Tuesday, May 10, 2011

Weekly Update

The last four to six weeks has been a crazy period in spine, indicative of the activity and many stories that have surfaced. The posts that we have published have played like a broken record.  For those of you that don't know what a record is, it was made out of vinyl and played on a turntable, think Grand Master Flash.  As many of you know, the medical device industry spends billions of dollars annually in marketing to physicians.  To paraphrase a well known crusader for POD's, "Surgeons are disenchanted with the amount of money spent on sales, marketing, and distribution of acquiring implants, placing the hospitals and the surgeons at a great disadvantage economically. Oh, really?  Don't surgeons have enough of things on their plate to have to worry about this?  A number of surgeons believe that they can and could distribute and sell implants far better than the current business model.  Would we expect otherwise?  These surgeons claim market forces cannot work in this environment, and that the POD model allows them to do their job more efficiently with less cost to the hospital.  Yet the question must be asked, how does one know that the surgeon is offering the best implant for their patient, at the cheapest price possible to the hospital?  Isn't any decision making process subjective?  As Dr. Steinmann, the Rupert Pipkin of all POD's has stated, "Surgeons are most qualified to be at the center of the hub to make these decisions," obviously because they know quality, their case load, and can hire their own product representative.  Yet, doesn't the hospital have greater negotiating power by leveraging volume in comparison to any one surgeon owned POD?  By developing and implementing this business model the question must be asked, "is the surgeon acting as an independent sales representative on behalf of the companies that participate in this model?  This is a question that Orthopedics This Week's Robin Young failed to ask Steinmann during their nine minute You Tube interview in December of 2010.  Would anyone expect otherwise?  Many industry professionals thought they were watching Matt Lauer lob soft-ball questions on the Today show.  "Compelling business model," pleaaaaasssse, give us a break.  Why wasn't Steinmann asked whether he believed that a POD was a shell entity strictly for the purpose of directing remuneration to the physician, cutting out the sales representative?  Tough question, huh Robin?  We would never want you to compromise your integrity, what integrity, or, challenge a surgeon for the love of orthopedics, would we?  The potential exists that they wouldn't subscribe to OTW, not attend one of your meetings, or use stem cells.  Why wasn't Steinmann asked whether he believed that by having a financial stake in the distribution of product, does the potential exist to distort his and his colleagues decison making process?  There is a fundamental flaw in a business model that allows the surgeon to become a partner, or owner, in a medical distributorship.  Hasn't there always been an issue regarding surgeon's getting paid a dividend?  Isn't this the reason that surgeon investors have never taken a dividend, on their capital investment into a start-up spine company? Isn't a POD another way of redirecting and remunerating a surgeon for their ability to control selection of implants sold through this business model?  Regardless whether the POD is saving the hospital money, isn't the POD model redirecting profits to the POD?

The OIG an the DOJ have expressed serious concerns, unfortunately, the government's bark is always louder than its bite when it comes to punishing a potential white collar crime.  Isn't this model providing physicians another method to earn an economic benefit in exchange for ordering their own implants?  By participating in this model, isn't the surgeon nothing more than a paid sales representative?  Based on the anti-kickback statutes,  it can be argued that an investment by a surgeon into a POD is an inducement for the investing surgeon to order specific implants for their patients.  How noble for the Rupert Pipkin's of the industry to argue that they are only concerned with saving the hospital money.  But isn't the real intent of the POD to increase the participating surgeon's profitability?  State of mind, Rupert, state of mind, in addition to intent.  Let's face it, POD's have questionable motives and features at best. If surgeons are disgruntled and believe that the cost of implants continue to escalate while their reimbursements decrease, why don't they go after the hand that feeds them, large corporations?  Because it compromises their ability to leverage their skills in exchange for another method of making money off of the industry.  If surgeons are so concerned about the escalating cost of delivering healthcare, why don't they send out an olive branch and agree to take a cut in their fees for service?  Regardless whether our readers agree to disagree, socialized medicine is only a stone's throw away, and it won't matter whether it is a Democrat or Republican in the the Big House.

On another note, NuVasive reported 14% growth for the quarter.  Now TSB understands that there are some NuVa minions that accuse TSB of being a NuVa basher, actually, TSB likes the people at NuVasive. Just because the powers to be are a bit delusional makes it all the more enjoyable in poking fun at them.  We love all those buzz words like, "speed, laser like focus, a prolific product innovator, etc.."  TSB has to wonder, if one backed out the benefit that NuVa received in the modifications to the accounting rules for how they account for their loaner sets, what would real growth look like?  Contrary to what the oracles of Wall Street say about the stock, it is rather disingenuous to talk about growth when one does not define what is real and what is make believe.  Many of our bloggers have discussed the potential of NuVa being acquire, unfortunately, Alex believes that the stock is worth $50 per share, hopefully, he doesn't believe in the tooth fairy.  If NuVa was going to be acquired, IT WOULD HAVE ALREADY HAPPENED.  So as we start another day, get out there and sell something, because you never know when a POD is going to be coming to your town.

119 comments:

  1. Yet the question must be asked, how does one know that the surgeon is offering the best implant for their patient,......


    I know of a POD where the surgeon has his implants custom manufactured. Some of the local hospitals were falling over themselves to make sure that all the surgeons at least trialed his implants due to their bottom-dollar price. One of guys that was forced to do so was shocked as he was applying axial force to the rod while inserting the set-screw and the screw-heads started to drastically splay open. The big boys overcame these types of problems with polyaxials a long time ago, but hey, when you only have to pay $300/screw it's all about the patient.

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  2. That wouldn't be in Georgia would it?

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  3. I'm hearing a lot of chatter on the street of a Seaspine/Integra deal on the horizon. Anyone else hearing this?

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  4. 6:32, were the screws fda approved? If not, that could put them in a heap of trouble, the hospital and doctors.

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  5. Sounds Like Kentucky to me. Let me guess - the screw system is the "gold standard" for pedicle screws?

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  6. No actually, our company has the "Gold Standard" Pedicle Screw System. Top loading, polyaxial screw that is better than all others on the market. It can be yours at a discount for $1150 per screw.

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  7. Unless Seaspine is selling cheap, Integra is not buying them. They don't pay much.

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  8. it's a buyer's market. I'm hearing the same thing here about Seaspine. I heard that Dr. Hyder wants out. This is the second or third time Integra has gone down this road with them.

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  9. Robin Young lost his integrity a loooong time ago, probably pre-HealthPoint. His OTW Spine Technology Awards are one of the best examples. The "Presidents Awards" just seem to have his fingerprints all over them. LMAO

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  10. Robin Young is a POD.

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  11. Physician Owned Douche

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  12. Globus has offered a POD to a surgeon in the Houston area.

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  13. How about Distributor Owned Practices? A DOP?

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  14. You can not worry about things that you cannot control. Why do people share the"word on the street." It's R-E-T-A-H-H-H-H-D-E-T...

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  15. I am buying Texas Back Institute.

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  16. 10:59, I'm carrying the Seaspine line. I have to worry about the word on the street. My docs hate Integra. Might be time for me to start using my secondary line more.

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  17. Why would Integra want Seaspine? Their key products are pretty much the same. It would just create a slightly larger me-too company.

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  18. Yeah, that would wreck the amazing lineup of advanced, innovative products that Integra has.

    DUH! They've built a big, very profitable company by gobbling up lots of me-too stuff for cheap.

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  19. I am new to this blog, and often hear the term "Me-too" companies. From what I can gather these are the smaller companies that have products with slight changes or variations to existing lines (of larger companies) Is this accurate? If so, who are the "me too" companies and who aren't? Thanks.

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  20. 12:42,

    The term "me too" is used by reps of the larger companies to describe all of the smaller companies or at least to describe the core products like cervical plates and pedicle screws. It is a bit delusional for them to assume that their core products are not also "me too" products. All tulip head polyaxial pedicle screws are derived from either a Depuy or a Biomet (via Interpore Cross) patent if I am remembering correctly and they all pay a license fee to one or the other. That includes Medtronic, Stryker, Synthes, etc. Synthes developed the first locking cervical plate CSLP (and they haven't generated much improvement since) with Orion shortly after.

    Every company that decides to enter the spine market starts with these two products because this is where the volume is. The smaller companies should take the moniker "me too" as a complement because it is an admission that they are, or can be, just as good as the "me too" products that the the big guys sell a ton of. Its almost like they feel since they are bigger, or older, they have a right to sell the commodity products, but no one else does.

    Don't worry about those comments, but you do need to worry about Dr. Steinmann and his moral brethren.

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  21. "As many of you know, the medical device industry spends billions of dollars annually in marketing to physicians. To paraphrase a well known crusader for POD's, "Surgeons are disenchanted with the amount of money spent on sales, marketing, and distribution of acquiring implants, placing the hospitals and the surgeons at a great disadvantage economically."

    No surgeons, it doesn't. Actually it is actually an indicator of how much power you have. The power that you've always had but never used is the power to demand a lower price. But as long as price didn't matter, you were happy to respond to "service" in your decision making. (e.g. "Let's support Company X, as they gave the most research dollars, or let's support Company Y as the rep always brings us lunch, etc.) The power you had, still have and now are beginning to use is to work with your hospital and demand lower implant prices. Thus the companies are now cutting back the services that provide the least value, which everyone should view as a good thing. If you want to eliminate industry's low value marketing practices, POD's are not the answer, increased price sensitivity is.

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  22. I find it a twisted bit of logic for Dr. Steinmann to declare that by entering the supply side of the market, he is aligning himself with the hospital. Huh? If you are on the supply side, don't you benefit from higher volume and higher prices?

    You will find it interesting that the OTW article "The Great POD Debate" was posted on Dr. Steinmann's Alliance Surgical (POD) website because he snowed the author into thinking his model was legitimate. However, the article received a bunch of knowledgeable comments that rebuffed the author and Dr. Steinmann and the link is still on the site, but has been disabled.

    Dr. Steinmann has spent a lot of time and effort to prove that his POD did not overutilize in order to profit from the supply side of the equation. The problem is that abuse doesn't have to be present. If the inducement to abuse is present, the entity is illegal. I think that the fact he went to such great efforts to prove he didn't abuse also proves that the inducement is there (why else would he do the study?)

    The study is linked below. Read it with the same discernment you would read any scientific paper in JBJS or Spine. It is full of holes and unproven conclusions that any one of us in the industry can see right through. Because it is a purely scientific study, he notes that device companies get 15% price increases annually, that the rep AND the distributor make more on a case than the doctor or the hospital and that a $4200 piece of plastic cost $168 to make (he doesn't tell us what his POD charges for the same piece of $168 plastic). Depending on your personality, the "study" will have you in stitches or steam coming out of your ears.

    The "study":
    http://www.coa.org/Sunday/sun9paulburtonmdhandout2.pdf

    Here is the OTW article: https://www.orthoworld.com/site/index.php/publications/view_article/221815

    Here is the Alliance website: http://www.alliancesurg.com/ click on "The Great POD Debate"

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  23. The simple fact is that the surgeons have ALWAYS had the opportunity to implant cheaper implants into their patients, but chose not to for "clinical reasons", until they established a mechanism for indirect financial gain. Patient beware. ACOs spell trouble and opportunity for further financial gains to the surgeons if PODs are left to thrive.

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  24. I would question why Dr. Steinmann could not get lower prices prior to owning a POD if he was truly interested in lowering costs and was willing to switch products to get the lower cost. That is a hospitals wet dream. The fact remains that virtually no surgeon would be willing to switch products for the benefit of the hospital. It's a turf issue. The surgeon maintains control in the OR by proclaiming that the hospital can't make his product decisions unless they want to pay his malpractice insurance.

    If the pricing was so high prior to the POD, I blame the surgeon because that is the single biggest obstacle for the hospital to overcome to have a position of power in a pricing negotiation with a vendor.

    I am waiting for the day when the hospital buying POD products at the same price for years finally nuts up and puts the products out to bid. Do you think the surgeons will see that as a direct attack on their income by the hospital? Do you think that might be a conflict of interest? Do you think they might leverage their inpatient referrals to keep the POD pricing where it is?

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  25. PODS PODS PODS- what about Physician owned hospitals? This is WORSE! quality care my ass- as long as the physician is getting a piece of the action on these deals, patients get f'd.

    The thing that cracks me up about all of these deals is the physician wants to F you and get a reach around - ie- consulting deal - at the same time. The industry is pretty f'd up- and frankly physicians have a lot to do with it.

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  26. POH's took a hit with Obama care. 45 Facilities under construction were halted according to one report. Appellate courts have ruled in favor of the government and warned that they could continue to build their hospitals, but should not expect to have Medicare patients treated in them.

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  27. My post was deleted! Whats up MM?

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  28. Texas Back Institute is going to a 4 vendor POD model. It would be great if the WSJ would expose them.

    10:28
    I doubt Globus would allow a POD to be set up, I would be interested to know if it truly goes down.

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  29. 5:18

    Do you mean they are using 4 different spinal hardware vendors? Specific products from each or the full line from each? I would be surprised if they buy a full set up from each vendor instead of standardizing to save themselves from too big of an upfront investment. Interesting.

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  30. Dr. Steinmann corresponded with Theresa Ford on the OTW website, defending his POD. He seemed to fool Ms. Ford and subsequently put a link on the Alliance Surgical (POD) website to the correspondence, presumably because he was proud of the result. Subsequently, several knowledgeable commenters rebuffed Ms Ford and Dr. Steinmann. The link to the OTW website is still on the Alliance website, but the link is no longer active.

    Here is the exchange between Ms Ford and Dr. S, but take care to read the comments at the end.

    https://www.orthoworld.com/site/index.php/publications/view_article/221815/1

    And in case you haven't read the "study" that Dr. S presented at the AAOS and the California Ortho Association, it is at this link:

    http://www.coa.org/Sunday/sun9paulburtonmdhandout2.pdf

    Anyone that is in this industry can shoot a million holes in this "study". It is a PR piece. He concludes that "Surgeons can effectively establish a legally compliant distribution company..." without ever even discussing the legal risks. He finds it a necessary piece of data to state that implant companies have an annual price increase of 15%. He also builds his case scientifically by stating that the implant rep AND the distributor both make more on a case than the surgeon or the hospital. Of course, he doesn't provide any data or research to back up those claims. He simply states it for the purpose of self justification and to demonize the device industry. It was a complete disgrace that AAOS even allowed this mullet wrapper to be presented at their annual meeting.

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  31. Does anyone know what kind of pricing Alliance is charging at Dr. Steinmann's hospitals? Is it more or less than other nearby hospitals. Have any of you reps in those accounts seen anything fishy. Any Increased use of crosslinks, increased wasted implants, product deficiencies/failures, more multi-level cases, conversion from TLIF to PLIF, bone to PEEK, or anything else that would not have happened prior to the POD being formed? Somebody speak up!

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  32. TSB,, I heard that Alex was thinking of having Penn & Teller, as well as David Blaine participate in Nuvasive's next earnings call,, His goal is to show them that he too knows a thing or two about creating illusions.

    Perhaps he'll even run w/ the idea and invest in another musical, maybe call it "Magic Man"?? He could have the lead,,

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  33. 5:35

    I have not heard all the specifics of what TBI is planning to do. This news bubbled up at few weeks ago and has not been finalized. My guess will be that they go with companies like Alphatec, Spine 360 ect. Their ego's are too big to allow any company in the top 7 to come in and try to negotiate any type of reasonable deal for both parties.

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  34. You dirty little hamsters you!

    A bunch of weak sales reps complaining about POD's, POH's and any other force about to annihilate your sales. I'm surprised you guys don't also post your disappointment in your local Walgreens for selling out of your favorite douche.

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  35. Dr. Steinmann + Theresa Ford + Two Shills in a POD

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  36. Heres a newsflash TSB. If this was a truly honest industry, there would be three companies bidding low-price products and a few company reps stocking hospital shelves. Thats all thats needed to adequately provide product to treat patients. Anything more is a fallacy based on physicians willingness to demand more in return for perks. Incentivisation, even including PODs, is the foundation of your industry whether you like it or not.

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  37. I think this site could be a useful forum to discuss POD's and whats going on in the industry around the country to help one another out. Information is key!

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  38. 8:38... from the terror stricken faces of surg techs when something goes even a little bit wrong, I would say we will still need a rep or two that can calm the room down (including the hyper surgeons) and guide the crew back to sanity.

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  39. 8:38

    POD is most certainly incentivism. As you point out indirectly, so it commissioned sales. The difference is that POD's pushing the limits legally and ethically. Sales, in and of itself, is essential in any business. If we were a socilaist country, the number of companies could be limited to 3, their prices dictated to them and spinal surgery would still occur. It doesn't take much imagination to see what that surgery would look like in that scenario. But since we live in a capitalist society with no such limitations, competition is fierce which leads to improved service, innovation, and also leads to greed and malfeasance. The POD is the culmination of that greed. If we were subjected to a government imposed limitation to 3 companies, I can guarantee you that POD's would not be allowed either.

    As 4:58 mentions, the service levels now present have spoiled hospitals to the point that most, in my area anyway, cannot reorder or even resterilize implant trays without industry rep involvement. They certainly can't train their OR staffs to perform the cases without representation in the room.

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  40. But does it really lead to improved services and innovation? In its purist form, TSB believes in free markets, not the kind of government sponsored socialism that bailed out Wall Street. Talk about entitlement. When the market becomes glutted with me too products, where is the innovation? And then we wonder why hospitals are capping the cost of implants. Why is it that everyone believes that one has to develop another pedicle screw or cervical plate to be a viable company, unless you are only seeking to appease investors with a grandiose vision. Look at a company like SI Bone, how big is that market, realistically? What about a company like Flex-U-Spine? Just because you said, it doesn't mean its true. And then you have Robin Young singing the hallelujah's of every technology as though he is some industry svengali. With all the innovation that the spine industry touts has it really improved the outcomes? And where is the U.S. ranked in global healthcare? Undoubtedly, not No.1. As for surgeons claiming that reps are making more than they do, my question once again is, why aren't more surgeons quitting their jobs and becoming sales reps. The Dr. Steinmann's of the world do nothing more than provide us with lip service to justify the existence of their scheme to increase their profits at the expense of the sales rep.

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  41. 5:19 best comment in weeks. Thank You for bring sanity, rational thought, and articulation to this normally bankrupt blog.

    TSB, innovation has been lacking firstly because profit could be had without it. Now, however, it is suffering because of FDA limitations and individuals reticent to invest capital into an industry that their government is trying to socialize.

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  42. TSB asks:

    "Why is it that everyone believes that one has to develop another pedicle screw or cervical plate to be a viable company...?"


    Answer: Because it's absolutely true. Young companies need some bread and butter products to pay the bills while developing new technology. It's infinitely better to bootstrap a company with some commodity product revenues than sell out to vulture capitalists to keep the lights on.

    To use a music analogy, even the Beatles had to get their start as a cover band.

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  43. New technology? Estimated cost to bring an innovative product from concept through production is $25-30 million. Who can afford to take that financial risk knowing that they continue to loose market share on their commodity product and still risk the FDA dragging their feet on getting their innovative product cleared.
    Companies are willing to support POD's and every other questionable consulting agreement in order to hold on to their market share.
    In the end the consumer (patients) looses on all levels.

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  44. I legal question with PODs from a Stark standpoint is whether or not they are shell organizations. For POHs, ASCs, and other facilities, the surgeons have a significant financial risk/investment. If a POD functions as a typical small distributor (i.e. the company sells to the hospital and pays a commission to the distributorship) then there is no way under Stark/Anti-Kickback for the POD to be legal. If the POD actually invests in a facility, purchases implants/instruments, sells direct to the hospital, and handles all accounting responsibilities then there is a higher liklihood the POD would not be found in violation of Stark. However, the AKS could still be used to shut down virtually all PODs.

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  45. 7:12

    Disagree-

    http://www.floridatechnologyjournal.com/sections/north-florida/131-news/677-exactech-acquires-spine-portfolio-from-vertiflex

    There was no press release for the office furniture yard sale.

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  46. 8:25

    All PODs, at a minimum, need to be stocking distributors that purchase and take risk of their inventory. Inventory is expensive, needs to be paid for in advance of use, and there is a risk that product will not be used or reimbursed. Infractructure with capital cost must be purchased. Employees need to be hired. Docs need to be putting up real money, $100K+, in order to have a hope of justifying their profits. Any dividends from the distributorship need to be in proportion to their investment. Something like 10% may be justifiable.

    PODs that take product on loan or consignment or have a cheap buy-in relative to dividends are clearly illegal.

    So it's not a question of whether PODs are legal or not, it is a question of whether the returns are unreasonable given the investment. Reasonable returns on an business investment are legal. Unreasonable returns are a kickback. Most PODs I've seen probably fall into the latter category.

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  47. attorneys will end pods, the idea that all these small companies with limited r&d and validity testing are the implants of choice for these surgeons with some financial interest is a lay up.
    They arent aware yet but it just takes time for that first case, they will have a field day.

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  48. The spine companies that support the POD's are all desperate for business otherwise they wouldn't get involved. (Spineology, Alphatec, Asculap...you know who you are!) Not to mention the reps that support them...they are generally the reps who couldn't get a real job and be successful at it. The big companies don't get involved for a good reason...it is illegal and unethical.

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  49. 10:23

    Yes the big companies would rather pay millions in sham consulting and royalty agreements. That's much cleaner. Medtronic alone pays more in sham agreements then all the PODs in the country put together. Get real.

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  50. 10:51

    Well said. Or my other favorite. Paying for IP that the big companies have no intention of bringing to market. Pay off in return for business.

    Wink wink....

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  51. a little bird just told that the Wall Street Journal is Jackson, MS today.

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  52. Jackson, MS???

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  53. 10:23 and 10:51

    Can you prove it? I hear this sort of thing all the time but am curious as to what evidence you have that makes you so confidently scream foul at all the big companies? I will not argue that years ago there were some shady dealings, but I mean lately....within say the last 5 years?

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  54. 3:23

    Look on the Medtronic website at http://www.medtronic.com/collaboration

    and see for yourself how much they pay in consultant agreements and royalties. You are correct that consultant agreements have been reined in and are mostly above board now. Royalty agreements, on the other hand, are the new sham. How many docs are needed to help develop a line extension of Legacy? What exactly did they provide in the way of IP that was so innovative that they would pay 10s of millions to a single group in Louisville KY? The problem is, they can assign whatever percent they want to surgeon collaborators, there is no benchmark for what is reasonable or fair market value for IP.

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  55. Hope they packed a weekend bag or 2 for MS, they could be there for a long time

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  56. Very correct on the long stay in Jackson. Can you say "Spinal USA"? Maybe Mike Wallace and 60Min is next!

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  57. 3:37

    Who sets the "fair market value" on IP? Whatever it is based on is acceptable by all at this point. It may be the new "sham" as you say, but its not on the same level of "sham" as POD's and the like.

    Not sure what your role in the industry is but the lines have clearly been drawn here and a lot of companies now stand on the same side of the fence when once we did not.

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  58. 4:53

    That is my point, since no one knows what constitutes fair market value for IP, the companies can base royalty percentages on volume, exposure (a high profile doc with clout) or anything else they want and, at this point, no one can question the amount. They could contribute virtually nothing in the way of ideas, yet be granted a substantial royalty that will be paid for the life of the product. This could actually be more of a sham than a POD.

    I'm on the sales side, by the way. I have no tolerance for POD's and I am actively exposing them to the press, HHS and plaintiffs attorneys. I suggest everyone on my side of the fence do the same.

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  59. 10:23,

    You guys whining about which company the POD uses are missing the boat. It doesn't matter what company they use, if they start a POD, your business is gone. As far as it being illegal to sell to a POD, what law are you basing that on? If a manufacturer ships product to a company and sends them a bill and that transaction is done, what law was broken. It is not the manufacturers responsibility to police the entity they sold product to. They do not pay commissions that will then be paid to doctors. If they sold to a hospital that they knew was providing an inducement for the surgeon to refer, would you say the manufacturer was liable? I don't think you would if it was your company and your account. You would certainly not refuse the commissions from those sales. It sounds to me like they are fairly well insulated and separated from being implicated in an AKS violation. They aren't paying anything to anybody.

    I understand that you have to be mad at someone and thats fair enough. And I would let my manufacturer know that I wouldn't want them enabling these entities, but I wouldn't say it was either illegal or unethical. Those terms are reserved for the doctors and their POD partners.

    Personally, I think the hospital buying from the POD, knowing the proceeds will go to their referral source is far more questionable.

    Think what you want, I just think your ire needs to be directed in the right direction.

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  60. 3:23
    Read the above post on physician registry with Medtronic. Notice the high numbers being paid for "education" in additional to advisory, IP etc. As 6:09 said how do you constitute fair market value for these numbers? It is a creative accounting gimmick to buy business relationships. Quid Quo Pro. The fact that they now have to disclose does not mean the issue is any less blatant. Large companies buying market share.
    POD's are just another way for companies and surgeons to do just that. Kickbacks for market share. Manufacturers win. Surgeons win. Who acts as the advocate for the patient? The GOVT?

    I am also on the sales side.

    I have lots of POD's in my area in addition to a manufacturer (with physician ownership) that sells directly to the POD that the same surgeon owns in addition to his surgery center. Seriously. This surgeon gets a piece of the action from manufacturing to implant.

    so 6:09 who exactly are you forwarding this info to? Would love to send in the ones in my area.

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  61. hey 6:23

    I agree. But what if a surgeon is part owner in the manufacturing company who makes a device he developed, who sells then to his POD, who then sells to his surgery center that he himself implants?

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  62. 6:23 - You are wrong. If a manufacturer knowingly sells to a POD they are unethical. It may be legal but they are morally bankrupt. It's called business ethics and every college business program teaches it.

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  63. 4:48

    Read the FDA warning letter to Spinal USA back in 2007. The only thing that will shut these people down is bad press, AKA the Wall Street Journal and a few good plaintiff's lawyers. Once enough lawsuits get rolling insurance companies will stop proving malpractice insurance to surgeons that participate in this kind of shenanigans....if the FDA won't get them through the front door patient advocates will have to crawl through the windows.

    http://www.fda.gov/ICECI/EnforcementActions/WarningLetters/2007/ucm076591.htm

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  64. I am new to this blog.. but am out of work and wanted to post a quick resume to see if I could gets some physicians to switch suppliers. I am willing to relocate.
    32 years old, 5'10" Blonde/Blue- Physically fit. 38- 26-35.
    Really I don't know too much about spine.. but a little about implants.
    I would attach a photo.. but don't see how. I am sure there are a large number of companies that would sell to me so that I could make a good living and still provide some good "service" to the docs who "use me" I would prefer to live by the beach.. but that is all negotiable. please respond to bambispine@yahoo.com

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  65. I would love to see what a doc could actually make with all the extra potential income of say a lumbar fusion.
    One level fusion=$
    Neuro Monitoring=$
    Implant "motivation" POD-Royality_etc =$
    Back Brace =$
    Bone Growth Stim=$
    Physical therapy gft=$
    Medicare transportaion business=$
    Owns a piece of surgery center=$
    Never buys lunch for himself= Saves$ per year=$
    I am sure that there are more.. but lets just say they have multiple sources of income.

    ReplyDelete
  66. TSB must not want us to share info RE POD's, he deleted a post of mine a few minutes ago asking for people to share info. nice.

    ReplyDelete
  67. Yeah Bambi, send resume to ilk24nik8@yahoo.com
    please include pics in various poses with appropriate surgical swimwear on.

    ReplyDelete
  68. 7.26, you forget to apply the mutipliers:

    Redo fusion $$$
    Redo the redo: $$$$$
    Redo someone elses redo of the redo: $$$$$$$ (he will do yours)

    One incestuous vicious cycle with the patient as Holsteiner.

    ReplyDelete
  69. 7:34

    Why can't we share info?

    Will TSB please answer this?

    ReplyDelete
  70. 6:40

    I was responding to 10:23 and none of the companies listed by 10:23 fit that description. If that is what a surgeon is doing then the same rules apply as any other physician owned manufacturer, POD, etc. He is most likely a greedy entrepreneurial surgeon who cannot see the flaw in the justification of his own actions. If I were you, I would call a local investigative reporter, plaintiffs attorney or the local HHS agent and describe to them the situation and let them look into it. HHS can get access to records that the rest of the world can't. They can probably subpoena the doc to provide the contract with the POD as well as the "dividends" and his initial investment. Even if they don't get a conviction, they will make his life miserable for a while.

    ReplyDelete
  71. 9:07

    And you forgot to add ...and you will never work in that town again. Very few docs operate totally above reproach. Maybe just a little consulting here or there. A snitch to the Feds or even worse the local plaintiffs bar will burn all bridges to the guilty and innocent alike.

    ReplyDelete
  72. 6:58

    Don't just say its unethical. Explain your point of view. I didn't take a business ethics class so I am not an expert.

    Tell me what you would do if you found out that one of your surgeon customers had an inappropriate financial relationship with the hospital that issues the PO's for your products? Would you discontinue selling product to that hospital? Answer that honestly because It's the same thing as what these manufacturers are doing. Furthermore, if you found out a surgeon was billing a code that didn't fit what he actually performed in the OR, but garnered a higher reimbursement, would you discontinue selling to him? I know the answer, but will you admit it. Anyone in this business for any amount of time has seen docs play games with coding, change their technique to garner more reimbursement (even though that change contradicted a previously held position).

    Don't apply moral rules to someone else that you don't live by in your own life and business. That is shallow and shows a lack of character. Having said that, I, personally, would not sell to these entities if I ran a manufacturing company. I am simply pointing out your hypocrisy.

    ReplyDelete
  73. 9:26 - I have no idea what codes my doctors use as I am not a coding expert. Your arguments make no sense. I will, and have turned down business where attorneys and 3rd party billing companies are involved. I make good business decisions and do not put myself in situations that could negatively effect my career or reputation.

    Let's say we are a gun manufacturer and we sell guns on the Mexican boarder. We know they are going to be used by the drug cartels to kill people but we didn't pull the trigger so we are free and clear right? Maybe, but business ethics should tell us its wrong and we should refuse the business. Just because the lawyers says it's ok doesn't make it right.

    ReplyDelete
  74. 9:26 - I have no idea how my doctors code or what their hospital relationships are? Do you know how surgeons you work with code and what deals they have with hospitals? I consider myself a good rep with good relationships and I have never ask any of these questions as it's none of my business. That is a very strange argument.

    ReplyDelete
  75. A personal shout out to the blogger or bloggers that claim that TSB does not want you to share information or post on this blog. The blog administrator has not deleted any comments from this post, therefore, you are either "yanking our chain," or "cranking the yank." Repost!

    ReplyDelete
  76. How does one describe the "GE Way"?

    ReplyDelete
  77. 4:24

    1. Sell your soul to Obama
    2. Sell out your country
    3. Cash your checks

    ReplyDelete
  78. "GE WAY"?

    Referring to prior CEO of GE Healthcare coming to take over Big Blue? MM, what do you think about this move?

    ReplyDelete
  79. Just as an FYI the Medtronic website shows only the current agreements in place and the monies exchanged. MDT approached ALL of their surgeons and let them know that in 1 year we will begin collecting data and posting all payments. You can opt out know for a lump sum or have your information posted for the world too see.

    Wonder how many "opted out"

    ReplyDelete
  80. 6:25,
    The same amount of people who "opted out" of explaining NuVasive's quarterly earnings report. The world will never really know the answer to either

    ReplyDelete
  81. OMEGA SHUT DOWN
    On May 5, OTW learned from the CEO of Omega that the company has shut its doors. According to the CEO, device companies that had been selling implants to the Omega POD, notified the company that due to the publicity generated by the WSJ article, they would no longer be selling product to the POD. The CEO told us that he's looking at a warehouse full of implants that he and his physician partners will not be able to sell. He says they followed the letter of the law and now their significant investment is in danger of being lost.

    ReplyDelete
  82. How about a link?

    ReplyDelete
  83. http://ryortho.com/fda.php?article=576_The-Risks-of-PODs

    Appears in Ortho this week....may have to subscribe to see the full article but they do have an 8 hour pass you can utilize for no charge.

    ReplyDelete
  84. Someone please copy and past the OTW article about OMEGA. I'm not paying Robin $250 to join.

    ReplyDelete
  85. If the companies selling to Omega are in the clear why would they stop supplying the POD? They knew what was going on all along and they claim what they're doing is legal. They need to make up their minds. If they feel it's wrong why supply them in the first place? If they feel it's legal and ethical keep selling to these scum bags. Typical business for companies like Alphascum. Why would any legit distributorship carry their products?

    ReplyDelete
  86. 9:53

    If you were a good rep you would know which codes applied to your products. If your surgeons thought you knew what you were doing, they would ask you about coding issues. Many companies have 3rd party coding companies they refer these questions to so you learn these things being involved in the business. If you know what the codes are and you hear a doctor dictating an OP note, you would hear them use terms and phrases that they don't normally use but are clearly meant for the coders to hear because they use the terms and phrases that are used in the coding manuals. Some docs will clearly manipulate the OP note to garner a higher paying code than what was actually done in surgery.

    The example about a hospital was just theoretical, but if it were going on, you would hear about it from people in the OR, the office or from the doc himself.

    Just curious, what kind of business are you referring to that has attorneys and 3rd party billing companies involved?

    ReplyDelete
  87. 10:24

    I am not commenting on the legality or morality of any of this but my guess is that no POD would enter into an agreement with a manufacturer if the manufacturer could simply pull the plug and stop supplying them AFTER they bought an initial inventory. There had to be a material breach of the contract. I would bet the manufacturers' attorneys do know that those companies are way into the grey area and put all kinds of "outs" in the contract to protect themselves.

    But the biggest question now is: Since Dr. Makker found an implant that was no doubt superior and saved the hospital money thru his POD, what system is he going to use now that his POD is shut down. I feel very confident that he will continue to be a good steward of our Medicare dollars and do his darndest to continue using that same implant thru a distributor at the same cost.

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  88. 11:00 - Our business is not coding it is implants. We CANNOT tell surgeons how to code for their procedures, nor should we be listening when they dictate their cases. If your company knew you were telling doctors how to code they would fire you. If you were a good rep you would know this.

    I am not sure what type of people you work with but I never hear gossip in the OR about the surgeon hospital relationships. Maybe I am lucky and only work with stand up surgeons and hospitals.

    There are 3rd party billing companies that get in the middle of the implant bill charging $5000-10,000/screw to work comp. It is technically legal for me to do the case as long as I bill published list price and receive my standard commissions. I refuse this business as I know what these 3rd party scum bags are doing and it's unethical. I do not operate in the grey at all, it's never worth the headaches.

    ReplyDelete
  89. 1-877-817-6450 | www.ryortho.com VOLUME 7, ISSUE 15 | MAY 10, 2011
    In an April 13 story, The Wall Street Journal (WSJ) claimed that Omega Solutions, a California-based physi¬cian-owned distributorship (POD), “sometimes pays surgeons to use its products.” We took the Journal to task for citing poor evidence in accusing a company of committing a felony in our own story on April 15.
    On April 27, OTW received a “Letter to the Editor” (reprinted below) from attorneys at the Hogan Lovells law firm. The firm represents device manufactur¬ers and issued a widely published White Paper in 2009, arguing that physician-owned distributorships ran afoul of fed¬eral kickback statutes and potentially clouded a physician’s ability to choose the best implant for his or her patient.
    Omega Shuts Warehouse, Inventory in Limbo
    On May 5, OTW learned from the CEO of Omega that the company has shut its doors. According to the CEO, device companies that had been selling implants to the Omega POD, notified the company that due to the public¬ity generated by the WSJ article, they would no longer be selling product to the POD. The CEO told us that he’s looking at a warehouse full of implants that he and his physician partners will not be able to sell. He says they fol¬lowed the letter of the law and now their significant investment is in danger of being lost.
    Hogan Lovell: PODs Run Afoul of Kick¬back Statutes
    Below is the Hogan Lovell letter to OTW, [slightly edited for brevity]. Follow¬ing the Lovell letter, we share 19 legal requirements for a POD sent to us by the CEO of Omega and prepared by the law firm of Hooper, Lundy and Bookman. Hooper represents PODs and wrote the legal paper cited by many PODs as the opinion they relied on to structure their business.

    ReplyDelete
  90. disproportion¬ate to business risk.” It believes that POD arrangements “should be closely scrutinized under the fraud and abuse laws because they raise the type of risks that [those statutes] were designed to address.”
    The OIG also has affirmed that “the fact that a substantial portion of a venture’s gross revenues is derived from partici¬pant-driven referrals is a potential indi¬catorof a problematic joint venture.” And the OIG has reminded industry on many occasions that “increased costs to the Medicare and Medicaid programs and harm to beneficiaries” are not nec¬essary in order for an arrangement to violate the law.
    The Centers for Medicare and Medic¬aid Services (CMS) has echoed this concern, stating its belief that POD arrangements “may serve little pur¬pose other than providing physicians the opportunity to earn economic ben¬efits in exchange for nothing more than ordering medical devices” from their POD. “When physicians profit from the referrals they make to hospitals through physician-owned implant and medi¬cal device companies (‘POCs’), we are concerned about possible program or patient abuse.”
    So why do PODs continue to proliferate?
    In part, the arrangements are so beguilingly free of business risk and full of profit potential that it is diffi¬cult for physicians to resist their allure in the absence of visible enforcement proceedings. Add to this that federal enforcers appear to be biding their time, waiting for just the right case, and the short-term opportunities may appear to outweigh the long-term negatives. But as hospitals who lived through the government’s enforcement campaigns against billing for medical residents will recall, it is little help when faced with such proceedings to plead that “we thought it was ok at the time because nobody tried to stop us.”
    Responsible implant manufacturers, hospitals, and physicians should pay close attention lest they become poster children for a new wave of enforcement.
    Sincerely,
    Thomas N. Bulleit
    Sara Kraner

    ReplyDelete
  91. Apologies for it being broken out into many posts, but there are limitations on character amounts to an individual post! Hopefully this sheds light on things.

    ReplyDelete
  92. 7. The company will hold any and all licenses or governmental approvals necessary for operation of its busi¬ness.
    8. The investment price offered to phy¬sicians will not be based on the pro¬jected referrals from the physicians, nor will the amount being offered to physicians reflect the anticipated referrals generated from the physi¬cians procedures.
    9. No physician’s investment interest will be subject to repurchased for failure to use the company’s devices in their surgeries.
    10. The investing physicians will not be pressured in any way to utlize the company’s devices in their surgeries.
    11. The investing physicians will not exert pressure on the hospitals or surgery centers to purchase the devices from the company.
    12. The company will be adequate¬ly capitalized for its operations through the initial capital contri-butions of its members and that the

    physician investments will not be nominal. The members’ capital con¬tributions will not come from the manufacturers/distributors that sell devices to the company, nor will the managers or its affiliates loan funds to the physician investor for their capital contributions.
    13. The use of the devices will at all times be medically necessary.
    14. The company will not bill patients or payors (including Medicare and Medi-Cal) for the devices.
    15. The company will have written agreements with the manufactur¬ers/distributors for purchase of the devices.
    16. The company will have written agreements with the purchasers, hospitals or surgery centers, for the sale of the devices.
    17. The purchasers, hospitals or sur¬gery centers will be charged a fixed price based on negotiations, which will not increase with the use of more devices.
    18. The company will generally have a fixed list of prices that will be gen¬erally available to all purchasers, hospitals or surgery centers.
    19. However, the company may be willing to accept lower pricing if the purchaser dictates lower fixed pricing. The payments by the pur¬chasers will not be higher than fair market value for the devices.
    The CEO of Omega told OTW that he and the physician owners followed all these rules and risked a significant amount of capital. That risk is now in danger of becoming a loss. The sooner the government acts to advise physi¬cians, manufacturers and distributors about the legality of PODs, the better. There are too many implants in ware¬houses in limbo. ◆

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  93. Hooper, Lundy: The Indirect Com¬pensation Exception
    The Hooper, Lundy and Bookman website offers the following February 2011 Health Law Perspectives titled, “Regulatory and Structural Consider¬ations for Physician-Owned Medical Device Companies,” by Eugene Ngai and Charles Oppenheim.
    “The physician-owned device com¬pany arrangement is likely to create an indirect compensation arrangement between the physician-investor and each hospital to which that physician-investor refers Medicare patients for hospital services.
    However, a properly structured physi¬cian-owned device company may rely on the indirect compensation arrangements exception. This exception is met if the agreement between the physician-owned device company and the hospital provides for the medical devices to be sold at fair market value, and at a price that does not vary during the term of the agree¬ment based on referrals or other business generated by the referring physician-investor. In addition, the agreement must be set out in writing and signed by the parties, and must not violate the federal anti-kickback statute.”
    http://health-law.com/health-law-perspectives/february-2011/#3
    POD Legal Requirements
    The following “Legal Requirements for Medical Distributorship,” prepared by Hooper Lundy was shared with OTW by the CEO of Omega:
    1. The company will hire and employ its own personnel.
    2. The company will purchase prod¬ucts directly from manufacturers/ distributors under its own contracts.
    3. The company will sell products directly to its own customers such as hospitals or surgery centers under its own contracts.
    4. The company will manage its own inventory.
    5. The company will have its own dis¬tinct office and warehouse space for operation of its own business.
    6. Products will be shipped to the com¬pany by the manufacturer/distribu¬tor and will be separately ware¬housed by the company before resale to hospitals or surgery centers.

    ReplyDelete
  94. Based on the article it means Alphatec is pulling away from supplying "ALL" PODs. Therefore, their earnings should drop next qtr and it becomes an opportunity to short ATEC? Wishful thinking perhaps.

    ReplyDelete
  95. What's with all the fear about POD's? Sounds to me like reps that are afraid of a little competition in the marketplace?

    Are your fat little wallets feeling the squeeze?

    You may have to prove that the service you provide is worth the additional cost of the product.

    You're delusional if you think that the government or a newspaper will ride in on a white horse, kill off PODS, and leave nice big fat profit margins for a bunch of whiny reps to feed on.

    PODS are competition driving the price of implants down. The government needs this to help get Medicare under control. The manufacturers want this to reduce commission payments and rep training costs.

    All that will happen is that regulatory guidance is issued regarding how the physicians have to structure the companies.

    The only person who has a vested interest in killing the PODS is a sales rep.

    So...if you don't think you can provide service that somebody wants to pay for in that new environment...start polishing your resume...PODS are in every segment of medical devices, not just spine. They may get a facelift, but they are here to stay.

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  96. 10:30 - I have a letter from a major east coast health system that disagrees with you. The letter details how PODs of any kind are not allowed to conduct business at any of their facilities. This will continue to be the trend as hospitals do not want the liability. Keep dreaming Peter Pan!

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  97. Hey Dr. POD - I know that you know that PODs don't drive down implant prices. It just gives you a cut of the reps commission. So, yes, we reps want your sleazy little enterprise gone. Hope you have some good legal representation. You will need it when Grassley gets his arms around this thing.

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  98. 10:30

    Are you really trying to justify POD's by claiming that they lower price, that they are saving by eliminating "big fat profit margins" for reps, and that they provide competition? Then you clearly don't know what they are.

    If the surgeon is both the customer and the supplier, and a third party is forced to pay whatever bill he runs up, then he is motivated to run up bigger and bigger bills. People on the supply side benefite from high prices and high volumes, but they don't get to control pricing and volumes like the POD surgeons do.

    If you are a surgeon in a POD, and you have been bilking the system for a few years and the hospital comes to you, like they do to reps, and says "We are implementing a new spinal pricing Matrix", what would be your response? I have a strong suspicion that you would take that as a direct attack on your income from the hospital. They are taking money out of your pocket to line theirs, right. Then what happens? Do you take the cut in "dividend" without a fight? Do you take your cases to another hospital? Does the hospital cave and continue paying the higher prices? Two of those answers are illegal and the other is make believe, you decide which is which.

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  99. 10:30 am.....you are correct!!

    POD's are here to stay.

    ReplyDelete
  100. The reps who the surgeons find most valuable will be offered roles within the POD to continue to provide value.

    The others will be left out in the cold. And those must be the ones who are the most upset on this board as they've done little to build business over the years, but instead have done nothing but live high off the hog by bringing little value to the surgeon other than moving sets & filling otu charge sheets.

    That's why there is a difference between SALES reps & Service reps.

    Bye Bye you whiney bee-atches!!

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  101. 10:30
    Please inform us on what other medical device industry has PODs. With most hospitals implementing their own pricing structure, I would love to hear how PODs are saving the government money. Most of the spine market is already dealing with pricing decreases, which is a good thing and PODs had nothing to do with it. When I look in the mirror I see something I like, you should try it sometime.

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  102. 4:43

    Reps who do nothing but move sets and fill out charge sheets have never, and will never, live "high of the hog". And you are wrong about valuable reps being offered roles in a POD. The POD model's first goal is to villainize the reps for making too much money. And then, of course, sell the doctor on the basis that THEY can make that money instead of the rep. If the reps are offered a job, it is a paltry offer than no sales pro would ever take, because it isn't ethical or lucrative.

    POD's aren't formed to save the hospital money, they NEVER fall within all of the safe harbors, and they all expose a hypocritical side of the investors who are all too willing to switch products "to save money" when they never gave a rat's ass about saving the hospital money in the past. It's all about the money and NOTHING else!

    Dr. Steinmann, you still haven't answered the call to have a dialog. You are only willing to be the torch bearer for this hoax with prepared statements from your lawyer. Not only are you a crook, but you are also a coward.

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  103. I love this talk on PODS. Keep up the full chatter. It's a lovely thing to bring these words together so others who mean well can see it. You guys are digging your own graves...just a matter of time....

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  104. 1103am: Can you post your letter? We need to start educating hospitals on the steps other hospitals are taking to protect themselves.

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  105. It is time to weed out those slimy surgeons who are POD-sters as well as Company-contracted surgeons by informing the PATIENT (billboards, radio ads, etc.).

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  106. Here's a thought... Isn't it a violation of Stark law to have more than one revenue stream when providing care to a medicare/medicaid patient? If a POD physician provides care to a medicare patient and recieves payment from medicare as well as some dividend based off of product sales from his/her POD, then there would exist 2 streams of revenue to the physician for this one patient. "Things that make you go hmm.".

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  107. I don’t know which is more pathetic, this topic of POD's or the ones who are wasting their time posting about it.

    For all you sitting at home in your pajamas winning on this page as to what "POD's" have done to your business and that you can't compete, then do us all a favor and QUIT and get out of the industry!! Otherwise, grow some hair on your peaches and do something about it! Instead of posting on this Blog, why don't you "google" the topic preceded or followed by typing in OIG, there is plenty of information for you to compile. Hell, I will even give you some links on the topic:

    http://online.wsj.com/article_email/SB10001424052748704336504576259142044058726-lMyQjAxMTAxMDEwMjExNDIyWj.html

    http://www.aaos.org/news/aaosnow/jul09/managing6.asp

    http://www.hoganlovells.com/files/upload/PODWhitePaper_Nov2009.pdf

    http://www.jhconline.com/article-sepoct2007-physicianorsupplier.asp

    http://www.wolffsamson.com/news_events/43-arrangements-physician-owned-medical-device-distribution-purchasing

    http://online.wsj.com/article/SB10001424052748704336504576259142044058726.html

    I am sure that every CEO, CFO, Compliance Manager of each hospital and their retained Council in your territory would be grateful to receive a hard and electronic copy of this information. Don't assume they know what is going on, some of them REALLY don't and here's a little tip, once they receive it and it is on record, they can't claim ignorance, they MUST at least research it. If they research it, they won't allow it as evidence from one hospital chain that did just that, threw the POD out!! In addition, I am sure each of you have a fairly prominent plaintiff firm in your city that would like nothing more than to be educated as to which companys’ are selling to POD's and the hospital Executives that are allowing it at their facilities.

    These device companies that are KNOWINGLY selling to POD's MUST be held accountable, it is nothing more than a circumvention scheme that is cheating all of us. After all, when you buy a firearm, depending on the state in which you live, you have a waiting period which includes a background check. Hmmm, I wonder why the manufactures don’t do their own series of “checks and balances” on who they are working with? So all you so-called Spinal Executives with the various companies (and you know who you are) that are reading this and selling to POD's, take a good look in the mirror, do you like what you see? If not, reach deep down and find that moral fiber that your father taught you about, remember……….. it’s not about what IS or IS NOT legal, it’s about doing what is RIGHT.

    News flash Mr. “Spinal Implant Executive”, a) if POD's were an ethical business practice don't you think the "big 3" would have already done it and compressed the market and b) if POD's don't have access to the implants, they can't exist! So in other words, your actions or rather lack of, makes you a conspirator to the issue!!

    Stop cheating the system by taking the easy road, do the right thing, sell on merit and service, you will sleep better at night!

    ReplyDelete
  108. POD naysayers...please get your facts correct and understand completely (through professional legal advice) and not from your arm chair "wanna be but never was never smart enough to become a lawyer, much less a mediocre salesperson that is too cheap to afford good legal advice and understand thoroughly how the laws are written that allow these arrangements to be forthright and legal. Your ignorance and posts are showing even more why you are in the situation you are in because the industry you think you are an expert in has taken you as a prisoner by your own arrest. I hear there are openings at State Farm and Farm Bureau for you to apply .

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  109. Here is a letter from a major east coast health system. EAT IT 9:53!

    ******* Health Systems and its affiliated entities ("*******") believe that the growing influence of physician-owned intermediaries (sometimes referred to as "physician owned distributors," "PODs" or "POIs") in the medical device and supply industry is inconsistent with the spirit and intent of the federal anti-kickback statute, creating what the Office of Inspector General of the Department of Health and Human Services has characterized as a "strong potential for improper inducements between and among physicians investors, the entities, device vendors and device purchasers." The Office of Inspector General has stated that "these
    ventures should be closely scrutinized under the fraud and abuse laws.
    "Physician-owned intermediaries are beginning to appear in hospital supply chains as "middle man" entities (typically organized as a "product distributor" or a "group purchasing organization") that gives physician investors an opportunity to receive profits from the sale of certain medical devices or supplies to hospitals in which the physician investors provide professional services. After reviewing various recent publications and legal opinions on this subject, has concluded that it shall be its policy to refrain from entering into business relationships with
    supply chains that involve physician-owned intermediaries. Specifically,
    policy shall be as follows:
    ******* prohibits purchasing items or services for use in patient care, including but not limited to pharmaceuticals. implants, instruments and other medical devices, from any supply chain that involves a physician-owned intermediary with which any affiliated physician or immediate family member has a financial relationship or which otherwise
    involves physician ownership in excess of 5%. Exceptions to this policy may be approved only by ***** Audit Committee, in consultation with the Chief Executive Officer, Chief Legal Officer and Chief Compliance Officer.

    It goes on but you get the point.

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  110. 11:08....so 1 out of 2200 hospitals that perform orthopedic implant procedures means you have 2199 more to follow suit...Probably had an Administrator or surgeon son or for one of the Big 3 get his lunch eaten and started crying to Daddy to do something....LMAO...GL...2000+ more to go and maybe in 2015 you will get your wish when you are selling used cars.

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  111. 1:00 - I am sure that is exactly what happened.
    If you think this is the only hospital system banning PODs you are an idiot. The largest hospital system in my area just booted every company with POD relations...13 more hospitals on top of the system above. Make money while you can at the big boys because your days are numbered. I am sure you will still be able to operate at the run down shit hole hospital in your area. You will be similar to a cockroach at a shitty restaurant.

    I don't care if it's legal or illegal. The fact is, good business people will always find a way to win....and I have. The scum taking the easy road makes money for a while but it always ends. Maybe you would fit in as a sub Prime mortgage lender, by 2015 the market should turn around. When I hang up on you when you cold call me don't feel bad, it's just that my house is paid off.

    By the way, my family owns 9 car dealerships so if you need a new auto I would be happy to sell you one. I will even throw in the floor mats....for an additional $149. hahahahahaha You have no idea who you writing to stupid!

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  112. So they are willing to allow 5% then. Let's do the math: A busy doc implants $2 million in hardware and biologics per year. If they are resellers, they are probably marking up at least 50% from wholesale. 5% is still a $4200 check per month - not huge money, but pretty good for doing nothing. It'll pay for a condo and lingerie for the mistress, at least.

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  113. The 5% rule is a great deal for the POD non-surgeon principals. Let the greedy docs work their ass off for their 5% of the profit and I'll keep the 95%. Sounds like a good deal to me!

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  114. 1:46...there you go again in a fantasy world of your fame and fortune...Mr GMC Car Dealer Guy...looks like your family also left you out of business like your wannabe surgeon friend(s) did. Maybe you need to see if one of the family car lots need a car detail position filled as you will probably be there soon...Lol...By the way, the cars I purchase already have floor mats included so maybe the family should step up to a nicer line of automobiles to represent! Keep trying to give your Hummers away...nobody is biting.

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  115. 9:53

    Maybe you got an opinion from a lawyer you paid that disputes the opinion of the OIG. That's great for that lawyer when you get a whistleblower suit filed on you. He can then charge you anything he wants and you will pay it to stay out of jail and to try and keep the 3 houses and still make the 2 alimony payments.

    Just like Theresa Ford says in her OTW column, she has set up these arrangements for customer who paid her to do it, but she strongly advises against it.

    Please attach a link to any web page that has an opinion that says these entities are legal. The laws were not written to allow these entities, they were written to prevent them. Your lawyer is attempting to set yours up to fall within the law and all of the safe harbors, which is easy enough on paper. But it is impossible in practice.

    The people close to you will see the changes in your practice pattern to accommodate the new products, to overutilize implants, the loosening of indications, the lack of a sales force, the lack of non-investing surgeon business, the lack of marketing, etc. You just better hope that one of those people close to you doesn't end up with nothing to lose.

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  116. TSB at 6:06

    Absolutely it leads to innovation and improved service. Every company is searching and developing "the next big thing". Admittedly, nothing has been earth shattering the last few years. Infuse and XLIF are examples that succeeded. Many others failed (Dynesis, NuFix, Mystique, etc) but the attempt to innovate is ever present simply to differentiate. But the fact remains that the cervical plates and pedicle screws are where the money is so competing for that business requires something extra. Hopefully it is a higher level of service, it may be something else depending on the surgeon and what motivates him. But generally speaking, if you aren't providing excellent service on the core products, that business may be in jeopardy.

    Since you mentioned it, I have to ask: What country has better healthcare than in the US? I know this is an entirely different debate, but you started it!

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  117. Just wondering but does anyone know what cities have a ortho spine doc's son as his rep, an ortho spine doc's brother as his rep, a neuro spine doc's son as his rep and a neuro spine doc's wife as his rep?

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