Article - June 29, 2008 - Philadelphia Inquirer

Implant firms pay doctors millions

As joint replacements have increased, so have payments to surgeons.

By Josh Goldstein

In the past decade, hip- and knee-replacement surgery has exploded - nearly doubling to about 750,000 operations a year and fueling a multibillion-dollar implant industry with profit margins approaching 20 percent. With so much money in play, competition among artificial hip and knee manufacturers has fostered a system of five-, six- and seven-figure payments to doctors in royalties, consulting deals and speaking fees. Those financial arrangements, long an open secret in the medical community, have now come under intense scrutiny from federal prosecutors and members of Congress - who are considering legislation requiring disclosure.

Critics question whether the payments can present a conflict of interest by skewing doctors' judgments on how best to treat their patients. At the same time, some concede thatpayments to pioneering surgeons who help design and patent artificial joints and other medical devices are legitimate.

Federal investigators who have examined the deals have in some cases found large consulting fees paid to doctors for little or no work, lavish trips disguised as medical seminars, and direct payments to surgeons that seemed aimed at convincing them to use a company's products. Last year, a U.S. attorney in New Jersey filed criminal complaints alleging that four of the largest artificial-joint makers conspired to violate a federal anti-kickback statute by making payments to surgeons as inducements to use their medical devices.

In a settlement, the companies - Biomet Inc., DePuy Orthopaedics, Smith & Nephew, and Zimmer Holdings Inc. - paid a total of $310 million, without admitting wrongdoing. A fifth manufacturer, Stryker Corp., cooperated with the probe and was not charged. One byproduct of that settlement is disclosure statements, posted on the companies' Web sites, showing for the first time all of the payments made to doctors. There is no breakdown detailing which payments were for royalties on patented devices, and which ones were for other purposes.

An Inquirer analysis found that 51 doctors got more than $1 million each in 2007 alone. Locally, 29 doctors and others received a total of $7.9 million last year. Most of thatmoney went to two of the region's busiest and most prominent orthopedic surgeons. Richard H. Rothman, founder of the Rothman Institute at Thomas Jefferson University Hospital, receivednearly $3 million last year from Stryker. A Rothman spokesman said most of that money came in royalty payments for a hip Rothman helped design.

The other surgeon, Robert E. Booth Jr., who practices at Pennsylvania Hospital, received nearly $2 million from Zimmer Corp., the company that makes the so-called gender knee for women. Booth is one of eight patent holders on it.

Both doctors declined to be interviewed. Through spokeswomen, they said they disclose their company ties to patients. There is no indication that either have engaged in any wrongdoing.

Indeed, many patients seek out surgeons like Booth and Rothman, who help design implants, precisely because they are known as pioneers in the field.

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