The New York Times is running a piece highlighting various investigations into what it calls doctors’ “unusually close, but largely unseen” ties to device makers. The article focuses on the issue of the “consultant” status of many surgeons in device-heavy fields, as well as the nebulous pricing structures which leave different hospitals paying different prices.
But the rising cost of the devices and the relationships between doctors and manufacturers are causing profound concern among hospital executives, health care economists and other experts, mirroring recent reactions to the way pharmaceuticals are marketed. In the last two years, Medicare payments to hospitals for implant surgery have risen about 40 percent, from $10 billion to $14 billion, according to an analysis of Medicare records. And federal prosecutors have begun to investigate some device makers’ deals with doctors, trying to determine if they amount to payoffs for using a product.
Among the loudest objectors have been hospitals, which buy the devices and most immediately feel the pain. But health care economists stress that consumers and insurers are also hurt by the rising cost of medical technology, including implantable devices.
“We’re paying for it, but no one can see it,” said Paul Ginsburg, president of the Center for Studying Health System Change, a research group in Washington.
The device companies occupy a privileged corner of the medical economy, where many of the checks and balances that have come to govern health care costs simply do not apply. Hospital officials and health care experts say the companies have used their relationships with doctors and a climate of secrecy to ensure that their products remain unusually profitable.
Central to this equation are the surgeons, who typically decide which devices are used yet bear no financial burden for their costs. Hospitals, which do bear that burden, have been reluctant to challenge doctors about their choices and are mostly in the dark about the inner workings of the marketplace. One large device company, Guidant, has even sued two hospital consultants because they divulged pricing information to competing hospitals.
Prices paid by hospitals vary widely, yet information is so scarce that hospitals say they are often unaware if they are overpaying, and impotent to negotiate a better price. Many hospital executives say some orthopedic and cardiovascular operations, once a major profit center, have become a marginal, even money-losing, endeavor.
Nor do the hospitals generally know which of their doctors have relationships with the device companies and if so, the details of those arrangements. In addition to six-figure consulting agreements that also pay doctors to promote a given device, companies pay royalties on new devices, send doctors to educational conferences, sponsor fellowships and provide unrestricted grants.
Regardless of the appropriateness of a given doctor-industry relationship, it is apparent that the secretive nature of these relationships certainly provides easy targets for those looking to make a fuss or rake some muck. …And that’s all the opinion this medgadgeteer is willing to offer on the issue.
Article summary at CNN/Money…
The article at the NYTimes.com…