Physician conflicts of interest involving medical device manufacturers have made headlines lately. The hospitals and physicians featured may not find the publicity entirely welcome, however.

The Wall Street Journal recently published an article describing in detail a deep financial relationship among The Cleveland Clinic, its chief executive (a heart surgeon), and a company called AtriCure, which manufactures equipment used in an operation to correct atrial fibrillation.

Although the FDA has thrice rejected AtriCure’s application for cardiac use of its device, Clinic surgeons use the AtriCure device off-label for cardiac procedures, and "the Cleveland Clinic and its doctors have been leading advocates of the AtriCure procedure." 1

A venture capital partnership that the Clinic helped found owns $7 million in AtriCure stock. Dr. Cosgrove sat on AtriCure’s board, and AtriCure will begin selling a device he developed and for which he will be entitled to be paid royalties. The article stated that "The Clinic didn’t disclose these ties to AtriCure to the patients on whom it performed the AtriCure procedure."

In another noteworthy story, The New York Times documented incidences in which Medtronic paid a Wisconsin spine surgeon $400,000 a year to consult for just eight days annually. Medtronic paid another spine surgeon in Virginia almost $700,000 in just the first nine months of 2005.2 The information was contained in court papers related to a whistle-blower lawsuit brought by a former Medtronic employee.

According to the Times, "the internal Medtronic documents…offer an unusually detailed glimpse of the intense campaign that device makers wage to win doctors’ loyalty…Medtronic spent at least $50 million on payments to doctors over some four years."

Medtronic also "played host at medical conferences where the ‘principal objective’ was to ‘induce the physician, through any financial means necessary’ to use its devices" and tracked use of its products to determine what level of attention a physician might receive.

In Mount Sinai Medical Center’s (New York) Policy on Business Conflicts of Interest, a financial interest is described as "ownership of stock, stock options, or other securities...salary (other than from Mount Sinai), loans…gifts (other than de minimis gifts such as advertising novelties and perishable or consumable gifts shared by members of a department, whose aggregate value does not exceed $250 per annum), royalties, patents, consulting fees, honoraria or other payments from any organization that has a business or financial relationship (including a research sponsorship relationship) with, or is a competitor of, Mount Sinai."4

Hospital costs should not be caught in the middle of this either. A hospital should not have to pay more for a product, when the physician’s preference for it may be influenced by a conflict of interest.

It’s timely to review with your compliance officer the hospital’s Conflicts of Interest policy to ensure that it effectively defines and manages conflicts of interest. If it is due for a re-write, there are a number of examples available on line, including the AMA’s and those of medical centers, such as Harvard, that may be helpful to consult.5

Where such relationships exist, your Conflicts of Interest Policy must be clear on how to disclose them. Many hospitals now require all members of the medical staff to complete a disclosure form annually and keep it up-to-date throughout the year.

More hospitals are also requiring disclosure by participants at each meeting of Value Analysis or Technology Review committees and section meetings in which products are bring reviewed. In most cases, a physician with ties to a vendor is required to excuse himself from the evaluation of that vendor’s products, and this is recorded in the meeting minutes.

1. Delicate Operation: How a Famed Hospital Invests In Device It Uses and Promotes. David Armstrong. The Wall Street Journal, New York, N.Y.: Dec. 12, 2005.
2. Whistle-Blower Suit Says Device Maker Generously Rewards Doctors. Reed Abelson. The New York Times, New York, NY. Jan. 24, 2006.
3. Conflict of Interest Guidelines for Organized Medical Staffs, Office of General Counsel, Organized Medical Staff Section, American Medical Association, http://www.ama-assn.org/ama1/pub/upload/mm/395/ coiguidelines111805.pdf
4. Policy on Business Conflicts of Interest, The Mount Sinai Medical Center Inc., New York, New York, http://www.mssm.edu/coi_policy/
5. Harvard Faculty Policies on Integrity in Science, http://www.hms.harvard.edu/integrity/