Thursday, April 14, 2011

Thursday Op-Ed Piece

In the wake of Monday's (4/11/11) Wall Street Journal article, TSB has been deluged with information regarding nefarious business models that have been potentially designed to shift profits that threaten the industry's future. Some readers have accused the Journal of sensational tabloid journalism. Many people in the industry couldn't be any happier that people like John Carreyrou and Tom McGinty of the WSJ, and Barry Meier of the NY Times continue to shine a light on spine companies and spine surgeons in the news.  Those individuals and companies that are directly, or indirectly involved, will argue that this business model is legitimate, based on various legal opinions.  Some bloggers question whether it is politically correct and financially beneficial to attack our customers?  In all likelihood, individuals involved in these schemes rationalize their existence by calling themselves "stronger," "bigger," and "smarter," than those that attempt to earn an honest living.  Based on various complaints in public records, Dr. Makker probably believed that he was smarter, stronger, bigger, and beating the system.  Dr. Makker will be afforded due process under the U.S. judicial system. Unfortunately, the only people that have suffered are those that put their faith and health in a system that has countlessly failed at policing their own. Where was the hospital administration and hospital board the entire time?  If TSB was counsel for the plaintiffs, not only would Dr. Makker be sued, but Providence Portland Medical Center would be sued for failing to provide oversight .  NASS, AANS, AAOS and AdvaMed are lame duck organization. Rarely if ever has the industry disciplined one of its own.  Even the OIG and the DOJ have failed the public.  To this day, industry people ask, will the FBI and the DOJ ever prosecute the former Blackstone Medical executives? Answering that question is the equivalent to answering the meaning of life.

Surgeons rationalize the POD model by saying that this model does not lead to over utilization.  Maybe some are sincere with their intent.  Yet, when one looks at the 25% dividend that was supposedly paid to an L.A. Spine surgeon totaling over $500,000, one must admit that this lends a new definition to paying dividends on investment.  If surgeons are "disenchanted" with the amount of money spent on sales, marketing and distribution of product, maybe some introspective due diligence should be paid to what corporations pay in surgeon consulting fees.  TSB would argue that general administrative costs are dwarfed by consulting agreements.  All one has to do is take a tour of  Medtronic's, Stryker's, Zimmer's, Biomet's and DePuy's websites.  TSB guarantees that this information is incomplete since full disclosure is not mandated for a few more years.   How do small companies rise like a meteor, claiming 20%, 30%, 40%, 50% growth at a time that the market is essentially flat?  Is it their innovation?  Is it their technology?  Most of us know that we continue to compete in a zero-sum market, so what's the incentive?

Surgeons are quoted as saying, "that they feel that they could do this much better, if afforded the opportunity to be the intermediary with the hospital." Have any of us ever met a surgeon that didn't think he could do something better? If the intent is to save the hospital money, and drive down the cost of delivering healthcare, then why not just open the process to closed bidding? Modern technology and product saturation has leveled the playing field.  If surgeons know design preferences, have an ability to forecast volume, and understand product quality then let's eliminate the preferred vendor list that minimize free market competition.

But the bigger question that must be asked is, if the rationale for physician owned distributorships is to drive down the cost of delivering quality care, then physicians shouldn't complain when the government or the insurance industry looks to decrease their reimbursements.  Isn't this just another avenue to driving down the cost of delivering healthcare.  POD's, POC's, POH's are nothing more than an attempt at manipulating the system to increase one's own profits.  In closing, Dr. Makker may have done the industry a favor.  If found guilty will the legal system punish him?  Or, will they slap him on the wrist only to find out he surfaced in another state practicing medicine?


  1. These last 2 stories have infuriated me. A bunch of whiney people trying to fight the tide of change that is going on. You either evolve or you fade away. Please keep in mind that surgeons are strapped and handcuffed by sooo many legal and litigation rules that they are forced to get creative in finding new revenue streams.
    You all sound like a bunch of scabs being damned by your surgeons. If you don't like it get out and find another sales job that pays this well!!


  3. It really doesn't bother you that a surgeons clinical decisions could be influenced by performing unnecessary procedures to increase their profits?What would your reaction be if the individual that had 6 or 7 procedure was your mother, father, brother or sister? Would you be infuriated? Or would you look at them as purely a profit center? It doesn't bother you that surgeons and attorneys conspire to drive up the cost of care in workers' comp cases to increase insurance settlements. Whom do you believe pays for that? Unfortunately what should infuriate you is this type of behavior rather than the WSJ article or a TSB post. But then you are probably one of those people that condemn the government for its actions until the levees break, there's an earthquake, a bridge collapses, or there is an attack by a foreign entity on US soil, then you want action. As for surgeons being strapped, get serious, spine surgeons are some of, if not one of the highest paying professions in healthcare, its not like their selling vitamins out of their office.

  4. I swear to fulfill, to the best of my ability and judgment, this covenant:
    I will respect the hard-won scientific gains of those physicians in whose steps I walk, and gladly share such knowledge as is mine with those who are to follow.

    I will apply, for the benefit of the sick, all measures [that] are required, avoiding those twin traps of overtreatment and therapeutic nihilism.

    I will remember that there is art to medicine as well as science, and that warmth, sympathy, and understanding may outweigh the surgeon's knife or the chemist's drug.

    I will not be ashamed to say "I know not," nor will I fail to call in my colleagues when the skills of another are needed for a patient's recovery.

    I will respect the privacy of my patients, for their problems are not disclosed to me that the world may know. Most especially must I tread with care in matters of life and death. If it is given to me to save a life, all thanks. But it may also be within my power to take a life; this awesome responsibility must be faced with great humbleness and awareness of my own frailty. Above all, I must not play at God.

    I will remember that I do not treat a fever chart, a cancerous growth, but a sick human being, whose illness may affect the person's family and economic stability. My responsibility includes these related problems, if I am to care adequately for the sick.

    I will prevent disease whenever I can, for prevention is preferable to cure.

    I will remember that I remain a member of society, with special obligations to all my fellow human beings, those sound of mind and body as well as the infirm.

    If I do not violate this oath, may I enjoy life and art, respected while I live and remembered with affection thereafter. May I always act so as to preserve the finest traditions of my calling and may I long experience the joy of healing those who seek my help.

  5. Then answer is: 42

  6. Don't surgeons who do or don't own POD's have financial interest in performing surgery anyway? I mean they all get paid to do surgery right?
    with a royalties or interest in a pod they just get paid more but either way that's how they get paid...isn't there already a conflict of interest?


    I get implants from my brother. Who BTW flys in from NY to work my cases. Guess what company he uses???

  8. 7:48 AM - There is a manageable conflict of interest because the same surgeon diagnosis the need for surgery as performs the surgery. The surgeon's choice of implant should be made solely on the basis of the patient and cost benefit. A POD, consulting agreement, kickback, and even the personal relationship with the rep are all items that should not be part of the implant choice decision...theoretically. System performance, quality, service (rep), and cost are really all that should be part of the decision process. A POD and consulting agreement corrupt the implant decision process and diminish patient care.

  9. Does he use ATEC? Just throwing a dart here...

  10. 7:58 AM - I'll bet one of the big 3! MSD, DePuy, or Synthes!

  11. I had a Zimmer doctor flat out tell me that to use my products I had to provide a "kickback" to his practice. Is it whiny for me to tell him to go $@ck himself and hope dearly that the DOJ one day cracks down on this? No, I don think so.
    Is it whiny that I'm walking away from a surgeon that performs 600 joint surgeries a year?
    I did the math- that comes out millions in sales from one doc. But we have to draw the line somewhere. If we don't, when the DOJ comes knocking, who's going to jail? The doc or the rep? We will. Everytime. This isn't Real Sports on HBO where we get to tell our story and yell, "But he had his hand out and he took the money"!
    Loosing your license to practice medicine is one thing, but to become a "bitch" in prison is another. Thanks but no thanks. I'll hold out as I have for two years to break in and work with the guy or gal who practices medicine, likes my service and professionalism, and provides sound technologies for their patients. It's a harder row to hoe but in the end, worth the years of my life I'm not staring a Zimmer, Medtronic, or J and J exec. In a 5 x 5 jail cell.

    So to the responder who thinks the past two posts are bullshit- go fuck yourself- or pay your rep to do it. This ruling or motion has a ripple effect in the choices we distributors have to make in the field. And for those that don't have the moral fiber to discern the differences in their choices in business- this blog provides highlight to the coming consequences of those choices made..

  12. PODs are a fad which will come and go. Going to war with surgeons will ruin relationships forever. All of the threats and venom towards surgeons on this site will only serve to further drive a wedge between surgeons and the industry.

    Work hard, support the docs in your community, and support the patient to the best of your ability. It may take time, but when PODs fall apart, you want to be there to pick up the pieces. Burn the bridges and they are gone forever.

  13. How do you get a hospital administrator mad?
    Answer: do unnecessary surgery at someone else's hospital.
    How do you get a spine rep mad?
    Answer: do unnecessary surgery with someone else's implants

  14. TSB you're missing the forest for the trees on this one.

    There are tectonic, generational sized forces at work here. Makker and PODs are symptoms of a dying way of doing business. A 'way' that was founded on a fee-for-service model and then over two decades, co-adulterated by industry and surgeon providers. Problem for all of us is, it was financially unsustainable.

    Bubble pops, the unwinding begins, and puffed-up reps and Makker-esque surgeons are left wondering who moved the cheese.

    When I think of the Ortho/Spine docs in their 30-40's having cut teeth and trained in the halcyon days of 'drop-of-the-hat' consulting agreements and the endless stream of reps and agents panting to do what it takes to get the attending's business, I wonder if they're the lost generation.

    Are they dumbstruck looking at the horizon, at reimbursement cuts, at health-care reform, at procedure reductions, at shrinking industry subsidization, and thinking, well my passion is medicine and healing people, let that be the food and drink that sustains me? Or are they thinking, WTF?! I didn't sign up for this @#$!. I know what my rep makes and I'll be damn if he's pulling more coin than me.

    In totality, the answers probably somewhere in-between, but far towards the later. I think the rapid adoption of the POD is all the proof.

    The 'bigger' question you pose is fundamentally flawed. It's not to 'increase' profits, it's to 'maintain.' As we've seen in this blog, the psychological forces among reps and surgeons are intense and are growing in their opposition. And that 28 year old with a BA in Communications jamming his 2010 Escalade in physician parking so he can cover a case is the mark.

    This'll take year's to roll out and history would show that soliciting or bullying people to find their higher angels is a non-starter. When PODs blow up and the associations wake up, surgeons may get back to the time honored principles of medicine and industry might start making stuff that helps them improve outcomes. But I guarantee you, that by then, rep commissions will be a fraction of what they once were.

  15. Been there and so true!

  16. 9:06 Best post in a while.

    There is one simple cure to get rid of PODs, sham agreements, and the other incentives in this industry. Cut ASPs by 75%. Just enough money to manufacture, transport, and clear a 7% corporate net. There simply won't be any money left to pay for the shenanigans. Problem solved.

    Be careful what you wish for folks, the cure will be worse than the disease.

  17. Thank you tsb for finding a couple bad apples and acting like the hwole entire system needs to be changed. Wake up you stupid reps! Medtronic now submits pricing with "rep included" and a pricing list of "no rep included".
    What does that mean and won't that effect you wayyy more ?

  18. No one has stuck a gun to the head of a doc graduating med school and made them go into a specialty such as orthopaedics or neuro. It is their choice and unfortunately a good percentage of them have done it solely with dollar signs in mind. "...Orthopedic spine, neurological and sports medicine surgeons were among the top five highest-paid specialties in 2009, according to MGMA's Physician Compensation and Production Survey: 2010 Report Based on 2009 Data". The hippocratic oath is a mere joke these days for most, it is all about money and ego.

  19. 9:06, eloquently stated. Best analysis of the market and the POD phenomenon yet! The only issue you don't address is how POD's will ultimately "blow-up." Will it be due to market forces, social pressures or legal intervention?

    I think it will likely be a little of each. I am hopeful that you are wrong about how long it will take, but I fear you are right. The quicker this passes, the less destruction there will be to rep incomes.

    Regardless of anyone's opinion, those of us that do the job know how hard we work, how much stress we endure, and how often we have to bite our tongues to keep from coming unglued toward our customers and managers.

    We(those of us that do it "right") may be the only ones in the system, other than the "good" surgeons, that actually earn our pay. $150-$200K doesn't get anyone rich these days. There are a few that are making far more than that, but it is not the norm.

  20. The device industry is (and will) slowly move to more of a pharma comp model. Any "old guys" will know that decades ago, pharma salaries were more commission-based and not the base salary, benefit laden, bonus structure of today. These changed to control costs and increase profits at the corporate level. The same is destined to happen within the ortho device side of things. Lower commissions and/or base salaries with capped bonuses will be the norm. No getting around it

  21. The hardware may be a large % of the "other sources of revenue" a surgeon can find. But it is amazing what a ACDF or Lumbar fusion could cost. Toss in a bone growth stimulators, the neuro monitoring and a back brace, the flavor of the month biologic, then some therapy for rehab.. All of the above have the availability and have offered to have the prescribing doc participate in the profits.

    I bet a few of these guys make more in the affiliated profits than they actually make running a surgical practice.

  22. 9:52

    "Medtronic now submits pricing with 'rep included' and a pricing list of 'no rep included'."

    Wow, first time I've heard this. What is the price difference between rep and no rep? If that's true, reps better start looking at an alternative career pathway.

  23. "they are forced to get creative in finding new revenue streams" - What? Are they starving? And I hate to break it to you, in the real world you don't get to go find new revenue streams for doing the same job. You can go find another job which provides you a new revenue stream. The job you've chosen - a POD - is a conflict of interest with your current one. Sorry, but you can't be the Secretary of Defense and a defense contractor at the same time. If you want to find a second job because you can't make ends meet, go find one like Sanjay Gupta did. No conflict there. Or go do legitimate consulting for companies, like numerous of your physician forefathers did, where you foresake time in your practice and put in hard R&D hours for pretty good pay. But to say, "Gee, here's something I have control over. Let's see if I can profit from it too." is corruption, not legitimate work, and disrespectful to the 90+ percent of the surgeons out there who are hard working, honest, and as repulsed by the thought of a POD as we are.

    And kudos to 8:20 and 9:06 for a couple of insightful posts.

  24. 9:06 You got it right.. I love the 28 year old escalade guy.. The funny part is that the dude thinks he deserves it and is an important contributor to the outcome of the surgery. No one can work a laser pointer like the communication majors!

  25. Wait a minute are you telling me if ATEC stops paying my docs a "royality" I may no longer be able to make 25K a month working really hard(budding up to the doc and flirting with the OR staff) from 8AM to 1pm 3 days a week.

  26. 10:10

    "Will it be due to market forces, social pressures or legal intervention?"

    I'm no oracle, and whether or not this was a rhetorical question I think about it a lot. Truth be told, my gut says, a 'blow-up' is highly unlikely.

    I see more examples being made, more Makkers being brought to justice. And that'll have a dampening effect for sure. But what of the larger groups that are operating out in the open, across state lines with booths at major society meetings? They're not hiding, they're growing and in my conversations they're already prepared for the DOJ and are building a business focused on solving implant expense issues for hospitals not solely lining the pockets of surgeons. The shared profit at the surgeon level gives them the one thing GPOs can't, provider commitment. (Essentially Gainsharing in a different form.)

    So what does all that mean? My opinion, right now, the systemic problem is cost, pure and simple. I think it's less about their existence and more how they are defined and operated. If they drive down cost in the short term, their not going anywhere.

    Once costs get wrung out, the next question to answer will be the effect on quality of care?

    Short term, POD may become a four letter word, but don't underestimate the need for cost reduction and the creative forces at play.


  27. Who are you to decide what amount is too much or too little for someone to make ?

  28. What say you guys about this operation:

  29. 6:45 > you can't be that dumb. If there is anyone that should be complaining it's the ortho hip/knee surgeons. What spine surgeons get for 1 level ACDFs and Lamis is more than fair.

    "new revenue streams"? To make up for your poor real estate investments? You idiotic stock market investments? Your "mistress"? The fact you brought your bracing "in house" but your billing people are idiots so you end up losing $? fleet of sports cars? gambling/drug additions? you bought too much or too many houses without paying off your student loans? built a new office and the patients didn't come?

    I've seen almost it ... the need to for "new revenue streams" comes from the fact that most (not all) surgeons are HORRIBLE businessmen, SUCK with $, and only retain lawyers that tell them what they want to hear.

    Please do not reply with the "I'm tired of my spine rep making $250K+". Those days are long gone. There are distributor who gross a lot of $$ but that's before they meet a payroll and business expenses.

    If it's so great on our side ... why aren't docs becoming reps?

  30. 9:06 Maybe, maybe not

  31. 10:13 am hit the nail on the head. This industry will end up just like the pharma industry. I just got out of device sales three days ago but read the WSJ article and came to this website for obvious reasons. Get ready folks.....for those of you just out of college, I suggest a different type of career or fast track to management. Rep and management commissions will drop significantly in the next 5-10 years. Device companies are increasing costs and insurance companies/medicare are lowering reimbursement rates. Sometime very soon, things are going to come to a screeching halt.

  32. 12:06pm....agreed on ALL points. Your point about those who believe that almost everyone is making 250k + is well founded. I started on the joint side and then came to spine 5 years ago. There were always someone stating, "Holy crap that guy sells 5,8,10 million. Just think of what he is clearing" and "he has x number of consultants", etc. etc. etc. Possibly a comfortable living? Yes. But not the crazy numbers that a lot of people will thrown around. Do the quick math, they have raised quotas to obscene levels (although you have 70% market share in your area, have hit targets by more than 20% and get your nose clean) then they knock your commission down to 3% on house/consultant accounts and 5% for others. Those 5+ million in sales quickly become less than most think.

  33. All these rep posts seem so holier than thou with respect to how they feel about surgeons. Is there any way possible that if there was a "POD" equivalent for reps that you maintain your "integrity" and "honesty" and not being apart of it? Not a chance! I have never known one rep or distributor that wan't trying to pull one over on their boss...big companies trying to peddle their on bone graft, BS biologic, brace or bone stimulator. You guys are a joke.

  34. To state a couple of facts:
    ASP in the spine market has dropped 35% in the spine market in the last three years. Commission rates have not gone up, they are going down, so that's an automatic 35% drop in income to maintain the status quo. Travel expenses have increased 22% in the last two years; significantly affects reps bottom line. Don't know of anyone who isn't paying well over $1500 a year to be able to walk through the door of hospitals thanks to Rep Tracks and the like. So, anyone who is wondering if reps are getting rich, sorry, it ain't happening. Neither are the companies they represent. The industry will be happy to get a 2% increase.

    Surgery volume is down about 12% thanks to over 30 years of no change in fusion outcomes. Yep, good to excellent results are still at 75% while fusion rates are over 90%, yet fusions have increased 400% in the last 10 years. What have all the new fancy toys done for patients for open surgery of the lumbar spine? NOTHING!!! MIS is slightly better, like 3 points, nothing to write home about. And surgeons are bitter that 3rd party payers are not waiting in line to approve surgery that has just slightly better clinical results than conservative care.

    So here's the deal, instead of worrying about trying to make up income by doing more, device industry, and trying to find shady ways to maintain a lavish life style, surgeons, and bitching about change, sales reps, how about we all try to do a better job of taking care of the patient - give them something be happy about, a reason for 3rd party payers to say, "this is worth the money we pay". I don't know who said the definition of stupid is continuing to the same thing over and over and expecting a better result, but damn ... let's get a clue device industry, surgeons and hospitals; I'm old, and in some ways that's a good thing. You see I remember a time no-one bitched about the cost of medicine because there was a balance of patient health and cost.

    Who ever said the gravy train is over above is right. We all made this bed, and like most things, it will not change over night, but if we don't find a way to get to a balance, those that are paying the bill, 3rd party payers, or the government will. It doesn't take much vision to see what's going on outside the US. How many governments are broke over seas - ask those folks what's killing them. Healthcare is the most common answer.

    The US is one of the very few societies that pain is a disability. Outside our very comfy life style, people understand pain is something you deal with. If you can't play tennis any more, well that's just the breaks.

    PODs are a symptom, poor reimbursements are a symptom, how about a few go recognize the disease and find a cure.

  35. You sound like TSB, sanctimonious about caring for patients and clinical outcomes, exposing the insanity of doing things over and over and expecting different results, admitingt that you are a tenured industry professional who is a generation removed from those of the entitlement era, but what our readers must applaud is that this is the best damn post anyone has ever put up on this board, its the truth, and you know what they say about the truth, it hurts. Thanks for the post

  36. You are all Cry Babies! Trample the weak and hurdle the dead!


  37. MM, I do love the blog, don't know of a better place to get the pulse of what folks are thinking, and thanks for the comment, but do get a bit pissed when there is nothing but bitching about this or that without giving consideration to making a change. Yes, I'm a bit old, but not so old to see the only constant is change and understand if we don't learned from history, we do tend to make the same mistakes over and over.

    In my Pop's best year ever, he made $18,000. For a while a few years ago, I was making that a month (not for very long, but it was pretty cool while it lasted). Dad, was a farmer. He understood you have a string of banner years, but that will come to an end because there will be bad times. So, you can bitch and complain, or you can prepare. Like many, I am now earning 50% less than I did only four years ago. I don't have a fancy house and drive a reliable car, and for God's sake, I for no reason would ever drive an Escalade into a customer's parking lot.

    Was this predictable; this time of uncertainly? Well hell yes. What did everyone expect when the economy started to freaking tank in August of 2008. But instead of paying attention, so many just figured it was a blip, continued to spend, didn't look for way to do something differently.

    So, for all those who continue to waist time spewing continuous shit, take the time you waist bitching and try something different, like finding a better way to do it. There is no easy way, not quick fix, it takes work; true, honest investment. What's obvious is that instead of taking the time to talk, to work with and try to find solutions with customers, third party payers, etc., re., those that can and do control our destiny, too many are hoping it will just go away. Well it won't go away.

    Yes I'm old, but old don't mean stupid. Success is all about continuing to try to lead the way, not follow in the wake of other's stink. For too long, it was easy. Now that it's not ... well time to get to work. All we can do is the best we can. How many can truly say they are?

    Anonymous 6:12

  38. It's an honor to have Mr. Steinbeck in the house. Thanks for leveling the truth among a group of ne'er do wells whose greed and self importance has blinded them.

  39. 5:00 This isn't John Steinbeck, maybe if you sat down and thought about what he wrote it would impart a bit of wisdom.

  40. Ok 8:00pm

    Find a better way for them to do it? Great idea...

    How about if the device manufacturers provided better service, custom instruments made in a week, larger implant selection, longer term clinical results, lower pricing to the hospital, revision systems with removal instruments, custom implants, or cadaveric medical education programs?

    Do you think our fellow surgeons in PODs will switch back?

    This blog exists because we all know they would rather fight than switch back. All due to the fact that they are making their implant selection based upon other criteria. Passive Income.

    That it what appears to be most frustrating thing to these device reps. They are being cut out not by a legitimate competitor, but by a clear financial conflict of interest!

  41. POD's now there's real innovation, take the rep out of the equation and let the physician make all the money. Give it a break. Financial conflict, you mean surgeons predicating their surgical decision making based on the amount of money they can profit from the POD's LOLLLLLLLLLLLLLLLLLLL

  42. Hey POD Surgeon. John Steinmann. Paul Burton.

    If Zimmer or DePuy or Stryker paid you the exact same amount for using their implants, would you drop this ethically immoral "distributorship"?

    Of course you would. Why hassle with the with compliance conflicts you place your hospital in by forcing them to buy your junk, when you could make the same amount from using J&J or Zimmer?

    The answer is because non of those companies will pay you to use their implants. It is illegal due to public opinion and subsequent legislation.

    There is a way to carve out a small 3 hospital distributorship for you with these large companies, but they will never do so as the concept of a POD is going to go down in flames from mass exposure by the WSJ, or New York Times, and massive public outrage as a result.

    Your Safe Harbor is about to snap shut and all those homemade spinal implants and instruments? You will be left with a garage full of fishing lures and boat anchors. Let me help you out:

    Steinmann & Burton's Bait and Tackle, Redlands CA

  43. check the first WSJ on Makker and you all will see that although PODs may not be your cup of tea his revision surgeries were whil his Stryker reps counted the dollars in 2004-2009. Pods had zero to do with it.

  44. PODs may not be the reason he's in hot water now, but it definitely underscores the mindset that this Dr. has towards his career, his patients and the power that he holds over others. He is exploiting everything that should be sacred to make an extra dollar, or somebody else's dollar. I think you will find some degree of this mindset with ALL surgeons that are involved with a POD, but he may be the worst case (although I doubt it).

  45. TSB, late in the stream of posts here but I wanted to run a thought experiment by you.

    Admittedly this will lose relevance to 9/10ths of your readership given this isn't 'Gauzeblogger', but hear me out.

    Is there a sliding scale with respect to the product/diagnostic in question and the ethics/morality of POD distribution/surgeon profit?

    All things being equal, what if PODs were set up around say drapes, gauzes, surgical gloves, or surgical masks? What about sutures, wound drains and dressings? How would you come down on that? Is there a line?

    What would life be like if surgeons were reimbursed for inpatient spine fusions as they are for non-facility APC coded procedures (aka office procedures) where supply costs are bundled with physician fees. Wouldn't they directly profit from the utilization of lower cost supplies be it gloves, tongue depressors or a pedicle screw?

    Whether or not a pedicle screw is a commodity or a well made surgical glove have as much to do with outcomes as an implant may be splitting hairs. What is clear is PODs are being created in reaction to an imbalanced system. What is missing are healthy market forces that account for amoral surgeon providers.

    Put another way, when deciding to use a product, optimum, efficient patient care must lead. Yet, absent this moral, practical wisdom, I'd personally want sticks and carrots equitably distributed between the cost and the outcome. I'd want the risk/benefit of that decision as close to the surgeon possible. In a perfect world, I'd want it constructed in a way that it could function without the need for ancillary, costly government oversight.

    Surgeons should profit from good, cost-effective care, implant selection has do be part of the equation.

    Thought experiment turned rant...mea culpa!

  46. 11:14
    I get what you're saying about bundled costs that drive the surgeon to be cost effective. The problem is that with POD's, they are not being cost effective, they are setting the price at a fraction below the current vendor, (which they chose in an open, competitive market) to satisfy the hospital. The argument that they saved money gets lost when the overall ASP has dropped dramatically in my area everywhere except in the hospitals with the POD's because the hospital can't really hammer the docs on pricing like they can hammer me and every other non-POD vendor. So now a hospital 100 miles away in the same state is paying 60% more for the exact same products that other surgeons are using outside of the POD model.

    The achilles heel of POD's will be when hospitals nut up and hammer a POD for pricing and the docs threaten or leverage their admissions to keep the prices and margins high.

  47. @ 11:14

    I know this is an old post, but I had to comment. Gauze and surgical gloves have very little to do with patient outcomes. Gauze is a commodity item. While the industry may be flooded with me-too technologies, you have to leave space for technological advances, however far off they may be. The real question is: is the instrumentation becoming the commodity that the gloves and the gauze are? and how do you know when you're there? I guess the line is drawn at 100% fusion rates.

    Then guess what happens to the rep job, and surgeon reimbursement for that matter. I know some that are claiming 96%. Let the snail race commence.

    I don't know. my $.02

  48. POD's are killing the industry from a reps point of view and tainting the industry from the nations point of view. Im sick of these doctors trying to make money on the side with these small companies. They are screwing the patients over for putting in way too much hardware or "wasting" screws during cases for their own good. If they patient cant pay for it, guess what, we do! There's a guys in southern Middle TN that is known for asking for money and now he seems to be in a POD type scenario with NEXXT Spine. Everyone knows but no one is blowing the whistle! So annoying!