With stagnant, if not declining, incomes from taking care of patients, physicians are looking for additional sources of income from within the health care industry—an industry they know well. This search takes many forms. In an earlier editorial, I described the Stark laws, which prohibit physician ownership in health care facilities and services to which they may refer patients for diagnosis and treatment [5]. Arising from congressional hearings, primarily influenced by Congressman Pete Stark (D-CA), was legislation creating these prohibitions. The hearings revealed that physicians were more likely to order certain services if they owned, or had a financial interest in, the instrumentality for the provision of those services. The list of targeted designated health services included chemical and biological laboratories, radiologic imaging services such as computed tomography and magnetic resonance imaging (MRI), and physical therapy.
These laws are quite restrictive but have a number of exceptions that permit ownership, for example, by a group of its own MRI to which the physician members of the group can refer. However, there is a very complex definition of a group and many technical rules of how the group can handle the revenue from the MRI so as not to reward a physician for referring patients; exacting documentation is required. By creating means whereby physicians can profit not only from their interactions with patients through the physician/patient relationship but also from the services of others that arise from that relationship, physicians have increased scrutiny of the profession by governmental regulators who have responded with increasing regulation of the profession.
This has led to innovative ways of bypassing the letter of the law and, it appears, the spirit of the law. These laws arise out of an understanding that the public does not want physicians to profit secondarily from its illnesses. However, physicians continue to innovate in searching for ways to increase their incomes by financial investments in lucrative components of the health care system, in addition to the accepted reimbursements for medical practice. Elaborate internal auditing systems are created by the management of physician-owned imaging centers to prevent services to Medicare patients who are inadvertently referred by personnel in offices of physicians who have ownership in those centers. Increasingly popular are joint ventures between groups of physicians and hospitals involving a myriad of schemes for providing health care services. Recently released amendments to the Stark laws are designed to limit these endeavors [4]. Physicians are investing in “specialty (eg, spine)” hospitals. A few years ago, there was a moratorium on such hospitals for several months, and it appears Congress is preparing to look at this issue again.
Spine surgery is beginning to attract public attention because of its costs and lucrative return to the surgeon, principally because of instrumentation [1]. It seems there are new systems for instrumenting the spine introduced monthly, with increasing return to the surgeon. The development of these systems require considerable input by experienced, objective, and respected surgeons. Distressing are revelations that some surgeons are benefiting financially beyond expected remuneration for their efforts from the research they are conducting and the knowledge gained by that research, which is unavailable to other physicians, much less the public. Recent reports describe investments by investigating surgeons in the parent company developing an artificial intervetebral disk, expecting return on that investment based upon their knowledge of the developing scientific results of their research on behalf of the company [2]. One very respected neurosurgeon from an outstanding medical university, among other spine surgeons, admitted investing thousands of dollars in one such enterprise while conducting research on the product. Perhaps this is not legally the same as insider trading in the securities markets, but it appears to be the moral equivalent.
The American Medical Association Code of Medical Ethics and various court cases do not look favorably upon such investing philosophies. However, these positions are not my primary concern. In the aforementioned reports, it is noted that the Food and Drug Administration (FDA) is actively looking into the matter. As of this writing, senate hearings are being held on this issue, and there is no question additional regulations will be adopted that will be felt by the next generation of surgeon scientists and other physicians as they attempt to take care of their patients and improve therapeutic armamentaria. This reported activity places a cloud of suspicion upon both the medical profession and the spine instrument industry. At a time when respect by the public for the medical profession is falling, we do not need even the appearance of impropriety. Physicians who wish to make money in the health care industry outside their interactions with their patients need to remind themselves that the only way we can rationally take care of our patients is to maintain the public's trust and to avoid such appearances of impropriety—if it is only appearances.
A surgeon who advances the art through innovation should benefit financially as he works with device manufacturers similar to any inventor, whether that benefit is conveyed through royalties, consulting fees, or purchase of the patent with cash or stock. However, he should not be the person who carries out the primary research required for FDA approval. The conflict of interest is simply too great. The primary investigators should be paid by the company according to their work on the basis of standards of the research community as found in National Institutes of Health grants, according to fair market value, with the income not dependent on the results. To have the serious scientific investigators on retainers by the companies as consultants simply is unacceptable. Taking questionable liberties with their professional mantles of respect, with the results being printed in major public newspapers, is a failure of their oaths to the profession and to the public. Ultimately, such activity invites greater public scrutiny, less public trust, and more smothering regulations.
I believe a result of current scrutiny by Congress and the FDA will be such regulations that will inhibit the ability and desire of innovative surgeons, and certainly those surgeons in the general medical community, to work with device manufactures in the future [3]. Taking cues from the defense industry, these regulations will require disclosures of private information such as personal income and how and where it is spent, practice relationships outside those of the intellectual property venue, perhaps even details of the professional practice itself. And recall, the Stark regulations prohibit not only physician ownership in certain health care delivery entities, but they prohibit ownership by members of the immediate family also. These regulations will be designed to convince the government the data generated by the relationship between the company and the surgeon scientists are not contaminated by financial bias—the very bases for the Stark regulations. I believe the profession itself, through its governing organizations and even its licensing structures, should examine these concerns and develop codes of responsibility that are more binding than mere suggestions. Perhaps the public will then be more inclined to let the profession police itself with, if not less stifling regulations, at least not more.
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