Out Goes the Tiger, In Comes the Rabbit - 2010 The Year in Review

Fellow Bloggers,

It's time for TSB's second annual year in review. Time flies when you're having fun.  Based on the Chinese Calendar,  2010 was the Year of the Tiger.  Unfortunately for Tiger Woods and the spine industry, it's a year that couldn't come to an end any sooner.   Considering that the U.S. has mortgaged our future with our Asian brethren,  2011 will be the year of the Rabbit.  The Hsin Mao 2011 symbolizes sensitivity, prudence, and wealth earned with hard work.  Maybe we will realign our priorities and revitalize the importance of family.  The only drawback to the year of the Rabbit, is that you may not express your feelings in words, but make it up in deeds.  Therefore, TSB is already breaking with tradition.  Hopefully, we will all start off and complete the cycle on terra firma.

2010 was an unpredictable and divisive year in spine, a microcosm of a much larger story.  Many of our illustrious CEO's will be happy to close the books on 2010.  There is an old Chinese proverb that says, "men in the game are blind, to what men looking on see clearly."   If anything, much uncertainty still remains for spine.  A thriving industry, where 20% was the rule rather the exception,  spine is  in search of the holy grail.  The challenge of containing cost while providing quality care in a discerning manner is here to stay.  Meaning, the industry is under public scrutiny, more than ever before, and we are going to have to provide effective remedies.  Access to investment capital is making it much more difficult for start up companies to bring new ideas and technologies to the market, and it will become harder, as more and more layers of the onion are peeled back on healthcare.  Yes, fellow bloggers, there is much untapped capital sitting on the side line, but no one is interested in betting the house on more hardware.  Besides, banks in this country would rather play in the derivatives market and overseas, than help its own people.  Fiscal austerity is here to stay.  All will be held accountable.

The first quarter of '10 was a taste of things to come.  NuVasive began the year poised to move up the ladder, only to experience a slight derailment, having to defend XLiF with the insurance industry and the analysts' which included, enlisting NASS to address coding issues, and providing data to substantiate the clinical efficacy of XLiF.  Rumor was that Luiz Pimenta sent his pictures of Shakira (who was that blonde?) dancing up and down the steps to highlight how effective this procedure is.  In addition, the Bear made some formidable predictions that were based on KOL's that surgical volume was not slowing down,  even though the healthcare economy was readjusting itself to market conditions.  A 52 week high of $46.83, NUVA is now $26.01 attributed to surgeries being denied by the insurance companies. Welcome to the new decade in healthcare,  accounting for 25% of the GDP.  With much uncertainty in the market, it will be interesting to see how defiant the Bear is in his guidance for the upcoming year.  Stryker was another big story.  During the first quarter, TSB blogged that Stryker should retire OP-1 and stop the Kabuki Theater with Apatech by pulling the trigger on acquiring this biologic, only to be upstaged by Baxter.  Stryker's Ego will defend that selling OP-1 to Olympus was addition by subtraction, distancing oneself from a segment of the market that has led to a series of investigations and litigation.  As Stryker continues to look for the next new thing, maybe Olympus will be a future partner?  The industry has learned that Stryker is not very good at biologics.  The quarter also brought us the Trans 1 and Life Spine marriage,  a marriage made for divorce court.  One thing for sure, after a 52 week high of $4.11 per share TSON closed at a $1.98.  Like NUVA, TSON is dealing with chronic reimbursement issues, and it will become even more challenging for them as the scrutiny intensifies.   Zimmer made some perfunctory noise.  But when doesn't Zimmer make some noise?  If there ever was an organization that is out of its spinal element, it is the Big Z.  DD are you listening, TSB is giving you free advice, cut your losses and get rid of the spine division, you're completely out of your league.  Legacy companies continue to hire the same people over and over expecting different results.  If you want talent, you need to move spine out of Minnesota to a warmer climate.  What is it about this company, and spine?  Yet, TSB believes that the biggest story of the first quarter was the rise of the POD.  Surgeon distributors intend on saving the  U.S. healthcare market by driving down the cost of implants by eliminating the sales representative from the equation.  In addition to POD's, word on the street is that some insurance companies are considering passing on the direct cost of the implants to the patients.  We will be following this as it develops.   POD's need to be scrutinized, claiming that it's not about the profits, it's about cost containment.  If that isn't a bit of pretzel logic, what is?  We learned that the spine industry is no different than Wall Street.  As long as you can stretch the laws, anything is possible.  The legality of this model will eventual be challenged regardless of what has transpired on the Left Coast. Legacy companies are concerned about the deleterious effect that POD's will have on its business distribution models and profits.  The so-called "ankle biters" in the industry are elated, because everything is not global but local when it comes to their business, leveraging their geographical strengths and relationships.  The bottom line POD's are not going away, at least not in the very near future.  If anything, the states will have to challenge this model, before it ever becomes a federal issue.

The second quarter brought us a run for the roses.  Questions arose regarding the industry's odds on favorite NuVasive, in achieving its guidance for the year, while the rest of the industry burned.  As summer approached, rumors swirled that US Spine had the proverbial "For Sale"sign up on the front lawn.  Cardo Medical and Amedica were the then leading contenders, the rest is history.   During the quarter, we heard rumblings on the Street that Applied Spine R.I.P., and Disc Motion were hanging on the ropes.  Was there a symbiotic relationship there?  Since then, Craig Corrance was hired as the new CEO at DMT.  TSB now believes that Corrance, aka Virgil Kint, is the real Kaiser Soze.  If Andy Greenburg could not raise capital, wouldn't invest his own money and couldn't sell the company, what does that tell you?   We reported about the continued lack of transparency at NASS, based on the fact that surgeons report stock, honorarium and consulting fees, but fail to report that they are actual investors in certain companies.  As a tribute to the ailing Queen of Soul, "Shame, Shame, Shame ......... Shame on You."

Lanx became everyone's darling in the third quarter.  Confusion arose as to whether they were hiring former Medtronic employee Michael DeMane as CEO.   Another company with a one-trick pony, and an aberrant BOD's,  Lanx is better known for getting rid of employees than making progress.  Talk about a company that flushed an entire year down the drain.  Today, they have hired Dan Gladney in hope that he will lead his flock to the promised land.   Hopefully he will have the vision to clean house using the "inside out" employed on DGI's technology.  In many respects,  Lanx was the 2010 poster child for incompetance.   The K2M story was bigger than anything else, selling majority ownership to Welsh, Anderson, Carson, and Stowe.  The company is now poised to be package and sold to a legacy company.  S&N's name keeps surfacing.   Just what the industry needs, more GE wonks trolling the aisles at NASS.   You know what the late Lowell George always sang, "Time Loves A Hero."  Biomet CEO, Jeff Binder made some noise during a earnings call, stating that Biomet was looking to place an emphasis on "highly differentiated products."  Ahem!  Based on their portfolio and track record in spine, the only differentiating story in 2011 will be whether they are closing Biomet Spine in Parsippany, NJ and relocating the division to the corn fields of Warsaw, Indiana.  It is inevitable that the moving van is not that far behind.  If anything,  this will allow Binder to get rid of the dead wood that exists in that division.

The fourth quarter brought the industry much legal angst.  Synthes was finally slapped with a nominal fine for their complicity in the Norian debacle. $23 million is mere pocket change for Mr. #7 aka Hansjoerg Wyss considering that he used $35 million of his own to prop up the environment in Montana.  The industry awaits word as to whether the Fantastic Four will serve some jail time.  Sometimes, one has to wonder how someone so smart, could be so dumb?  NuVasive and Globus are enriching the legal industry with their tete-a-tete, while AlphaTec is under tremendous scrutiny for potentially manipulating and misleading investors that purchased ATEC stock only to watch it collapse. This has resulted in a class acton law suit involving investors which probably are made up of pension funds that were silly enough to buy into Healthpoints BS.   The question still remains, how lame of an excuse can one use, by claiming that they had difficulties integrating Scient'x?   At best, Scient'x had revenue of $20-$25 million and a market cap of $60 million?    In addition to the aforementioned suits, once again Tom Errico and Stryker are at each others throats.  This has been, and is a love-hate relationship.  But what really jumped out at the industry during this quarter is the continued onslaught by the government and the press regarding surgeon royalties and consulting agreements which for one reason or another, always leads back to Medtronic.  With Hawkins departure, TSB sees the Evil Empire placing a CEO that will focus on rehabilitating its reputation with the Government. Once again, Drs.  Kuklo, Polly, and Rossner are now under investigation by the US Senate's Dynamic Duo of Grassley and Baucus for using Hydrosorb off label.  Hydrosorb is probably a biocompatible and biodegradable polymeric device that was a carrier for INFUSE.  Yet, one must wonder how much longer will this charade continue?  Whether or not Mssrs. Kuklo, Polly and Rossner used this product off label should not even be of concern to Batman and Robin, considering that the patients that have been contacted, and all seem to be doing fine.  One does have to wonder what is going on at Walter Reed in the name of medical progress?  The most recent article that was released on December 30th in Bloomberg exposing Twin Cities Spine as a "Fusion Factory," performing a weekly spinelalapalooza  should be cause for major concern.  If NASS, AANS, or CNS does not have the ability to police and question its own members regarding their outcomes, the government will definitely step in.  

So in closing, TSB wants to wish all our readers and their families a healthy and prosperous 2011.  We will continue to monitor and report on the industry in the most efficient and honest way possible, regardless whether our opinions differ. What we can tell our bloggers is that this year alone, we had over 800,000 viewers, with 500,000 unique visitors and send a special thanks to each and everyone of you that contributed your opinions and comments.  

Is There A Doctor In the House?

Groucho Marx said it best, "A child of five would understand this.  Send someone to fetch a child of five." Thanks to one of our loyal bloggers, TSB finally became motivated to post on last week's report by the Boston Globe's Liz Kowalczyk, regarding neurosurgeons at Beth Israel Deaconess (BID) that had operated on the wrong levels during spine surgery on three patients.  Seems like BID is having a difficult time digging out of this negative publicity.  Unfortunately for the patients, the surgeons apparently miscounted while identifying the levels to be operated on, and proceeded to operate on the adjacent level above or below the affected vertebral bodies.

Dr. Kenneth Sands, Senior Vice President of Health Care Quality at the Boston hospital, declined to identify the surgeons, but he did add that "both surgeons were experienced," thank God, and had taken the "time out" to verify the type and location of the surgery.  Could these surgeons be members of the Louisville 5 spine basketball team?  They took a time out and diagrammed a play so that they could execute the procedure.  No one ever said that surgeons were good at counting, it's not like we're asking them to design an algorithm so that we could manipulate some financial instrument.  TSB assumes that by time one gets out of residency most spine surgeons have learned how to count to seven, count to twelve, or count to five.

What's even more entertaining is when Dr. Sands attributes this occurrence to pilot error.  Can anyone imagine what would happen if an airline pilot miscalculated the length of a runway, or, missed the runway on approach, or, decided to land on the runaway for departing flights?   We would have what is commonly known as FUBAR.  Fortunately for these patients, by the sounds of this report, these were not fusion procedures.  But what really jumps out in this report is that one patient's back pain had gotten better even though the surgeon operated on the wrong level.  Could that procedure have resulted in a placebo effect?  By decompressing the adjacent level the patient supposedly felt better.  But it gets better.

The neurosurgeon and the fellow assisting him had a difference in understanding how to count and mark the correct vertebrae.  Let's see one comes before two, two comes before three, etc.... The hospital reported that state and federal authorities had found deficiencies and that hospital administrators are addressing the problem by hiring an arithmetic teacher, while adopting a checklist developed by NE Baptist Hospital to help surgeons mark the correct vertebral body.

Considering that most insurance companies will not pay for these trial run procedures, BID administrators were kind enough not to bill the patients and will be sending them to an all expense paid vacation in Barbados, of course right after their attorney's get through suing the hospital.  You got to love America, it doesn't get any better than this.  TSB wants to know, is this act coming to your local town?

Sunday Op Ed Piece - It's Time for Change, But Can We Do It?

Most Americans believe that the United States has the greatest healthcare system in the world, rightfully so.  As the country moves into a new decade, many questions remain unanswered as to how we create an affordable healthcare delivery system, while equitably compensating physicians for their services.  The notion that Obamacare is a socialist program is laughable.  The public has not been privy to all of the back door deals that were negotiated with Big Pharma and the Insurance Industry so a half-assed healthcare reform bill could be passed.  The statistical fact that 50% of all personal bankruptcies are attributed to catastrophic healthcare should be cause for concern that there is something fundamentally wrong with the entire system.  When patients, doctors, and hospitals are at the mercy of an unaccountable insurance industry, that can deny coverage, fix and manipulate pricing, deny claims, and intimidate and scare patients, it's time for the Federal Government to repeal the McCarron-Ferguson Act of 1945.

TSB can hear the moans and groans from the Spine Nation.  WTF?  How crazy is this person, asking us to rise up and start a campaign for the Federal Government to finally challenge this legislation in a court of law.  In order for those of you that don't believe that this is an issue of life and death, one needs to understand how this Act effects our industry.  The average person needs to understand the machinations of how McCarron-Ferguson works to keep the government off the backs of the insurance industry.  Of course, the free-marketeers will react in typical knee-jerk style without looking at the view from thirty thousand feet.  Historically, McCarron and Ferguson worked to invalidate the U.S. vs. South Eastern Underwriters Association Supreme Court decision and established ground rules for decades of highway robbery by our friendly insurance industry.  Essentially, the bill is a heist perpetrated upon the American people by elected officials in concert with the insurance industry.

McCarron-Ferguson was originally written to maintain authority by the states over the insurance industry, but, it also included a provision that the Sherman Act would apply if and when state laws were inadequate.  Basically, it was intended to be a temporary law set to expire in 1947.  As with any bill, it can be rewritten.  A new clause emerged from conference that stated that after January 1, 1948, the Sherman, Clayton, and FTC acts "shall be applicable to the business insurance to the extent that such business is not regulated by the State Law.  Instead of being a temporary Act, allowing the Sherman Act to be applied when state laws proved inadequate, the law became permanent excluding the application of the Sherman and Clayton Acts.  Therefore, the insurance industry was given a license to steal.

How absurd is it that physicians are not allow to collaborate and determine structural pricing, or they will be thrown into jail, yet, the big bad insurance industry colludes by sharing and setting reimbursements by manipulating the market?  Ever hear of INGENIX?  It gets crazier when in 1980 an amendment to the Federal Trade Act was passed making it illegal for the Federal government to investigate the insurance industry?  A LEGAL CHALLENGE to ending the Anti-Trust Exemption for the Insurance Industry should be a mandate from all people.  Isn't it absurd that Senator Ben Nelson has received over $1,259,000 in campaign contributions from the insurance industry and the Democratic Party caved in and gave Nelson's Nebraska $100 million and allowed Nebraska to have its Medicaid payments subsidized by other states?  Isn't it time that an anti-competitve law passed over sixty years ago by mistake, be repealed?

Our industry loves to chase a wagging tail.  How absurd is it for a physician to unequivocally blame sales people for driving up the cost of healthcare?  How absurd is it for a CEO to pontificate at an Analysts' call about how insurance companies are denying coverage to patients, which in turn affect a companies ability to achieve its fiscal guidance?  If anything, we have learned that by dividing, one can conquer, or at least keep everyone busy arguing with one another.  A mandate to citizens that they must all be covered is not a solution to the problem.  If anything, it is another empty promise, another stop gap measure.  Of course, many bloggers will attack the point of this editorial, claiming that TSB is a socialist, that TSB desires to impede free-markets.  But unless one truly exposes oneself to the realities of the system, how can one understand the issues at hand?  How can we be competitive, if our own elected officials game the system?  How will you make the correct choice in 2012 at the ballot box?  The reason TSB infuses political issues into our posts is because everything we do in life is influenced and determined by politics.

So in closing, if NASS, AAOS, AANS, CNS, AMA, etc, etc, etc, really want to make a difference, don't spend your money on lobbying bullshit issues that just keep greasing the wheel, take a real position on an issue that is effecting not only your livelihood but your ability to deliver the best healthcare in the world.  TSB wants to know, are you part of the problem, or do you want to be part of the solution?

Merry Christmas to All

TSB wants to take this time to wish our Bloggers and your loved ones,  a Merry Christmas and a Happy Holiday Season.  I always worry about our Agnostic brothers and sisters.  Please remember that there are many people less fortunate than those of us that work in this industry.  Since Christmas is a time of giving, don't forget to give to your favorite local or national charity, every little bit makes a difference.

As usual we'll be having a tremendous family get together spanning three generations of Spine Bloggers.  There will be good food, good drinks and plenty of laughter, what else is there to life?   Take the time to be thankful that you have health, happiness and those that you love the most surrounding you tomorrow.  Life is Great.

TSB

PS, And remember there is no groveling allowed, or Santa will be leaving a road apple in your stocking.

MERRY CHRISTMAS, HO! HO! HO!

The Trial of the Louisville 5

It's bad enough Rick Pitino was out carousing on his wife with some Louisville hussy, but now, Norton Hospital in Louisville is bringing some unnecessary attention upon the Possibility City.  The WSJ reported that the "starting five" on the Norton Hospital Spine Team is being investigated for performing the third most spinal fusions on Medicare patients between 2004-2008.  In addition, they are being singled out for being among the largest recipients nationwide of payments from industry giant Medtronic.  One would think that at this point the Evil Empire would stop hiding behind Mama AdvaMed's skirt, claiming their innocence.   Unfortunately for Darth Vader, the court of public opinion is all that matters.  In the first nine months of 2010, the Dream Team received an estimated $7 million from MDT.  LeBron, Dwayne and Chris would be proud, next thing you know, the Louisville 5 will be hanging in South Beach on the Heat's turf.  Medtronic is defending itself by stating that the payments are mostly royalties that they earned for designing one of its best selling products.

The overuse of hardware has haunted the spine industry for many years, driving up the cost of delivering healthcare.  Yet, in defense of Medtronic, the public must be made aware that without clinician input, companies would not be able to deliver products that improve the public's quality of life. At this juncture,  the only method of informing the patient of any financial interest in the implants  is when a consent form is signed just prior to surgery.  Is there any better way to address this?  Does anyone think a patient cares about disclosure when they are in pain, and are looking for a remedy?  As for product development, TSB has never met an engineer that has operated on a patient, even though he has worked with few that thought they did.  So how does a company validate a product in development?  Regardless, the potential for illicit kickbacks does exist.  Abuses in consulting agreements became prevalent when companies like Blackstone Medical made it sport.  Of course, someone had to be the Gaetan Dugas, aka as "Patient Zero," spreading the consulting disease like the AIDS virus.  That honor will always be bestowed upon the Platinum Plus of the spine world.

The most interesting aspect of this report is that spinal fusion went from costing Medicare $343 million in 1997 to $2.24 billion in 2008, a 400% increase.  Spinal implants have become exceptional profit generators, at least to this point.  And up until this point, rarely did we see an insurance company deny a subscriber, medical care due to pain.  But it has become evident that insurance carriers are becoming much more discerning in their approvals, based on the recent BCBS of NC fiasco.  What should be troubling is the Workers' Comp study that was published in the Journal of Spine which showed that patients that had a spinal fusion were less likely to return to work within two years post-op, than patients that didn't have invasive surgery for similar diagnoses, with a 27% revision rate for that that had primary fusion.  But let's be honest Workers' Comp patients are some of, if not the worst patients to deal with. Rather than beat this issue to death, which it has been by the government, the DOJ (poor job), and even on this blog site, this is what TSB proposes;

A thorough investigation into the products that these surgeons have actually worked on by subpoenaing all of Medtronics and the Louisville 5's records.

Subpoena the IP on these products and see if the Louisville 5 has any ownership in designing these products.

Subpoena all of Medtronic's record to identify if they were paying the Louisville 5 royalties on the implants they were using.

Subpoena Norton's Hospital's pricing with Medtronic and compare it to a national average to see if Medtronic is using the surgeons to obstruct fair and equitable implant pricing compared to other facilities, by demanding the use of Medtronic products when there are other products that are substantially equivalent and can be purchased at a lesser cost to the facility.  This would be the perfect opportunity for the Louisville 5 to show that it is a team player and start their own POD.

Linda Richmond use to start her skit every Saturday Night by asking her viewers, "can we talk?"  One of TSB's followers had the most interesting comment about this article stating, "You gotta take out the trash, if you're gonna clean this thing up." With Hawkins heading for the hills, it looks like the Evil Empire will be looking for a new leader.  As "the Gipper" used to say, "forces of good ultimately rally and triumph over evil."  TSB wants to know what our readers think?

Sunday Funnies

What do

Scient'x
Altiva
Raymedica
Applied Spine

and now, Disc Motion Technology have in common?  Winner gets a free subscription to Spineblogger.

NuVasive In A Rout

A shut out is a shut out, no matter how you look at it.  With Bill Lee heading back to Philadelphia, one team in Texas is looking to find its ace.  While others are more interested in belly fat, TSB thought that most of our bloggers would be interested in knowing that Orthofix International, aka The Fix, today announced an internal reorganization to streamline its three Global Business Units, Spine, General Orthopaedics, and Sports Medicine.  So why the big shake up?

In the holiday spirit of giving, Milinazzo et al, expect to record a charge related to employee termination benefits of $4.0 million, $2.4 million net of tax, or $0.13 per diluted share.  In the best interest of the share holders, this restructuring will result in an annual saving of approximately $6-7 million per year beginning in 2011.

So, Why the Big Deal?

In simple words, The Fix, got its ass kicked in court, announcing today the on behalf of itself and MTF that they executed a comprehensive settlement agreement with NuVasive and Osiris concerning Trinity Evolution tissue allograft.  Basically, the court ruled that The Fix infringed upon IP owned by NuVasive and Osiris.  As part of the settlement, the parties entered into a licensing agreement covering Trinity Evolution.  The Fix will record a charge of $2 million in the fourth quarter of 2010.  Additional terms of the settlement were kept confidential.  The Fix has also lowered its guidance for the up coming year due to rumors of impending reimbursement issues regarding bone stimulators.  Word on the Street has been that it hasn't been a very festive environment down in McKinney.  Could it be that with the current state of the economy and pending challenges there will be many changes occurring at The Fix.  Maybe, those corporate raiders of summer's past weren't that wrong when they were looking for a change in government at The Fix.  So as we enter the holiday season, maybe its time that the Board once again revisit some of the decision making that is going on internally.   The spine industry is a post apocalyptic world where gunslingers rule.  No more 20%.  So in return the plenty shall suffer for the mistakes of a few.

Final Score:  Nuvasive 1  Orthofix 0, in a rout!

FDA Clearances of 510(k)s

DePuy Spine:  Modification to Expedium Spine System
Depuy Spine:  Viper Spine System
Difusion Technologies: Xiphos Interbody Fusion System
K2M: Caspian Spinal System
LDR Spine: Spinetune Titanium Ti. Spinal System
Life Spine: Small Plateau Spacer System
Medtronic: Kyphon Xpander II Inflatable Bone Tamp
Medtronic: T2 Xvbr 1.5 Spinal System
Medtronic Spine, LLC: Kyphon Anchor Facet Facet Screw System
Orthovita: Fm-02 Bone Graft Substitute
Paradigm Spine: Interspinous Fusion Plate
Pioneer: Spinous Process Fusion Plate
Pioneer: Cannulated Screw
Spinal Elements: Sapphire Anterior Cervical Plate
Vertebral Technologies Inc: Interfuse T Intervertebral Body Fusion Device

Looks like it was another busy month for the FDA.  The trend is for companies to attack the existing opportunities in the interspinous process market witness by additional products that were approved in addition to the AXLE Rose Interspinous Process Device that X-Spine recently launched.  Word on the Street is that the Guns n' Roses device has some nice features and benefits. A little marketing would go a long way for X-Spine.  If anything this device should help X-Spine.  As for Pioneer launching a cannulate screw, logic tells us that in all likelihood it will be used for facet fusions.  Spinal Elements came out of its summer hibernation from the mountains to launch another cervical plate, that should make it 367 and counting in the market.  The origins of the name could come from drinking Bombay Gin all summer, or with trace amounts of iron, titanium or chromium the color of the plate could be blue, yellow, pink, purple or pinkish in color.  With the launch of another cervical plate comes an increase in quota.  Pity those poor managers and distributors.  VTI continues to launch the spine version of Lego interbody devices.  By the looks of things, those long hot hazy days of summer are behind us as companies begin gearing up for a new decade and their annual national sales meetings.

The Circle Game - Back to the Future

Life imitates art.  Like art, there is a cycle in any relationship from its beginning to end.  Every relationship has a turning point. Back in 1968 Joni Mitchell wrote, "and the seasons they go round and round and the painted ponies go up and down, we're captive on the carousel of time, we can't return we can only look behind from where we came and go round and round in the circle game."  With today's announcement that Wenzel Spine had hired Jon Luedke as EVP, TSB thought it be interesting to get our bloggers take on a device that is touted as simple, dependable and proven, or is that the company mantra?  Could Joni Mitchell have been incorrect when she sang that "we can't return, we can only look back from where we came and go round and round in the circle game?"  Are we going back to the future?  Marty and George McFly would be proud.  Wasn't that another father and son team?  Could this be another American science-fiction comedy?  Many years ago the industry attempted to market the cylindrical cage as a panacea for degenerative back disease.  For those that have been in the industry less than five years you probably don't realize that the cage as you know it today evolved from carbon fiber and titanium alloys into PEEK.  Back in its heyday, when spine surgeons stumbled upon the hammer, everything became a nail, especially neurosurgeons.  Some were attempting to implant the cylindrical cage without augmenting it with posterior fixation.  The procedure was better known as the "stand-alone cage."  Based on the Wenzel website, it seems that the VariLift is attempting to take the industry back in time when gasoline was $2.00 a gallon and a half of gallon of milk was $2.69.  If the VariLift is a proven alternative to traditional spinal fusion does this make it a non-traditional alternative?  Why is everyone looking for the holy grail claiming that they are simplifying surgery when there is nothing simple to begin with?  TSB must admit that Mr.Luedke has an ominous task ahead of him, if his new employers believe that this is new technology.  At best, its an old technology with a new spin, besides there are other patents out there for expandable cages that are sitting on some people's shelves collecting dust.  Could Marty be attempting to convince us that he is from the future and asking for our help to return back to 2001?  This time machine may need a little more than 1.21 gigawatts of power.  It may take a bolt of lightening to awaken everyone at Wenzel to bring them back to the future.  TSB wants to know what our bloggers think, is this something old, something new, something borrowed, or something blue or just a silver six pence in their shoe?

It's a Bird, It's a Plane, It's Centinel Spine

Wow, a wild weekend in this crazy world.  Hope everyone survived the snowfall towards the end of the week, and, the wild barrage of bloggers having a verbal tete-a-tete due to our last post.  Didn't think that anyone's head would explode. By the looks of things, TSB was wrong.  I was sitting on my porch this weekend watching the Yellow billed Magpie and wondering if stem cells have a migratory behavior?  I guess I'll just leave that for others to write about.  But before TSB has to get back to reality,  word on the Street is that times are getting tougher at Centinel Spine.  Cash flow is tighter than the G string on a banjo.  Supposedly, there will be no bonuses emanating from their 505 Park Avenue offices this Christmas, nor, will there be any Purple Brioni ties being given as Christmas gifts.   Belts are in.  There's been plenty of belt tightening going on.  Are the Purple People Eaters trying to figure out how to hold onto a sinking ship?  Could transferring international distribution rights to the STALIF, and some other products acquired from Surgicraft save the day?  This might be a scenario that even Musculoskeletal Man can't save.   Is filing bankruptcy imminent?  The spine world wants to know what you know?

A Call To Arms

On Thursday, December 9th, 2010, the Republican Senate blocked legislation sought to provide medical care to rescue workers and others who became ill as a result of breathing in toxic fumes, dust and smoke at the site of the WTC attack on September 11, 2001.  Usually, TSB attempts to keep this forum as non-political as we can, yet, there is only one word that describes the actions of the U.S. Senate, DESPICABLE.

To hold the brave police, fire and emergency rescue workers hostage over party politics and the passage of a tax bill is immoral.  Where were all these politicians when we were attacked, and after we were attacked?  I implore each and everyone of you to pick up the phone and call every Republican Senator today threatening not to cast a ballot in their next election.  If we have an ounce of decency left in our bones, now is the time to act. Tell anyone and everyone that you meet today to take the time out of their lives and do the right thing.

Whatever happened to the accolades that politicians threw around like a cheap $2 whore, but then, they are pretty good at doing that.  TSB challeges OTW, Orthworld and OrthoSpine News to stop with their daily propaganda and give this issue some visibility.  Let your voices be heard!

The Death of Capitalism - The Death of Healthcare As We Once Knew It

Bye Bye Miss American Pie, brought my Chevy to the levee but the levee was dry, 'em good ol' boys were drinking whisky and rye singing this will be the day that I die, this will be the day that I die........

For those young 'uns that never listened to a poet singer, and TSB is not talking hip hop poetry,  Don McLean's American Pie, a song that will live on in infamy,  was about the loss of innocence in American music. Ironically, it can also be interpreted as a loss of innocence in the America, we once knew it.  But this post isn't about music.  No fellow bloggers, this is not someone waxing nostalgia. This post is about the fundamental breakdown of America as we once knew it.  An America that was built on hard work, a country that prided itself on its ability to lead, a country that understood that everyone deserved an opportunity, an America that once stood proud.  Today, whether you like it or not, this once great country is in the throes of a class struggle between two classes, the Corporatist's and the have nots.  But before we elaborate, let's keep things in perspective.  If you're earning $250 thousand or less, you're not one of the haves, unless you're single, especially in this economy.  And unlike the perception that many of our beloved surgeons have, many of you are making $120 to $150 thousand per year, and that doesn't include being responsible for most of your own business expenses.  If you are the sole provider in a family of four, have a mortgage, have children that are going to college, need to put food on your table, gas in your cars, pay auto and healthcare insurance, and want to take a family vacation let alone two a year, most of you are living by a thread.  And, I can guarantee that many of your wives, unlike surgeons wives, are working, and, you are not living in McMansion's over looking the Pacific Palisades. So why does the TSB write an editorial on Friday morning?  Is it because I am looking to provoke you into irrational commentary?  Absolutely Not!  Because somewhere along this journey called life, we have all lost our sense of balance.

The last three or four years have made it woefully painful that we are heading in the direction of class warfare.  Witnessed by what went on in England yesterday when students attacked "the Royals" in their Rolls Royce.   No need to worry about the Taliban, or some terrorist organization, we will be the demise of ourselves, based on our greed and selfishness.  Any student of history will attest, every great dynasty eventually falls and restructures itself.  The good times in healthcare are coming to an end.  Today, American is in the initial stages of a total collapse.  If balance is not important, just look at our industry.  As the cost of delivering healthcare continues to escalate, the new game in town is called the blame game.   The insurance industry blames the doctors (those poor helpless doctors), the hospitals blame the doctors, the doctors blame tort reform, the Corporatista's blame the government and high taxes, and the sales people continue to get defecated upon, being blamed by the doctors for driving up the cost of delivering healthcare.  Why is it that the guy on lowest part of the totem pole always gets the blame?  Is it because some people don't have the intestinal fortitude to stand up to a higher authority?   Based on Monday's story in the NY Times regarding a Baltimore cardiologist who implanted as many as 30 stents in one day, and the concern that was expressed by a leading cardiologist at the Cleveland Clinic, isn't it time that some people start focusing on cleaning up their own house, before worrying about someone else's business?  Isn't this just a microcosm of what is happening in our industry?   There are many surgeons that love their calling, and are exceptional at their craft, and, I am sure that the good doctor in question is a wonderful family man, witnessed by the many testimonials given on his website, but just like any other person, money or the prospect of being the richest man in the room can obfuscate reality.  After all, we are human. It happened at Enron, it happened at WorldCom, it happened to Bernie Madoff.  So let's not fool ourselves that it doesn't happen in medicine. Once again, this is a photo-op for the government to launch another investigation into improprieties in the medical device industry, led by yours truly Senators' Grassley and Baucus.  I am not going to judge Dr. Medei, the legal system will do that, and I am sure that he has the financial wherewithal to hire the best, yet, how can one not be a skeptic let alone a cynic based on what we see on a daily basis?

What this industry needs to do is get back to basics.  If that means challenging the system, then the system must be challenged.  This means executive management teams projecting realistic forecasts based on current economic and market conditions, and not what happened fifteen years ago when they were selling in a not so saturated market.  This means developing innovative products that not only improve patients lives, but improve outcomes, and are not a product looking for an indication.  This means thinking long-term and not acting like Wall Street, this isn't a short-term industry.  This means telling your shareholders that if they want longevity, everyone is going to have to sacrifice, including those that think the only reason you invest in a company is to generate a major windfall.  Maybe that's part of the problem.  Too many executives are more concerned with their personal portfolio's rather than the direction their organizations are going.  Lastly, stop the hype.  How absurd was the total disc market as companies released their products.  We didn't have enough of  retrospective data on the efficacy of total disc arthroplasty and we were touting our devices as first generation, second generation, third generation.  Just for the record, in human terms a generation is usually thirty years and it usually means producing an offspring from the preceding device.  

As the first decade of the new millennium comes to an end and a new era ushers itself in, hopefully we will come to terms that we are all in this together, and that its okay to share the wealth, because if you don't, you all will be able to one day say that you live in a socialist state.

Someone Was Caught With Their Hand in the Cookie Jar.

Men, this stuff that sources sling around about American's wanting out of this war, not wanting to fight, is a crock of bullshit.  Americans love to fight traditionally.  All real Americans love the sting and clash of battle.  You are here today for three reasons.  First, because you are here to defend your homes and your loved ones.  Second, you are here for your own self respect, because you would not want to be anywhere else.  Third, you are here because you are all real men and real men like to fight.  When you, here, everyone of you, were kids, you all admired the champion marble player, the fastest runner, the toughest boxer, the big league ball players, and the All-American football players. America loves a winner. Americans play to win all the time. I wouldn't give a hoot in hell for a man who lost and laughed.  That's why Americans have never lost nor will ever lose a war; for the very idea of losing is hateful to an American............................We have the the finest hospitals, the finest medical technology, and a fine generation of surgeons that money can buy.  Why by God, I pity those poor sons of bitches we're going up against.  By God I do.

                                                         - General George Patton/TSB -

On Monday, December 6, 2010, the NY Times, that bastion of liberal news, ran an article about a Baltimore cardiologist, Dr. Mark Midei, who had inserted 30 cardiac stents in a single day in August 2008. With the WikiLeaks controversy being played out in the media, many corporate executives are learning that maybe its time to tone down their e-mails, witnessed by the comment by an Abbott executive who wrote, "this is the biggest day that I ever heard about."  Of course the salesperson did not help matters when two days later the Abbott sales rep showed up at Dr. Midei's home with  a whole slo-smoked pig, peach cobbler, along with all the fixin's.  Hopefully they bought their barbeque sauce from you know whom. Total cost: $2,159.  The dinner was just a small token of appreciation in comparison of the millions that were already showered on Dr. Midei for putting more stents than any other cardiologist in Baltimore.  The irony is that Dr. Midei is accused of putting stents in patients that did not need them.

The 10,000 documents from Dr. Midei and St. Joseph's located in Towson, Maryland (what's in the water at St. Joe's) concludes that he implanted 585 stents which were medically unnecessary from 2007 to 2009.  This case has turned into a legal quagmire for Dr. Midei and St. Joe's.  They are now being sued by hundreds of patients who claim they have received unnecessary implants.  Some doctors have been quoted as saying, that this case has revealed a level of care that is more common than most patients know.

Dr. Steven Nissan, chief of cardiovascular surgery at the Cleveland Clinic states "that what is going on in Baltimore, is going on right now in every city in America.  We're spending a fortune on procedures that people don't need."  Of course Dr. Midei's attorney said that his client will be exonerated (what else would anyone expect from a lawyer), yet last month good ol' St. Joe's agreed to pay $22 million dollars to settle the charge that it paid illegal kickbacks to the good ol' doctor in exchange for patient referrals.  As usual, the hospital denied any wrongdoing.  Considering how much Medicare spent on stent procedures, $3.5 billion, its a wonder the feds aren't investigating other specialties, ahmmmmmm spine.

Enter the federal government.  Senator Max (I'm every insurance companies best friend) Baucus who was quoted as saying that "this could be a sign of a larger national trend of wasteful medical device use." Hey Maxie, where have you been, are you kidding me?  How many war stories have we heard where some surgeon is implanting 'X" amount of interbody devices every week, let alone every month.   All one has to do is look at all the fly by night interbody companies that have surfaced and continue to do so. Ever wonder why?  Like trickle down economics, eventually, cases like these open up pandora's box, exposing all the dirty little secrets and evils between the medical device world and physicians.  Yet, hope springs eternal that the majority of surgeons in spine do the right thing, especially for their patients.  TSB wants to know, is it the beginning of the end, or is it business as usual?

Stem Cells, Stems Cells, Stem Cells.............. Monty Python and The Holy Grail

Recently there have been a rash of reports debating the efficacy of stem cells.  Even Robin Young  acknowledges having ownership in this technology, witnessed by the many articles that are dedicated to promoting stem cells on OTW.   It has been reported that stem cells are the ultimate therapeutic panacea for your biologic needs.  Some people are paying up to $7,500 to have their own stem cells harvested, and stored for future use, regardless, whether they really know anything about stem cells and how they can be used.  Of course, a nominal $70 per month storage fee is included.  There is no free lunch in America.  But as an industry insider, one has to wonder, is it too early to declare that some have found the fountain of youth?  Could this be a re-run of an old movie?  As usual, there are two sides to every debate.  Some scientists and physicians are taking a conservative approach, warning that there is a need for ongoing research to validating the efficacy of stems cells for various applications before we start singing hosanna's in praise of another technology.  TSB is not a skeptic.  I believe that software is the future of spine, yet, before hardware becomes passe, there is plenty of work to be done.  Please excuse my naivete, before we coronate stem cells ...........why the fuss?

By some estimates,  it is forecasted that the stem cell market has the potential to be a $250 million dollar market by the year 2015.  Hopefully, this forecast was not made by Tony Viscogliosi.  Like any new therapy, validating efficacy and outcomes will determine its success or failure, and we're not talking anecdotal evidence. The so-called experts claim that stem cells are an improvement over current biologics.  Yet, isn't the current technology that is being sold by NuVasive and Orthofix, old technology with a new marketing spin?  TSB believes that somewhere deep in the recess of those little stem cells, there may be answers to some of life's wonderful mysteries.  Spinal Cord injuries?  Brain Tumors?  Soft-Tissue Injuries?  Spine Surgery?  Trauma?   But before we continue the quest for the Holy Grail in spine, can some industry "experts" pull back on the onslaught of articles proclaiming that stem cells  regenerated another tail on the Kimodo Dragon, or that stem cells were found to have grown another head on an 8 year old boy in South Dakota.  That one was in the National Enquirer.  If we could dress up Robin Young in a togo, what a sight, and have him walk around NASS proclaiming, Stem Cells, Stem Cells, Stem Cells, he would be playing the role of Commodus in Gladiator at his coronation proclaiming to be the Emperor of Stem Cells.  The real pioneers are the people in the laboratories that persevere and  commit an endless amount of time and energy into finding how these little cells interact.

Alan Milinazzo was quoted in an article as saying; "The traditional rod and screw device implants are very invasive techniques, and if you can remove the need for hardware, that is a benefit, and biologics can play a big role in that."  No kidding Alan.  But I don't want to break your bubble, it's gonna take advancements in gene therapy before you start talking about removing the need for invasive surgery and the implantation of hardware.  What a pioneer.  The newest attempt is by Allosource. The company has launched its stem cell bone growth substitute derived from adipose tissue and cancellous bone that is processed and cryopreserved.   But here is a question for our readers, in times of economic distress, why are people donating tissue that others are making money off of?  Some claim that biologics is where the industry is heading.  That's quite the broad stroke of a brush.  What do some of these people think has been going on in the industry during the last ten years?  Of course there are wonderful opportunities to make money at the expense of others.

If adult MSC's are the future in biologics, then TSB has a simple question, why would someone want someone else's MSC?  If a surgeon could harvest a patients stem cells intra-operatively, and deliver them in real time, why isn't the industry looking for additional ways to contain cost, rather than driving up the cost of biologics.   At a time when the state of the U.S. healthcare market is in a total state of disarray, why are we looking to increase the cost of medicine?  Not to burst the bubble of any of the aforementioned visionaries, but hardware is not going away, anywhere soon.  As long as surgeons are performing invasive, or even minimally invasive surgery in hope of alleviating back pain, there will always be a need to provide structural support.  In closing, TSB must ask our readers, is this hype or is this the Holy Grail when it comes to spine?

OP What?

No fellow bloggers, this isn't one of those Fairy Tales where the prince saves the damsel in distress.  Matter of fact, it's more likely to be compared to a Greek tragedy of sizable proportion.  Once upon a time, around November of 1998, Stryker went out and signed a irrevocable patent licensing agreement for OP-1 with Creative BioMolecules.  If memory serves me correctly, the deal was for $222 million.  Based on the daily report on the Weather Channel, a cold front came in somewhere near Kalamazoo.  The Almighty Stryker announced that it had entered into a definitive agreement with the Olympus Corporation for the sale of its OP-1 family of products.  My how the worm has turned.

The question that any casual observer must ask is, how badly mismanaged has this acquisition been from the beginning?  Was the best that Stryker could do is get this pharmaceutical through the FDA as an HDE?  Strategic planning and a delivery protocol came into play during the submission.   The ensuing years laid to claim that spine and trauma surgeons were coaxed into using this off-label.  Some former Stryker employees remember this being used by spine and trauma surgeons, dabbing this accelerant on a foam sponge to deliver this drug.  After twelve years,  one must wonder how much capital was INFUSED into this project, including the recent legal cost that Stryker has had to incur inorder to defend its reputation with the DOJ, for what transpired from its leadership team in Hopkinton, Massachusetts?    Stryker has used the Sergeant Schultz defense, "I know nothin'" denying any knowledge of what was going on in the Bay State.  Stryker will also rationalize that it was better to cut one's losses than continue on a road to nowhere.  Considering the magnitude of the loss, I guess a loss is a loss.   Based on its track record in biologics, hopefully, Stryker will find some competent people to provide the organization some guidance when it comes to biologics, or pharmaceuticals for that matter.  There are many parallels between this management team and those that attempted to get Hydrocision's Spine Jet to the market.  But then you reap what you sow.  TSB wants to know what our readers think?

The FDA : The Favorable Device Administration

"Unpredictable, inefficient and expensive regulatory processes are jeopardizing America's leadership position in Medtech innovation."

One of our bloggers posted a question regarding the pro's and con's of the FDA, and whether it encourages, or discourages, innovation in the medical technology sector.  Obviously, the pernicious social and political environment that currently exists in this country plays an important role in any dialogue that may be expressed regarding any government agency.  In all likelihood, this question was probably posed because of a recent report that was published in November by Josh Makower, MD, a consulting professor at Stanford and the CEO of ExploraMed Development, LLC, Venture Partner, NEA.  The study focused exclusively on the pre-market regulatory process, surveying 204 companies which make up 20% of venture backed medical device companies that are attempting to bring innovative technologies to the market in hopes of improving patients lives.  The participants were asked about their experience working with the FDA, as well as working with their counterpart in Europe.  But before we get into the MDM, let's give the FDA their due process considering that many people probably don't even know what the FDA really does.  To summarize;

The FDA is responsible for protecting the public health by assuring safety, efficacy and security of human drugs, biological devices, medical devices, our food supply, and products that emit radiation.  I'll spare you the vetinary and cosmetic part.  Their role is to help advance the publics health by helping SPEED INNOVATIONS THAT MAKE MEDICINE MORE EFFECTIVE, SAFER, AND MORE AFFORDABLE and by helping the public get the accurate science based information they need to use medicines and foods to maintain and improve our health.  When it comes down to the spine industry their perfunctory role is to regulate pre-market approval, oversee and monitor manufacturing performance standards and track medical device reports and adverse reactions.  The November study contends that patients in the Europe are getting new therapies an average of two years before patients in the United States due to regulatory challenges.  Why?  It seems that the argument that is made is that our regulatory environment is adversely impacting innovation, which leads to impacting the quality of patient care and job creation.   But why is this happening?

It seems that 44% of those survey complained that part-way through the pre-market regulatory process, they experience changes in key personnel, including the lead reviewer and or the branch chief responsible for the product's evaluation.  34% surveyed stated that integral decision makers were not present at meetings between the FDA and the company.  Participants also voiced their concerns about the time that it took for a 510(k) approval, some claiming it took as long as ten months for low to moderate risk devices.  In addition, for those who spoke with the FDA about conducting a clinical study on low to moderate risk devices before making a regulatory submission, the process took an average of 31 month as compared to 7 months in Europe.  High risk devices too an average of 54 months in the U.S. as compared to 11 months in Europe.  TSB is sure our readers can surmise that the FDA compared unfavorably to their European counterparts.  There are many reasons why this is happening.  But let's first let's take a view from thirty thousand feet and get a realistic perspective as to the process rather than just looking at the results.  Considering that the POTUS just froze federal employees salaries and wages, the question must be asked, why is it so difficult to retain talented and knowledgeable people at the FDA? Based on TSB's experience, tenure is not an endearing trait of many examiners.  No doubt that there are some veterans, but if you want bright lights and big dollars, its not happening at the FDA.  Tenure and efficiency are not the FDA's better qualities.  But there are other aspects to the process.  By nature everyone believes that they dot their "i's" and cross their "t's."  But if one is going to throw stones at the FDA, how about some of the people that are preparing the necessary documentation on behalf of some of these ventures.  It seems that many people in corporate regulatory "tippy-toe" around this organization because they themselves are not efficient or they love creating the aura that its not nice to ask big brother questions or challenge their inefficiencies.  It's a two-way street.  But why has this become such an issue?

Money!  Because on average cost for low to moderate risk 510(k) products from concept to clearance was approximately $31 million, with $24 million spent on FDA related activities.  As investment capital is shrinking, these mounting costs are unsustainable.  Therefore, companies are going OUS to develop emerging technologies.  Of course, then the FDA becomes the culprit as to the ever escalating cost of delivering innovation in an ever escalating financial healthcare environment.  The implications are tremendous.  Regulators and innovators must find a better way of working together.  But will this happen in an ever increasing obstructionist environment?  The Republicans just spent two years blocking any attempt to pass legislation, whether one agrees with that political view or not, and now the Democrats will spend the next two years doing the same.  But it's going to take a little more than just calling the FDA on the red carpet.  It' going to take both sides coming to the table and making some serious concessions about the process, including companies evaluating whether the people responsible of carrying out the necessary documentation are capable themselves of efficiency.  Only then, will we arrive at a workable medium.  Think about some of the companies in our own industry that have either failed or are struggling with their submissions.  The blame cannot be place entirely on one party, it takes two to tango, and you know what Charles O. Prince, and don't let me forget the "III" after his name said; "as long as the music is playing, you've got to get up and dance."  TSB wants to know, is this really a one-way street, or is there traffic jam coming from both directions, you be the judge.

Finally, Some Sanity

Normally TSB doesn't spend much time applauding some of the comments that are made on this blog spot.  But I must admit, there actually is someone amongst us that brings us some sanity by the commentary that they provided us.  If anything, this individual should be applauded.  Please take the time out to read this and rather than provide us with a knee-jerk reaction take the time to think about the truth that echoes in these words.


"I have seen some of the most extreme intellectual hypocrisy among us at the meetings in the U.S. lately. 

I could literally write a list of 100 things...but the top has to be

To hear most of "us" talk, Medicare should simultaneously be discontinued and have its budget tripled. 

Private insurance companies need to listen to the "Government" when it approves something...

The "Government" needs to listen to private companies to decide what to approve...

We want FDA to approve what we tell them to approve, but we want FDA approval to shield us from liability.

We file patents for unique inventions and 510(k)'s for Me-too copies; of the same exact drawing.

Its actually quite hilarious to listen to people argue with themselves sometimes."


Have some of you ever listened to yourselves?  

Do Not Pass Go, .........

If anything 2011 could be the beginning of a new legal era in spine.   Michael Huggins, Tom Higgins, Richard Boehner, and John Walsh could become the first white collar defendants sent to jail under the 1975 Park Doctrine which would hold them responsible as corporate officers whether they intended to break the law or not.  On Tuesday, November 30th, 2010 Synthes put closure by pleading guilty to dozens of crimes related to their unauthorized tests on some 200 spinal surgery patients, three of whom died on the operating room table.

In 1975 the SOTUS upheld the conviction of John Park, the President of Acme Markets Incorporated, on the theory that people that manage businesses that make and sell products that are regulated by the FDA have an affirmative duty to ensure the safety of the product.  The Court concluded that the government can criminally prosecute a corporate officer who is in a responsible relationship to some illegal activity by the company even though that officer did not personally engage in, or even know about that activity.

In the past 15 years there have been very few pure Park cases in which the government solely charged a misdemeanor against a company official on the ground that due to the official's position of responsibiltiy, within the company, the official should have prevented or corrected the deficiency.  But the question must be asked, is this an opportunity for the Department of Justice to prove to the industry, once and for all, that the Park Doctrine is not a paper tiger?  Recent changes to the Sentencing Guidelines could spell some jail time for Mssrs. Huggins, Higgins, Boehner and Walsh.  Considering that Synthes/Norian had documented violations harsh penalties could await those that have already plead guilty to misdemeanor charges.

But the bigger question that must be asked is why didn't the government go after Mr. Famous (#7)?   After consulting with attorneys regarding this case, the consensus seems to be that all four individuals will in all likelihood do some time.  Judges and prosecutors frown upon cases where innocent people die.
Maybe Wyss will get some Judge out of retirement to cut these boys a break, but then, maybe not.  You know what TSB says, it's a new dawn, a new day.

2011 A New Decade In Spine

"Business demands a docile government and unrestrained corporate freedom, there must be balance."
                                                            - TSB -

2010 will be remembered as the year that spine was brought back to earth.   Just like Ziggy Stardust, the industry was technologically promiscuous, almost drug induced. glutting the market with more versions of me too products in hope of windfalls only to destroy a once thriving industry with its own gluttony.  What precipitated the changes that have taken place in the spine?  As the industry enters a new decade, an autopsy on the last ten years is quite revealing.  Our bloggers know that commoditization and capped pricing have become the norm, rather than the exception.  Some companies are holding strong, despite a decrease in revenue due to the economy, and, third party payor denials. The next few quarters will tell a compelling story for those companies. Here are some concerns you have expressed during the past year;

• Are we developing products that improve clinical outcomes, and benefit patients?
• Has healthcare economics re-aligned growth expectations?
• Have our wages/salaries really increased in the past ten years?
• Why are surgeons and investors concerned with how much money salespeople earn?
• Will the government step in and outlaw POD's?
• Have stem cells become the industry's derivatives?
• When did this transformation really begin?

The years leading up to 2010 have provided the spine industry with many "so-called" breakthrough technologies.  And no fellow bloggers, we are not talking Blackstone Medical type breakthroughs, that corrupted, and shifted practical ethics in spine.  If there ever was an albatross that lingers around the industry like a bad stench, it's name was Blackstone Medical, indicative of the efforts that Orthofix made to distance itself of any association to a sordid past.  The effective demand of the market has been to identify technologies that enhance outcomes, yet at the end of the day, the financial objective is to  make those that lead the crusade, rich.  It's time that some industry executives spare us their stories of how a personal injury changed their life, and sent them on a mission to heal the sick, and feed the hungry. That my fellow bloggers was another lifetime.  Today, profits take precedents over outcomes.  

For better or worse, the crossroad in spine was 1999, when the Viscogliosi Brothers acquired Pro Disc from Aesculap AG.  This marked the first time an investment banker/ research analyst took the reigns of a spine company.  The efficacy of fusion was being hotly debated, and, the Europeans were years ahead utilizing newer technologies, materials and methods.  One has to express cynicism when industry executives decry socialized medicine, but rely on Europe, South America and third world countries to test drive their products on foreign lab rats.  Without them, where would the U.S. market be?  Total Disc Arthroplasty was not only going to return patients to early mobilization, it was touted a superior alternative to fusion.  U.S. investors and surgeons jumped on the bandwagon.   Tony Viscogliosi was quoted as saying, " the Pro Disc will transform spine surgery by replacing a high percentage of fusion procedures with disc replacements."  Just like the Great White, Wall Street and the investment community circled the waters.   By Viscogliosi's estimates, the total disc market would grow to $3 billion dollars by 2008.  Was that anything like his vision that one day we will have one rep for one surgeon?  From God's mouth, to our ears, the race was on.  All of a sudden there were more private equity investors than a roomful of cockroaches, when the lights go on in a New York City restaurant in the middle of the night.  This ushered in an era of investment greater than the California Gold Rush of 1849.  Like any paradigm shift, the new new thing was to leverage others capital to increase one's wealth, and, with that came demands that the spine industry assimilate the persona of financial markets rather than behave like a healthcare oriented industry.  What the oracles of Wall Street failed to grasp was, that healthcare unlike finance, has broader oversight and regulation in the form of third party payors and the FDA, rendering it impossible for quants to create algorthims with super computers that could erase product development protocol and approval guidelines.  Many of these people believed that their money and power would change the rules of the game.  The benefits of TDR is still debatable, contingent on appropriate patient profiling and advancement of disease.   What we have learned is that an industry that was once built on long-term results became short-term oriented.  Things had to get done faster than ever before, witnessed by the constant complaint that the FDA has too much oversight in commercializing products.  Today, product development is in a transitory state.   Dynamic Stabilization is DOA, witnessed by the "For Sale" sign that pioneering Applied Spine threw up earlier in the year.  If Panjabi can't get it done, who can?  Disc Motion Technologies cannot raise capital to keep its posterior disc and dynamic system afloat.  BMP's are under attack as being too expensive in an ever increasing hostile cost environment, and even ISP devices are under scrutiny.   All one has to do is look at facet fusion technologies and wonder how long can this scam go on?  The last few years have led to more failures than success stories with a cadre of start-up and  early-growth stage companies folding while those that survived are in a holding pattern, flying on vapors.  The industry is moving away from hardware and looking for software as an alternative to fusion.

Spine industry stasis.  Essentially, there has been an inactivity in emerging technologies in spine since the total disc.  Since the inaugural stem cell meeting at the Chicago Airport in 2006, stem cell mania has picked up momentum, with more capital being invested in development, marketing, and commercializing what many argue is old technology with a new spin.  Like derivatives, stem cells have a value based on expected future movement as an asset.  The industry is looking to replace BMP's, TCP's, and other biologics with stem cells, in hope of a tremendous payoff.  Spine surgeons are much more fixated with stem cells in comparison to general orthopedists.  The ultimate goal of those leading the crusade is to convince clinicians, third party payors, and hospitals that stem cells are the golden goose.  Unfortunately, stems cells continue to look like an exotic derivative.  Companies are hoping that by leveraging its underlying value it will lead to pull thru revenue.  In essence, companies are hedging their futures on the new new thing.

A concern that we hear from many of you, is that you are making less money, or,  you are earning the same amount that you did five years ago, while our illustrious CEO's continue to line their gilded pockets, behaving as though nothing has changed.  Some have even asked employees to forgo their salary for a period of time, until they can raise more money.  If there is any truth to those rumors, those individuals should be ostracized by the industry for behaving with such arrogance.  The same way that the American political system has been hijacked by special interest, our industry continues to be hijacked by the same CEO's, that are laughing all the way to the bank.  During the third quarter of 2010 only 33 companies in the entire U.S. went public, there isn't another Apple or Microsoft ready to explode in the spine market.  Rumors of certain spine companies going public is comical.  The investment community is not infusing capital into companies that continue to design and manufacturer more of the same.  Banks and investors are more interested in exploiting the day-to-day movements of the market by focusing on trading.  If we are interested in containing the ever rising cost of healthcare, why aren't we developing products that allow us to streamline cost, while allowing us to maintain our profitability?

As for surgeons complaining about how much sales people earn, TSB doesn't feel the need to even address this issue.  If surgeons believe that we are making so much money, they should become salespeople instead of surgeons.   Between being concerned with our earnings and starting POD's, class warfare is here to stay.   Bowie sang;

Ziggy played guitar jamming good with weird and gilly
And the spiders from mars, and he played it left hand
But made it too far, became the special man, then we were Ziggy's band.
It's a new dawn, a new day!

Thanksgiving Greetings

Fellow Bloggers,  it's been a week since we posted on the blog.  Fortunately, we are working on an interesting expose on the industry.  One aspect of this future post is that we are looking to ensure that most of what will be written is accurate.  But with that said, TSB would like to take this time to wish each and everyone one of our readers a Happy Thanksgiving.

Please take the time out to give thanks with your family and friends for the ability to break bread and don't forget about those less fortunate.  For as different as our opinions may be, hunger should not exist in the greatest country in the world.   There isn't anything better in life than great food, good libations and family and friends.

Enjoy the Day
TSB

Memorandum from ISASS

Tom Errico, M.D., the acting President for the International Society for the Advancement of Spine Surgery (ISASS) published a memorandum to its members regarding changes to the spine fusion insurance reimbursement policy for lumbar fusions.  ISASS has learned that effective January 1, 2011, Blue Cross/Blue Shield of North Carolina has issued a more restrictive policy effective lumbar fusion procedures.

This restrictive policy may make it more difficult for patients suffering from low back pain due to spondylolisthesis to receive their needed surgery.  The criteria includes;

• Patients with degenerative Spondylolisthesis who don't have as much leg pain as back pain
• Patients with Isthmic Spondylolisthesis that is not progressive but nonetheless painful
• Patients where fusion for Spondylolysis may be necessary beneficial in situations where there is no slip and only back pain
• Patients where fusion is the only procedure that will relieve pain and immobility associated with DDD after 6 months of exhaustive conservative measures that failed.

ISASS has reached out to all the legacy companies to enlist their lobbying efforts with BC/BS of NC.  TE welcomes your thoughts on this policy.  E-mail your thoughts to Kristy Radcliff, Executive Director @ ISASS.  kristy@isass.org.  

Question to our readers, how long are doctors going to run from filing a legal challenge to the anti-trust laws that continue to handcuff their efforts in fighting the Orwellian changes that continue to kill the delivery of healthcare in this country, and their ability to be paid for their services?  You know what TSB says, sometimes when your back is against the wall, its time to roll up your sleeves and kick some ass, the question is do the surgeons have the ability to do that?

Down For The Count, 1, 2, 3, 4, 5, 6, ......Default, Default

The dictionary defines the word default as a failure to act, an inaction or neglect.  In business, it usually mean a failure to meet one's financial obligation.  On Monday, November 15th, Paradigm BioDevices Incorporated announced that it filed a lawsuit in the U. S. Dictrict Court of Massachusetts against Viscogliosi Brothers, LLC, Viscogliosi & Company, LLC, Paradigm Spine, LLC, Centinel Spine, Incorporated, and Anthony "Tony" Viscogliosi and John "BBQ" Viscogliosi alleging successor liability, willful and tortious interference, unfair competition, malicious business practices, fraud and the default of a United Kingdom High Court order to pay monetary damages that were awarded to Paradigm BioDevices.

A major concern of anyone buying a business should be whether or not the buyer (VBrothers) would be exposed to any of the sellers (SurgiCraft's) liabilities, meaning, were the V Brothers exposed to SurgiCraft's liabilities?  Successor liabilities usually exist when there is a stock purchase instead of an asset purchase, meaning if the buyer (V Brothers) purchased a business by acquiring the common stock, in this case SurgiCraft's, or the partnership interests in a partnership, or the membership interests in an LLC, the V Brothers would step into the shoes as the owner of that entity.  So if this rule applies, the question must be asked, were the Viscogliosi Brothers aware of the contingent liabilities that SurgiCraft had?  And, did the Viscogliosi Brothers structure the purchase transaction as an asset based purchase?  The other Successor Liabilities would include; Product Line Successor Rule, Failure to Comply with Bulk Sales and liabilities pertaining to taxes.  These liabilities don't seem to apply, yet, one doesn't know unless they know all the claims in the suit.

Tortious interference occurs whenever a third party acts to intentionally and willfully interfere and break an existing contract between two parties causing damage to the relationship between the original two parties.  In this case PBD and SurgiCraft.   If the V Brothers assumed all liabilities, a U. S. Court will not only determine if they violated these allegations, but, also whether they were complicit in fostering a climate of unfair competition and fraud which usually encompasses an intentional misrepresentation of material existing fact made by one person to another with knowledge of its falsities for the purpose of inducing the other person to act, and upon which the other person relies with resulting injury or damages.

Based on comments made by Mike "Punchy" O'Neill, President and CEO of Paradigm BioDevices, "All the parties involved were and are acutely aware of the financial obligations due PBD in the event of the termination of our contract due to a change of control."  The allegations claim that an elaborate scheme was cooked up by Centinel Spine, its Directors, and related interested parties to circumvent these obligations, breach the PBD contract and defraud us of our rightful compensation due PBD as ordered by a English High Court.

Seems like this bout will have more intensity than the Pacquiao - Margarito fight.  The question is, who will be on the Margarito end,  and whom will have bruises dotting their face standing for the final count?  Everyone knew this was coming, maybe its time to start selling seats.  If TSB is a betting man, I'm placing my money on O'Neill in the ring.   Bob Arum, where are you when we need a real promoter in spine?  TSB wants to know, who are readers are placing their money on?

The Blame Game - Weekend Op-Ed

Within the last few days and weeks,  NuVasive, AlphaTec, and Trans 1, have reported quarterly earnings much to the dismay of the Street.  I guess we could give ATEC an ever so-slight reprieve for exhibiting euphoria over 2% growth. Yet, it's been a difficult year in spine, let alone the healthcare industry.   Most companies have lowered their guidance accordingly as the U.S. economy and healthcare continue to grind to a halt.  Based on the last few investor calls, it seems that the industry is revitalizing an old game called, The Blame Game.   No fellow bloggers, this isn't the game that is broadcast weekly on BBC radio hosted by Tim McGarry, nor is it the thirty minute 1999 MTV version.  Yet, as Mr. McGarry would say, "Welcome to The Blame Game, the show where there are more cheap shots than at a student union bar."  The victim is corporate America.   The culprit is?  Corporate America.  The enemy is the Big Bad Insurance Industry.  Today, spine stands at the proverbial fork in the road, and anyone that appreciates baseball would know the old Yogism, when you come to the fork in the road, take it.  So we must ask our bloggers is, whom do we blame for this temporary potentially permanent derailment?

CEO's like Dvorak, Lukianov, Randall, and Kuyper must be reading each others press clippings.  I mean imitation is the highest form or flattery, yet it breeds indifference.  The new mission statement is "our sales have been adversely affected by a higher rate of insurance denials for lumbar surgery."  These fellas must be practicing Ohm's law, whereby the current through a conductor between two points is directly proportional to the potential difference across two points and inversely proportional to the resistance between them.  Playing the blame game , or the crying game never works.  It's a proven fact that  people who blame others for their mistakes or failures usually lose face, or status, and, eventually perform worse than if they "fess up" to their failures.  For argument's sake, let's say that we are in for a rough ride over the next few years, are we going to become an industry of excuses?  If so, will this stunt our already declining ability in being creative and innovative, eventually reducing our productive risk taking?  Could it be that there is a blame virus being spread throughout the industry?  Remember the old saying you can't make Beef Wellington out of Bullshit.

The germ that these so-called leaders are spreading is protecting one's ego and more importantly one's self.  This germ may be going viral.  These difficult times will either bring out the best or the worst characteristic traits in these people.  Hopefully, the industry as a whole is learning something about itself, like how to avoid making some of the same mistakes that we have made, by putting ourselves in this position.  Complacency is sinister.  The temptation is to point your finger at someone else.  Could these individuals be showing signs of insecurity, a chink in their armor?  Truly powerful leaders are man enough, or woman enough, to state, "the buck stops here."  It's time to redirect your organizations.  But the question is, do you have the ability to think out of the box, now that you have become slaves to the Street?   That's the question that many of these leaders must answer.  Are they willing to roll the dice and force the shareholders of these companies to make short-term sacrifices to preserve their long-term viability?  Could the Blame Game create a cascading effect?

It's actually entertaining to listen to some of these power players discuss educating and working with the insurance industry.  How much more do you want to kiss the ass of an industry that rapes and pillages healthcare.  Rather than kissing the ass of the insurance industry, maybe its time to mobilize against it.  But then playing the blame game, is no different than playing the crying game, and you know what Boy George sang;

Why there are heartaches, why there are tears, and what to do to stop feeling blue when love disappears.........

So the legacy companies will re-align their guidance and eat some humble pie, while the start-ups and early-growth stage companies will downsize their sales force, cut the budgets on research and development, surgeon training and travel.  Sounds like some people are looking for survival, could be an appetite for destruction

Welcome to the jungle we got fun and games
We got everything you want
Honey we know the names
We are the people that can find whatever you may need
If you got the money honey We got your disease
In the jungle, Welcome to the jungle, watch it bring it to your knees

Don't Take Me Alive

Finally, one of our bloggers has opined about a concern that many industry professionals in spine, let alone the orthopaedic market, have been concerned about for many years.   Why do sales reps dress in operating room scrubs when they go to work?   TSB must concur with this blogger.  Never in the history of my career have I left the house in scrubs, nor, have I made a sales call in scrubs.  I mean common, WTF?  That's why they put those clean scrubs in the doctor's dressing room, dude and dudettes.  Besides, the girls don't look sexy with their pumps in scrubs.  On numerous occasions TSB has written about the untimely death of the art of selling.  Much to the readers' dismay, we have been accused of being outdated, or out of touch.  What has happened to our sense of professionalism?  TSB's granddaddy always said; "people judge you as they see you."  Unfortunately, this isn't just an indictment of the sales rep, this is an outright indictment on the lax attitude that those that run these companies promulgate.  Laissez-faire equals lazy sales people.  Cover your case, and go home.  Money, Money, Money.  Then we wonder why companies are cutting back on commissions and investors have total disdain for salespeople, and would like to cut us completely out of the picture.  But who created this culture?  The Stryker's, the Danek's, the Synthe's, the DePuy's.  TSB sees many of these make belief/wannabe surgeons standing in line at Starbucks every morning or running around the hospital.  To top it off, some of these people  do not even change when they get to their next account.  How aspectic is that technique?  Do some of you know what that word even means in the English lexicon?

The reason selling has died is because with the advent of consulting fees and under-the-table deals we no longer sell product, we buy business.   Let the first company that doesn't do this throw the first stone.  But remember what Donald Fagen once sang:

Can you hear the evil crowd, the lies and the laughter, I hear my inside, the mechanized hum of another world, where no sun is shining,  no red lights flashing, here in this darkness, I know what I've done, I know at once who I am.....  I'm a bookkeeper's son, I don't what to shoot no one,  don't take me alive.

A Marriage Made in Heaven

On Monday, November 8th, 2010, Synthes USA (SUSA) announced that it had acquired Anspach Incorporated, a West Palm Beach, Florida based company known for its high speed pneumatic and electric powered tools for neuro, orthopaedic, spinal and ear, nose and throat surgery.  Having visited Anspach on numerous occasions, Synthes acquired much more than state-of-the art powered tools.  Anspach corporate headquarters now provides Synthes a satellite office where cadaver labs can be offered for the Southeast, Southwest and Mid-Atlantic Regions.  But this is really only a small benefit of this acquisition.  Today, Synthes now offers one of the most comprehensive power tool portfolios with a power tool division with close to $200 million dollars in sales.

Looks like the Almighty Stryker better start looking over its shoulder, there's a new sheriff in town and his name ain't Reggie Hammond.  Is this the new Syntes (love that lisp)?  In addition, they have bought some nice shoulder instruments, considering that they have been attempting to get into the shoulder market over the last few years.  This organization has done a wonderful job of assimilating itself into the American culture of buying, rather than developing their own products, especially when it is cheaper to gobble up a leading company rather than develop it organically.   But what does it say about R&D at Syntes?  You know that new generation of engineers, love sitting in front of a computer rather than being in surgery.  Will they become the next T-Rex in the industry, gobbling up anything that's worth their cash.  You be the judge.  TSB wants to know what our readers think.

Get in On, Bang the Gong, Get it On!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!

Hey Big Spender, Spend a L'il Time with Me

The minute you walked in the joint, I could see that you were a man of distinction, a real big spender

Good looking so refined, say wouldn't you like to know what's going on in my mind, so let me get right to the point, I don't pop my cork for every headhunter that I see

 Hey big spender, spend a little time with me.....

No fellow bloggers, TSB is not looking for some Sweet Charity, neither am I looking for Bob Fosse to choreograph some dance step....... TSB is writing on behalf of the many complaints that we have heard from industry professionals that are out of work, either looking for a new opportunity, or just checking out the job market.  Can we talk?  Are there any intelligent search firms or headhunters out there capable of doing their job in an organized and coherent manner.  You know, follow-up with phone calls to update the potential candidate as to the status of their interview or search?  What's wrong with you people, does TSB need to start outing some of you incompetent organizations.

How ridiculous is it when a candidate who has had multiple interviews, calls the recruiter to find out the status of their interview, and, the recruiter snaps back that they should take it incumbent upon themselves to follow up with the company.  No less, the imbecile is on the floor of NASS.  Hey dip shit, it's your job to do the leg work.  Just like the company is your client, the candidate is your meal ticket........hello!  How about this one, a fellow blogger notified us that a major search firm out of Philadelphia calls them up for one job, and then three weeks later calls them up for another job that doesn't even meet their skillset.  What's wrong with you people, didn't you vote for Proposition 19?  If you didn't, you should have because many of you people are walking around stoned.  Recently, one of our bloggers applied for a job only to be told that the hiring company was not interested in pursuing him without looking at his qualifications because he had previously worked at a company that they did not like.  WTF is that?  Don't sweat it, non of us would want to work for a dirt bag like that.

Stop with the "Linked In" BS.   That's got to be the biggest farce going around.  Just log on and read some of the non-sense that is bandied about on that platform, and you legitimize much of what we write about.  So in the spirit of debate, TSB wants to know your story, who has helped and who just plain sucks the life out of you?

The Sandbaggers? You Be the Judge

Bloggers of the spine world, during the late 70's and early 80's there was a British tele drama called the Sandbaggers.  The Sandbaggers were a highly trained group of MI6 officers trained in espionage and deception.  Well never fear, a real life sandbagging may be in the works emanating from the Garden State .  It seems that on May 12, 2010 there was a contract law suit filed on behalf of Tom Errico, M.D., against the Almighty Stryker Corporation (always say that with reverence), in the Southern District Court of NY.

The impetus for the suit lies in the minutiae of Stryker's acquisition of the Flexi/CerviCore TDR from Dr. Errico.   Like in any acquisition of this magnitude, there are always provisions and milestone's attached to remuneration paid in multiple tranches.  Word on the Street is that Stryker seems to be dragging its feet, or sandbagging with the PMA submission.  Could this be a deliberate act of deception on their part?  Could this be attributed to the disc being an albatross around Stryker's neck?  Where's Dennis Stripe and Mike (da Bulldawg) Manelli when you need them?  Haven't these parties traveled down this road before?  If I'm Errico, I need to cash out, stop dreaming up of more innovations, get on my yacht "the Stugotz" and go fishing.  Sometimes a man's got to know his limitations.   Looks like someone may be in for a haircut at Stryker.  You know what they say, "a deal is a deal, regardless."

It seems with the holiday season upon us, the gift of giving is being exacerbated by one law suit after another in our industry.  I guess at least the lawyers are making money.  TSB wants to know what you've heard on the Street, and what you've heard in the court of public opinion.