Pain in My Back and Medicare’s Pocketbook: Why So Many Spinal Fusions in Norton, Kentucky?

Jeffrey Moe, Ph.D. Executive in Residence and Adjunct Associate Professor, The Fuqua School of Business, Duke University

The Wall Street Journal published a December 20, 2010 article describing how the 3rd highest number of “spinal fusion” procedures (fusing two or more vertebrae to alleviate back pain) for Medicare patients (2004-2008) occurs in Norton, Ky.  The Dartmouth Atlas, which analyzes Medicare expenditures against local population characteristics, describes this outlier as “unwarranted variation.”  “Unwarranted” suggests that the base incidence of spinal disease, general population health or demographics of Kentucky don’t explain the high frequency of this procedure.  Some private insurers won’t reimburse for the controversial procedure: short term pain relief is not a certain outcome and because the vertebrae are fused it creates a leverage effect where pain can move into new areas of the spine creating longer term deficits.  5 spine surgeon/innovators who practice in Norton have a royalty arrangement with the device manufacturer Medtronic which paid them > $7 million (cumulatively through 2010) for the special screws, materials and intellectual property for this approach to fusing vertebrae.  The story describes a lack of transparency, conflicting interests of financial gain v. patient welfare; policies to support innovation pitted against a desire to conserve increasingly scarce tax funded care for American seniors.  It’s just the type of case we will examine at the Nov 13-15, 2012 Health Sector Advisory Council (HSAC) and the Collaborative on Health Care For Aging Populations and Advanced Illnesses (CHAPI) at Duke University (

“Norton’s [the hospital] Dr. Glassman [1 of the 5 surgeon/innovators] cited this policy [Medtronic doesn’t pay royalties to the innovator for patients he treats with the licensed property] as a safeguard against any conflict of interest and said the royalties he and his colleagues receive are ‘legitimate.’ He added that they inform their patients of their financial ties with Medtronic. Norton Hospital said it has policies ‘to prevent direct conflicts of interest.’ “

Carreyrou, WSJ, December 20, 2010

When we teach ethics at the Fuqua School of Business, Duke University, and I lecture this case in the Health Sector Management program, we use articles like “Up to Code” to reveal how business ethics can clash with professional ethics such as those in medicine.  Up to Code was based on surveys of major corporations, not limited to health care, and found that a few recurring principles informed their corporate policies that went beyond meeting regulatory or legal burdens alone.  The article summarizes a “Global Business Standards Codex” (GBSC) or “widely endorsed conduct guidelines.”

  • Fiduciary:  Act as a fiduciary for the company and its investors.  Carry out the company’s business in a diligent and loyal manner, with the degree of candor expected of a trustee.
  • Property:  Respect property and the rights of those who own it.  Refrain from theft and misappropriation, avoid waste, and safeguard the property entrusted to you.
  • Reliability: Honor commitments.  Be faithful to your word and follow through on promises, agreements and other voluntary undertakings, whether or not embodied in legally enforceable contracts.
  • Transparency: Conduct business in a truthful and open manner.  Refrain from deceptive acts and practices, keep accurate records, and make timely disclosures of material information while respecting obligations of confidentiality and privacy.
  • Dignity: Respect the dignity of all people. Protect the health, safety, privacy, and human rights of others; refrain from coercion; and adopt practices that enhance human development in the workplace, the marketplace, and the community.
  • Fairness: Engage in free and fair competition, deal with all parties fairly and equitably and practice nondiscrimination in employment and contracting.
  • Citizenship: Act as responsible citizens of the community. Respect the law, protect public goods, cooperate with public authorities, avoid improper involvement in politics and government, and contribute to community betterment.
  • Responsiveness: Engage with parties who may have legitimate claims and concerns relating to the company’s activities, and be responsive to public needs while recognizing the government’s role and jurisdiction in protecting the public interest.

Norton Hospital and Medtronic could point to these principles, and the specific royalty policy for the 5 innovator/surgeons, and perhaps claim they are meeting and exceeding GBSC. Many of us would ask for more explanation of Fairness, “fair to whom?” or Dignity “has the patient’s health and welfare been fully protected?” The Norton case becomes much more problematic when we consider primary and secondary interests within biomedical ethics.

In class we define a conflict of interest:

  • Professional judgment or action based on a primary interest (e.g. scholarship, patient care) which is unduly influenced
  • By a secondary interest (e.g. financial gain, prestige).

Does the physician’s gain through the royalty arrangement unduly influence his/her judgment in diagnosing and treating the patient?  In the Norton case does the disclosure of the royalty arrangement go far enough to protect the patient’s interests?  While Medtronic’s policy of withholding the royalty payment to Dr. Glassman for surgeries he personally performs may reduce the direct conflict of interest, for most of my students it doesn’t go far enough.

In the discussion we acknowledge that some patients may choose to consult Dr. Glassman because he’s the inventor.  If the patient is convinced spinal fusion is the best option, what better surgeon than the inventor himself?  Perhaps one explanation for the high frequency of the procedure is Dr. Glassman’s and his 4 colleagues’ reputations.  And we note the recurring finding in medicine that if you consult a surgeon, patients are disproportionately recommended a surgical intervention; consult a radiologist to more frequently be recommended radiation, etc.  Is surgery recommended because surgery is what a surgeon knows best?  While we want to believe that a physician puts his/her patients health needs first, it perhaps comes as no surprise that a spine innovator/surgeon would disproportionately recommend surgery and perhaps even his own licensed procedure.  Is Dr. Glassman’s and his colleagues procedure the “best” (or as good as any other alternative) if spinal fusion is the patient’s choice?  Can Dr. Glassman (or the patient’s insurer) require a patient to get a second opinion; and a second opinion from a non-surgical sub-specialty?  Who pays for that second opinion; what if the patient can’t afford a second consultation?  Will a second opinion requirement ensure that spinal fusion is being appropriately weighted against other choices?  Do we offer the patient full independence to choose a procedure even when evidence suggests that the chosen procedure may have uncertain, immediate or longer term “bad” outcomes?

And what about patients in pain?  Do symptomatic patients make their decision focused intensely on short-term outcomes, pain relief; perhaps ignoring or minimizing longer term complications?

As the discussion continues we introduce medical ethics which typically asks us to consider these medicine-specific principles.

  • Respect for autonomy: promote self-rule free from limitations
    • Basis for patient choice and right to information
  • Nonmaleficence/beneficence  Do no harm; contribute to other’s welfare
    • Basis for the patient’s right to safety or standard of care; but the ideal of beneficence goes further
  • Justice: ensure appropriate distribution established by social norms
    • Multiple, often competing norms exist (distribution based on needs, effort, free market exchanges)
  • Physician/Patient relationship
    • Trust and confidence is essential to medical practice

How do we balance the innovator/surgeon’s right to “justice,” a free-market exchange of his/her valued knowledge with the patient’s right to free choice and information?  I direct the student discussion to creating a range of balance points for the interests of 5 stakeholders:  patient, innovator/surgeon, hospital, Medtronic, Medicare.  The high incidence of the procedure and the lack of transparency by Medicare itself (by court order Medicare cannot make public the bills and payments for individual physicians in the program) continues to make consumer advocates, patients and payers very suspicious that the secondary financial interest is skewing the patients in what economists would call supplier-induced demand: the surgeon creates the demand for surgery.  We open up the discussion further by segueing to a related spinal innovation that has brought Medtronic and the spine subspecialty unfavorable publicity: goes directly at the integrity of scientific inquiry and medical practice.

INFUSE® Bone Graft is recombinant human bone morphogenic protein-2 (rhBMP-2). It is applied to an absorbable collagen sponge carrier to stimulate bone formation.  The first FDA approval was in 2002 and has 3 approved indications.  In 2008 Medtronic’s INFUSE® received the Prix Galien USA 2008 award for Best Biotechnology product.

Industry-sponsored clinical research on rhBMP-2, published in a variety of orthopedic and spine-related medical journals, reported no adverse events or complications in hundreds of patients.  However the use of rhBMP-2 has been associated with inflammatory reactions, cancer, osteolysis, infection implant dislodgement and in some instances life-threatening complications.  A study in the June, 2011 issue of The Spine Journal associated rhBMP-2 more frequently with male sterility than had been reported heretofore.

The Spine Journal took the unprecedented step of devoting an entire issue, June 2011, to rhBMP-2.  Christopher M. Bono, MD of Brigham & Women’s Hospital in Boston, MA and acting editor in chief of the special issue wrote: “The history rhBMP-2 research is a cautionary tale for all medical professionals, researchers and patients.  As this matter demonstrates, the spine care field is currently at a precarious intersection of professionalism, morality and public safety.  As physicians and journal editors, we felt an obligation to present a thorough examination of this controversial issue.”

Industry-sponsored studies can be withheld from publication as the rhBMP-2 experience illustrates.  How can the principle of patient autonomy be upheld if relevant information is unavailable?  How can physicians accurately inform themselves, their patients and maintain the trust in the patient/physician relationship if evidence is missing?

Industry will continue to be a primary funder for pre- and post-market studies.  And they have argued some study results should not be released because studies were flawed.  But if and how the investigators in those studies disclose their relationships to industry and the sponsors disclose results, especially when those results are unfavorable, demonstrates a important intersection between business and medical ethics.

The stakes are high as Dr. Bono describes them, “the core of our professional faith is to first do no harm.  It harms patients to have biased and corrupted research published.  It harms patients to have unaccountable special interests permeate medical research.  It harms patients when poor publication practices become business as usual.  Yet harm has been done.  And that fact creates a basic moral obligation.”

The Spine Journal has updated its review policies in light of the rhBMP-2 controversy with levels of review, more disclosure and industry involvement disclosures.  Possible the most innovative change is that funding sources (including the actual dollar amounts) and topic-specific conflict of interest disclosures for authors will be reported in the “methods” sections of clinical research studies.

On November 13-15 we will examine these issues using a case approach with experts from medical ethics, law, philosophy, psychology, divinity, business; and our dynamic group of health care business executives.  It’s a session in which we all learn more “practical bioethics” to better balance the needs of stakeholders; and opportunities to self-regulate and raise the ethical bar in health care while doing good business.   We hope to see all members of CHAPI and HSAC at the upcoming Fall meeting.

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