NEIN X NINE = NEIN

No spine nation, it's not the Godfather of Soul (may he rest in peace),  neither is it that other Godfather, you know the one that ran a pizza  company who basically was taken to the woodshed by his wife Gloria last weekend, neither is it memories of Adolf Hitler who liked to scream, "Nein, Nein, Nein."  What Nein X Nine =  Nein  amounts to is the answer that the Supreme Court issued to Blackstone Medical and Orthofix with regard to their Petition for a Writ of Certiorari.  The Cert Petition is a legal request to the SCOTUS whereby a defendant, in this case Blackstone and Orthofix, asks the Court to review a decision by the a lower court, in this case, Blackstone Medical Incorporated v. U.S. ex rel. Hutcheson.  But before we go any further let's understand the issue at hand.

The issue in Blackstone Medical was whether a device company THAT PAID ILLEGAL KICKBACKS to prescribing physicians (we know who you are) could be liable under the False Claims Act for causing false claims to be submitted to MEDICARE.  The basis for the law is that anyone submitting claims for federal monies cannot submit false or fraudulent claims.  If so, the Federalis can recover large fines for each submission as well as treble damages.  Treble damages is a term that indicates that a Statute permits a court to triple the amount of the actual/compensatory damages (are you listening boys).  In addition to the treble damages, the whistleblower shares in the bounty.  Blackstone, Orthofix and its cadre of attorneys were hoping to argue that another law for which the filer had certified compliance was being violated.

Considering that this Writ of Cert came in front of the Robert's Court and was denied is BIG.  It seems that Blackstone's/Orthofix attorneys were hoping for a "Hail Mary"considering that the Roberts Court has decided five FCA cases in five terms.  In addition, for those that applauded the effort of the Writ and the law firm for throwing the kitchen sink at the plaintiff, let us remember a few facts.

            It is estimated that the SCOTUS usually hears 40-50 cases per term
            Legally, 99% of the time, a Writ like the one filed by Blackstone/Orthofix is denied

Why? Because the SCOTUS adjudicates issues that affect and effect Constitutional Law or disputes between Circuit Courts of Appeals with the intent to create uniformity in the law.  So the question is asked, will this establish a new precedent, whereby any company that knowingly and willfully is involved in kickbacks (PODS?)  think twice about its business model?   Will the BOYZ and Orthofix be ready to ante up more than that $50 million in escrow that has been reserved for this rainy day?  Or, will their arrogance and money let them believe that they could crush the whistleblower acting like the two thousand pound gorilla that they like to think they are?  The end result is that not even Darth Vader will right the ship.  So like TSB likes to say, "it's game time BOYZ."  This is an opportunity for the DOJ to set an example once and for all.  Stop acting like the paper lion that you are perceived to be by those of us in the industry that attempt to do the right thing.  Bitch slap the parties involved with the MAXIMUM, don't negotiate.  Let them come to you asking for forgiveness and show them no mercy. Considering that they thumbed their noses at everyone, pay back can be a bitch.  So you know what Jackson Browne use to sing;

I'm sitting down by the highway, down by the highway side
Everybody's going somewhere, riding just as fast as they can ride
I guess they have a lot to do, before they can rest assured
Their lives are justified, pray to God for me baby, He can let me slide

Cause I've been up and down this highway, far as my eyes can see
No matter how fast I run, I can never seem to get away from me
No matter where I am, I can't help feeling I'm just a day away from where I want to be
Now I'm running home baby, like a river to the see.

Seems like Blackstone and Orthofix have them Bright Baby Blues.  Who knows, maybe OTW will write something in defense of the industry?  The bigger question that remains is whether or when will the government proceed with criminal charges?

The Rainmaker or Is It the Rainman Is Gone

As Yogi Berra use to say, "it ain't over t'ill it's over." Word coming out of Amedica is that the Rainmaker, aka Ben Shappley is no longer the CEO of Amedica.  An inside source has informed TSB that Ben Shappley was greeted by two BOD members and the CFO resulting in Custard's Last Stand at Little Big Horn.  No scalps were taken, but Ben was last seen being escorted from the building in a heated confrontation.  As the company went on to announce Mr. Shappley's termination via a conference call, the company erupted in simultaneous cheers and applause.  Free at last, Free at last, thank God Almighty, Free at last.

Could this termination be a by product of Ben's inability to take the company public?  Could this termination be the result of an acquisition, US Spine, gone awry? It will be interesting to see who will take the helm of this industry darling.  TSB knows that there will be plenty of candidates lining up to take a shot at the title.  You know what John Lennon use to say, "instant karma is going to get you, gonna knock you off your feet, better recognize your brother, everyone you meet." TSB wants to know what are readers think?

Nine Months: A Lifetime

High drama?  No fellow bloggers, this wasn't Judge Judy's courtroom.  Today at around 2:45 p.m. Judge Lagrome D. Davis sentenced Michael Huggins and Tom Higgins to nine months in prison with three months probation and a $100,000 fine for their roles in Synthes illegal promotion and clinical tests by spine surgeons resulting in the deaths of three patients.

Judge Davis said that Michael Huggins showed a "knowing disregard" for the safety of the patients. But one must ask the $21.3 billion dollar question, why didn't prosecutors seek any charges against one Hansjoerg Wyss? Huggins and Higgins must share responsibility for their conduct, yet, how is it that one individual named in the original legal documents as Person #7, not be held responsible for the actions of those that were employed by Sin-thes.  A miscarriage of justice?  Is this another case where the minions pay the price while the man pulling all the levers rides off into Big Sky country counting his billions.

Obviously there will be no joy in the Huggins or Higgins household this holiday season, but then what about the deceased families? Hopefully Wyss will have done the right thing and paid for everyone's legal fees, a small token for keeping his raggedy Swiss ass out of jail.  So fellow bloggers the next time someone asks you to do anything that potentially threatens your freedom, remember that at the end of the day, it's your ass that's on the line.  As for the three deceased patients, may you rest in peace, all for the love of the almighty dollar.

Spine Art?

With the recent barrage of comments regarding Spine Art, TSB decided to send some of our investigative reporters into the Street to identify who is this clandestine operation.  But before we could do any due diligence on this company, it was important to get security clearances for our roving eyes and ears from the CIA.  We started by looking at their website, figuring that a company touting its technology as innovative would be more than happy to let the world see what this innovation is all about.  What we have learned is the Spine Art is developing highly classified stealth like technology that fly's under the radar or under the C-arm. Holding a top-secret security clearance, even TSB was not able to accomplish the task at hand. What we have learned is that Spine Art has classified information that pertains to technology that will affect the national security of both Switzerland, the United States, and potentially the rest of the world.  Having presence in thirty-four countries, it is obvious that this maybe more of a movement than a company, or could it be both?  Actually, our reporters saw them setting up distribution networks in Zucotti Park and Berkeley.  One must question motive when there are no products on display, could this be nothing more than a ruse? So we followed the bouncing ball to the K-wireless website and found a product that was an MIS system that can be utilized wireless we think, or with a wire. At one point we were wondering were we involved in a game of Where's Waldo, when in reality we were involved in a game of Where is Yoda?

So TSB must ask our readers is this a legitimate company?  Do they actually have revenue?  Or is this an organization that is run by a masked man, bunkered down in an Atomic Bomb shelter in the foothills of West Virginia?  Could it be that the Lone Ranger rides again, Hi-O Silver!

Supersize? How about Downsize

Stryker is going to focus on quality by laying off ............................1,000 people

Stryker is going to innovate by laying off........................................1,000 people

 Stryker is going to control cost by laying off...................................1,000 people 

Stryker is going to drive growth by laying off...................................1,000 people

As consolidation becomes the noun du jour, it is interesting to read many of our your reactions especially as companies continue to use the upcoming 2.3% medical device tax as their rationale for laying off more employees, or moving manufacturing overseas.  A point in fact is the announcement by the Almighty Stryker that they will "downsize" their workforce by 5% "as part of Stryker's ongoing focus on quality, innovation, and cost, and position the company to provide strong consistent growth in a changing environment."

If you analyze the anatomy of MacMillan's quote, it reflects a perverse corporate mentality that has been prevalent for years, whereas publicly traded companies rationalize their decision to downsize its workforce to preserve growth for its shareholders. Has there ever been a CEO who had the chutzpah to tell its shareholders that they will have to tighten their belts for the sake of innovation? Now that would be out of the box, Stevie. Have you ever heard a CEO at one of these giant companies announce that they were taking a pay cut, or foregoing their stock options or bonus, because their company really isn't providing quality, innovation, or even growing the business at double digits, let alone being profitable after years in the marketplace? Let's be honest many of these companies take advantage of modified accounting rules as much as they attempt to increase revenue by buying marketshare or even occasionally launching a not so innovative, but new product.  It never has anything to do with their lack of vision, it always comes down to some external force or the current boogeyman that is causing lack of growth.  C'mon Stevie Wonder where is all that innovation coming from at Stryker? If the acquisition of Orthovita is innovation, I guess Stryker is really innovating.  Stryker is no different than a company like Covidien, in that it is a "bean counter" driven company.  Their foray into the recon medical device market was driven by their acquisition of HA technology, their jump into trauma was a by product of their acquisition of Osteo, and they acquired DIMSO to enter spine. Where is the innovation Stryker?  So, here is how Stryker is going to bring quality, innovation and cost to its shareholders, by downsizing the workforce by 5%.

TSB is sure that Stevie Wonder goes to bed at night tossing and turning that he has to let 1,000 people go, but at the end of the day, its all about the shareholder, isn't it?  We are sure that when the time comes to hand out those pink slips, he will send them a message on behalf of all of those at Stryker telling them how valuable their contributions have been and that Stryker will be providing outplacement service to help them find employment in an economy that is built around downsizing to begin with, but isn't that the same propaganda that has been Stryker's modus operandi for all these years?  TSB could hear Stevie Wonder in the background,

I just called to say I love you, I just called to say how much I care, I just called to say I love you, and I mean it from the bottom of my heart.

One Million and Counting

Spine Nation:

Those of us at TSB, would like to thank each and everyone of you for supporting our blog site.  As the ticker keeps ticking, TSB has reached a new milestone.  The month of November has graced us with our one millionth viewer for 2011. That's right, 1,000,000 and counting, in addition we are averaging over 60,000 unique visitors per month.  Last year we had 750,000 readers, meaning that contrary to what visionary industry analysts like Mike Matson, Joanne Wuensch, or Raj Denhoy may profess, and you all know that those boys and girls never pump up the volume, TSB may just be the fastest growing spine platform in the industry, growing with laser like precision, avoiding Japanese companies at all costs, avoiding hiring relatives to write stories on behalf of our personal interests. Yes indeed, we are humbled to provide those of you in the trenches with a forum. Whether you are a sales rep, marketing director, engineer, nurse, hospital administrator, patient, surgeon, owner of a POD, delusional CEO, or had some bad plastic surgery, we love you all.  You are what makes us get up in the morning and keep a watchful eye on the industry. We keep many of you entertained, get some of you angry, and keep some of you on your toes.  No fellow bloggers, TSB will not be erecting any Golden Arches, there will be no Spine Technology Awards, neither will we be investing in a stem cell company, there will be no analyst luncheons, no Taj Mahals being erected to honor the Spine Gods, we'll just keep on keeping' on. You know what Billy Squier once sang,

You crave attention, you can never say no, Throw your affections any way the wind blows

You always make it, you're on top of the scene, You sell the copy like the cover of a magazine

Puttin' on the eyes, 'til there's nobody else, You never realize what you do to yourself

The things we see make the daily reviews, You never get free, Everybody wants you

So in closing, there's no need to write a review on NASS.  Based on your many comments, we still feel that NASS rips off the attendees, charging, say what, how much? Whoa Baby! A G note to walk around in a drug induced stupor?  Listen to Karl Rove?  Is that where our money goes, shame on you NASS.  Boring! It would have been more interesting listening to a crash survivor from the Uruguayan Rugby Team than another political bloviator. As one of our roving reporters stated, the model in the silver outfit with the headlamp was lame, the girl with the low cut top had fame, and walking the McCormick Center caused foot pain. The Baxano and SI-Bone booth had activity, but maybe that was more of a reflection of how boring many companies have become, rather than how innovative some of those technologies really are. It was nice to see David Paul and his sidekick Tatoo walking the floor. TSB wants to know who had the best new technology?  Cervical?  Lumbar? MIS? Interbody? Pain Management? Biologics?  We want to know what our readers think?  Did anyone had technology that was ripe for the pickings? You be the judge.  Is there one company that really stands out?  Who is ripe for an acquisition?  Who will be subjected to an inquisition?  As another year winds down, it will be interesting to see who is left standing when the dust settles. Once again, TSB wants to thank you for your support, now let's finish the year on a strong note. 

NASS: A Harbinger of Things to Come

Well Spine Nation, tomorrow marks the beginning of the 26th Annual North American Spine Society meeting in the Second City for exhibitors. Are there any words to express the euphoria you all must be feeling? NASS was kind enough to send TSB an invitation to drop by for some Halloween Candy, and you know what Jack Torrance said in Stanley Kubrick's infamous 1980 psychological thriller, "all work and no play makes Jack a dull boy," so maybe Wendy when least expected We may stop by and tickle your fancy.

This will be an interesting meeting, to say the least. The theme of the meeting should be called "The ShinIng." In all likelihood there will be various national media outlets attending the 2011 lovefest as a result of many stories that have found their way onto front page news for the American public to read. Yes, fellow bloggers, TSB is sure NASS will be monitoring attendance. This will amount to a mere side show in comparison to what will be going on down on the exhibition floor. The recent Medtronic Round 1 TKO over NuVasive will definitely be worth watching, in addition, many will be monitoring how the V Brothers behave in response to being named as a party to the Olympus scandal that is unfolding on a much larger scale. Will they continue to party on, or will they be less flamboyant, even Marshall Mathers from Deutsche Bank says that this deal has nothing on the real Slim Shady,"may I have your attention please."

Lately, it seems that some of the luster has been knocked off the billion dollar baby. At close yesterday, NuVasive was rapidly approaching its 52 week low of 14.81, by closing at 14.82. It will be interesting to attend NuVa's Investor luncheon on the 3rd to hear the company's strategic plan and see whom the loyalista's are that will sit on the surgeon panel. If there is any truth to Key surgeons jumping ship to the competition, could this be a sign of some fatigue beginning to set in at NUVA? For those that have criticized our reporting on NuVasive, could they have ridden XLiF into the ground? Pioneering a surgical approach is formidable, building upon these advancements is where the challenges lie. So,who will bail next? If there is any truth to surgeons jumping ship, could investors be next? If NuVa's public relations firm is ever going to earn its keep, this meeting will be a telltale sign, considering NuVa's market cap has plummeted faster than a speeding bullet. If today's market (14.03) is a barometer of things to come as Keith Jackson use to say, "whoa nelly," As for some of our fellow bloggers whom attack TSB for NuVa bashing, get over it, the company's on the hot seat and in the news, what would you write about, the Spine Technology Awards? Sometimes it's better to be humble and stealth like, rather than roar like an engine on a 757. Panache is a double edge sword.

Another company to keep one's eyes on is Zimmer. Are they poised to do something in spine,or is spine truly the bastard step child? Let's be honest, when Zimmer acquired Spine Tech, they had no clue as to what they were getting into, and neither did their then savior Ray Elliott, the acquisition was well a Clusterf#*k from the get go. Abbott Spine just exacerbated the management deficiencies that exist at this company. Dvorak massages the analysts' by telling them the patients will come back when they are no longer afraid of losing their jobs, and they are investing in their sales infrastructure. So where will the growth come from in a zero-sum market? By raiding other companies distributors? For some the lure of a signing bonus or additional commissions will be attractive, but in reality, aren't you jumping out of the Frying pan and into the fire? And, how long before your hospitals declare you persona non grata? There has to be some innovation, if not, some type of product acquisition to jump start this Edsel.

And what about the North America Spine Society, aren't they coming into this meeting with a battered and bruised reputation based on the recent publicity some of its members have received in the press. How many more front page headlines can you withstand before the organization's governing body has to assess its policies and procedures, again. It really doesn't bode well when class warfare between surgeon and sales people becomes the rule rather than the exception, considering that we are all in this together. Thanks to some well known surgeons that believe that with the advent of Skype sales people will be replaceable, your organization does nothing more than throw gasoline on a burning fire. So fellow bloggers it's another year, and it will be your turn to judge who has the best booth, who is offering the best new technology, and how much traffic you get at your booth will be dictated by how late we all stay out, hopefully we can thank each other for making it thru another year without killing each other. PS, and don't be surprised if one of our TSB models stop by your booth and give you a squeeze.