Question: Should our hospital adopt a policy on physician relationships with medical devices companies and, if so, what should it say?

Answer: While not required, it is a very good idea to adopt such a policy.  Physician-owned device companies, or PODs as they are sometimes called, have been in the crosshairs of the federal government for a number of years.  While not illegal, the concern is that physician financial relationships with medical device companies or other vendors can lead to unnecessary utilization and higher costs.  On the other hand, an outright ban on such arrangements could stifle innovation and possibly adversely impact patient care.  Still, the patient should know about the potential conflict. Therefore, any hospital policy should focus on disclosure of such relationships to the hospital and to patients.  Here are some of the basic things that should be in such a policy:

• Any physician on the hospital’s medical staff who has a financial relationship with a medical device company shall disclose that financial relationship to the hospital.

• Physicians who have a financial relationship with any medical device company must disclose the relationship to the patient when they are ordering a medical device sold by the company for the patient.

• The hospital should pay only fair market value for medical devices obtained from companies with which physicians on its medical staff have a financial relationship pursuant to its normal purchasing policies.

• Cost, quality and clinical effectiveness should determine hospital purchases of medical devices.