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Implant vendors and hospitals: Competing influences over product choice by orthopedic surgeons

Burns, Lawton R.; Housman, Michael G.; Booth, Robert E. Jr; Koenig, Aaron

doi: 10.1097/01.HMR.0000342984.22426.ac
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Background: Vendors of hip and knee implants court orthopedic surgeons to adopt their products. Hospitals, which have to pay for these products, now court the same surgeons to help reduce the number of vendors and contain implant costs.

Purposes: This study measures the surgeon's perceived alignment of interests with both vendors and hospitals and gauges surgeons' exposure and receptivity to hospital cost-containment efforts.

Methodology/Approach: We surveyed all practicing orthopedists performing 12 or more implant procedures annually in Pennsylvania. The survey identified the surgeon's preferred vendor, tenure with that vendor, use of the vendor during residency training, receipt of financial payments from the vendor, alignment of interests with both vendor and hospital stakeholders, and exposure and receptivity to hospital cost-containment efforts.

Findings: Surgeons have long-standing relationships with implant vendors, but only a small proportion receive financial payments. Surgeons align most closely with the vendor's sales representative and least closely with the hospital's purchasing manager. Paradoxically, surgeons support hospital efforts to limit the number of vendors but report that their own choice of vendor is not constrained. The major drivers of surgeons' alignment and stance toward cost containment are their tenure with and receipt of financial payments from the vendor.

Practice Implications: Hospitals face a competitive disadvantage in capturing the attention of orthopedists, compared with implant vendors. The vendors' advantage stems from historical, financial, and service benefits offered to surgeons. Hospital executives now seek to offer comparable benefits to surgeons.

Lawton R. Burns, PhD, MBA, is The James Joo-Jin Kim Professor and Professor of Health Care Management, Department of Health Care Management, The Wharton School, University of Pennsylvania, Philadelphia. E-mail: burnsL@wharton.upenn.edu.

Michael G. Housman, AM, is Doctoral Candidate, Department of Health Care Management, The Wharton School, University of Pennsylvania, Philadelphia.

Robert E. Booth, Jr., MD, is Clinical Professor of Orthopaedic Surgery, Department of Orthopaedic Surgery, University of Pennsylvania School of Medicine, and Chief of Orthopedic Surgery, Pennsylvania Hospital, University of Pennsylvania Health System, Philadelphia.

Aaron Koenig, is Medical Student, University of Pennsylvania School of Medicine, Philadelphia.

© 2009 Lippincott Williams & Wilkins, Inc.