Senate Finance Committee launches physician-owned distributorship hearings: 5 things to know

Spinal Tech

The Senate Finance Committee held a hearing on physician-owned distributorships to explore how physicians receive revenue from medical devices used in surgery with PODs.

Here are five things to know:


1. Orrin Hatch (R-Utah), the Senate Finance Committee chair, and Ron Wyden (D-Ore.) announced the hearing, which will include Scott Lederhaus, MD, president of the Association for Medical Ethics.


2. Previous investigations and reports have shown physicians are more apt to implant excessive hardware when involved with PODs. "While the vast majority of doctors operate with the highest ethical standards, those with a vested stake in the medical device distributorships raise a number of concerning questions about the physician's motivation in prescribing a procedure, as well as the overall cost to the healthcare system," said Senators Hatch and Wyden.


3. In 2011, the Office of Inspector General estimated 20 percent of spinal fusions were done with POD implants.


4. The Physician Payments Sunshine Act requires physicians and device companies to disclose financial relationships publicly online. The Association for Medical Ethics advocated for the Sunshine Act, testifying before Congress in 2008. "Once again, with PODs we are seeing how conflicts of interest are contributing to the overuse of spine surgery in the U.S. and need to be exposed for what they are — profit at the expense of patient care," said Dr. Lederhaus.


5. Physician-owned distributorships have been under attack over the past few years. While POD proponents maintain they can generate cost savings, an October 2013 report from the HHS Office of the Inspector General reported POD devices were not cheaper than devices from other companies and costs were higher for spinal plates. The report also found surgeons at hospitals purchasing from PODs performed 29 percent more surgeries than hospitals that didn't purchase from PODs and 94 percent of hospitals noted surgeon preference influenced their decision to purchase from PODs. Regular spinal fusions at hospitals using PODs grew 21 percent over the one-year period examined, compared with 9 percent for all hospitals.

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