Using Surgeon-Owned Distribution to Change an Unsustainable Trend

In a presentation at the 9th Annual Orthopedic, Spine and Pain Management-Driven ASC Conference in Chicago on June 10, Paul Burton, MD, chairman of the board of the American Association of Surgeon Distributors, discussed surgeon-owned distribution and the importance of transparency.

The cost of implants is increasing more than 13 percent each year while reimbursement and profits continue to decrease, according to Dr. Burton. To change this unsustainable trend, some surgeons are forming distributorships for medical devices such as implants. Surgeon-owned distribution is a business model in which surgeons purchase inventory, hire product representatives and contract directly with hospitals. Dr. Burton said these distributorships are a "true ancillary business" that includes risk. The model is designed to control implant costs and more fairly compensate surgeons in cases involving implants.

Transparency is essential in surgeon-owned distribution, Dr. Burton said. Surgeons should evaluate the products, report utilization and provide full disclosure to patients. Transparency is particularly important as this type of distributorship is a new type of organization. Another key component to the success of this model is having a physician who champions the project, according to Dr. Burton.

Related Articles on Supply Chain:
7 Top Challenges to Overcome When Purchasing Surgical Instruments
Value-Priced Implants Can Yield Savings for Orthopedics and Spine Surgery
Reducing Implant Costs: Advice From Tulsa Spine Hospital CEO Terry Woodbeck

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