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Are surgeons getting kickbacks from Medtronic?

Dec 20, 2010 11:00 EST By Felix Salmon  blogs.reuters.com

The WSJ puts a lot of time and effort into its leders—those long, exhaustively-reported front-page exclusives about topics which might not be breaking news but which are still very important. So why is it that when a story is based on information found online, the WSJ still can’t seem to link to it? Today’s leder is a good one, about possible waste in the world of spinal surgery. But it could definitely do with a few hyperlinks:

Medtronic began releasing information about its payments to surgeons on its website in June, after coming under intense scrutiny from Sen. Charles Grassley (R., Iowa)…

Medtronic’s website shows that the company paid Dr. Vaccaro $1.28 million in royalties in the first three quarters of 2010…

Dr. Foley has had royalty-bearing agreements with Medtronic since 1996. The company paid him more than $27 million from 2001 to 2006, according to internal Medtronic documents reviewed by the Journal. On its website, the company discloses paying him another $13 million in royalties in the first three quarters of this year alone.

The failure to link to Medtronic’s website is part of what makes this story more confusing than it needs to be. There’s also a cryptic reference to a court ruling which is preventing the WSJ from printing everything it knows:

The Journal mined hospitals’ Medicare claims to see what proportion of fusions performed fall in this category. Due to a three-decade-old court ruling guarding the confidentiality of physician information, the paper is barred from disclosing what it found regarding the five Norton surgeons.

Critics of the court ruling and of the privacy policies of the federal Medicare program argue that making such information public would help taxpayers understand where their money is going, and potentially deter abusive or wasteful practices.

A couple of hyperlinks would be great here, too: which court ruling, exactly, are we talking about? And which critics? I’m sure their criticism is online, under their real names—so why not link to that criticism, rather than wave vaguely at it before moving on to something else?

The bigger problem is that the WSJ makes it very hard to separate two different stories. The first story is that Medicare is paying lots of money—$2.24 billion in 2008—for spinal surgeries, many of which might not be necessary or even desirable. The second story is that Medtronic is paying lots of money to a select group of surgeons who perform a lot of such surgeries.

The first story is reasonably clear, although it would have been helpful to compare Medicare with private-sector insurers: if everybody’s happily paying for these surgeries, then the problem doesn’t really lie with Medicare. The second story, however, is murkier. The WSJ is aggressive chasing it:

Corporate whistleblowers and congressional critics contend such arrangements—which are common in orthopedic surgery—amount to kickbacks to stoke sales of medical devices.

The official statements from both surgeons and Medtronic make the kickback allegations seem a bit of a stretch. But look how the WSJ follows those statements with an explicit reprise of the kickback theme:

Dr. Foley responded in an email that he doesn’t receive any royalties from Medtronic on devices he has contributed to when they are implanted in patients by himself, members of his practice or hospitals where he has admitting privileges.

Brian Henry, a spokesman for Medtronic, says the company applies that policy to all its collaborating surgeons, thereby eliminating the temptation for them to do more surgeries to earn more royalty income.

Two former Medtronic employees have alleged in separate whistleblower lawsuits that the royalty agreements are intended to disguise the fact that the payments the company makes to surgeons are really kickbacks for using Medtronic devices.

The paper says it “reviewed” a copy of one of the lawsuits—again, this is something it would be great for them to have posted. And more generally, it would be great to see some mathematics on the alleged kickbacks: how do the payments to surgeons compare to the profits that Medtronic makes from their work? Are the payments linked in any way to the number of surgeries they perform? What proportion of spinal surgeons get these payments? Is there evidence that surgeons getting paid by Medtronic use more Medtronic devices than their colleagues?

My gut feeling here is that Medtronic is quite deliberately paying large amounts of money to key spinal surgeons, who as a result become well-disposed towards the company and the kind of of surgery which involves its products. In turn, their enthusiasm spreads across their hospitals and their region as a whole, since these surgeons are senior, respected physicians who are emulated by their peers.

But that kind of thing is a kickback only in the most conceptual way: if the surgeons help to make a certain procedure more popular among their peers, then they’ll eventually get larger royalty checks. What I’m not seeing is any evidence that if certain surgeons funnel money to Medtronic by using Medtronic products in their operations, then some of that money ends up getting kicked back to them.

My larger problem with the WSJ story is that by concentrating on kickbacks and Medicare, it downplays the bigger picture—that surgeons around the country are getting paid millions of dollars by Medtronic and performing lots of unnecessary surgeries, with the cost coming out of everybody’s rapidly-rising health-insurance premiums. If there’s a scandal here, it would seem to be one endemic to the healthcare industry. I don’t understand why the WSJ would narrow its focus so specifically onto Medicare.