AASD Media Backgrounder

The American Association of Surgeon Distributors (AASD) is the only non-profit association whose purpose is to provide, monitor, and enforce an industry-recognized set of strict standards for surgeon owned distributorships. The AASD grants and maintains membership only to those distributorships – deemed ethical PODs (or ePODs) – that are fully compliant.

Five Key Facts of Interest:

  • The orthopedic medical device industry has a $25 – $30 billion/yr. impact on U.S. health care.
  • Five orthopedic medical device companies have established an oligopoly.
  • Physician-owned medical device distributorships (PODs) have emerged as both an alternative distribution model and the only form of real competition to help lower prices.
  • Most PODs functioning today follow no standards for disclosure, and don’t necessarily provide meaningful cost savings to hospitals.
  • Only strict standards, such as those established by the AASD, protect patients and hospitals, assure proven cost savings (often exceeding 30%), guarantee full transparency, and help ensure competition.

Medical device costs comprise an enormous portion of total procedure expenses. A recent independent study shows most physicians, who make the purchase decisions, have no knowledge of implant costs. Greater pricing knowledge and involvement often lead to lower prices.

The AASD is the only industry accrediting body that has created and is fighting for strict standards to be followed by all distributorships with surgeon ownership to help ensure: transparency and full disclosure to hospitals and patients; commitment to cost savings and patient outcomes; product quality assurance; strict legal compliance; and submission of costs, pricing, and utilization data for auditing.

Strong evidence exists that endorsing standards like those established by the AASD will result in significant benefits to hospitals and meaningful healthcare savings.

The AASD’s strict, published standards for membership state that each Distributorship:

  1. Maintains a business structure consistent with Federal Self-Referral and Anti-Kickback statutes, and reports in compliance with the Physician Payment Sunshine Act.
  2. Demonstrates merit by proving to be the lowest average cost vendor of like implants during a comparable contract period.
  3. Does not have annual price increases to customers that exceed 3% above the consumer price index (CPI).
  4. Is a legitimate, freestanding stocking distribution company with employees, contracts, address, business license, and insurance.
  5. Demonstrates adherence to the AASD Product Evaluation Policy.
  6. Demonstrates adherence to the AASD Employee Training Policy.
  7. Demonstrates adherence to the AASD Disclosure Policy.
  8. Demonstrates adherence to the AASD Investment and Distribution Policy.
  9. Submits utilization data annually and demonstrates adherence to the AASD Appropriate Use Monitoring Policy.
  10. Has written contracts with hospitals, with pricing that is consistent among hospitals, and contract periods of at least one year.
  11. Does not leverage referrals to any hospital or surgery center.
  12. Does not require, pressure, or otherwise leverage physician owners’ use of the Distributorship devices.

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