AASD Press Release

AASD Applauds Media, Federal Government for Critical Look into Abuses of Physician Owned Distribution Model Association Supports Government Efforts to Ensure Patient Protections; Crack Down on Unethical  Surgeons

Washington, D.C. – The American Association of Surgeon Distributors (AASD) today welcomed a report by the Office of Inspector General for the Health and Human Services Department that was critical of the potential abuses of physician owned distributorships (PODs). AASD recently began designating their members as ePODs or ethical PODs a signal to patients, hospitals, and physicians that AASD members are held to the highest standards of transparency and accountability.

“Surgeon Distributors that have earned the ePOD designation appreciate the media and the OIG shedding light on the abuses of the POD model. We hope this is another step in eliminating abuse of this innovative and valuable model” said Dr. John Steinmann, DO, who serves as Advisor to the AASD Board. “ePODs go beyond established legal requirements and must prove they meet the high standards set by the AASD for transparency, full patient disclosure, and submission of costs, pricing and utilization data for auditing.”

An ethical physician owned distributorship (ePOD) is a business model that allows doctors to align with their hospital for the purpose of lowering healthcare costs. ePODS purchase medical devices in bulk and distribute their orthopedic devices (such as hips, knees, spinal screws, etc). The ePOD model is an innovative approach to purchasing devices and it’s gaining popularity in surgical practices. The model allows surgeons to skip the middleman, buy medical devices directly from the manufacturer, in bulk thus eliminating many of the non-value added costs. This reduces costs for hospitals, the entire medical system, and most importantly for patients.

“AASD has been proactive by establishing high standards for those wishing to earn ePOD designation through their vetting process of membership,” stated Dr. Kevin Booth, MD and Spinal Deformity Surgeon who is a partner in Farallon Surgical LLC, an AASD ePOD member. “A recent study of AASD ePOD members found there to be no increase in utilization due to physician ownership interest in the distributorships. It concluded that the surgeons commitment to ethical and professional standards were not compromised by their ownership interest in implant distribution.’”

The OIG report raised questions about claims of cost savings on medical devices supplied by PODs but a recent study of multiple AASD ePODs showed up to a 36 percent savings in the first year.

“We encourage those concerned with health care reform to look into the high costs associated with the traditional process of medical device distribution,” Booth concluded. # # # About the American Association of Surgical Distributors (AASD): AASD is a public benefit non-profit association. The purpose of the association is to provide an industry-recognized set of standards for surgeon owned distributorships, and to grant membership to distributorships that are fully compliant. For more information on ePODs, including AASD’s standards and policies, please visit www.aasdonline.org.

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