Joseph Paduda's weblog on managed care for group health, workers compensation & auto insurance, covering health care cost containment, health policy, health research, and medical news for insurers, employers, and healthcare providers.

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Corruption in the implant business

The sleazy world of surgical implants has been exposed recently, with reports of doctors receiving kickbacks, huge settlements by manufacturers, and outrageous pricing.

Just when you thought "finally, a company gets hammered", we find out that the corruption doesn't stop with the implant manufacturers, but infects the regulators themselves.

The US Attorney who settled the case against Zimmer for $311 million forced Zimmer to pay his former boss, John Ashcroft, between $28 and $52 million over 18 months (on a no-bid contract) to oversee the settlement. According to Ashcroft's firm, the fees are justified because they have hired an additional 30 employees and outside consultants for this project, and Ashcroft himself has actually traveled to Indiana several times (several times!!) to oversee the work.

Ashcroft, the former Attorney General, was US Attorney Chris Christie's boss.

Among the terms of the Ashcroft deal are:

--$150,000 to $250,000 per month for travel and incidentals

--$750,000 as a monthly retainer

--hourly fees up to $895

No wonder Ashcroft's spokesman said the firm "was pleased about the deal".

And no wonder implant prices are so high - they have to be to afford the payoffs, both legitimate and illegal.

This is disgusting.

Joseph Paduda is the principal of Health Strategy Associates.

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