Association for Medical Ethics to Testify at Senate Finance Committee’s Hearing on Physician Owned Distributorships

By Association for Medical Ethics
November 16, 2015

(Washington, DC – November 16, 2015)Association for Medical Ethics President Scott Lederhaus, M.D., has been invited to testify at the Senate Finance Committee’s hearing on physician owned distributorships titled “Physician Owned Distributors: Are They Harmful to Patients and Payers?” to be held at 2:15 p.m. on Tuesday, November 17, in Room 215 of the Dirksen Senate Office Building.

Senate Finance Committee Chairman Orrin Hatch (R-Utah) and Ranking Member Ron Wyden (D-Ore.) announced the hearing, which will explore how through physician owned distributorships (POD) physicians receive revenue from the sale of medical devices they prescribe to patients. The hearing will be available online at

Dr. Lederhaus has long been a vocal critic of PODs and their pervasive effect on patients, physicians and the medical community. “The corruption surrounding physician owned distributors and the idea that every patient with any level of low back pain is a surgical candidate is nothing short of unbelievable,” Dr. Lederhaus said. “The financial incentive is leading doctors to perform unnecessary surgeries as they put profits before patients.”

A POD is an entity whereby the physician purchases an ownership in a medical device or implant company. The POD buys the implants wholesale and then sells those implants to the hospital at retail. The physician then inserts the POD implants into their patients, and the physician and POD organizers pocket the difference. The physician, in effect, becomes a salesman. It also has been found that a physician is more apt to implant excessive hardware for the sake of enhancing income when using implants the surgeon owns. The Office of Inspector General estimated 20 percent of all spinal fusion operations done in 2011 used POD implants.

In a statement announcing the meeting, Senators Hatch and Wyden said, “While the vast majority of doctors operate with the highest ethical standards, those with a vested stake in medical device distributorships raise a number of concerning questions about the physician’s motivation in prescribing a procedure, as well as the overall cost to the health care system.”

“The Association for Medical Ethics is dedicated to transparency in medicine and was an early advocate of the Physician Payments Sunshine Act, testifying our support before Congress in 2008,” said Charles Rosen, M.D., Association for Medical Ethics Board Member. “Once again, with PODs, we are seeing how conflicts of interest are contributing to the overuse of spine surgery in the U.S. and need to be exposed for what they are – profit at the expense of patient care.“

About AME:

The Association for Medical Ethics (AME) consists of physicians from every specialty of medicine who have joined together to promote patient care and good evidence-based medicine. AME provides increased public awareness on important issues such as departures from the ethics of responsible patient care, and identifies the often pervasive, and not infrequently adverse, influence of industry on many health care providers and their patients while maintaining a focus on the utilization of evidence-based care criteria in this process. AME was integrally involved in passage of the Sunshine Act through Congress being the only physician group to testify in favor of the Act. For more information about AME visit