Los Angeles County Suspends Contract With Surgical Instrument Company Over Conflict-of-Interest Concerns
Los Angeles County on Wednesday suspended its contract with Orthopedic Sciences -- a surgical instrument company owned by one of Martin Luther King Jr./Drew Medical Center's orthopedic surgeons -- because the contract could violate the county's conflict of interest laws, the Los Angeles Times reports. During the past five years, King/Drew has paid nearly $1 million to the company for instruments that stabilize degenerating hips or extract bone for grafts. The devices often cost more than double the price of more conventional instruments. Orthopedic surgeons said that although the devices have certain benefits, the advantages "appeared to be outweighed by the costs," the Times reports.
Dr. James Brannon -- co-owner, president and CEO of the company -- also practices at King/Drew. County law prohibits contracts with companies in which county employees serve as "officers, principals, partners or major shareholders." A Times review of 170 company invoices found that Brannon "routinely used his company's products during operations" and in five instances, purchased more than $17,000 worth of instruments and implantable devices -- three times the Medi-Cal reimbursement for each surgery and two days of hospital care, the Times reports. In some cases in which patients were uninsured, the county absorbed the entire cost of the devices.
Brannon said that the products he has supplied to King/Drew have "excellent" outcomes and cannot be obtained "from anywhere else in the country." He added, "We followed the rules to the T." Bannon said he notified both the county and his patients of his financial ties to the company. Some patients denied the claim, saying they were never told the surgeon profited from the devices' use. "They didn't even hint that a tool that was being used was developed by one of the doctors," Pamela Carlton, a former patient on whom Brannon operated, said. Some orthopedic surgeons said that the devices' success has not been proven because Brannon has not published any studies of their efficacy in peer-reviewed journals.
The county's Department of Health has been investigating the situation since May but to date have taken no actions against him, according to department spokesperson John Wallace. According to Joe Sandoval, the county's top purchasing manager, Brannon's company might have misrepresented itself in paperwork filed with the county in January, the Times reports. The statements said the products were "patented by a former resident of the county who is now a current employee," but Sandoval said he inferred from the statement that the inventor was an employee of the company, not of the county. The statement does not indicate that Brannon used the devices in surgeries at King/Drew. Orthopedic Sciences might be operating illegally in the state because the secretary of state's office in April suspended its license when the company failed to file mandatory corporate information for three years, the Times reports. Brannon said he was unaware of the suspension (Ornstein, Los Angeles Times, 8/26).This is part of the California Healthline Daily Edition, a summary of health policy coverage from major news organizations. Sign up for an email subscription.