Monday, January 30, 2012

Thursday, January 26, 2012

AB 378 - Lawyers in Love

Effective January 1, 2012 the California State Law prohibits physician self-referral  in the context of workers' compensation cases.  Physicians will no longer be able to own an interest in a company that supplies prescription drugs and medical devices/implants.  This law effectively reverses the existing California law and outlaws Physician Owned Companies (POC's) in the workers' comp space.  The primary focus of the law was to address the perceived abuses related to compounded drugs (steroids or human growth hormones) and medical foods the primary objective was to place checks and balances on physician self-referral when it comes to medical implants.  Many of you know that there is a growing trend across the country where workers' comp attorneys, physicians and distributors are collaborating to take advantage of workers' comp patients.

Section 139.3 (a) of the California Labor Code as amended by AB378 states the following;

Not withstanding any other law, to the extent that those services are paid pursuant to [the workers' compensation program], it is unlawful for a physician to refer a patient for pharmacy goods, whether for treatment or medical legal purposes, if the physician or his or her immediate family has a financial interest with the person or in the entity that receives the referral.

The statute also provides that no claim for payment shall be presented by an entity to any individual, third party payor, or other entity for any goods or services furnished pursuant to a referral prohibited under Section 139.9.  Violation of section 139.3(a) shall be a misdemeanor, and that the appropriate licensing board shall review the facts and circumstances of any conviction pursuant to the statute and take appropriate disciplinary action if the licensee has committed unprofessional conduct.  In addition, violations of this section may be subject to civil penalties of up to $5,000 for each offense, which may be enforced by the California Attorney General, the Insurance Commissioner or District Attorney.

It will be of interest to gauge the response from the many POC's and POD's that have infiltrated the California market from the East Bay all the way to Orange County.  All medical devices will contain an FDA required Rx only or similar label.  This prohibition applies to POC's that are supplying spinal impants and orthopedic devices.  Could other states be watching the outcome?  TSB wants to know has this been a long time coming?  With prohibition being enforced by the Attorney General for the State of California, the market is 2/3's of the way from completely banning POC's and POD's.  No matter what the outcome, TSB is sure that there will be some legal challenge to this law as it continues to evolve to eliminating POC's and POD's.  You know what JB would sing:

God sends his spaceship to America the beautiful
They land at six o'clock, and there we are the dutiful
Eating from TV Trays watching Happy Days
Waiting for WWIII while Jesus slaves
To the mating calls of Lawyers in Love

Saturday, January 21, 2012


On behalf of those that contribute to TSB and our many readers we would like to apologize for the delay in posting. Our objective was to reenergize our batteries for the 2012 campaign.  As for blogspot, we would like to ensure you that some of the changes that were initiated were not of our own doing.  Ever wonder why computer geeks do the things they do without ever notifying you? With that said, we send our condolences to those that have had trouble posting. Collectively, we have decided to initiate a website that will cover more than just spine.  What do you think?  We believe that with our tenure in general orthopedics, recon, trauma, biologics and spine this would be a more entertaining venue. Who knows maybe we can write another article on how stem cells can grow a real mustache.

Every now and then, one has to step back and put the fun back in spine.  Like the Energizer Rabbit, it keeps going, and going, and going, and quite frankly sometimes it just doesn't know when to stop. Even when it's at a standstill, it's still turning. What precipitated this blog was the screening of Money Ball, that team TSB attended. Team building, you've got to love it. If you ever get an opportunity to meet Billy Beane or hear him speak, he is truly thought provoking let alone entertaining, you know like having W come to your NSM, LOL. Or better yet, you could have some CEO get up on the podium and regurgitate some anecdotal leadership principles from some iBook, or, what some public relations firm wrote for them.  So, it got us thinking, and there's a scary thought,  why has this industry, let alone other industries evolved into such an us against them environment?  Is it the competition? Yes fellow bloggers,  there is mucho testosterone running around. Is it envy?  Is it a lack of corporate loyalty? Hmmm?  Is it a lack of understanding what it takes to build a business? Maybe you have all become the Street's prostitua.  Is it unrealistic expectations? Short-term thinking.. Are we self-immolating right before our own very eyes? Not only are you beating yourselves up, you are getting beaten up by your CEO's, hospitals, surgeons, rapetrax, vendor-rape, and the list goes on.  We have become so selfish and self-centered that Machiavelli and Sun Tzu would be proud of our behavior? They would love this atmosphere. How has this behavior affected our leadership? Too many people think these people are oracles and give way too much credit to the Lukianov's, Paul's, Orsingers, etc.  Maybe things have come much too easy for all of us?  Years ago, and yes young un's there is something to learn by living life, there was a fundamental understanding of how to build a business.  As previously stated, organic is a thing of the past whether we like it or not.  Is it because a lack of talent?  You be the judge.  How out of touch are some people? How many engineers actually spend time in the operating room Mr. CEO? All right, enough with the bitching. Let's just say there were rules by which we all understood we had to play by.  Even the CEO of the team and the Manager overseeing the team that he fielded understood each and every players ROLE.  But the one aspect that TSB truly sees lacking in our industry, is a fundamental disconnect between the rules and the respect that we had for one another.  Just read your comments.  What is it about the industry and the people that run it that make it so insane?

Let's look at corporate loyalty.  Recently over dinner, TSB had a conversation with a CEO about whether the so-called "negative employee attitude" was the product of inherent corporate deficiencies, or an individual personality trait?.  I am sure 99% of you can guess what his answer was?  Voila!  It's always the employee.  Have you ever met a CEO or senior manager whom was honest enough to admit that he had an ugly baby? HOUSTON WE HAVE A PROBLEM.  So I asked, what are the company's responsibility to it's employees?  Is it just providing the individual a job and benefits?  What happens in a relationship when one person perceives that they do not do anything wrong, or they do not listen, or do not communicate effectively?  If corporations are truly people (Mitt's Witt, or is it Nit Wit) why is it that corporations suck at understanding the human element in business? If corporations are truly people, then why do they suck at managing people? So, TSB proceeded to pose questions that many of our readers experience on a daily basis in spine.  Here's a sample of our discussion;

How responsive are you to the market, your customers, and your sales peoples needs?  A timely execution and focus results in success. Untimely execution results in well.....your untimely execution, or a staggering company. Can you name a few? Ever work for a CEO who insisted that there was nothing wrong with the product?  You know the old expression, "while Rome burned Nero fiddled." You can't make Beef Wellington out of BS.

Have you set realistic goals and objectives?   There is a difference. Goals are about effort, while objectives are about attainment.  How many of you work for management teams that have delusional expectations, and then hold you accountable for their ineptitude?  What would be the point of providing you with a objective that is UNATTAINABLE, and then hold you responsible for it?  

Do you listen with an open mind?  Years ago people didn't have books written on management, leadership, strategy, tactics and execution, yet somehow they managed to succeed.  Could it be that common sense no longer exists? Did it die?  Today, confusion reigns.  How did yesteryear's companies flourish without Drucker, Covey, Kotter, Menkes, or Maxwell?  Unfortunately, too many people read these books and then begin to believe that the company, or their employees are their laboratory, spewing out anecdotal quotes thinking that this will motivate when the problem lies within the corporation.  Leadership goes beyond academic intelligence, and contrary to what is written in books sometimes one has to look beyond the individuals magnetism or charism.  Do you want style or do you want substance? 

Do you provide your employees with what they need to be successful? If a carpenter does not have the right tools, how can one build a house on a foundation?  This goes back to the adage that one cannot make Beef Wellington out of BS.

Do you make promises that you cannot keep?  Haven't we all heard this before?  The companies that respond win, the companies that BS their customers LOSE.  Just look at who are the contenders and who are the pretenders.

Have you ever participated in an anonymous 360?  This is TSB's favorite considering how fragile and insecure most of the CEO's and senior managers are in this industry.

So how does this tie into MONEYBALL.  The companies that have succeeded in many respects are like Billy Beane.  Individuals who are or were willing to step off the ledge, take a chance, learn from their mistakes while at the same time keep life in perspective, yet understand that there is a human element to any venture. They realized what it takes to build a great product, go against the grain, and that doesn't mean stealing other people's IP.  But let's give credit where credit is due, behind every Billy Beane there is a Paul Podesta and without Paul's genius, Billy and the 2002 Oakland Athletics would have never accomplish what they did.  The most memorable moment in the movie comes when one of Beane's scouts confronts him, telling him that he was in over his head, that he doesn't understand that "this is the way its been done in baseball for years (sound familiar)." This is exactly what this blog has been about, this continues to do it the same way because for some ungodly reason, are you listening you brilliant investors and BOD's, you think you have a formula and it works regardless of the situation or environment, but its just not that simple.

What the movie also teaches us is that the art of arbitraging is unique in that one profits from the simultaneous sale and purchase of an asset in order to profit from a difference in cost. Timing is everything. Maybe the spine market can learn something from its inefficiencies.  Ever work for a company that pissed money into the wind?  TSB is sure that many of you have.  Considering that pricing has deviated substantially from what was once considered the norm, how do we ensure that pricing along with our livelihoods does not continue to erode and you do not perish? Fluctuation in pricing in the spine market has resulted in decreasing profits across the board.  Why would someone want to underwrite another IPO when we don't even know what will happen with healthcare in this country?  In addition, this has placed a tremendous strain on start-up and early growth stage companies.  Who will survive and who will perish? If INFUSE has been battered and bruised, do those stem cell aficionados believe that there isn't a plan percolating for them?  

But the gift of giving will continue as you walk the aisles of CNS, AANS and NASS take a look around and ask yourself, what's new?  Where are we going?  Are we making things better? Are the patients really benefitting from all these procedures?  Are the outcomes getting any better? Hey what happened to the total disc market?  Or, has it all come down to the almighty dollar?  Who knows, maybe the Chinese will teach us that they can copy our implants and technology and sell them at a cheaper price around the world and even in the U.S.. Don't believe it, ask the Koreans. Unfortunately for many of you, it comes down to who is running the company, do they have the cash to make things happen, have they surrounded themselves with their friends because of their insecurities, and then you'll know where your organization is going.  So as we springboard ourselves into another year of fun and games, TSB wants to know will you make a difference, or will it be business as usual.  To paraphrase a line in the movie, "many are called, but few are chosen."

Sunday, January 8, 2012

7 Habits.......of Highly Unsuccessful People

On January 2, 2012 Forbes magazine published an article entitled "7 Habits of Highly Unsuccessful People." The interesting aspect of this article is that many of us have experienced the consummate CEO that was successful at first, and then.................well you can fill in the blanks. What TSB thought was enlightening is that there have been many individuals in spine that have fallen victim to their own success. TSB encourages everyone to read this article. Here are the 7 Habits;








How many of us have experienced an individual or individuals that have fallen prey to one if not all of these categories? Exhibiting confidence is an important element when factoring what drives success. Yet at times, is there a fine line between what is truly attainable and what is fantasy? As an industry, we hear many of the successes, but do we ever learn from the failures? Do we take the time to understand the relationship of causation to effect? How many truly understand leadership? What TSB has learned is that instinct and experience plays a much greater role in leading the right way, than reading some motivational book. Anecdotal quotations will only take you so far, and sooner rather than later reality catches up to you and bites you in the old arse. If you haven't experienced it, how can you understand the challenges and needs of your team? If you've ever been an athlete, you know that relying on your god given abilities will only take you so far and then you have to draw the line between inspiration and perspiration. Whenever someone sets goals, the objective is to make them attainable. How many leaders still live on fault line thinking 20% growth or even 50% growth in a shrinking market? Don't believe it, you be the judge. TSB wants to know, who do you think is a great leader in the industry and who needs some schooling?

Sunday, January 1, 2012

Breaking Up Is Hard to Do!

On December 30, 2011, David Sell of the Philadelphia Inquirer reported that Synthes had fired the first salvo in an attempt to make a statement regarding non-competes and corporate raiding against three former Synthes employees, and the Almighty Stryker.  The three former California employees are accused of allegedly breaching their confidentiality agreements and violating patents.  As to what this confidentiality and  these patent violations pertain to leaves much to the imagination.  If the accused are AO/ASIF consultants what could they possibly know?  The confusion surrounding this story is that Stryker hired them to sell nails, screws and plates to fix broken bones and then goes on to state that it is mostly related to spinal ailments.

Synthes charges that Michael Russell allegedly used Synthes medical devices to complete a surgery on behalf of Stryker.  If the device in question was an implant, and for those of us in the industry, when the terminology device is used, it usually means an implant, why would Synthes care?  The last time TSB noticed, no one was billing for instruments per se in a surgery, therefore, what's the big deal? Unfortunately, there was no comment from Synthes attorney Anthony Haller, incredible that the old Wyss meister still has his trusty relic Tony at his side.

So TSB has to ask our readers, is this a case whereby Synthes is attempting to enforce a non-compete and are utilizing the typical legal tactic of piling on accusations in the hope of intimidating these former employees from pursuing their right to work?  Isn't this the United States, or will we be mandated to acquire a work visa to be employed in this industry?  TSB has not met too many salespeople that had, or were privy to confidential information, let alone violating patents.  The truth is that companies in this industry are so desperate to preserve market share and revenue that they enforce these ridiculous non-competes.  If your products are good, why worry.  If your surgeons are loyal customers, why worry?  But then again, when your product portfolio no longer has the technological advancements that you were once known for, isn't it time for litigation and threats. And then there's Stryker.  Back in the late 80's and early 90's Stryker become known for these shenanigans and old habits die hard.  So you know what Neil Sedaka once sang in early 60's;

Don't take your implant business away from me
Don't you leave Orsinger in misery
If you go, then Synthes will be blue
'Cause breaking up is hard to do

Remember when you held me tight
You covered those IM nailing cases thru the night
Think of all that we've been thru
"Cause breaking up is hard to do