AAOS Bulletin - August, 2006

AAOS meets with industry representatives

Corporate Advisory Council focuses on gainsharing, industry’s relationship with orthopaedists

Orthopaedic surgeons and industry representatives gathered at the June 8 meeting of the AAOS Corporate Advisory Council (CAC) in Rosemont, Ill., to discuss issues affecting both practitioners and suppliers. The subjects ranged from gainsharing to relationships between orthopaedic surgeons and industry. Comprised of approximately 40 companies serving the orthopaedic market, the CAC serves as an important link between AAOS fellows and industry. The meeting was cochaired by AAOS chief executive officer Karen L. Hackett, FACHE, CAE, and Sheryl Conley, acting CAC cochair and president, Global Products, Zimmer.

New AAOS initiatives
Ms. Hackett reviewed several AAOS initiatives, including the Professional Compliance Program, efforts to support the new Maintenance of Certification requirements, AAOS branding efforts, the Web site redesign, the upcoming AAOS 75th Anniversary and the AAOS strategic planning process, “AAOS in 2010.” She also raised several issues of concern to AAOS members, including physician reimbursements, pay-for-performance guidelines and trauma call.

DTC advertising
In his presentation on “Direct-to-Consumer (DTC) Advertising: The Good, the Bad and the Ugly,” AAOS President Richard F. Kyle, MD, said that DTC advertising is a “double-edged sword.” Depending on how it is done, DTC advertising can result in a better informed patient or one who has unrealistic expectations.

Richard F. Kyle, MD, AAOS president, makes a brief presentation at the Corporate Advisory Council.

Although some DTC advertising focuses directly on specific products, a preferred approach would be to focus on increasing awareness of musculoskeletal disease. In an audience response poll, two-thirds of those voting agreed or strongly agreed that DTC advertising helps inform patients about medical information and care available; 84 percent agreed or strongly agreed that DTC advertising helps sell procedures and products.

On two other issues, however, opinions were more diverse. When asked whether DTC advertising interferes with the patient-physician relationship, slightly more than half (52 percent) agreed or strongly agreed, but 24 percent were neutral and 24 percent disagreed. Most of the respondents (54 percent) disagreed that “DTC advertising is a valuable aid in patient care,” compared to 30 percent who agreed or strongly agreed and 15 percent who were neutral.

Gainsharing panel

William J. Robb III, MD, moderated a panel on gainsharing. Panel participants included: David A. Halsey, MD, chair of the Council on Advocacy and chair of the AAOS Project Team on Gainsharing Arrangements; Leland H. Chait, JD, a partner with McGuire Woods LLP; Jeanne DelSignore, MD, chair of the AAOS Ethics Committee; and Christopher White, JD, executive vice president and general counsel of AdvaMed, the Advanced Medical Technology Association.

Defining “gainsharing” as “any hospital-based cost-savings arrangement that attempts to better align incentives for a hospital and its physicians through direct or indirect payments to physicians from realized savings,” Dr. Robb reviewed limited participation and open participation gain-sharing and their application to medical specialties, such as orthopaedics, that use many costly devices and implants.

Mr. Chait reviewed the reasons hospitals favor gainsharing (quality-based, lower costs, alignment of physician and hospital interests). He also discussed the legal challenges, which are substantial because of the current anti-kickback laws. In his opinion, gainsharing cannot be truly effective unless legislative changes occur.

Mr. White covered AdvaMed’s position on gainsharing. AdvaMed believes that gainsharing programs appear to violate the Civil Monetary Penalties Act, which prohibits hospitals from making a payment, directly or indirectly, to a physician as an inducement to reduce or limit services. Other negatives to gainsharing include the possibility of a conflict between the best interests of the patient and the economic interest of the physician, an inappropriate limit on patients’ and physicians’ choices and the inhibition of new technology adoption.

Dr. DelSignore presented the AAOS Ethics Committee’s generally negative point of view on gainsharing arrangements. Noting that such arrangements could create serious ethical dilemmas, Dr. DelSignore presented a list of recommendations:

• Gainsharing arrangements must be carefully constructed and monitored to avoid creating conflicts of interest.

• Current gainsharing demonstration projects should be carefully scrutinized to determine whether they are cost-effective, maintain quality and reasonable choice, and protect the patient’s best interest.

• Orthopaedic surgeons should work with hospitals to create clinical pathways, standardize implants and contain costs without being paid to do so.

• Any cost savings from gainsharing arrangements should be channeled back into patient care and departmental improvements.

• Evidence-based medicine should be used to determine whether implant choices are critical for quality care or simply reflect physician preference.

Dr. Halsey presented the AAOS perspective on gainsharing, saying that a project team is currently preparing recommendations for AAOS action and education on the topic.

Surgeons and industry

Dr. Kyle led a panel discussion on the relationship between orthopaedic surgeons and industry. Panel participants included Joshua J. Jacobs, MD, chair of the Council on Research, Quality Assessment and Technology; Dr. DelSignore; Mr. White; and Laura O’Donnell, chief compliance officer at Zimmer.

Dr. Jacobs noted that approximately 25 percent of academic investigators receive research funding from industry and that industry “is a partner with medicine in providing the tools needed to serve the needs of patients.” He reviewed three different types of interactions between orthopaedic surgeons and industry—license agreements, consulting agreements and promotional agreements—and noted that the last is the most questionable and may be illegal, depending on how it is structured.

Dr. DelSignore pointed out that the role of industry in continuing medical education (CME) is increasing and that one-third of medical schools sponsoring CME events now receive more than 40 percent of their CME support from industry. The Ethics Committee emphasizes that the physician/patient relationship is paramount and anything that compromises it should be avoided.

Ms. O’Donnell stated that the relationships between orthopaedic surgeons and industry are under intense scrutiny from the media, government and the law. For example, earlier this year, the U.S. Senate openly questioned the appropriateness of educational grants from industry to any physician-affiliated institution.

Mr. White reviewed the AdvaMed Code of Ethics and discussed his organization’s ongoing campaign to educate device makers on compliance with the rules governing physician/industry interactions. AdvaMed has developed a symbol, similar to a “seal of approval,” that can be used by companies that comply with the Code.

About the CAC

The Corporate Advisory Council (CAC) functions as a forum for the exchange of information of mutual concern to the AAOS and the orthopaedic industry, within policy, ethical, judicial and legislative constructs that govern the relations between industry and organized medicine. The CAC has four goals:

• To coordinate and oversee the activities of existing groups that address Academy and industry relations, such as the Advisory Task Force on Industry and CME and the Exhibitors Advisory Council

• To share information and periodically review the CME activities of industry and their relationship to the Academy’s efforts

• To encourage and support public education and public relations programs that increase the public’s awareness of the special skills of the orthopaedic surgeon and the efficacy of orthopaedic health care through combined and complementary public education and public relations programs

• To coordinate the financial support of industry for the Academy’s educational courses and research projects


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