how would they like to be involved in a business model that saves the hospital money?" At least to TSB's experience, that has usually evoked a hearty laugh. It usually starts out like this, "how would you like to be involved in a business model that increases your personal profitability?" If decision's are based on quality and comfort, why are some surgeons switching to products that are not improving outcomes, and are not a technological improvement? Simply put, it's all about the Benjamin's. If many of these surgeons were not making a profit on this model, how many of these products would even be given the time of day? This model is no different than having a surgeon invest capital into a start-up company with the objective of cashing out in the future. The difference being, the future becomes now.
How absurd is it that a surgeon would believe that a sales person has no value, and, that the reason the cost of healthcare is escalating is because of the money that salespeople earn? Cut out the middleman and there are more profits. You can thank the outside investors, private equity and investment banks because this model has been promulgated by them for last few years. Whom do you think some of our biggest adversaries are? The basic attitude is they should make all the money, while you peons should pick up the scraps. That is why America is burning rather than raising itself from the ashes. This is a baseless rationalization on the part of individuals that claim their superiority because of the profession they chose, or the money they have. Yet with all the bitching by surgeons, has anyone ever met a surgeon who left their profession to become a sales rep. Because I know of a few sales people that left their careers to become physicians. How many surgeons do you know that exerted their influence with many a company so that their children, girlfriends, or relatives are employed in medical device sales? I have met a few surgeons that left to become partners or employees in a private equity firm or an investment bank, only to have mediocre careers at best. But then again, maybe those individuals were mediocre at their craft. Our industry is no different than the Street, it lacks adequate disciplines and safeguards. The commentary that eliminating sales people will improve and drive down the cost of healthcare in the U.S., is reckless at its best.
2011 will be an interesting year. Based on the investigations that are currently taking place into potential fraud and stock manipulation in spine, it will be interesting to see what comes to fruition. Will the government have the chutzpah to throw some surgeons and corporate executives into orange jump suits remains to be seen. Many of you have shared the commitment you make on a daily basis and take great pride in the clinical knowledge and service that you provide your customers. Unfortunately, sales is no longer selling. About fifteen years ago, some legacy companies established a precedent whereas they no longer employed sales professionals, instead opting for cover boys and girls. Ever hear of the Gallup Poll? Those companies were out raiding distributorships by offering them money in exchange for their customers and volume, ergo, the onset of non-competes. Do POD's sound any different? What next? Are hospital administrator's out of the question? Just like there are professional sales people that love their craft, there are great surgeons that laugh and shake their heads in amazement when they hear of some of the distractions that their peers are preoccupied with. As one of my surgeon friends said, "the majority of my peers are terrible businessmen, have terrible social skills, and are condescending to their patients." Everyone wants to be like the highly esteemed Professor who has taught his pupils well on the craft of medicine and the art of making the deal.
Authorities have expressed concern about POD's. Compliance issues appear to be raised with regards to these arrangements between the POD's and the hospitals. If anything, hospitals should approach these business models with caution. When the surgeon becomes the purchasing agent does this become an opportunity for the POD to profit from their referral to the hospital by generating a fee for service and a profit on the product they use? This in itself can constitute prohibited remuneration under the Anti-Kickback Law. In closing, a wise old man once said, "the only thing that history teaches us, is that history doesn't teach us anything." Once again thanks for your commentary, and have a great weekend.