The recent growth in physician owned distributorships (“PODs”) prompted five U.S. Senators to ask the HHS Inspector General to undertake an investigation to determine if they are in compliance with federal law, particularly the federal anti-kickback statute. This would appear to be almost a foregone conclusion. POD’s provide physicians, particularly surgeons, with another bite in the surgical food chain by permitting them to take a financial cut when a POD provided device is implanted in a patient. Hospitals are generally happy to please their surgical staff by purchasing and stocking the devices preferred by the surgeons. Would it surprise you to learn that there tends to be a strong surgeon preference for devices from the distributorship in which the surgeon has a financial interest?
The Wall Street Journal recently reported that PODs currently exist in at least 20 states most notably California. Between 2002 and 2007, the medicare costs for spinal fusion leaped 1500 percent and billions of dollars. Some patients appear to have been almost addicted to surgical procedures with 7 or 8 back operations performed by the same surgeon. It is hard to understand how intelligent and educated physicians can be so blinded by apparent greed and self interest that they can’t see the venality of having an ownership interest in medical devices they insert in patients. Its a little like a general having a financial interest in weapons systems that re recommends to the Pentagon. This is a perversion of the American Dream.