Bipartisan group of senators calls for investigation of surgeons profiting by steering medical devices through hospital
Most surgeons dictate to the hospital what type of medical device they will implant in a patient. Some have abused this authority by opening Physican-owned distributorships (PODs) that act as middle-men, taking a cut of profit between the manufacturer-supplier of the devices and the hospital where the surgeon operates. The Wall Street Journal reported recently that in Oregon, a Portland neurosurgeon and other physician investors earned $500,000.00 a year from the manufacturer of a spinal implant, on top of their surgical fees, by funneling the implants through their own POD called Omega Solutions.
Five Senators-two Democrats and three Republicans--sought Senate authority to conduct an investigation of the practice this month. They cited a surgeon who provided evidence to their committee of elderly patients who were undergoing eight to 10 dangerous fusion procedures in one POD area, despite the personal health risks and speculative therapeutical value to the patient. The Senators also noted an article in the Journal of the American Medical Association which documented a 15-fold increase in the number of complex spinal fusions between 2002 and 2007. They believe this number is driven, in part, by excessive profit-making fostered by PODs. Spinal fusion cost Medicare $343 million dollars in 199, according to the WSJ, and $2.24 billion in 2008. At one hospital alone, the number of spinal fusions increased by 300% after a POD was created to market fusion devices.