As with almost everything to do with the U.S. health system, the answer is complicated, and a combination of policy and politics.

This article was published on Wednesday, August 11, 2021 in Kaiser Health News.

By Julie Rovner August 11, 2021

Sorry, Joe Namath. Despite what you keep saying in those TV ads, under Medicare, seniors are not "entitled to eliminate copays and get dental care, dentures, eyeglasses, prescription drug coverage, in-home aides, unlimited transportation and home-delivered meals, all at no additional cost." But if Democratic lawmakers in Congress have their say, seniors could soon be entitled to some of those services.

Namath's commercial is hawking private Medicare Advantage plans, which frequently do offer benefits traditional Medicare does not — in exchange for being limited to certain doctors and hospitals. "Traditional" Medicare does not cover many benefits used overwhelmingly by its beneficiaries, including most vision, dental and hearing care, and drug coverage is available only by purchasing a separate insurance plan — Medicare Part D.

But Democrats in the House and Senate plan to try to change that as soon as this fall. On Monday, Senate Majority Leader Chuck Schumer released an outline of a coming budget bill that includes a directive to the Senate Finance Committee to expand Medicare "to include dental, vision, hearing benefits." The catch — all the Democrats in the Senate and almost all in the House will have to agree on the entire budget bill for it to become law.

Still, that raises a question about Medicare: Why has it taken so long to add such obviously needed benefits?

As with almost everything to do with the U.S. health system, the answer is complicated, and a combination of policy and politics.

"Medicare is the kind of program where you'd expect the benefits would be expanded over and over again. It's popular, and benefits expansions poll well," said Jonathan Oberlander, a professor of health policy at the University of North Carolina-Chapel Hill and author of the book "The Political Life of Medicare." "It's one of the great puzzles of Medicare politics: why benefit expansions have been so rare."

In fact, in the 56 years since Medicare became law, only a few benefits have been added to the package, which was created to emulate a 1965 Blue Cross/Blue Shield plan. During the 1980s and '90s some preventive care was added, like pneumonia vaccines and mammograms. Republicans spearheaded the addition of prescription drug coverage in 2003, when they controlled both Congress and the White House. But they decided to make that coverage separate from the program's traditional benefit package.

Other efforts to expand benefits have not gone so well. In 1988, a bipartisan effort in Congress produced the Medicare Catastrophic Coverage Act, which would have added drug coverage to traditional Medicare and also would have plugged a hole: the fact that there is no limit on the amount patients can be charged for their share of covered services. That law, however, was repealed just a year later after seniors rebelled against being asked to foot most of the bill for the new benefits via a new income "surtax." Today, Medicare beneficiaries still face the risk of unlimited expenses.

Medicare is funded by a combination of money paid directly to the government from paychecks and taxes paid by working Americans and their employers. That brings us to another big reason Medicare's benefit package hasn't been beefed up more — the cost of the current program.

"When Medicare was created, its architects assumed expansion, both in terms of population and in terms of benefits later," said Oberlander. "They didn't anticipate the shift in American politics to the right, and they didn't anticipate that Medicare would be labeled a fiscal problem and that policymakers would be more concerned with avoiding the next trust fund shortfall than expanding benefits."

Indeed, in the '80s and '90s, Medicare spending was more often restrained than expanded. A series of budget reconciliation bills trimmed millions of dollars out of Medicare — usually at the expense of payment to doctors, hospitals and other health providers.

As the years wore on, Medicare has remained popular, but it has grown less generous than most private insurance policies. Many Medicare patients, however, have been able to find supplemental coverage to fill in what Medicare does not cover, through private "Medigap" policies, employer-provided retiree plans or Medicaid for those with low incomes. Increasingly popular in recent years have been those Medicare managed-care plans, now known as Medicare Advantage, that were first authorized in 1982 and often provide extra benefits for members.

All of that "has taken some of the pressure off" lawmakers to expand the program, Oberlander said. And a final reason that vision, hearing and dental care have not been added to standard Medicare is that they are far from the most critical gaps in Medicare's benefit package.

For example, Medicare does not cover long-term custodial care — the sort of non-nursing, personal care that provides assistance in activities of daily living such as bathing, dressing, eating, getting in or out of a bed or chair, using the bathroom or preparing food. Custodial care tends to be both very expensive ($50,000 to $100,000 a year or more) and needed by a large number of beneficiaries, particularly after age 80. Efforts over the years to create a government long-term care benefit have been largely unsuccessful. A very limited program, the CLASS Act, was part of the Affordable Care Act in 2010 but was repealed before it could take effect because its financing was deemed insufficient. President Joe Biden has called for Congress to include billions of dollars for caregiving in the infrastructure package Democrats will work on this fall.

Also, as previously mentioned, traditional Medicare includes no limits on patient cost sharing — the percentage or amount of a medical bill that a beneficiary must pay. Its basic hospital benefit runs out after 90 days, and the 20% coinsurance (the percentage patients are responsible for) on outpatient care runs indefinitely.

So why are dental, vision and hearing coverage on the front burner now as lawmakers consider beefing up the program? Part may be self-serving for lawmakers tasked with appropriating funds. All three benefits "are less expensive than [adding] nursing home" coverage, said Oberlander.

But a big part is politics. On the campaign trail, Biden promised to lower Medicare's eligibility age from 65 to 60. "Medicare for All" advocates like Senate Budget Committee Chair Bernie Sanders (I-Vt.) pledged to try to do the same, and lowering the eligibility age is included in the outline Schumer shared with Senate Democrats as an option.

But lowering the eligibility age is vehemently opposed by hospitals and other health providers, who fear they will lose money if people currently covered by higher-paying private insurance are covered by Medicare instead. That makes benefits expansion the much easier choice for Congress.

That is not saying it will happen. The Congressional Budget Office said the vision, hearing and dental benefits included in a bill passed by the House in 2019 would have cost an estimated $358 billion over 10 years. But this is the closest the benefits have gotten to enactment since Medicare's inception.

HealthBent, a regular feature of Kaiser Health News, offers insight and analysis of policies and politics from KHN's chief Washington correspondent, Julie Rovner, who has covered healthcare for more than 30 years.

Julie Rovner: jrovner@kff.org, @jrovner

The CDC's recent guidance on students and masking "lacks a well-grounded scientific justification." -- Florida Gov. Ron DeSantis in a July 30 executive order.

This article was published on Wednesday, August 11, 2021 in Kaiser Health News.

By Victoria Knight   

On July 30, Florida Gov. Ron DeSantis issued an executive order stating that schools couldn't mandate that their students wear masks, and that it should be up to parents to decide whether they want their children masked in school buildings. The order also said the state can deny funding to districts that don't comply.

One part of the order particularly caught our attention because of what it said about masks: "WHEREAS, despite recent Centers for Disease Control and Prevention (CDC) 'guidance,' forcing students to wear masks lacks a well-grounded scientific justification; indeed, a Brown University study analyzed COVID-19 data for schools in Florida and found no correlation with mask mandates."

The executive order came on the heels of the CDC guidelines for reopening K-12 schools, which recommended that everyone age 2 and up should wear masks whether they are vaccinated or not. This guidance was issued partly because of the increase in COVID cases due to the delta variant, which is more contagious than other versions of the virus. It was also issued because COVID vaccines have not yet been authorized for use in children under age 12.

During the pandemic, DeSantis, a Republican, has consistently taken positions contrary to public health guidance from experts and said he wants Florida to remain open.

"In Florida, there will be no lockdowns, there will be no school closures, there will be no restrictions and no mandates," DeSantis said during a speech introducing the executive order, which drew immediate pushback. President Joe Biden criticized his position and a group of Florida parents filed a lawsuit to block the order.

But the state is currently considered a COVID hot spot. New COVID-19 cases jumped to 28,000 on Sunday and total COVID-related hospitalizations to almost 14,000 on Monday — numbers that surpassed previous statewide records. For context, in Florida there were 2,500 new COVID cases and a seven-day average of 229 hospitalizations reported two months earlier, on June 6, before the delta variant surge.

DeSantis' executive order cites a Brown University study to support his argument that schools can't mandate masks.

We reached out to DeSantis' office to confirm the role of that study and to ask if any other research was involved in the development of the executive order.

Press secretary Christina Pushaw replied with a statement reiterating the governor's position that studies have shown COVID's spread in schools is typically less than within the larger community and that science has yet to substantiate the effectiveness of masks in reducing what she said was "an already very low risk of COVID-19 in children." She acknowledged that the delta variant has been shown to be more transmissible — which means it could increase children's risk — "but that is only a working theory as no studies have shown that conclusively."

That made us wonder about key elements of the executive order — specifically, whether the Brown study indeed illustrated that mask mandates didn't prevent transmission of COVID-19 and if it's correct that "forcing students to wear masks lacks a well-grounded scientific justification."

The Brown Study

We reached out to Emily Oster, a professor of economics at Brown University, and the lead author of the study that DeSantis' order references. Oster became well known during the pandemic for issuing data-driven recommendations on parenting and schooling. Some experts, though, have taken issue with her being an economist and not an epidemiologist.

Oster told us she couldn't participate in a direct interview about the study, but she sent us this statement:

"We did not consult with Gov. DeSantis on these issues. Our paper is currently a pre-print, undergoing peer review. It relies on data from the 2020-2021 school year, prior to the emergence of the more contagious delta variant. Current CDC guidance, taking into account the current virus situation and all available data on masking, suggests masking for all K-12 students and staff, regardless of vaccination status."

The study analyzed whether mask mandates in school districts in Florida and other states influenced the number of COVID cases among students and staff members by looking at mitigation strategies as well as COVID case counts. The researchers found that staff rates of COVID were slightly higher in districts without mask mandates, but the difference was not statistically significant. Overall, no correlation was found between mask mandates and COVID cases in students.

But within the study itself, the authors wrote about the limitations of their methods.

For instance, the study looked only at whether mandates existed at particular schools — not at the mask-wearing behavior of students and staffers. The study also didn't account for mitigation measures that might have been in place in the surrounding community, which would influence case counts.

At the end of the study, the authors offer a conclusion that undermines the executive order: "We would emphasize that in general this literature suggests in-person school can be operated safely with appropriate mitigation, which typically includes universal masking. It would be premature to draw any alternative conclusions about this question based on this preliminary data."

Justin Lessler, an epidemiology professor at the University of North Carolina, who led a peer-reviewed study that found masking in schools was associated with a significantly reduced risk of COVID transmission, said he didn't think this Brown study showed any strong conclusions to support the governor's position.

"I think the lack of correlation with mask mandates at the population level is pretty weak evidence," Lessler wrote in an email. "Also, mechanistically, it is a little hard to believe masking would not have some effect."

Other Studies on Masks in Schools and COVID in Children

Dr. Lynn Goldman, dean of the Milken Institute of Public Health at George Washington University, said masks are absolutely effective in reducing COVID transmission in children.

"What the science actually shows is that for children ages 2 and above, masks are not only protective but needed," said Goldman, who is also a pediatrician. Since "those kids who are below the age of 12 cannot yet have the vaccine so they don't have that layer of protection."

Goldman also said studies show masking is effective in preventing COVID transmission in schools.

The CDC guidance also cites several CDC-led studies that show the benefits of masking in schools, while independent researchers have shown similar results. Masking was often combined with other efforts to reduce spread, including improved ventilation and filtration systems. 

These points counter a claim central to DeSantis' executive order: that the CDC school-reopening guidance "lacks a well-grounded scientific justification."

"I think this 'whereas' of DeSantis' executive order is just false, it's just patently false," said Dr. Jeffrey Goldhagen, a pediatrics professor at the University of Florida Health in Jacksonville.

What About Infection Risks for Children?

Though studies early in the pandemic did seem to indicate children were less likely to get COVID than adults, current CDC data suggests that no longer seems to be the case.

CDC data through March 2021 shows that COVID infection and symptomatic illness in children ages 5 to 17 was comparable to infection and illness in adults ages 18 to 49. Studies have also shown that even if children have mild or asymptomatic cases of COVID they can spread the disease to adults who may then develop more severe cases — meaning children can be significant vectors of disease.

Children also are susceptible to the delta variant, which is more transmissible than the alpha variant.

Goldhagen said he has already anecdotally heard and seen the spread of the delta variant among children in camps and in schools that have started their semesters.

Pediatric COVID hospitalizations have also been increasing in Florida in the past week, likely due to the delta variant, and there are reports that some children are experiencing serious symptoms. "The increase in the number of patients that we have in our children's hospital due to COVID has increased 500%," Goldhagen, who is also a pediatrician at Wolfson Children's Hospital in Jacksonville, told us on Aug. 5.

Our Ruling

DeSantis' July 30 executive order missed the mark with its claim that "forcing students to wear masks lacks a well-grounded scientific justification."

It also cited a Brown University study as scientific evidence that there is no correlation between mask mandates and reduced COVID spread. However, while that study didn't show a correlation, its authors noted the study's limitations and concluded that appropriate mitigation typically includes universal masking. It flatly stated it would be premature to draw other conclusions based on the researchers' preliminary data. Multiple studies also show masking in schools does have an effect on preventing COVID transmission.

DeSantis' executive order cherry-picked a study that offers little basis for his position and includes a variety of elements that are not accurate. We rate this False.

Source List

ABC Science Collaborative, Final Report, June 2021

Bloomberg, "Florida Parents Sue DeSantis, Ask Court to Allow Mask Mandates," Aug. 8, 2021

Centers for Disease Control and Prevention, Mask Use and Ventilation Improvements to Reduce COVID-19 Incidence in Elementary Schools — Georgia, November 16-December 11, 2020, May 28, 2021

Centers for Disease Control and Prevention, COVID-19 in Primary and Secondary School Settings During the First Semester of School Reopening — Florida, August-December 2020, March 26, 2021

Centers for Disease Control and Prevention, Trends in Number of COVID-19 Cases and Deaths in the US Reported to CDC, by State/Territory, accessed Aug. 9, 2021

Centers for Disease Control and Prevention, Guidance for COVID-19 Prevention in K-12 Schools, updated July 9, 2021

Centers for Disease Control and Prevention, Science Brief: Transmission of SARS-CoV-2 in K-12 Schools and Early Care and Education Programs – Updated, July 9, 2021

Centers for Disease Control and Prevention, Estimated COVID-19 Burden, updated July 27, 2021

Department of Health and Human Services, Protect Public Data Hub — Hospital Utilization, accessed Aug. 9, 2021

Email interview with Justin Lessler, epidemiology professor at the University of North Carolina-Chapel Hill, Aug. 5, 2021

Email interview with Jill Roberts, associate professor at the University of South Florida College of Public Health, Aug. 3, 2021

Email statement from Emily Oster, economics professor at Brown University, Aug. 3, 2021

Email statement from Christina Pushaw, press secretary for Gov. Ron DeSantis, Aug. 4, 2021

Harvard Medical School, Coronavirus Outbreak and Kids, Aug. 2, 2021

medRxiv, COVID-19 Mitigation Practices and COVID-19 Rates in Schools: Report on Data From Florida, New York and Massachusetts, May 21, 2021

The Miami Herald, "Florida Children's Hospitals See Pediatric COVID Cases Soar Amid Delta Variant Surge," updated Aug. 9, 2021

National Bureau of Economic Research, School Reopenings, Mobility, and COVID-19 Spread: Evidence From Texas, May 2021

NBC 6 South Florida, "'Governor Who?' Biden Hits Back at DeSantis as Feud Continues," Aug. 6, 2021

The New York Times, "She Fought to Reopen Schools, Becoming a Hero and a Villain," June 22, 2021

Office of Gov. Ron DeSantis, "Governor DeSantis Issues an Executive Order Ensuring Parents' Freedom to Choose," July 30, 2021

Phone interview with Katherine Drabiak, associate professor at the University of South Florida College of Public Health, August 3, 2021

Phone interview with Dr. Jeffrey Goldhagen, pediatrics professor at the University of Florida Health in Jacksonville, Aug. 5, 2021

Phone interview with Dr. Lynn Goldman, dean of the Milken Institute School of Public Health at George Washington University, Aug. 6, 2021

Reuters, "Florida Governor Blocks School Mask Mandates, Says Parents Can Choose," July 31, 2021

Science, "Household COVID-19 Risk and In-Person Schooling," June 4, 2021

Victoria Knight: vknight@kff.org, @victoriaregisk

Hundreds of orthopedists and neurosurgeons have cashed in on stakes in companies that design, manufacture or distribute orthopedic implants — sometimes after investing little or no money.

This article was published on Tuesday, August 10, 2021 in Kaiser Health News.

By Fred Schulte August 10, 2021

Several orthopedic surgeons who invested in Renovis Surgical Technologies made big money when a Japanese technology giant snatched up the small California medical device company.

Kyocera Corp., which was eager to expand its U.S. spine and joint implant sales, bought Renovis' assets in 2019. While the parties kept the sale price under wraps, Renovis' physician stockholders held stakes valued at over $34 million by the end of that year, with nearly half that sum to company founder and chief executive Dr. John Steinmann, according to the federal government's "Open Payments" database, which tracks payments to doctors from device and drug companies.

Hundreds of orthopedists and neurosurgeons have cashed in on stakes in companies that design, manufacture or distribute orthopedic implants — sometimes after investing little or no money — and despite ongoing ethical and legal concerns, a KHN investigation has found.

KHN found that surgeons had stakes in more than 200 privately owned device companies from 2013 through 2019. At the end of 2019, their holdings topped $300 million in value. Doctors can dispute the payments but rarely do so.

Device makers often reach out to orthopedic surgeons for help designing or evaluating new implants, a practice they say spurs innovation and leads to safer, more durable devices. Offering feedback can land surgeons lucrative royalty and consulting deals or stock holdings that escalate in value when startup device companies are sold. In other cases, surgeons have owned a piece of distributorships that buy implants from manufacturers and resell them at a profit.

Dr. John Steinmann speaks during a Senate Finance Committee hearing on Nov. 17, 2015.

Whistleblowers and government fraud fighters have argued for years that money passing from industry to doctors can corrupt medical judgment, inflate costs and lead to unnecessary operations or otherwise harm patients.

Some of the harshest criticism has been directed at surgeons who profit from the sale of orthopedic devices — from spinal implants and screws and other hardware to artificial knees and hips that typically cost thousands of dollars. Federal officials warned as far back as 2013 that these sales could violate federal anti-kickback laws.

Steinmann, a Southern California orthopedic surgeon, has been a staunch defender of the profitable distribution companies and has held a stake in at least nine of them, according to Open Payments data. He and four other surgeons at Arrowhead Orthopedics in Redlands, California, were paid nearly $2.5 million in "dividend, profit or other return on investment" by a single distributorship of implants in 2019, according to the database.

The biggest surgeon investors in implant maker Renovis also owned a stake in distributorships. Steinmann received $16.4 million in "ownership and investment interest" from Renovis in 2019, according to Open Payments data, which says he invested $6.7 million in the company. Five other surgeons had holdings worth $1 million or more, according to the data.

Steinmann told KHN that he and the other surgeons invested millions in Renovis and worked for years building it. "We earned every dollar that we made," he said. Renovis developed innovative products over a decade and the investment return was "good, but not out of line in any respect," Steinmann said. He added: "I didn't do any better than if I invested in the stock market. I don't think it is fair to say otherwise."

In testimony before Congress, Steinmann has conceded that a few "bad apples" may have endangered patients by performing needless, or overly complex, operations for quick profits on implant sales, but testified his distribution companies have operated legally and ethically and have saved hospitals millions of dollars on implants.

Critics counter that surgeons should collect only professional fees for operating on patients — and steer clear of taking profits from devices they choose to implant in patients. Orthopedic and neurosurgeons typically earn upward of $500,000 annually for their professional services and are among the highest-paid specialists in medicine.

"Doing surgery is a loss leader for what you can get for selling your own products," said Dr. James Rickert, an orthopedic surgeon and head of the Society for Patient Centered Orthopedics, an advocacy group.

A 'Crowded and Cutthroat Field'

The orthopedic surgery industry is awash in cash; more than $3.1 billion flowed from device makers to surgeons from August 2013 through 2019, according to KHN's analysis of payments that device makers reported to the government-run website.

Much of that money paid surgeons for consulting work, including helping to market new products to their peers, or royalties for inventing or fine-tuning surgical tools.

"Orthopedic surgeons are the type who design things. That is inherent in their nature," said Mark Weiss, a California lawyer who represents physicians.

They also accounted for nearly a third of physicians with stakes in device and drug companies of $250,000 or more during 2019. While some surgeons lost money, many saw their stakes in these companies shoot up in value.

Consider Parcus Medical, a Sarasota, Florida device maker with a self-described "lust for innovation and creativity." Parcus, which takes its name from the Latin word for "thrifty," specializes in implants for repairing sports injuries. Massachusetts-based Anika Therapeutics swallowed it for $35 million in January 2020, and 22 surgeon investors saw their Parcus holdings at least triple in value, Open Payments records show.

Dr. Brian McKeon, a Waltham, Massachusetts, orthopedic surgeon and former head physician for the Boston Celtics of the NBA, held Parcus stock in 2019 valued at just over $1.4 million based on an investment of $146,000, according to the Open Payments database. The site states that McKeon did not dispute the figures as posted. But in an email to KHN, McKeon called the Open Payments numbers "way off," adding "if you find that money please forward to me." He said he invested in the company in 2006 and has disclosed ownership interest to his patients.

Also in January 2020, Anika Therapeutics paid $60 million for implant company Arthrosurface, which had about 20 surgeon investors; nine paid just $1 for their shares of stock, according to the company. These investments grew in value from $12,600 to $151,200 in 2019, depending on the surgeon, Open Payments records show.

Mark Namaroff, Anika's executive director for investor relations and corporate communications, said that most of the surgeons invested in the companies prior to the acquisition.

"It was also our understanding that Arthrosurface granted certain surgeons (likely those referenced as paying $1 for stock) common stock in the company during the company's early years as compensation for services rendered or inventions assigned to the company. As the investments by these individuals all took place prior to our purchase of the companies, we can't provide additional information about them," he wrote in an email.

Both Parcus and Arthrosurface had prominent sports orthopedists among their owners, including a dozen who have served as medical consultants to professional sports or U.S. Olympic teams.

It is legal for doctors to work for, or own a piece of, a medical business as long as their compensation is not tied to the volume of its products they use and provided that medical decisions are made in the best interests of patients. Several surgeons' organizations encourage members to keep detailed records of the services they provide, accept only "fair market" compensation from device makers, and fully disclose industry ties to patients and their peers in scientific journal articles and professional meetings.

Device companies are not required to specify what work surgeons did to justify their stock awards, which more than 100 companies have granted to one or more surgeons who invested $100 or less, according to Open Payments data.

Stock can skyrocket in value after a device company's sale.

That happened with Titan Spine, a titanium implant maker in Mequon, Wisconsin, bought by industry giant Medtronic in June 2019. In all, two dozen physician investors received more than $17 million in payments. The company reported that a few who put up no money of their own between 2014 and 2019 gained shares worth hundreds of thousands of dollars. One was Dr. Andrew Cappuccino, an orthopedic surgeon and team doctor for the NFL's Buffalo Bills, who received "vested LLC units" valued at $387,500, according to the company's report to Open Payments for 2019. Cappuccino had no comment.

A spokesman for Medtronic said: "Collaboration with physicians is critical to innovation and the development of medical devices that save and improve the lives of patients, as well as the training of surgeons who use them."

Not all investors were happy with their financial gains, however. Utah orthopedic surgeon Dr. Kade Huntsman is among a group of doctors and former Titan sales executives suing the company, for which he once worked as a consultant. The lawsuit calls Titan a "glittering Cinderella success story in an otherwise crowded and cutthroat spinal implant field."

Huntsman argues he dwelt on the "dark side" of the fairy tale after spending years providing "the voice, prestige and reputation" that made Titan's products appealing to surgeons.

In legal filings, Huntsman said a Titan sales executive brought him into the fold in April 2014 and persuaded him to try out a Titan device in the operating room. He was so impressed with it that he quickly became "one of the company's top utilizers" of hardware, according to the suit. Through his lawyer, Huntsman declined to comment.

Huntsman said in the lawsuit that Titan regarded him as a "potential game-changing advocate" for its implants. He talked up Titan's products at spinal surgery conferences and later taught other surgeons how to use them, according to the suit.

Huntsman agreed to help develop a new spinal fusion implant for Titan and was "certain it would be groundbreaking" — so much so that he declined a salary in favor of company "membership units," according to the suit.

But he alleged that Titan executives restructured his holdings, so that upon the sale to Medtronic for more than $150 million he saw a return of $180,000, "far less than the $828,750 he calculated he was entitled to receive," according to the suit. Medtronic denied the allegations and filed a motion to dismiss the case. In June, a judge in Milwaukee dismissed most of the case. Medtronic and Titan are opposing a bid by the plaintiffs to amend their complaint, calling it "futile," court records state.

'Corruption of Their Medical Judgment'

More than a decade ago, then-New Jersey Attorney General Anne Milgram investigated global device maker Synthes for failing to disclose stock payments to surgeons conducting pre-market trials on orthopedic hardware. She called that a conflict of interest and a "betrayal of the public trust [that] has the potential to jeopardize patient well-being."

The case centered on a spinal implant from Spine Solutions, a company partly financed by New York investment firm Viscogliosi Brothers. According to Milgram, Viscogliosi Brothers had offered the researchers "substantial investment opportunities in Spine Solutions, as well as consulting contracts that included gifts of company stock and stock options."

Milgram argued that Synthes failed to tell the Food and Drug Administration about the stock payments after it bought Spinal Solutions for $350 million in February 2003. The FDA approved the device in 2006 largely on the basis of research results. In May 2009, Synthes settled the New Jersey investigation by agreeing to disclose any payments to physician researchers.

Viscogliosi Brothers, which went on to help finance other spinal device startups, was not a defendant in the New Jersey case. But one of its companies, Paradigm Spine, later was accused by a former sales executive of paying kickbacks through "investor opportunities" offered to dozens of spine surgeons.

The surgeons were selected "because they are in a position to generate substantial business for Paradigm, and they have done so," according to the whistleblower's suit, which said four of Paradigm's top 10 users were investors. "This is a corruption of their medical judgment," according to the suit.

The whistleblower also accused Paradigm of prompting surgeons to try an implant for an unapproved use and bill for the operation improperly, allegations the company denied. In May 2016, Paradigm agreed to pay the government $585,000 to settle the errant billing claims, court records show. It denied any wrongdoing.

Paradigm Spine was sold to RTI Surgical, a Florida device company, in March 2019 for $300 million. A few surgeon investors wound up with $1 million or more in "ownership and investment interest," though the company reported that many of the surgeons saw their holdings shrink in value.

When Surgeons Profit Off Implant Sales

The Front Range Center for Brain & Spine Surgery in Fort Collins, Colorado, uses implants supplied by Highline Surgical Solutions LLC, whose owners include three of the center's surgeons, according to Open Payments filings.

The doctors say their stakes in the implant company and other medical businesses, including two local surgery centers and a diagnostic imaging center, assure them of a "strong influence on the quality, cost and effectiveness" of medical services.

Highline Surgical Solutions also generated a total of more than $3 million for five surgeons from 2016 through 2020, according to Open Payments data. The Front Range Center discloses the ownership ties and notes patients "will not be treated any differently" should they ask for products from other sources. The Front Range Center had no comment.

A few companies have joined the American Association of Surgeon Distributors, a nonprofit group advised by Steinmann that has set standards for "ethical and legal" physician-owned implant distributors. Most of the distributorships with ties to Steinmann have been members, according to the distributors' association website. As of 2018, Renovis was listed on the association's website as a "corporate member."

The association argues that the nation's five largest orthopedic device companies have established an "oligopoly" that its members fight to compete with, offering "meaningful" cost savings. Steinmann has presented state and federal regulators with research papers that he says document these savings and show how these companies can be run legally and ethically, by taking steps such as forbidding a distributorship from pressuring physician owners to use its products. "There is a right way and a wrong way," Steinmann said.

Yet the U.S. Department of Health and Human Services Office of Inspector General has argued that physician ownership in device distributors tends to prompt costlier and more-complex surgeries, calling the practice "inherently suspect" in 2013. Last December, officials said these deals could violate anti-kickback laws and "induce physician owners to perform more procedures (or more extensive procedures)" and use its products "in lieu of other, potentially more clinically appropriate devices."

KHN identified more than three dozen implant supply companies that generated millions of dollars for surgeons from 2013 through 2019. Farallon Surgical LLC, for instance, earned three California surgeons more than $7 million from 2014 through 2020, Open Payments records show. The surgeons had no comment.

About three dozen surgeons have bought stock in the Orthopaedic Implant Co., of Reno, Nevada. Most put in $1,250, an investment the company valued at $31,250 for each of those investors in 2019.

Company president Itai Nemovicher said the doctors would make money only if the company were sold. He said the company offers "high-quality implants at a lower price" to benefit patients. "We are aboveboard in everything we do," he said in an interview.

Thomas Bulleit, a Washington lawyer who has represented device makers opposed to doctor-owned distributorships, said he sees no reason for physicians to have a stake in the implant supply trade. "The problem is doctors steering patients to products that make them money," he said.

For their part, federal officials told KHN in interviews that they could not comment on any company's business practices without first reviewing "all of the facts and circumstances on a case-by-case basis." But they said the inspector general's office has repeatedly warned physicians about ownership deals that among other things distribute "extraordinary returns on investment compared to the level of risk involved."

Just what is permissible could be clarified by a Justice Department civil case in California that has dragged on for nearly a decade. The suit alleges that Reliance Medical Systems LLC and its non-physician owners paid kickbacks to orthopedic surgeons who agreed to use its products. One surgeon paid nothing for a 20% ownership in one of Reliance's companies and was paid "an average of more than $500,000 per year between 2007 and 2012," according to the suit. The suit alleges that 25 of Reliance's 35 physician investors increased their rate of complex spinal fusions and, in some cases, elderly patients on Medicare suffered complications from operations that were "more extensive than necessary."

Reliance and its owners have repeatedly denied violating any laws. "Our clients will never settle. They believe they have done nothing wrong and they want their day in court," said Reliance attorney Patric Hooper.

The trial is set for early 2022.

Payments Less Than Transparent

While device companies must report physician ownership stakes, patients are largely on their own in deciphering what it all means.

The federal Centers for Medicare & Medicaid Services, or CMS, which runs the Open Payments website, offers little help. CMS "is unable to speak to how the public should interpret the data," according to an agency spokesperson. Though it has the authority to do so, CMS has not conducted an audit to verify the accuracy of the reports it receives. One action CMS took in 2018 suggests that, at least in past years, tens of millions of dollars in orthopedic surgery-related payments was not reported.

Responding to written questions, CMS said that in 2018 it contacted about 38,000 orthopedic or neurosurgeons to remind them of the reporting requirements. The action "identified 388 new ownership records associated with 235 physicians, totaling $162,301,018 in reported payments and financial transactions," according to the agency. "CMS considered this outreach a success," the spokesperson said.

Much remains less than transparent, however. Some companies report paying thousands of dollars to surgeon owners one year only to disappear from the database the next. And it is rarely clear what percentage of a device company's total stock is owned by surgeons who may influence hardware sales, an important legal and ethical distinction.

The Open Payments website refers to an ownership interest as a "payment" expressed in dollars but does not always say whether it was paid out in cash or exists only on paper — or how the surgeons obtained their holdings in the company. Some surgeons apparently invested cash, sometimes hundreds of thousands of dollars. Yet there is no explanation of how some surgeons put up $100 or less for stakes that later soared in value. That makes it all but impossible to know whether the compensation paid to a surgeon was reasonable as required by ethics standards and federal anti-kickback laws.

"There are legitimate arrangements and possibly illegitimate ones," said Richard Saver, a University of North Carolina School of Law professor who has studied the reporting system. "Separating the two is proving very difficult."

Fred Schulte: fschulte@kff.org, @fredschulte

Abigail Matos-Pagán has made it her mission in the U.S. territory to vaccinate as many people as possible against COVID.

This article was published on Monday, August 9, 2021 in Kaiser Health News.

By Caroline Almy and Alicia Carter

MAYAGÜEZ, PUERTO RICO — Abigail Matos-Pagán entered a bright-blue house in Mayagüez earlier this summer and was met by Beatriz Gastón, who quietly led the way to her mother's small room. Matos-Pagán had come to provide a COVID-19 vaccine for Wildelma Gastón, 88, whose arthritis and other health concerns confine her to bed.

Wildelma Gastón asked for her rosary to be placed on her chest and motioned to her "good arm," where Matos-Pagán injected a first dose of the Moderna vaccine. The Gastón household, made up of five family members, breathed a collective sigh of relief. Though the vaccine had been available for months, Wildelma had been unable to reach a vaccination site. According to the Centers for Disease Control and Prevention's COVID Data Tracker, Puerto Rico's vaccination rate in March was one of the lowest among U.S. states and territories despite receiving more than 1.3 million vaccine doses. The rollout highlighted disparities in access to medical services, and the challenges of tracking and reaching remote citizens, such as Wildelma.

With each trip to school or work, family members worried about bringing the virus into their home and the threat to Wildelma's life. Matos-Pagán also vaccinated two of Beatriz's children, who are students at the University of Puerto Rico-Mayaqüez, during her visit.

"We have been waiting a long time for this moment," Beatriz Gastón said as she hugged Matos-Pagán goodbye, expressing gratitude for the home visit. To her, the vaccine is more than protection from the coronavirus — it clears the way for the family to be together with her mother.

According to The New York Times' case tracker, as of Friday, Puerto Rico has had more than 182,000 COVID cases and at least 2,594 deaths. About 57% of the population is fully vaccinated, but many of the unvaccinated are hard to reach because they live in remote mountainous communities or have chronic illnesses that leave them homebound. Matos-Pagán has vaccinated around 1,800 people in Puerto Rico so far, including 1,000 who have chronic illnesses or are bedridden.

In the pandemic's early days, Carmen Blas' health declined, and she began using a wheelchair. Blas, 78, was confined to her home, on the third story of an apartment building, which kept her safe from contracting COVID, but later she couldn't find transportation to a vaccination site. In June, her two children, Lisette and Raymond, visited from Wisconsin to help and immediately called the public health officials to get Blas inoculated.

"I usually come back every year and this was the longest I've ever been away. It was especially hard as my mother's health worsened, and I worried I might never see her again," said Raymond, who planned to extend his visit for as long as he was needed.

Matos-Pagán came to Blas' home in Aguadilla, Puerto Rico, to give her the vaccine. The family cheered the moment the vaccination was over.

"It's been really special to have intimate moments in someone's home during vaccinations. You can tell how much it means to their entire family," Matos-Pagán said afterward.

Mobilizing during a crisis is nothing new for Matos-Pagán. In the aftermath of Hurricane Maria, which cut off water and electricity to the entire island and claimed more than 3,000 lives, Matos-Pagán conducted initial community assessments in Puerto Rico's remotest and hardest-hit cities. Flooding and debris made many roads inaccessible, blocking these communities from basic needs such as food, water, prescription medications and transportation. Then, after a series of earthquakes in 2020 rocked the island, leaving even more people without housing or in substandard structures, Matos-Pagán organized local nurse practitioners to provide community healthcare. They supplied at-risk populations with their medicines when pharmacies closed, and teams set up mobile medical tents near overcrowded hospitals.

"I'm hyper and busy in my daily life, but when there is a crisis, I am calm and still. Grounded. I feel like I'm where I belong," she said.

Matos-Pagán was born in New York City. She became interested in medicine after watching nurses support her mother, who died of complications from an aneurysm when Matos-Pagán was 9. Her mother's death taught her "nothing was permanent," she said, which has inspired her to act when disaster strikes and support people through personal tragedy and loss.

Matos-Pagán returned to Puerto Rico to study nursing and later earned a master's degree and a doctorate at the University of Puerto Rico-Mayagüez. Through her work, she holds various titles: first commander of the Puerto Rican Disaster Response Team, and director and founder of the Coalition of Nurses for Communities in Disaster.

Her experiences managing medical professionals and resources during hurricanes have taken her to locations across the U.S. Atlantic coast and the Caribbean. During the COVID pandemic, she was recruited to assist in triage leadership for an ICU floor short on resources in El Paso, Texas, and a hard-hit senior living facility in Maryland.

"Not everyone is built for this. It's really sad, depressing work," Matos-Pagán said. "But even when there are mass casualties, you can still save lives and get people's basic needs met. I've seen communities come together in the most incredible ways. It's a challenge, but that's what keeps me going."

And, even as she is rapidly trying to get more COVID shots into the arms of Puerto Ricans, Matos-Pagán is preparing for the next crisis. Hurricane season officially began in June, and she will be on disaster-ready duty until the end of November.