December 12th, 2007
How common are medical kickbacks?
Wright Medical Technology has been subpoenaed in a probe of kickbacks on joint replacement systems going back almost 10 years. (Picture from a fine 1999 article about contracts between consultants and device makers.)
The company is best-known for its ads starring former tennis player Jimmy Connors. Yesterday it reitterated its confidence about rising earnings, but the stock is down.
The AP reports that five other orthopedic device makers recently agreed to pay $310 million in fines, and accept federal monitoring, in an investigation going back to 2005.
Rather than idly speculating on these cases the better questions should be how common is this, who is benefitting, and what is the impact on patients?
A kickback sounds like a bribe, and it is, but in other circumstances it might be considered a commission. The difference is that the relationship in a kickback scheme is opaque to the customer. They are not being told.
This is just one type of deal that is coming under scrutiny. Doctors are being charged with self-referring, sending patients to facilities they own. Drug kickbacks are also under scrutiny, although the most-recent big case in that area was lost.
So how common is this in your practice? What are you hearing about it? Is it being done out of financial need or just greed? How badly are patients being hurt?
As a non-physician, I’m not happy about any of this. I expect prescriptions and recommendations based on my needs, not the doctor’s.
But yesterday I had an eye operation. The doctor owned the laser equipment he used. I was thrilled with the results — I may keep the sight my mom lost when she was my age.
Had the equipment been more costly, had he needed to send me somewhere else, would it have been wrong for my eye doctor to get a cut for the referral?
Discuss.
Dana Blankenhorn has been a business journalist since 1978, and has covered technology since 1982. He launched the Interactive Age Daily, the first daily coverage of the Internet to launch with a magazine, in September 1994. See his full profile and disclosure of his industry affiliations.
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| 12/12/07
