Lack of a Vaccine Mandate Becomes Competitive Advantage in Hospital Staffing Wars

In the rural northeastern corner of Missouri, Scotland County Hospital has been so low on staff that it sometimes had to turn away patients amid a surge in covid-19 cases.

The national covid staffing crunch means CEO Dr. Randy Tobler has hired more travel nurses to fill the gaps. And the prices are steep — what he called “crazy” rates of $200 an hour or more, which Tobler said his small rural hospital cannot afford.

A little over 60% of his staff is fully vaccinated. Even as covid cases rise, though, a vaccine mandate is out of the question.

“If that becomes our differential advantage, we probably won’t have one until we’re forced to have one,” Tobler said. “Maybe that’s the thing that will keep nurses here.”

As of Thursday, about 39% of U.S. hospitals had announced vaccine mandates, said Colin Milligan, a spokesperson for the American Hospital Association. Across Missouri and the nation, hospitals are weighing more than patient and caregiver health in deciding whether to mandate covid vaccines for staffers.

The market for health care labor, strained by more than a year and a half of coping with the pandemic, continues to be pinched. While urban hospitals with deeper pockets for shoring up staff have implemented vaccine mandates, and may even use them as a selling point to recruit staffers and patients, their rural and regional counterparts are left with hard choices as cases surge again.

“Obviously, it’s going to be a real challenge for these small, rural hospitals to mandate a vaccine when they’re already facing such significant workforce shortages,” said Alan Morgan, head of the National Rural Health Association.

Without vaccine mandates, this could lead to a desperate cycle: Areas with fewer vaccinated residents likely have fewer vaccinated hospital workers, too, making them more likely to be hard hit by the delta variant sweeping America. In the short term, mandates might drive away some workers. But the surge could also squeeze the hospital workforce further as patients flood in and staffers take sick days.

Rural covid mortality rates were almost 70% higher on average than urban ones for the week ending Aug. 15, according to the Rural Policy Research Institute.

Despite the scientific knowledge that covid vaccinations sharply lower the risk of infection, hospitalization and death, the lack of a vaccine mandate can serve as a hospital recruiting tool. In Nebraska, the state veterans affairs’ agency prominently displays the lack of a vaccine requirement for nurses on its job site, The Associated Press reported.

It all comes back to workforce shortages, especially in more vaccine-hesitant communities, said Jacy Warrell, executive director of the Rural Health Association of Tennessee. She pointed out that some regional health care systems don’t qualify for staffing assistance from the National Guard as they have fewer than 200 beds. A potential vaccine mandate further endangers their staffing numbers, she said.

“They’re going to have to think twice about it,” Warrell said. “They’re going to have to weigh the risk and benefit there.”

The mandates are having ripple effects throughout the health care industry. The federal government has mandated that all nursing homes require covid vaccinations or risk losing Medicare and Medicaid reimbursements, and industry groups have warned that workers may jump to other health care settings. Meanwhile, Montana has banned vaccine mandates altogether, and the Montana Hospital Association has gotten one call from a health care worker interested in working in the state because of it, said spokesperson Katy Peterson.

It’s not just nurses at stake with vaccine mandates. Respiratory techs, nursing assistants, food service employees, billing staff and other health care workers are already in short supply. According to the latest KFF/The Washington Post Frontline Health Care Workers Survey, released in April, at least one-third of health care workers who assist with patient care and administrative tasks have considered leaving the workforce.

The combination of burnout and added stress of people leaving their jobs has worn down the health care workers the public often forgets about, said interventional radiology tech Joseph Brown, who works at Sutter Roseville Medical Center outside Sacramento, California.

This has a domino effect, Brown said: More of his co-workers are going on stress and medical leave as their numbers dwindle and while hospitals run out of beds. He said nurses’ aides already doing backbreaking work are suddenly forced to care for more patients.

“Explain to me how you get 15 people up to a toilet, do the vitals, change the beds, provide the care you’re supposed to provide for 15 people in an eight-hour shift and not injure yourself,” he said.

In Missouri, Tobler said his wife, Heliene, is training to be a volunteer certified medical assistant to help fill the gap in the hospital’s rural health clinic.

Tobler is waiting to see if the larger St. Louis hospitals lose staff in the coming weeks as their vaccine mandates go into effect, and what impact that could have throughout the state.

In the hard-hit southwestern corner of Missouri, CoxHealth president and CEO Steve Edwards said his health system headquartered in Springfield is upping its minimum wage to $15.25 an hour to compete for workers.

While the estimated $25 million price tag of such a salary boost will take away about half the hospital system’s bottom line, Edwards said, the investment is necessary to keep up with the competitive labor market and cushion the blow of the potential loss of staffers to the hospital’s upcoming Oct. 15 vaccine mandate.

“We’re asking people to take bedpans and work all night and do really difficult work and maybe put themselves in harm’s way,” he said. “It seems like a much harder job than some of these 9-to-5 jobs in an Amazon distribution center.”

Two of his employees died from covid. In July alone, Edwards said 500 staffers were out, predominantly due to the virus. The vaccine mandate could keep that from happening, Edwards said.

“You may have the finest neurosurgeon, but if you don’t have a registration person everything stops,” he said. “We’re all interdependent on each other.”

But California’s Brown, who is vaccinated, said he worries about his colleagues who may lose their jobs because they are unwilling to comply with vaccine mandates.

California has mandated that health care workers complete their covid vaccination shots by the end of September. The state is already seeing traveling nurses turn down assignments there because they do not want to be vaccinated, CalMatters reported.

Since the mandate applies statewide, workers cannot go work at another hospital without vaccine requirements nearby. Brown is frustrated that hospital administrators and lawmakers, who have “zero covid exposure,” are the ones making those decisions.

“Hospitals across the country posted signs that said ‘Health care heroes work here.’ Where is the reward for our heroes?” he asked. “Right now, the hospitals are telling us the reward for the heroes: ‘If you don’t get the vaccine, you’re fired.’”

KHN (Kaiser Health News) is a national newsroom that produces in-depth journalism about health issues. Together with Policy Analysis and Polling, KHN is one of the three major operating programs at KFF (Kaiser Family Foundation). KFF is an endowed nonprofit organization providing information on health issues to the nation.

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Jaw Surgery Takes a $27,119 Bite out of One Man’s Budget

For years, Ely Bair dealt with migraine headaches, jaw pain and high blood pressure, until a dentist recommended surgery to realign his jaw to get to the root of his health problems.

The fix would involve two surgeries over a couple of years and wearing braces on his teeth before and in between the procedures.

Bair had the first surgery, on his upper jaw, in 2018 at Swedish Medical Center, First Hill Campus in Seattle. The surgery was covered by his Premera Blue Cross plan, and Bair’s out-of-pocket hospital expense was $3,000.

He changed jobs in 2019 but still had Premera health insurance. In 2020, he had the planned surgery on his lower jaw at the same hospital where he’d been treated the first time. The surgery went well, and he spent one night in the hospital before being discharged. He was healing well and beginning to see the benefits of the surgeries.

Then the bill arrived.

The Patient: Ely Bair, 35, a quality assurance analyst. He has a Premera Blue Cross health plan through his job at a biotech firm in Seattle.

Total Bill: Swedish Medical Center billed Bair $27,119 for the second surgery in July 2020. This was Bair’s share of the negotiated rate, after the hospital took $14,310 off the charge. His insurer paid $5,000. Bair owed additional bills to the surgeon and the anesthesiologist.

Service Provider: Swedish First Hill Campus in Seattle, part of the largest nonprofit health system in the Seattle area, which is affiliated with Providence, a major Catholic health care network.

What Gives: Bair hit two maddening health system pitfalls here: He expected his new plan to behave like his previous one from the same insurer — and he expected his mouth to be treated like the rest of his body. Neither commonsense notion appears true in America’s health system.

Typically, large companies, such as Bair’s employers, “self insure,” meaning they pay their workers’ health costs but use insurance companies to maintain provider networks and handle claims. When Bair changed jobs, his insurance coverage changed even though both employers used Premera. Bair paid $3,000 for his first surgery because that was the out-of-pocket maximum under his plan from his previous employer, which covered oral and maxillofacial surgery.

Bair expected that using the same hospital and the same insurance carrier would mean his costs would be similar for part two of his treatment. Bair’s oral and maxillofacial surgeon — the same doctor who performed the first procedure — checked Bair’s benefits through his insurer’s online portal and thought it would be covered. Premera also sent his doctor confirmation agreeing that the second procedure was medically necessary.

About three months after the surgery, Bair was shocked to get the large hospital bill — about $24,000 higher than he expected.

When he called Premera, he learned his new plan had a $5,000 lifetime limit on coverage for the reconstructive jaw procedure known as orthognathic surgery, which is sometimes regarded as a dental rather than a medical intervention. His doctor said that information was not noted in Bair’s benefits when the practice reviewed them through an online portal. Premera told Bair he should have known about the limit because it was listed in his detailed, hard-copy, 86-page member-benefit booklet.

The Affordable Care Act in 2014 eliminated lifetime and annual caps on insurance coverage for categories of treatment such as prescription drugs, laboratory services and mental health care. While the ACA lists broad categories about what is considered an “essential health benefit,” each state decides which services are included in each category and the scope or duration that must be offered. Bariatric surgery, physical therapy and abortion are examples of care for which insurance coverage can vary a lot by state under this ACA provision. Orthognathic surgery is not considered an essential health benefit in Washington. It is sometimes performed for cosmetic purposes only. Also, plans sometimes regard the surgery as part of orthodontia — which frequently involves limits on coverage. But for Bair, it was a clear medical necessity.

Without an ACA requirement for orthognathic surgery, Premera and self-insured plans are allowed to provide various levels of benefits and can impose annual and lifetime caps.

Premera spokesperson Courtney Wallace said Bair transferred from a plan with his former company that did not have a lifetime maximum to a plan with a $5,000 lifetime maximum benefit.

Martine Brousse, a patient advocate and owner of AdvimedPro, which helps patients with health care billing disputes, said Bair acted appropriately by using a doctor and hospital in his health plan’s network and checking with his doctor about his insurance coverage.

She said Swedish should have told him before the surgery — which was planned weeks ahead of time — how much he would have to pay. “That is a failure on part of the hospital,” she said.

Sabrina Corlette, co-director of the Georgetown University Center on Health Insurance Reforms, said it doesn’t seem fair that his first employer covered the cost of his surgery but the second employer did not. She said the $27,000 bill seemed excessive and the $5,000 lifetime limit very low. “Essential health benefits serve a really important function, and when there are gaps or holes people can really get hurt,” she said.

Resolution: Bair’s doctor told him the hospital charge was at least three times the amount Swedish charges uninsured patients for the same surgery. Bair said Swedish offered to let him pay the bill over two years but did not make any other concessions.

Swedish would not say why it did not verify Bair’s insurance benefits before the surgery or let him know he would face an enormous bill even though he was insured.

“Hospital pricing is complex and nuanced,” Swedish officials said in a statement. Bair’s bill “was inclusive of all the care he received, which included specialized services and expertise, equipment and the operating room time. He had a jaw procedure that had a maximum benefit from his insurer of $5,000. He was billed the balance not covered by his insurer.”

The hospital system said it also has an online tool that generates estimates tailored to patients’ coverage and choice of hospital.

The online tool did not come up with anything on the term “orthognathic surgery,” however.

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Bair appealed three times to Premera to reconsider its decision to cover only $5,000 of the cost of his procedure. But the insurer rejected each one saying he had exhausted his lifetime orthognathic surgery benefit and he was responsible for any additional care. When Swedish wouldn’t lower his cost, he filed a complaint in December 2020 with the state attorney general’s office.

A few months later, Swedish reduced Bair’s bill from over $27,000 to $7,164.

“Because neither the patient nor his provider was aware of this limitation in coverage prior to the procedure, the surgeon advocated on the patient’s behalf to get the bill lowered,” the hospital told KHN in a statement.

Bair agreed to pay the lower amount. “The bill is at least a much more manageable number than the financial ruin $27,000 would have been,” he said. “I am just looking forward to closing this chapter and moving on.”

His surgeon, who helped him fight the hospital bill and limited insurance coverage, reduced his bill to $5,000 from $10,000, Bair said.

Bair said his employer, Adaptive Biotechnologies, is looking into eliminating its $5,000 lifetime limit for the procedure when it is medically necessary.

Since the surgery, Bair said he gets far fewer migraine headaches and his high blood pressure has been reduced. “I feel way more energized,” he said.

The Takeaway: When facing a planned surgery, talk to your hospital, doctor and insurer about how much of the bill you will be responsible for — and get it in writing before any procedure.

“In theory, you should be able to rely on your provider to confirm your coverage but, in practice, it is in your best interest to call your insurer yourself,” Corlette said.

Even though the ACA eliminated lifetime and annual caps on coverage, that applies only to services deemed essential in a patient’s state. Be aware that certain surgeries — like jaw surgery — lie in a gray area; insurers might not consider them a necessary medical intervention or even a medical procedure at all. Corlette said health plans should notify patients when they are closing in on lifetime or annual limits, but that doesn’t always happen.

Also, be aware that even though your insurance carrier may stay the same after switching jobs, your benefits could be quite different.

Kudos to Bair for being a proactive patient and appealing to the state attorney general — which got him a positive result.

Stephanie O’Neill contributed the audio profile with this report.

Bill of the Month is a crowdsourced investigation by KHN and NPR that dissects and explains medical bills. Do you have an interesting medical bill you want to share with us? Tell us about it!

KHN (Kaiser Health News) is a national newsroom that produces in-depth journalism about health issues. Together with Policy Analysis and Polling, KHN is one of the three major operating programs at KFF (Kaiser Family Foundation). KFF is an endowed nonprofit organization providing information on health issues to the nation.

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KHN’s ‘What the Health?’: Vaccine Approval Moves the Needle on Covid

Can’t see the audio player? Click here to listen on SoundCloud. You can also listen on Spotify, Apple Podcasts, Stitcher, Pocket Casts or wherever you listen to podcasts.

The Food and Drug Administration gave full approval this week to the covid-19 vaccine from Pfizer and BioNTech, which will henceforth be known as “Comirnaty.” It is not clear how many vaccine-hesitant Americans will now be willing to get a jab, but the approval has prompted many public and private employers to implement mandates for their workers.

Meanwhile, the U.S. House, back early from its summer break, overcame a brief rebellion by some Democratic moderates to pass a budget resolution that starts the process for a giant social-spending measure addressing many new health benefits.

This week’s panelists are Julie Rovner of KHN, Joanne Kenen of Politico, Tami Luhby of CNN and Sarah Karlin-Smith of the Pink Sheet.

Among the takeaways from this week’s episode:

  • House Speaker Nancy Pelosi walked a tightrope again this week but managed to keep her caucus together to move forward an infrastructure bill and a budget resolution that will be a vehicle for a massive social-spending bill. Nonetheless, conflicts among Democrats on the size of that bill and its timing were not resolved and could spark heated battles between progressives and moderates in the next couple of months.
  • Some aspects of the health programs in the spending bill are already in danger of being ditched, including a proposal to lower the eligibility age for Medicare. Other cost-saving strategies being discussed include implementing some programs for only a limited time. Democrats hope those programs would prove popular enough for future lawmakers to extend them.
  • Some companies, including Delta Air Lines, are not mandating vaccines, but they will charge workers a higher insurance premium if they opt to not get a shot.
  • To the horror of many public health experts, some people who are refusing to get vaccinated have instead turned to a veterinary medicine, Ivermectin, that is being touted as a covid treatment or preventive on social media and by conservative broadcasters. The FDA has warned people that the drug could be dangerous, tweeting out last week: “You are not a horse. You are not a cow.”
  • Florida Gov. Ron DeSantis, who has been determined to stop mask and vaccination mandates in his state, is setting up centers for people infected with covid to get infusions of monoclonal antibody treatments, which have been shown to help covid patients. But the treatments are expensive and timing is crucial, so it’s not clear how effective these centers will be. Those treatments have only an emergency use authorization from the FDA. Coincidentally, many people hesitant to get a vaccine complained it was because the products were authorized only for emergency use.
  • The FDA is warning parents and doctors against vaccinating children under age 12. It has not yet authorized the vaccine for them, and drugmakers say these younger children may need smaller doses. Studies are underway.
  • A new law is set to take effect in Texas next week that bans abortions after six weeks and allows private citizens to sue abortion providers and even individuals who drive women to abortion clinics. If federal courts do not step in to block the law, providers in the state say they will not be able to operate.

Plus, for extra credit, the panelists recommend their favorite health policy stories of the week they think you should read, too:

Julie Rovner: The Washington Post’s “Long-Term-Care Facilities Are Using the Pandemic as a Shield, Even in Lawsuits Unrelated to Covid-19,” by Christopher Rowland

Joanne Kenen: Politico’s “Sadness and Death: Inside the VA’s State Nursing-Home Disaster,” by Joanne Kenen, Allan James Vestal and Darius Tahir

Tami Luhby: CNN’s “My Son Was Lucky to Get a Pediatric ICU Bed When He Needed One. He Shouldn’t Have Needed Luck,” by Ben Tinker

Sarah Karlin-Smith: The New Yorker’s “Costa Ricans Live Longer Than Us. What’s the Secret?” by Atul Gawande

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KHN (Kaiser Health News) is a national newsroom that produces in-depth journalism about health issues. Together with Policy Analysis and Polling, KHN is one of the three major operating programs at KFF (Kaiser Family Foundation). KFF is an endowed nonprofit organization providing information on health issues to the nation.

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Microbiome Startups Promise to Improve Your Gut Health, but Is the Science Solid?

After Russell Jordan sent a stool sample through the mail to the microbiome company Viome, his idea of what he should eat shifted. The gym owner in Sacramento, California, had always consumed large quantities of leafy greens. But the results from the test — which sequenced and analyzed the microbes in a pea-sized stool sample — recommended he steer clear of spinach, kale and broccoli.

“Things I’ve been eating for the better part of 30 years,” said Jordan, 31. “And it worked.” Soon, his mild indigestion subsided. He recommended the product to his girlfriend.

She took the test in late February, when the company — which sells its “Gut Intelligence” test for $129 and a more extensive “Health Intelligence” test, which requires a blood sample, for $199 — began experiencing hiccups. Viome had promised results within four weeks once the sample arrived at a testing facility, but Jordan said his girlfriend has been waiting more than five months and has submitted fresh blood and stool samples — twice.

Other Viome customers have flocked to social media to complain about similar problems: stool samples lost in the mail, months-long waits with no communication from the company, samples being rejected because of shipping or lab processing snafus. (I, too, have a stool sample lost in transit, which I mailed after a first vial was rejected because it “leaked.”) The company’s CEO, Naveen Jain, took to Facebook to apologize in late July.

Viome’s troubles provide a cautionary tale for consumers in the wild west of microbiome startups, which have been alternately hailed for health breakthroughs and indicted for fraud.

The nascent industry offers individualized diet regimens based on analyzing gut bacteria — collectively known as the gut microbiome. Consumers pay hundreds of dollars for tests not covered by insurance, hoping to get answers to health problems ranging from irritable bowel syndrome to obesity.

Venture capitalists pumped $1 billion into these kinds of startups from 2015 to 2020, according to Crunchbase, buoyed by promising research and consumers’ embrace of at-home testing. PitchBook has identified more than a dozen direct-to-consumer gut health providers.

But not all the startups are equal. Some are supported by peer-reviewed studies. Others are peddling murky science — and not just because poop samples are getting lost in the mail.

“A lot of companies are interested in the space, but they don’t have the research to show that it’s actually working,” said Christopher Lynch, acting director of the National Institutes of Health Office of Nutrition. “And the research is really expensive.”

With nearly $160 million in government funding, the NIH Common Fund’s Nutrition for Precision Health research program, expected to launch by early next year, seeks to enroll 1 million people to study the interactions among diet, the microbiome, genes, metabolism and other factors.

The gut microbiome is a complex community of trillions of bacteria. Research over the past 15 years has determined that these microbes, both good and bad, are an integral part of human biology, and that altering a person’s gut microbes can fundamentally change their metabolism, immune function — and, potentially, cure diseases, explained Justin Sonnenburg, a microbiology and immunology associate professor at Stanford University.

Metagenomic sequencing, which identifies the unique set of bugs in someone’s gut (similar to what 23andMe does with its saliva test), has also improved dramatically, making the process cheaper for companies to reproduce.

“It’s seen as one of the exciting areas of precision health,” said Sonnenburg, who recently co-authored a study that found a fermented food diet increases microbiome diversity — which is considered positive — and reduces markers of inflammation. That includes foods like yogurt, kefir and kimchi.

“The difficulty for the consumer is to differentiate which of these companies is based on solid science versus over-reaching the current limits of the field,” he added via email. “And for those companies based on solid science, what are the limits of what they should be recommending?”

San Francisco-based uBiome, founded in 2012, was one of the first to offer fecal sample testing.

But as uBiome began marketing its tests as “clinical” — and seeking reimbursement from insurers for up to nearly $3,000 — its business tactics came under scrutiny. The company was raided by the FBI and later filed for bankruptcy. Earlier this year, its co-founders were indicted for defrauding insurers into paying for tests that “were not validated and not medically necessary” in order to please investors, the Department of Justice alleges.

But for Tim Spector, a professor of genetic epidemiology at King’s College London and co-founder of the startup Zoe, being associated with uBiome is insulting.

Zoe has spent more than two years conducting trials, which have included dietary assessments, standardized meals, testing glycemic responses and gut microbiome profiling on thousands of participants. In January, the findings were published in Nature Medicine.

The company offers a $354 test that requires a stool sample, a completed questionnaire, and then a blood sample after eating muffins designed to test blood fat and sugar levels. Customers can also opt in to a two-week, continuous glucose monitoring test.

The results are run through the company’s algorithm to create a customized library of foods and meals — and how customers are likely to respond to those foods.

DayTwo, a Walnut Creek, California, company that recently raised $37 million to expand its precision nutrition program, focuses on people with prediabetes or diabetes. It sells to large employers — and, soon, to health insurance plans — rather than directly to consumers, charging “a few thousand dollars” per person, said Dr. Jan Berger, chief clinical strategist.

Based on a decade of research, DayTwo has worked with nearly 75,000 people. It sends participants a testing kit and survey, and arranges for them to chat with a dietitian while their stool sample is processing. Then, when the results come in, it makes recommendations, Berger said.

“I can still eat two scoops of ice cream, but I need to add walnuts in it to regulate my blood sugar,” she offered as an example.

Viome says it has tested more than 200,000 customers and has published its methodology for analyzing stool samples, which is different from other gut health companies. But the paper does not address Viome’s larger claims of connecting the microbiome to dietary advice, and researcher Elisabeth Bik called the claims “far-fetched” in a 2019 review of the preprint version.

Viome makes additional money by selling supplements, probiotics and prebiotics based on consumers’ test results. It has also rebranded as Viome Life Sciences, expanding into precision diagnostics and therapeutics, such as saliva tests to detect throat cancer. Meanwhile, its gut health program has been mired in logistical missteps.

One customer who posted on Facebook tracked her sample through the U.S. Postal Service as it boomeranged between Los Alamos, New Mexico, and Bothell, Washington, where it was supposed to be picked up. Another fought for a refund after waiting six weeks to hear her sample was not viable and learning a second attempt had expired after spending too long in transit. The company’s expected lab processing time jumped from four weeks in February, when Jordan said his girlfriend took her first test, to six in summer. (Three weeks after I mailed my second sample in July, it still hadn’t made it to the lab, so I called it quits and asked for a refund.)

In CEO Jain’s July apology posted to the private Facebook group for Viome users, he said the company recently moved its lab from New Mexico to Washington state, close to its headquarters, which prompted a mail-forwarding fiasco. It bought new robotics that “refused to cooperate,” he wrote. “Many things didn’t go as planned during the move.”

Spokesperson Kendall Donohue said Viome has been working on the problems but laid much of the blame on the Postal Service.

She also said Viome has been notifying customers — even though many (including myself) had not been contacted.

It is Viome’s “top priority right now to ensure complete customer satisfaction, but unfortunately USPS needs to sort the issue internally for further action to be taken,” she said.

She also offered me a free “Health Intelligence” test. I declined.

KHN (Kaiser Health News) is a national newsroom that produces in-depth journalism about health issues. Together with Policy Analysis and Polling, KHN is one of the three major operating programs at KFF (Kaiser Family Foundation). KFF is an endowed nonprofit organization providing information on health issues to the nation.

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Mission and Money Clash in Nonprofit Hospitals’ Venture Capital Ambitions

Cone Health, a small not-for-profit health care network in North Carolina, spent several years developing a smartphone-based system called Wellsmith to help people manage their diabetes. But after investing $12 million, the network disclosed last year it was shutting down the company even though initial results were promising, with users losing weight and recording lower blood sugar levels.

The reason did not have to do with the program’s potential benefit to Cone’s patients, but rather the harm to its bottom line. Although Cone executives had banked on selling or licensing Wellsmith, Cone concluded that too many competing products had crowded the digital health marketplace to make a dent.

“They did us a tremendous favor in funding us, but the one thing we needed them to be was a customer and they couldn’t figure out how to do it,” said Jeanne Teshler, an Austin, Texas-based entrepreneur who developed Wellsmith and was its CEO.

Eager to find new sources of revenue, hospital systems of all sizes have been experimenting as venture capitalists for health care startups, a role that until recent years only a dozen or so giant hospital systems engaged in. Health system officials assert many of these investments are dually beneficial to their nonprofit missions, providing extra income and better care through new medical devices, software and other innovations, including ones their hospitals use.

But the gamble at times has been harder to pull off than expected. Health systems have gotten rattled by long-term investments when their hospitals hit a budgetary bump or underwent a corporate reorganization. Some health system executives have belatedly discovered a project they underwrote was not as distinctive as they had thought. Certain devices or apps sponsored by hospital systems have failed to be embraced by their own clinicians, out of either skepticism or habit.

“Even the best health care investors can’t reliably get their health systems to adopt technologies or new innovations,” said James Stanford, managing director and co-founder of Fitzroy Health, a health care investment company.

Some systems have found the business case for using their own innovations is weaker than anticipated. Wellsmith, for instance, was premised on a shift in insurance payments from a fee for each service to reimbursements that would reward Cone for keeping patients healthy. That change did not come as fast as hoped.

“The financial models are so much based on how many patients you see, how many procedures you do,” said Dr. Jim Weinstein, who championed a health initiative similar to Cone’s when he was CEO of the Dartmouth-Hitchcock health system in New Hampshire. “It makes it hard to run a business that is financially successful if you’re altruistic.”

Though their tax-exempt status is predicated on charitable efforts, nonprofit health systems rarely put humanitarian goals first when selecting investments, even when sitting on portfolios worth hundreds of millions of dollars or more, according to a KHN analysis of IRS filings. Together, nonprofit hospital systems held more than $283 billion in stocks, hedge funds, private equity, venture funds and other investment assets in 2019, the analysis found. Of that, nonprofit hospitals classified only $19 billion, or 7%, of their total investments as principally devoted to their nonprofit missions rather than producing income, the KHN analysis found.

Venture capital funds are a potentially lucrative but risky form of investment most associated with funding Silicon Valley startup companies. Because investors seek out companies in their early stages of development, a long-term horizon and tolerance for failure are critical to success. Venture capitalists often bank on a runaway success that ends up on a stock exchange or in a sale to a larger company to counterbalance their losses. As an asset class, venture capital funds assets annually return between 10% and 15% depending on the time frame, according to PitchBook.

While they lack the experience of longtime venture capitalists, health systems posit that they have advantages because they can invent, incubate, test and fine-tune a startup’s creations. Children’s Hospital of Philadelphia, for instance, parlayed a $50 million investment into a return of more than $514 million after it spun off its gene therapy startup Spark Therapeutics.

Many hospital-system venture capital funds, both established and new entrants, have grown rapidly. The largest, run by the Catholic hospital chain Ascension, has been in business for two decades and this year topped $1 billion, including contributions from 13 other nonprofit health systems eager to capture a piece of the returns.

Providence, a Catholic health system with hospitals in seven Western states, launched its venture capital fund in 2014 with $150 million and now has $300 million.

Cleveland-based University Hospitals launched its own fund, UH Ventures, in 2018. “We were candidly late to the game,” said David Sylvan, president of UH Ventures.

UH Ventures yielded $64 million in profits in 2020, Sylvan said, which pushed University Hospitals’ net operating revenue from the red to $31 million. Sylvan said the largest income contributor from UH Ventures was its specialty pharmacy, UH Meds, which provides medications to people with complex chronic conditions and helps them manage their ailments.

Another UH-supported startup, RiskLD, uses algorithms to monitor women and their babies during delivery to alert clinicians of sudden changes in conditions. It is used in UH’s labor and delivery units. Sylvan said it is being marketed to other systems. UH Ventures’ webpage touts the financial advantages for avoiding lawsuits, calling RiskLD “the first and only labor and delivery risk management tool designed to address birth malpractice losses.”

But sustained commitment is harder when the return on investment is not clear or immediate. In 2016, Dartmouth-Hitchcock, which operates New Hampshire’s only academic medical center, tested its remote monitoring technology, ImagineCare, on 2,894 employee volunteers. ImagineCare linked a mobile app and Bluetooth-enabled devices to a health system support center staffed by nurses and other Dartmouth-Hitchcock workers. The app tracked about two dozen measurements, including activity, sleep and, for those with chronic conditions, key indicators like weight and blood sugar levels. Worrisome results triggered contact and behavioral coaching from the Dartmouth-Hitchcock staff.

Dartmouth-Hitchcock found health care expenditures for the people with chronic conditions dropped by 15% more than matched controls. Nonetheless, in 2017, with the product facing unexpected technology challenges and the health system saddled with a short-term deficit, Dartmouth-Hitchcock scrapped the experiment and sold the technology to a Swedish company in return for potential royalties.

“We didn’t have the capital as a small health system,” said Weinstein, now senior vice president of innovation and health equity for Microsoft. “It wasn’t a venture investment to make money; in fact, we probably would have lost revenues on admissions. But it was the right thing to do.”

ImagineCare has found a more receptive home in Sweden. Two regions of the public health care system as well as a private health care organization have decided to deploy it as their remote monitoring service, according to ImagineCare’s CEO, Annette Brodin Rampe. The company expects to have 10,000 patients enrolled by year’s end.

Wellsmith, Cone Heath’s diabetes platform, suffered an even rockier trajectory. The concepts were similar, but Wellsmith was initially tailored to people with Type 2 diabetes. Data on weight, activity, blood sugar and patients’ compliance on taking medication was uploaded manually or through Bluetooth-enabled devices and sent to a small team of nurses and health coaches at Cone, who would contact those with disquieting signs.

Cone tested Wellsmith on 350 employees with Type 2 diabetes and reported encouraging results in 2018. Users’ physical exercise had increased on average by 24% and their A1c levels, which measure the percentage of red blood cells with sugar-coated hemoglobin, had dropped by 1 point on average. “We believe that the future will be carried by those who can invest in and create models of care like Wellsmith,” said Terry Akin, Cone’s CEO at the time.

But Cone grew apprehensive about Wellsmith’s commercial prospects, especially when other companies started pitching similar products. In its 2018 financial statement, Cone wrote that “management has determined that the existing technology will not be marketed for sale and licensing.” In October 2020, Cone decided to end its relationship with Wellsmith and shut it down this year, according to its financial statement.

Cone declined requests for interviews. In an email, Cone spokesperson Doug Allred wrote: “Unfortunately, a number of well-funded competitors established similar platforms. This has made it difficult to scale our platform to more customers and develop more partnerships. Due to these factors we made the difficult decision to sunset the Wellsmith platform.”

In interviews, Teshler said Cone had originally viewed the product as complementary to its efforts to move away from a traditional fee-for-service payment system. But she said alternative models — such as those in which insurers pay a set fee for each patient, providing doctors and hospitals with an incentive to keep spending low — remained the arrangement for a minority of Cone’s patients: those enrolled in Cone’s Medicare Advantage plans and accountable care organizations.

“The problem with these kinds of solutions — not just us — is it requires people to have digital devices that aren’t normally covered by health insurance,” she said.

Wellsmith’s business plan was to charge a per-member monthly fee to organizations using it. Teshler said Cone did not want to pay Wellsmith a fee when it had already lent it millions, since it couldn’t bill insurers for the service.

Other obstacles arose as well, according to Teshler. She said Wellsmith’s development was delayed when the second version of the software was a “dismal failure” and needed to be revamped. To further complicate matters, Cone began entertaining a merger with another health system, making the long-term financial commitment to Wellsmith uncertain. “And then we hit covid and it was game over,” Teshler said.

Teshler said she is still developing her concept, though, under her contract with Cone, Wellsmith’s software had to be destroyed when they split ways. She wants to market Wellsmith’s successor to primary care medical practices that contract directly with employers — groups that benefit when medical claims are reduced. She does not see other hospital systems as viable customers.

“It’s very simple for their attention to be diverted by the fact that their job is to keep people alive,” she said. Also, unless an innovation is unique, she said, “everybody’s got a fund, and nobody is going to buy anyone else’s product.”

KHN (Kaiser Health News) is a national newsroom that produces in-depth journalism about health issues. Together with Policy Analysis and Polling, KHN is one of the three major operating programs at KFF (Kaiser Family Foundation). KFF is an endowed nonprofit organization providing information on health issues to the nation.

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‘An Arm and a Leg’: Meet the Mississippi Lawyer Who Helped Start the Fight for Charity Care

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Richard “Dickie” Scruggs, famous for taking on Big Tobacco in the ’90s and winning, worked on a series of ill-fated national lawsuits against nonprofit hospitals. The goal? Get nonprofit — or “charity” — hospitals to actually provide charity care instead of price-gouging and dunning low-income patients. 

Scruggs didn’t exactly score a total victory — some hospitals kept behaving shamefully. And he lost big, eventually.

But he did help start important changes.

For instance: We’ve been following the work of Jared Walker, who went viral on TikTok, spreading the word that nonprofit hospitals are legally obligated to provide charity care. That obligation didn’t exist when Scruggs launched those lawsuits.

For the next few episodes, we’ll tell some of the stories about how that change happened — it’s a wild ride, and Scruggs wasn’t the only player (or the most effective) — and how folks today are pushing that work forward. 

This episode relies on audio from The Kindling Group documentary “Do No Harm.”

And researchers with the Innovation for Justice Program at the University of Arizona are looking at hospitals’ debt collection practices, and how laws or regulations could do a better job protecting people. They’re looking to talk to people who have been sued over medical bills. If that’s you, or someone you know, here’s a link to get in touch: bit.ly/talkmeddebt. It’s a 30-minute interview, and it is all anonymous.

Here’s a transcript of this episode.

“An Arm and a Leg” is a co-production of KHN and Public Road Productions.

To keep in touch with “An Arm and a Leg,” subscribe to the newsletter. You can also follow the show on Facebook and Twitter. And if you’ve got stories to tell about the health care system, the producers would love to hear from you.

To hear all KHN podcasts, click here.

And subscribe to “An Arm and a Leg” on Spotify, Apple Podcasts, StitcherPocket Casts, or wherever you listen to podcasts.

KHN (Kaiser Health News) is a national newsroom that produces in-depth journalism about health issues. Together with Policy Analysis and Polling, KHN is one of the three major operating programs at KFF (Kaiser Family Foundation). KFF is an endowed nonprofit organization providing information on health issues to the nation.

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KHN’s ‘What the Health?’: Booster Time

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As covid-19 cases in the U.S. continue to rise, the Biden administration is countering with new strategies. The latest efforts include preparing for vaccine boosters starting this fall, requiring that nursing home workers be vaccinated and pushing back against state bans on mask mandates in schools.

Meanwhile, the U.S. House is returning early from its summer break to begin work on a planned $3.5 trillion budget bill that will address a long list of health issues, including changes to Medicare and Medicaid, extending the Affordable Care Act subsidies and lowering prescription drug prices.

This week’s panelists are Julie Rovner of KHN, Alice Miranda Ollstein of Politico, Margot Sanger-Katz of The New York Times and Kimberly Leonard of Business Insider.

Among the takeaways from this week’s episode:

  • Democratic House members from the moderate and progressive wings are facing off over the fate of two key initiatives: the bipartisan infrastructure bill and the $3.5 trillion reconciliation package, which includes President Joe Biden’s priorities for health care, climate change and other matters. Moderates are pushing for the House to vote on the traditional infrastructure bill first and get it to the president’s desk, but progressives are insisting it must go forward in tandem with the more controversial reconciliation plan.
  • House Speaker Nancy Pelosi seems confident she can wrestle her caucus into moving forward without losing support from either wing.
  • The reconciliation package, while massive, is still very ambiguous. Most of the proposals and ways to pay for them are being negotiated. That makes it hard for lawmakers to endorse yet. The process is reminiscent of the difficult campaign to get the Affordable Care Act across the finish line in 2009 or the Republican effort to repeal and replace the ACA in 2017, when members of Congress did not have a lot of details about what might replace it.
  • The Biden administration’s call for booster shots for people who have been vaccinated against covid has generated some disagreement among public health experts. Some argue that the need in the U.S. is not yet great and that those shots should be sent to countries in greater need, where a new variant could develop if too many people contract covid. But the administration and its supporters argue it is better to be ahead of the virus, rather than try to tamp down a resurgence among the vaccinated later.
  • To push the nation’s inoculation efforts, Biden on Wednesday called for nursing homes to require staff members to be vaccinated or lose Medicare and Medicaid funding. Some other industries — especially those where risks are great — have already mandated vaccinations on their own.
  • The president also pushed back in his comments this week against conservative governors who insist schools may not require students to wear masks. Public health officials have said masking will help prevent kids from getting sick, especially since many are too young to get the shots and the delta variant appears to be more virulent than previous versions of the virus. In some states that start school early, thousands of children already have been forced to quarantine. The administration, educators and public health officials are concerned that rampant spread could force many schools to resume remote learning.
  • Nonetheless, some Republican state officials, including Florida Gov. Ron DeSantis and Texas Gov. Greg Abbott, are digging in their heels about mandates. It’s a tricky political issue for them because the delta variant is hitting Southern states the hardest.
  • Medicare Advantage plans have been growing in popularity, often because they offer benefits not available in traditional Medicare coverage. But if Democrats succeed in their efforts to beef up standard Medicare with dental, vision and hearing benefits, it could affect the business model of the Medicare Advantage plans.

Plus, for extra credit, the panelists recommend their favorite health policy stories of the week they think you should read, too:

Julie Rovner: KHN’s “Federal Vaccine Program Hasn’t Helped Those Whose Lives Were Altered by Covid Shot,” by Arthur Allen.

Margot Sanger-Katz: The Atlantic’s “How the Pandemic Now Ends,” by Ed Yong, and New York magazine’s “Don’t Panic, but Breakthrough Cases May Be a Bigger Problem Than You’ve Been Told,” by David Wallace-Wells.

Alice Ollstein: The New Republic’s “Here’s a Terrible New Idea: Making the Unvaccinated Pay Higher Insurance Premiums,” by Natalie Shure.

Kimberly Leonard: Business Insider’s “Amazon, Investment Banks, and Even Big Tobacco Are Spending Millions of Dollars to Try to Get Favorable Marijuana Laws,” by Kimberly Leonard and Jeremy Berke.

To hear all our podcasts, click here.

And subscribe to KHN’s What the Health? on Spotify, Apple Podcasts, Stitcher, Pocket Casts or wherever you listen to podcasts.

KHN (Kaiser Health News) is a national newsroom that produces in-depth journalism about health issues. Together with Policy Analysis and Polling, KHN is one of the three major operating programs at KFF (Kaiser Family Foundation). KFF is an endowed nonprofit organization providing information on health issues to the nation.

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Apple Aims to Push More Patient Data to Doctors. But Who Can Gauge Its Impact on Health?

Soon, Apple announced recently, it will enable doctors to monitor health data from their patients’ phones and watches between visits, part of the push into health care that Tim Cook, Apple’s CEO, has declared will constitute the company’s greatest contribution to mankind.

Since 2014, health systems around the country have partnered with Apple to tap into the mountains of data the company’s devices generate from patients. But most are still experimenting with these tools. While some doctors appreciate seeing records of home-monitored blood pressure, exercise and the like between visits, for others the data is more of a burden than an asset.

Over 100 types of data are available in Apple’s health app through iPhone, Apple Watch and third-party apps. In June, Apple said patients whose doctors work with one of the six electronic medical record companies participating in the new feature will be able to send them tracked data like heart rate, sleep hours, exercise minutes, steps, falls or menstrual cycle history.

Some see great promise in building “pipes” between a patient’s phone and the health records viewed by their clinicians. Apple is “democratizing the flow of health data” between doctors and patients, said Anil Sethi, a former Apple health director and current CEO of Ciitizen, a startup that manages health data for cancer patients.

But Apple’s announcement was shrouded in ambiguity and short on particulars. The company would not provide a complete list of the data patients can share with doctors and declined to comment for this article. Previous Apple moves to get more data into the hands of doctors have been announced with great fanfare, but questions remain as to how many health care providers are using the data and to what effect, and whether success stories are the norm or outliers. To date, rigorous studies showing clear health benefits from monitoring these types of data remain limited.

Although Apple has built pipes enabling patients to share growing amounts of data with medical professionals, it’s unclear how much data flows through them.

In 2014, Apple released HealthKit, a tool enabling health systems to pull in patients’ health data, with their permission, from their iPhones. At the time, then-Mayo Clinic CEO John Noseworthy said this would “revolutionize how the health industry interacts with people.” But a Mayo spokesperson told KHN the system’s use of HealthKit is now limited.

Cedars-Sinai Medical Center said in 2015 that, through HealthKit, more than 87,000 patients had been able to share their data, an arrangement Cook touted on a quarterly earnings call. A Cedars-Sinai spokesperson declined to comment on what became of this project.

Even Apple’s attempts to use its own employees’ app data to improve their medical care have yet to pan out. The Wall Street Journal reported that an Apple initiative testing a new primary care service for doctors to monitor Apple employees’ health through their devices had stalled. The company said many of the story’s assertions were inaccurate.

There have been a few reports of success. Ochsner Health in Louisiana reported that patients in a hypertension management program that provided health coaching while monitoring blood pressure data from mobile phones were more likely than a control group to get their blood pressure under control, follow their medication regimen and feel satisfied with their care. The health system now also has remote monitoring programs for diabetes, chronic obstructive pulmonary disease and expectant mothers, an Ochsner spokesperson said.

And Epic, the nation’s largest health records company, said that over 100 of its large health system clients are using Apple HealthKit to capture data from home monitoring devices like blood pressure cuffs.

But patient-generated data has not been widely adopted in health care, said Dr. Benjamin Rosner, an associate professor of medicine at the University of California-San Francisco. He and others point out major hurdles.

One, Rosner said, is that evidence is mixed that monitoring such data improves health.

Another is that doctors generally aren’t reimbursed by health insurers for reviewing data that patients collect at home.

“In America, we generally pay doctors and health systems to see patients in front of them and do things to them when they show up,” said Matthew Holt, a health technology startup adviser.

In instances in which doctors can be reimbursed for remotely monitoring patients, like those with certain chronic conditions, the payment is usually low, Rosner said.

And many doctors already feel inundated with patient health information and electronic health record tasks.

“Primary care doctors are overwhelmed by their inboxes,” said Dr. Rebekah Gardner, an associate professor of medicine at Brown University. “Before people start buying Apple Watches and sending all their sleep hours, let’s show that this improves health.”

She said she wants to see more rigorous, independently funded studies showing that monitoring data from wearable devices makes people healthier or improves their care.

Liability concerns weigh on some doctors’ minds. Dr. Oguchi Nkwocha, a community health center physician-executive in Salinas, California, worries he could be held liable if he missed something in “a diary of data,” but said he might be more open to data that was analyzed and presented with predictive insights.

Apple isn’t the only tech company that has struggled to make health app data-sharing mainstream. Both Google and Microsoft enabled patients to share their data in their personal health record products over a decade ago but shut down these businesses because of limited user adoption, Holt noted.

Optimists believe that, eventually, research will show that more forms of data monitoring lead to better health and that technology could help make the data more digestible for doctors. Then, Apple might succeed in making its apps part of medicine — assuming the payment system changes in a way that gives providers more incentives to identify problems early and intervene before people get critically ill, Holt said.

“This is exciting for the future of chronic care management,” Dr. David Cho, a UCLA Health cardiologist, said of the new feature. With data at his fingertips on risk factors like exercise, diet and blood pressure, he believes he could help his patients manage chronic conditions more easily. That data, combined with virtual visits, could mean fewer office visits.

Apple’s announcement that it can integrate patient-generated data into the electronic medical record could be critical for doctors who want to see their patients’ self-collected information but don’t have time to hunt for it, said Dr. Seth Berkowitz, who leads a remote monitoring app pilot program at Beth Israel Deaconess Medical Center in Boston.

Some patients welcome a feature that would make it easy to share data with their doctors. Jen Horonjeff, a New York City-based autoimmune disorder patient and health care startup CEO, recently discovered by using an Apple Watch tracker that her heart rate, which doctors had described as irregular, registered as normal.

“I would absolutely send this to my physicians,” Horonjeff said, noting that her data would give doctors an accurate baseline of her heart rate if she were hospitalized.

But Gary Wolf of Berkeley, California, co-founder of the Quantified Self, a movement of people who track their health and other personal data, said that finding a doctor trained to make decisions with “fine-resolution data” is impossible.

Without more evidence that getting health app data to doctors is clinically beneficial, it will be hard to assess whether Apple is succeeding, said Neil Sehgal, assistant professor of health policy at the University of Maryland.

“Right now, we don’t know if there are consequences if you don’t put your Apple Watch data into your electronic medical record,” he said.

If evidence ultimately shows a benefit to sharing this information with doctors, he said, “that benefit will be concentrated among people who can buy the $1,000 phone and $400 watch.”

This story was produced by KHN, which publishes California Healthline, an editorially independent service of the California Health Care Foundation.

KHN (Kaiser Health News) is a national newsroom that produces in-depth journalism about health issues. Together with Policy Analysis and Polling, KHN is one of the three major operating programs at KFF (Kaiser Family Foundation). KFF is an endowed nonprofit organization providing information on health issues to the nation.

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Surgeons Cash In on Stakes in Private Medical Device Companies

Several orthopedic surgeons who invested in Renovis Surgical Technologies made big money when a Japanese technology giant snatched up the small California medical device company.

Kyocera Corp., which was eager to expand its U.S. spine and joint implant sales, bought Renovis’ assets in 2019. While the parties kept the sale price under wraps, Renovis’ physician stockholders held stakes valued at over $34 million by the end of that year, with nearly half that sum to company founder and chief executive Dr. John Steinmann, according to the federal government’s “Open Payments” database, which tracks payments to doctors from device and drug companies.

Hundreds of orthopedists and neurosurgeons have cashed in on stakes in companies that design, manufacture or distribute orthopedic implants — sometimes after investing little or no money — and despite ongoing ethical and legal concerns, a KHN investigation has found.

KHN found that surgeons had stakes in more than 200 privately owned device companies from 2013 through 2019. At the end of 2019, their holdings topped $300 million in value. Doctors can dispute the payments but rarely do so.

Device makers often reach out to orthopedic surgeons for help designing or evaluating new implants, a practice they say spurs innovation and leads to safer, more durable devices. Offering feedback can land surgeons lucrative royalty and consulting deals or stock holdings that escalate in value when startup device companies are sold. In other cases, surgeons have owned a piece of distributorships that buy implants from manufacturers and resell them at a profit.

Whistleblowers and government fraud fighters have argued for years that money passing from industry to doctors can corrupt medical judgment, inflate costs and lead to unnecessary operations or otherwise harm patients.

Some of the harshest criticism has been directed at surgeons who profit from the sale of orthopedic devices — from spinal implants and screws and other hardware to artificial knees and hips that typically cost thousands of dollars. Federal officials warned as far back as 2013 that these sales could violate federal anti-kickback laws.

Steinmann, a Southern California orthopedic surgeon, has been a staunch defender of the profitable distribution companies and has held a stake in at least nine of them, according to Open Payments data. He and four other surgeons at Arrowhead Orthopedics in Redlands, California, were paid nearly $2.5 million in “dividend, profit or other return on investment” by a single distributorship of implants in 2019, according to the database.

The biggest surgeon investors in implant maker Renovis also owned a stake in distributorships. Steinmann received $16.4 million in “ownership and investment interest” from Renovis in 2019, according to Open Payments data, which says he invested $6.7 million in the company. Five other surgeons had holdings worth $1 million or more, according to the data.

Steinmann told KHN that he and the other surgeons invested millions in Renovis and worked for years building it. “We earned every dollar that we made,” he said. Renovis developed innovative products over a decade and the investment return was “good, but not out of line in any respect,” Steinmann said. He added: “I didn’t do any better than if I invested in the stock market. I don’t think it is fair to say otherwise.”

In testimony before Congress, Steinmann has conceded that a few “bad apples” may have endangered patients by performing needless, or overly complex, operations for quick profits on implant sales, but testified his distribution companies have operated legally and ethically and have saved hospitals millions of dollars on implants.

Critics counter that surgeons should collect only professional fees for operating on patients — and steer clear of taking profits from devices they choose to implant in patients. Orthopedic and neurosurgeons typically earn upward of $500,000 annually for their professional services and are among the highest-paid specialists in medicine.

“Doing surgery is a loss leader for what you can get for selling your own products,” said Dr. James Rickert, an orthopedic surgeon and head of the Society for Patient Centered Orthopedics, an advocacy group.

A ‘Crowded and Cutthroat Field’

The orthopedic surgery industry is awash in cash; more than $3.1 billion flowed from device makers to surgeons from August 2013 through 2019, according to KHN’s analysis of payments that device makers reported to the government-run website.

Much of that money paid surgeons for consulting work, including helping to market new products to their peers, or royalties for inventing or fine-tuning surgical tools.

“Orthopedic surgeons are the type who design things. That is inherent in their nature,” said Mark Weiss, a California lawyer who represents physicians.

They also accounted for nearly a third of physicians with stakes in device and drug companies of $250,000 or more during 2019. While some surgeons lost money, many saw their stakes in these companies shoot up in value.

Consider Parcus Medical, a Sarasota, Florida device maker with a self-described “lust for innovation and creativity.” Parcus, which takes its name from the Latin word for “thrifty,” specializes in implants for repairing sports injuries. Massachusetts-based Anika Therapeutics swallowed it for $35 million in January 2020, and 22 surgeon investors saw their Parcus holdings at least triple in value, Open Payments records show.

Dr. Brian McKeon, a Waltham, Massachusetts, orthopedic surgeon and former head physician for the Boston Celtics of the NBA, held Parcus stock in 2019 valued at just over $1.4 million based on an investment of $146,000, according to the Open Payments database. The site states that McKeon did not dispute the figures as posted. But in an email to KHN, McKeon called the Open Payments numbers “way off,” adding “if you find that money please forward to me.” He said he invested in the company in 2006 and has disclosed ownership interest to his patients.

Also in January 2020, Anika Therapeutics paid $60 million for implant company Arthrosurface, which had about 20 surgeon investors; nine paid just $1 for their shares of stock, according to the company. These investments grew in value from $12,600 to $151,200 in 2019, depending on the surgeon, Open Payments records show.

Mark Namaroff, Anika’s executive director for investor relations and corporate communications, said that most of the surgeons invested in the companies prior to the acquisition.

“It was also our understanding that Arthrosurface granted certain surgeons (likely those referenced as paying $1 for stock) common stock in the company during the company’s early years as compensation for services rendered or inventions assigned to the company. As the investments by these individuals all took place prior to our purchase of the companies, we can’t provide additional information about them,” he wrote in an email.

Both Parcus and Arthrosurface had prominent sports orthopedists among their owners, including a dozen who have served as medical consultants to professional sports or U.S. Olympic teams.

It is legal for doctors to work for, or own a piece of, a medical business as long as their compensation is not tied to the volume of its products they use and provided that medical decisions are made in the best interests of patients. Several surgeons’ organizations encourage members to keep detailed records of the services they provide, accept only “fair market” compensation from device makers, and fully disclose industry ties to patients and their peers in scientific journal articles and professional meetings.

Device companies are not required to specify what work surgeons did to justify their stock awards, which more than 100 companies have granted to one or more surgeons who invested $100 or less, according to Open Payments data.

Stock can skyrocket in value after a device company’s sale.

That happened with Titan Spine, a titanium implant maker in Mequon, Wisconsin, bought by industry giant Medtronic in June 2019. In all, two dozen physician investors received more than $17 million in payments. The company reported that a few who put up no money of their own between 2014 and 2019 gained shares worth hundreds of thousands of dollars. One was Dr. Andrew Cappuccino, an orthopedic surgeon and team doctor for the NFL’s Buffalo Bills, who received “vested LLC units” valued at $387,500, according to the company’s report to Open Payments for 2019. Cappuccino had no comment.

A spokesman for Medtronic said: “Collaboration with physicians is critical to innovation and the development of medical devices that save and improve the lives of patients, as well as the training of surgeons who use them.”

Not all investors were happy with their financial gains, however. Utah orthopedic surgeon Dr. Kade Huntsman is among a group of doctors and former Titan sales executives suing the company, for which he once worked as a consultant. The lawsuit calls Titan a “glittering Cinderella success story in an otherwise crowded and cutthroat spinal implant field.”

Huntsman argues he dwelt on the “dark side” of the fairy tale after spending years providing “the voice, prestige and reputation” that made Titan’s products appealing to surgeons.

In legal filings, Huntsman said a Titan sales executive brought him into the fold in April 2014 and persuaded him to try out a Titan device in the operating room. He was so impressed with it that he quickly became “one of the company’s top utilizers” of hardware, according to the suit. Through his lawyer, Huntsman declined to comment.

Huntsman said in the lawsuit that Titan regarded him as a “potential game-changing advocate” for its implants. He talked up Titan’s products at spinal surgery conferences and later taught other surgeons how to use them, according to the suit.

Huntsman agreed to help develop a new spinal fusion implant for Titan and was “certain it would be groundbreaking” — so much so that he declined a salary in favor of company “membership units,” according to the suit.

But he alleged that Titan executives restructured his holdings, so that upon the sale to Medtronic for more than $150 million he saw a return of $180,000, “far less than the $828,750 he calculated he was entitled to receive,” according to the suit. Medtronic denied the allegations and filed a motion to dismiss the case. In June, a judge in Milwaukee dismissed most of the case. Medtronic and Titan are opposing a bid by the plaintiffs to amend their complaint, calling it “futile,” court records state.

‘Corruption of Their Medical Judgment’

More than a decade ago, then-New Jersey Attorney General Anne Milgram investigated global device maker Synthes for failing to disclose stock payments to surgeons conducting pre-market trials on orthopedic hardware. She called that a conflict of interest and a “betrayal of the public trust [that] has the potential to jeopardize patient well-being.”

The case centered on a spinal implant from Spine Solutions, a company partly financed by New York investment firm Viscogliosi Brothers. According to Milgram, Viscogliosi Brothers had offered the researchers “substantial investment opportunities in Spine Solutions, as well as consulting contracts that included gifts of company stock and stock options.”

Milgram argued that Synthes failed to tell the Food and Drug Administration about the stock payments after it bought Spinal Solutions for $350 million in February 2003. The FDA approved the device in 2006 largely on the basis of research results. In May 2009, Synthes settled the New Jersey investigation by agreeing to disclose any payments to physician researchers.

Viscogliosi Brothers, which went on to help finance other spinal device startups, was not a defendant in the New Jersey case. But one of its companies, Paradigm Spine, later was accused by a former sales executive of paying kickbacks through “investor opportunities” offered to dozens of spine surgeons.

The surgeons were selected “because they are in a position to generate substantial business for Paradigm, and they have done so,” according to the whistleblower’s suit, which said four of Paradigm’s top 10 users were investors. “This is a corruption of their medical judgment,” according to the suit.

The whistleblower also accused Paradigm of prompting surgeons to try an implant for an unapproved use and bill for the operation improperly, allegations the company denied. In May 2016, Paradigm agreed to pay the government $585,000 to settle the errant billing claims, court records show. It denied any wrongdoing.

Paradigm Spine was sold to RTI Surgical, a Florida device company, in March 2019 for $300 million. A few surgeon investors wound up with $1 million or more in “ownership and investment interest,” though the company reported that many of the surgeons saw their holdings shrink in value.

When Surgeons Profit Off Implant Sales

The Front Range Center for Brain & Spine Surgery in Fort Collins, Colorado, uses implants supplied by Highline Surgical Solutions LLC, whose owners include three of the center’s surgeons, according to Open Payments filings.

The doctors say their stakes in the implant company and other medical businesses, including two local surgery centers and a diagnostic imaging center, assure them of a “strong influence on the quality, cost and effectiveness” of medical services.

Highline Surgical Solutions also generated a total of more than $3 million for five surgeons from 2016 through 2020, according to Open Payments data. The Front Range Center discloses the ownership ties and notes patients “will not be treated any differently” should they ask for products from other sources. The Front Range Center had no comment.

A few companies have joined the American Association of Surgeon Distributors, a nonprofit group advised by Steinmann that has set standards for “ethical and legal” physician-owned implant distributors. Most of the distributorships with ties to Steinmann have been members, according to the distributors’ association website. As of 2018, Renovis was listed on the association’s website as a “corporate member.”

The association argues that the nation’s five largest orthopedic device companies have established an “oligopoly” that its members fight to compete with, offering “meaningful” cost savings. Steinmann has presented state and federal regulators with research papers that he says document these savings and show how these companies can be run legally and ethically, by taking steps such as forbidding a distributorship from pressuring physician owners to use its products. “There is a right way and a wrong way,” Steinmann said.

Yet the U.S. Department of Health and Human Services Office of Inspector General has argued that physician ownership in device distributors tends to prompt costlier and more-complex surgeries, calling the practice “inherently suspect” in 2013. Last December, officials said these deals could violate anti-kickback laws and “induce physician owners to perform more procedures (or more extensive procedures)” and use its products “in lieu of other, potentially more clinically appropriate devices.”

KHN identified more than three dozen implant supply companies that generated millions of dollars for surgeons from 2013 through 2019. Farallon Surgical LLC, for instance, earned three California surgeons more than $7 million from 2014 through 2020, Open Payments records show. The surgeons had no comment.

About three dozen surgeons have bought stock in the Orthopaedic Implant Co., of Reno, Nevada. Most put in $1,250, an investment the company valued at $31,250 for each of those investors in 2019.

Company president Itai Nemovicher said the doctors would make money only if the company were sold. He said the company offers “high-quality implants at a lower price” to benefit patients. “We are aboveboard in everything we do,” he said in an interview.

Thomas Bulleit, a Washington lawyer who has represented device makers opposed to doctor-owned distributorships, said he sees no reason for physicians to have a stake in the implant supply trade. “The problem is doctors steering patients to products that make them money,” he said.

For their part, federal officials told KHN in interviews that they could not comment on any company’s business practices without first reviewing “all of the facts and circumstances on a case-by-case basis.” But they said the inspector general’s office has repeatedly warned physicians about ownership deals that among other things distribute “extraordinary returns on investment compared to the level of risk involved.”

Just what is permissible could be clarified by a Justice Department civil case in California that has dragged on for nearly a decade. The suit alleges that Reliance Medical Systems LLC and its non-physician owners paid kickbacks to orthopedic surgeons who agreed to use its products. One surgeon paid nothing for a 20% ownership in one of Reliance’s companies and was paid “an average of more than $500,000 per year between 2007 and 2012,” according to the suit. The suit alleges that 25 of Reliance’s 35 physician investors increased their rate of complex spinal fusions and, in some cases, elderly patients on Medicare suffered complications from operations that were “more extensive than necessary.”

Reliance and its owners have repeatedly denied violating any laws. “Our clients will never settle. They believe they have done nothing wrong and they want their day in court,” said Reliance attorney Patric Hooper.

The trial is set for early 2022.

Payments Less Than Transparent

While device companies must report physician ownership stakes, patients are largely on their own in deciphering what it all means.

The federal Centers for Medicare & Medicaid Services, or CMS, which runs the Open Payments website, offers little help. CMS “is unable to speak to how the public should interpret the data,” according to an agency spokesperson. Though it has the authority to do so, CMS has not conducted an audit to verify the accuracy of the reports it receives. One action CMS took in 2018 suggests that, at least in past years, tens of millions of dollars in orthopedic surgery-related payments was not reported.

Responding to written questions, CMS said that in 2018 it contacted about 38,000 orthopedic or neurosurgeons to remind them of the reporting requirements. The action “identified 388 new ownership records associated with 235 physicians, totaling $162,301,018 in reported payments and financial transactions,” according to the agency. “CMS considered this outreach a success,” the spokesperson said.

Much remains less than transparent, however. Some companies report paying thousands of dollars to surgeon owners one year only to disappear from the database the next. And it is rarely clear what percentage of a device company’s total stock is owned by surgeons who may influence hardware sales, an important legal and ethical distinction.

The Open Payments website refers to an ownership interest as a “payment” expressed in dollars but does not always say whether it was paid out in cash or exists only on paper — or how the surgeons obtained their holdings in the company. Some surgeons apparently invested cash, sometimes hundreds of thousands of dollars. Yet there is no explanation of how some surgeons put up $100 or less for stakes that later soared in value. That makes it all but impossible to know whether the compensation paid to a surgeon was reasonable as required by ethics standards and federal anti-kickback laws.

“There are legitimate arrangements and possibly illegitimate ones,” said Richard Saver, a University of North Carolina School of Law professor who has studied the reporting system. “Separating the two is proving very difficult.”

KHN (Kaiser Health News) is a national newsroom that produces in-depth journalism about health issues. Together with Policy Analysis and Polling, KHN is one of the three major operating programs at KFF (Kaiser Family Foundation). KFF is an endowed nonprofit organization providing information on health issues to the nation.

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Injuries Mount as Sales Reps for Device Makers Cozy Up to Surgeons, Even in Operating Rooms

Cristina Martinez’s spinal operation in Houston was expected to be routine. But after destabilizing her spine, the surgeon discovered the implant he was ready to put in her back was larger than he wanted to use — and the device company’s sales rep didn’t have a smaller size on hand, according to a report he filed about the operation.

Dr. Ra’Kerry Rahman went ahead with the operation, and Martinez awoke feeling pain and some numbness, she alleges. When Rahman removed the plastic device four days later and replaced it with a smaller one, Martinez suffered nerve damage and loss of feeling in her left leg, she claims.

Martinez is suing the surgeon, implant maker Life Spine Inc., and its distributor and sales representatives, alleging their negligence led to her injuries because the right part wasn’t available during her first surgery. All deny wrongdoing. The case is set for trial in November.

The lawsuit takes aim at the bustling sales networks that orthopedic device manufacturers have built to market ever-growing lines of costly surgical hardware — from spinal implants to replacement knees and artificial hips commonly used in operations. Sales in 2019 topped $20 billion, though covid-19 forced many hospitals to suspend elective surgeries for much of last year.

Device makers train sales reps to offer surgeons technical guidance in the operating room on the use of their products. They pay prominent surgeons to tout their implants at medical conferences — and athletes to offer celebrity endorsements. The industry says these practices help ensure that patients receive the highest-quality care.

But a KHN investigation found these practices also have been blamed for contributing to serious patient harm in thousands of medical malpractice, product liability and whistleblower lawsuits filed over the past decade.

Some patients allege they were injured after sales reps sold or delivered wrong-size or defective implants, while others accuse device makers of misleading doctors about the safety and durability of their products. Six multi-district federal cases have consolidated more than 28,000 suits by patients seeking compensation for injuries involving hip implants, including painful redo operations.

In other court actions, patients and whistleblowers repeatedly have accused device companies of failing to report injury-causing defects to federal regulators as required — or of doling out millions of dollars in illegal kickbacks to surgeons who agreed to use their products. Device makers have denied the allegations and many such cases are settled under confidential terms.

At least 250 companies sell surgical hardware, and many more distribute it to doctors and hospitals across the country. Spine companies alone obtained more than 1,200 patents for devices in 2018, according to an industry report. Many come to market through a streamlined Food and Drug Administration process that approves their use because they are essentially the same as what is already being sold.

“In orthopedics, we are inundated with a multitude of new implants that debut each year,” Dr. James Kang, chairman of the orthopedic surgery department at Brigham and Women’s Hospital, remarked at a Harvard Medical School roundtable discussion published in 2019.

Kang said surgeons often rely on industry “reps” in the operating room for guidance because it is “usually burdensome and difficult” for surgeons to know “all of the intricate details and nuances” of so many products.

Martinez’s lawsuit says the process went awry during her May 2018 spinal fusion in Houston, an operation in which an implant is inserted into the spinal column to replace a worn or damaged disc.

Martinez was under anesthesia, with her spine destabilized, when Rahman discovered the Life Spine surgical kit did not contain any implants shorter than 50 millimeters, or about 2 inches. That was too large, according to the complaint. Martinez, a former day care worker, blames her injuries on the redo operation, which replaced the implant with a 40 mm version Life Spine supplied later.

Through his lawyer, Rahman declined to comment. In court filings, the surgeon has denied responsibility. His operating notes, according to court pleadings, say he had ordered “all lengths available” of the implant through a Life Spine distributor and its sales reps. In a June court filing, Rahman contends the “small area of leg numbness experienced by Ms. Martinez was a known complication of the first surgery … and was not the result of any alleged negligence.”

In the court filing, Rahman also argues it was “appropriate” for him to rely on the sales reps and hospital staff to “inform him as to whether all materials and equipment needed for surgery were available.”

Illinois-based Life Spine also denies blame. In court filings, it says the sales reps initially ordered a sterile kit that included only implants from 50 mm to 55 mm long, which it duly shipped to Houston.

At the time of Martinez’s operation, Life Spine was the target of a sealed whistleblower lawsuit accusing it of paying improper consulting fees and other kickbacks to more than 60 surgeons who agreed to use its wares. Court records in the whistleblower case identify Rahman as one of the company’s paid consultants, although he and the other surgeons were not named as defendants. Life Spine and two of its executives settled the matter in November 2019 by paying a total of nearly $6 million. An orthopedic surgery expert hired by Martinez for her suit faulted Rahman for not making sure he had the right gear “prior to the start of surgery,” according to his report. The expert also criticized the sales rep for failing to bring “all available lengths to the procedure or to inform Dr. Rahman that the necessary implants were not available,” court records show. The sales rep and distributor denied any blame, arguing in court filings that they “met all applicable standards of care.”

Frenzied Competition for Sales

Major device makers train a corps of sales agents, some recruited right out of college, to cultivate and work closely with surgeons — one likened the relationship to a caddy and an avid golfer. Duties can include lugging 20-pound sets of surgical hardware to the operating room, assuring it is sterile and knowing its specifications, though the reps are not required to have medical training or credentials.

Stryker, one of the nation’s top four spine implant manufacturers, spends what it calls “a significant amount of time and money” to train reps. When hired, they typically “shadow” other reps for three to six months, then attend a 10-day intensive “Spine School” and other training. In all, the company said in a court filing, it typically takes eight to 18 months, often longer, to develop “long-term relationships” with customers.

For those who do, the jobs can pay handsomely. Veteran reps who influence which brands of hardware surgeons select command salaries and bonuses that can stretch into the low six figures and beyond, court records show.

The market is so hotly competitive that device makers typically require reps to sign contracts that prohibit them from working for a rival company in the same territory for a year or more — and aren’t shy about suing to fend off raids on their staffs, court records show.

In 2019, DePuy Synthes sued an Alabama sales rep who jumped ship, blaming him for stealing away accounts “worth millions of dollars practically overnight.” An arm of health care giant Johnson & Johnson, DePuy Synthes filed at least two dozen similar suits from 2014 through the end of 2020, court records show. Most, including the case of the Alabama sales rep, have been settled under confidential terms.

Some companies have spent lavishly to poach experienced sales agents — practices that can violate business conduct laws. One allegedly paid a New York sales pro a “staggering, seven-figure signing bonus.” Another is said to have dangled an $800,000-a-year job as “director of surgeon education,” while a gambit to make inroads in the Phoenix market dubbed “Sun Devil” guaranteed a branch manager a $500,000 annual salary, court records show. Another promised a sales agent $900,000 paid out over three years.

Whistleblowers and government investigators have argued for years that so much money changing hands can lead to kickbacks or other marketing schemes that corrupt medical judgment and endanger patients. Some injury suits also have blamed sales reps and distributors for staying mum about product deficiencies they observed in the operating room. These cases often are settled with no admission of wrongdoing.

Sometimes, surgeons help promote implants at medical meetings and other gatherings. Orthopedic surgeons and neurosurgeons received a total of about $511 million in industry consulting fees from 2013 through 2019 and nearly $300 million more for “serving as faculty or speaker” at industry-sponsored events, a KHN analysis of government data found. AdvaMed, the device industry’s trade group, says doctors often take “primary responsibility” for training other doctors to use new devices. “Unlike a pill or injection, procedures to implant or equip medical devices for patients can be extremely technical and complex,” said Scott Whitaker, the group’s president and CEO.

Some prominent surgeons who touted products that later were recalled, or who helped train surgeons to use implants, have been criticized in pending injury lawsuits.

One is Dr. Brad Penenberg, an orthopedic surgeon in Beverly Hills, California, paid by Wright Medical Technology as a “key opinion leader,” according to court filings. Multiple lawsuits cite a webinar for orthopedic surgeons that featured Penenberg and said hip surgery patients could resume “activities and lifestyles that include such things as tennis, horseback riding and snow skiing.”

Injured patients are arguing in court filings that Penenberg and several other experts paid by the company knew of significant failures of the hip device. Penenberg did not respond to numerous requests for comment but in court papers denied the allegations.

Hundreds of patients are claiming injuries they blame at least partly on overly aggressive marketing by Wright Medical. In one 2020 lawsuit, a Montana man who had received a hip implant said he was taking a walk while in Arizona on vacation when he “felt a severe jolt in his groin and fell.” He was out of cell range and could not get up or call for help. A “good Samaritan” called for an ambulance, which took him to a hospital in Gilbert, Arizona, where X-rays showed a fracture of the implant. It was removed and replaced. Wright Medical has denied the allegations.

Retired California psychologist Herb Glazeroff is suing Penenberg and Wright Medical Technology over a hip replacement that allegedly failed about five years after the surgeon installed it. In May 2019, Glazeroff was walking when he “suddenly dropped to his knees as his left leg gave out on him,” according to the suit. He alleges that the hip had fractured, which required a painful second operation and “a long and arduous rehabilitation program” from which he has “yet to fully recover.” Glazeroff argues that Penenberg failed to warn him about the implant’s dangers even though the surgeon had been named in “multiple lawsuits” alleging device defects. Penenberg has denied the allegations.

Dozens of lawsuits have taken aim at Indiana device maker Biomet’s advertising a hip replacement for “younger, more active patients” that showcased Olympic gold medal gymnast Mary Lou Retton. One ad says “Mary Lou lives pain-free, and so should you.” Yet Retton suffered painful heavy-metal poisoning requiring the implant’s removal and sued the company for damages, according to court records.

In a January 2020 court filing in Houston, Retton tried to block a subpoena seeking her deposition in a product liability lawsuit filed against Biomet by two patients in King County, Washington. The Washington case has since been settled and the deposition did not occur. But in a court filing opposing the subpoena, Retton confirmed she had a Biomet implant put in her left hip in 2005 and one on her right side about six years later. She said she promoted Biomet products from April 2006 through April 2013 and sued the company in January 2018, alleging the implants were defective. Retton said she and Biomet settled the suit in early 2019 “under confidential terms the parties find favorable to their respective positions. [Ms. Retton] values her long relationship with Biomet and her continued use of her [Biomet hip implants] and [Biomet] appreciates the support it has received over the years from [Ms. Retton].”

Defects Ignored, Downplayed

Whether touted by renowned surgeons or celebrities, orthopedic surgery marketing materials stress quick improvement in a person’s quality of life. That proves true for most patients. Yet researching how often implants fail or cause life-changing injuries — and which brands have the best safety records — can be daunting.

The FDA requires device makers to advise the agency of information “that reasonably suggests” a device they sell “may have caused or contributed to a death or serious injury or has malfunctioned” in a way that could recur. The FDA posts the reports on a public website, with the caveat that they may convey “incomplete, inaccurate, untimely, unverified, or biased data.”

KHN found that thousands of malpractice and product liability lawsuits have accused device marketers of concealing or downplaying hardware defects, leaving patients and their doctors in the dark about possible risks. In many cases, these claims are bolstered by company records, or actions by state or federal regulators. In 2019, for instance, DePuy Synthes paid $120 million to settle a lawsuit filed by 46 state attorneys general; the suit accused the company of advertising that a replacement hip it sold lasted three years in 99.2% of operations, when it knew of data showing that 7% had failed within that time. The company did not admit wrongdoing in settling the case.

British device company Smith & Nephew faces a federal civil proceeding comprising nearly 1,000 injury suits, including one that says the company “underreported and withheld” notices of malfunctions and “willfully ignored the existence of numerous complaints about [its] failures.” An expert hired by the patients cites a company audit showing “significant adverse events” were logged from two days to 142 days late, while a corporate memo circulated among executives to push sales was titled “Milk the Cash Cow,” according to court records. Smith & Nephew has denied the allegations and in one court paper called the expert’s opinions “speculative.”

A cluster of Florida injury cases pertaining to a knee implant from German manufacturer Aesculap alleges that the FDA cited the company for failing to report 25 adverse incidents — in some cases for a year or more — as a result of an inspection at its Hazelwood, Missouri, plant in September 2015. Aesculap has denied the allegations and the suits are pending in Florida’s Indian River County Circuit Court.

John Saltis is suing spinal device company NuVasive over its handling of his complaint that a screw holding his spinal implant in place snapped in May 2016, about 17 months after his operation.

Saltis, 68, was two hours into his workday as a toolmaker at General Electric in Rutland, Vermont, when he felt sharp pain in his neck and shoulder, bad enough to send him to the hospital emergency room. A few days later, X-rays revealed the screw had broken and, according to Saltis, fractured vertebrae in the process.

Saltis said the San Diego-based device company told the FDA the incident caused no harm. But Saltis said he has lingering numbness and pain in his right hand. As a result, he said, his lifestyle has “changed dramatically.” He sold his motorcycle and stopped biking and now relies on his left hand for simple tasks like opening doors and shaking hands — even plucking chips out of a bag.

“I miss things like bowling and playing toss with my grandkids,” he said.

In 2019, Saltis sued NuVasive without a lawyer, hoping to show the $600 screw was defective. In a court filing, NuVasive said Saltis is arguing “the screw is defective because it broke.” That’s not good enough, according to NuVasive, which argues that Saltis must show the screw was “unreasonably dangerous” to press his claim. In late June, a federal judge agreed and dismissed the suit, though she allowed Saltis to amend his complaint, which he is pursuing. The case is pending.

“I was pain-free for a few months and would have stayed that way if the screw hadn’t broken,” Saltis said. “This can change somebody’s life completely.”

A Push for Change as Pandemic Eases

As hospitals resume elective operations stalled by the coronavirus, some industry critics see an opportunity to rethink orthopedic surgery practices — from sales to tracking of injuries.

Some want to keep industry reps out of operating rooms and place tighter restrictions on their access to hospitals. They say the current system needlessly drives up health care costs and exposes patients to risks such as infection from extra people in the operating room. Reps counter that their incomes have been dropping due to global purchasing arrangements that give hospitals greater say over prices for surgical equipment.

Sales reps say their technical knowledge and skills make operations safer for patients and note that many surgeons enjoy the security of having them present in the operating room. Reps also say they perform tasks that hospitals would need to hire additional personnel to do, such as keeping track of device inventories.

“The industry has embedded reps into the supply chain, and it is a hard culture to break,” said Itai Nemovicher, president of the Orthopaedic Implant Co., which seeks to produce lower-cost implants.

Yet guidelines for “reentry” after covid put out by AdvaMed and the American Hospital Association say medical device reps should deliver “services, information and support remotely whenever possible.” The guidelines advise hospitals to use videoconferencing gear when it “does not compromise patient safety or privacy.”

Dr. Adriane Fugh-Berman, a professor of pharmacology and physiology at Georgetown University, said device reps are viewed as part of the operating room team even though they are there “to sell products. That is pretty horrifying from a patient’s point of view.” She said hospitals should train staff to perform these functions. “Relying on sales reps in the OR is appalling. We need to come up with a better system.”

Greater transparency might have helped Little Rock, Arkansas, resident Christopher Paul Bills. He sued Consensus Orthopedics, the maker of a hip implant system that he alleged failed and sent metal through his hip joint that his surgeon said in 2016 looked “as if a bomb had gone off.” An Australian registry that tracks outcomes of operations had in September 2014 identified the implant as having a “higher number” of hip failures compared with other manufacturers, according to the suit.

Bills underwent four operations and spent more than a year in the hospital and in rehabilitation, costs borne by Medicare and private insurance.

“Mr. Bills was left with no right hip at all and his surgeon does not plan to install a replacement hip,” the suit says. Bills uses an electric scooter to get around and hopes to graduate to hand-held crutches. “Since his right leg is useless, he will require a vehicle with hand-controls to drive,” according to the suit. The company disputed Bills’ claims and denied its hip system had any defects.

The case ended in 2019 when Bills died of cancer unrelated to his operations, said his lawyer, Joseph Saunders.

“He never did get justice,” Saunders said.

KHN (Kaiser Health News) is a national newsroom that produces in-depth journalism about health issues. Together with Policy Analysis and Polling, KHN is one of the three major operating programs at KFF (Kaiser Family Foundation). KFF is an endowed nonprofit organization providing information on health issues to the nation.

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