Three years ago, the Department of Justice took stock of the orthopedic medical device industry–represented by the five big makers of orthopedic implants–and concluded that it was rampantly violating federal anti-kickback laws with the bribes and favors it was offering to surgeons. Such bribes often came in the form of training grants for those just starting out in the profession, or as lucrative consulting contracts for influential academic orthopedists.

The Justice Department fined the companies $311 million, and imposed mandatory new corporate compliance measures. But while the companies did modify some of their methods in accordance with new, more stringent oversight, they have nonetheless continued to funnel large sums toward the training of orthopedic surgeons who are in a position to use and promote their products. Indeed, crosschecking 2010 grant reports from two orthopedic foundations (Orthopaedic Research and Education Foundation and OMeGA Medical Grants Association) against the roster of training programs published annually by the American Academy of Orthopedic Surgeons reveals that the industry is subsidizing the salaries of up to one-fourth of 2010’s approximately six hundred new orthopedists at medical centers across the country, as they learn how to use these companies’ latest products.

“If you fund a pipeline of people that are going to be the users of the product, then that’s the way you keep getting the product to be sold,” explains Dr. Charles Rosen, the only orthopedist who testified before the Senate’s Special Committee on Aging in support of the Physician Payments Sunshine Act, a mandate requiring corporations to make the consulting contracts and gifts they disburse public.

The Sunshine Act finally made its way into law this March as part of the health care reform bill. But so far, it, like the Department of Justice ruling, has done little to change the way orthopedics operates. Money continues to flow at a growing rate from industry to trainees. The difference now is that companies no longer give the money directly to specific surgeons, instead depositing it with third-party foundations, like the Orthopaedic Medical Grants Association (OMeGA) and the Orthopaedic Research and Education Foundation (OREF), who then pass it along to orthopedic departments. The new method is designed to prevent companies from rewarding specific surgeons for using their products. As Dr. Frank B. Kelly, chairman of OREF’s Education Grants Board explains, “we…make sure that the money is disbursed in a random and nonbiased fashion in compliance with the DOJ.” Any program that meets standards specified by the Accreditation Council for Graduate Medical Education can enter the funding lottery.

But despite these new controls, the device industry still can – and does–earmark its donations for certain types of orthopedic subspecialties over others, thereby creating external incentives and pressures that influence the field to the detriment of patients.

Take orthopedic back treatment, a magnet for device industry dollars.

Age-related back problems that were once commonly treated by simply cutting out small pieces of bone or fusing just two vertebrae together, are increasingly treated by fusing several vertebrae together from multiple sides. The newer methods are more costly to Medicare, risk more dangerous complications, and yield no better results, as a major study reported in April. But these more complex procedures–which translate into higher reimbursements for surgeons and equipment-makers – are rising in popularity.

In many cases, surgeries are being performed even when arguably no intervention at all is warranted. At a 2009 national orthopedics conference in Bonita Springs, Florida, the usefulness of surgery for back pain was debated. Those arguing against surgery pointed out that while 85 percent of adults experience lower back pain at some point in their lives, for all but 10 percent, the pain goes away within three months, regardless of what doctors do. In a poll that followed the debate, only one member in attendance volunteered that if she had “discogenic” back pain, she would choose surgery.

Yet surgeons fuse backs for lower back pain more often than for any other malady. Indeed, between 1998 and 2004, the amount spent on back surgery tripled from under six billion to $17.6 billion dollars per year. In most cases, it’s the appearance of a dark-looking “degenerated” disc on an MRI scan that precipitates a doctor’s decision to perform lower back surgery. But the appearance of such darkened disks are so common in people even without pain, that it’s essentially meaningless.

It’s worth noting that most orthopedic spine surgery programs can credit a piece of their financial security this year to donations from the companies that make spine implant and spine fusion equipment. Depuy Spine, Inc., alone allocated $2 million to pay for 25 new spine surgeons to start training in July. “There is too much surgery being done and industry is facilitating it,” says Dr. Rosen, “because they’re creating the demand by sponsoring fellowships.” Indeed, as industry-sponsored fellowship programs turn out more and more doctors trained to perform these kinds of complex back fusions, the pressure grows on those doctors to find more patients to undergo such procedures – whether it’s the best treatment option for them or not.

The device industry’s second favorite orthopedic specialty, by giving, is hip and knee replacement. There again, industry underwrites the majority of the formal training programs in this country (benefactors include all five of the DOJ-targeted companies). By contrast, such subspecialties as orthopedic cancer surgery and orthopedics for children share just six funded fellowships between them.

And forget about nonsurgical training. Dr. Eric Campbell, research director at the Mongan Institute for Health Policy, says he’ll curb his skepticism about industry manipulation of the field on the day that device manufacturers decide to fund fellowships at five major universities using nonoperative approaches to managing chronic back pain.

In these ways, industry-salaried training promotes treatments designed to earn the sponsoring companies the most money – not necessarily the treatments that are in fact the most important or beneficial. So far, however, professional organizations have given the issue little attention. Defending the continued flow of industry money into the field, a board member of OREF points out that while institutions like Massachusetts General Hospital, Johns Hopkins and the Mayo Clinic might be able to offer their usual roster of fellowships without the company checks they’re depositing this year, lower profile, less well endowed institutions might not.

Even the officials assigned to monitor the companies censured by the Department of Justice in 2007 worked with OREF to get the flow of industry training grants started again, as they understood such grants to be “very important to the development of the field,” says David N. Kelley, former U.S. Attorney for the Southern District of New York in Manhattan. (The DOJ tasked Kelley with monitoring Biomet Orthopedics, Inc., one of the big five, for 18 months ending in 2009.)

Leading medical journals, too, have given the issue short shrift: an otherwise comprehensive review of industry-related threats to the orthopedic profession published in the Journal of Bone and Joint Surgery this March doesn’t discuss the new fellowship funds at all. And a major position paper published in the Journal of the American Medical Association (JAMA) last year, co-authored by the journal’s editor, ventured no censure of the practice, instead offering, among its mindful suggestions, that fellowships “should not be named after the pharmaceutical or device industry sponsors.”

“Yeah, let’s don’t do that!” quips an exasperated Dr. Harlan Krumholz, a Yale cardiologist who writes about professionalism in medicine. While they’re at it, better to avoid NASCAR-esque patches glued onto those white coats too…

Dr. Rosen’s effort to take a stand against industry influence has sometimes seemed a lonely one. But he is relentless. In 2006, dismayed by the pervasive industry corruption of his profession, he founded what became the Association for Medical Ethics, dedicated to highlighting the repercussions of industry influence on health care. Any doctor can join, as long as they pass his litmus test: no industry ties.

Rosen believes his anti-industry activism, beginning with his vocal support for the Sunshine Act in 2008, earned him harassment, especially from the American Academy of Orthopedic Surgeons (AAOS). According to Senate sources, two people claiming to represent the AAOS called the Senate Aging Committee to lodge protests about Rosen even before his Sunshine Act testimony began. (The AAOS denies knowledge of the calls).  After Rosen’s powerful testimony attracted national attention, his boss told him he was getting friendly advice from AAOS members that firing Rosen might be a good move for his department.

Then things really got difficult for Rosen. The AAOS allowed a disgruntled surgeon – whose work Rosen had critiqued on behalf of the California medical board – to initiate an official grievance against him, alleging unprofessional behavior. The surgeon in question had been suspended from medical practice by the state of California. Nonetheless, in violation of its own bylaws (according to which, members whose licenses have been restricted or revoked are barred from active fellowship), the AAOS gave credence to the suspended surgeon’s charges, and scheduled an official disciplinary hearing on Rosen last summer.

For over a year, Rosen feared for his livelihood as the AAOS dragged out the process. “They can sanction you, expel you, send you a letter of reprimand and put it on the front page of the AAOS newsletter that goes to all 24,000 orthopedists,” Rosen says.

It was only after the Sunshine Act passed this spring that the AAOS informed Rosen it would dismiss the charges. (That’s five months after Rosen’s accuser finally lost his medical license altogether, for flatly refusing a psychiatric evaluation, competence assessment, remedial training, and an ethics course).

The AAOS attempted to explain itself, in a letter sent to Senator Kohl (D-WI), a sponsor of the Sunshine Act, maintaining that its actions against Dr. Rosen had not been made in retaliation for his testimony in support of the act. (That was important for them to establish because, as the Senator warned the organization, retaliation over Rosen’s testimony would have constituted a federal crime.) Despite protestations that its motivations were pure, the AAOS did not deny that it knowingly allowed a surgeon on probation to file the grievance.

While Dr. Rosen’s efforts are intended to promote awareness of problems like industry-financed medical training, there is one organization, according to a senior Medicare director (who asked to remain anonymous), that could actually change the system. The Accreditation Council for Graduate Medical Education (ACGME), the official explains, could bar outside funding sources for training programs today if it chose to do so.

Unfortunately, however, beyond a vague 2002 position paper stating that medical educators should manage industry relationships in ways that promote professionalism and medical ethics, the ACGME so far has had little to say on the matter. Dr. Thomas Nasca, the ACGME’s CEO, declined interview requests and would only say, through his spokesperson, “we are not involved in the funding decisions for residency and fellowship programs.”

For now, then, it seems that industry funded training is here to stay, as there is no authority willing to take action against it. Unless Congress steps in, Medicare can’t even prohibit double-dipping (a practice whereby institutions take in both federal and industry money for the same fellowship). That means that the nation’s hospitals and clinics are left to make difficult choices while trying to survive in a strained economy.

Not everyone, however, is giving in to temptation. Over the past few years, the University of Wisconsin has taken a close look at all of its industry connections and put in place tough internal policies that treat any new links with extreme caution.

Like many major teaching institutions, Wisconsin spends far more on its residents and fellows than Medicare reimburses, but it picks up the slack on its own, resolutely finding ways to raise money itself, rather than resorting to industry funds. As times have gotten tighter, its orthopedics department has sometimes eyed other institutions enjoying their industry provided wealth.

But “at this point,” says Dr. Carl Getto, Senior Vice President for Medical Affairs at UW Hospitals and Clinics, “we’ve chosen not to do that.”  And so, for the moment at least, they’re sticking to their ideals.

Ford Vox is a physician and medical journalist who has written for Reuters, U.S. News & World Report, and Newsweek. This piece originally appeared in The Atlantic, and is reprinted with the author’s permission.

Submit a guest post and be heard.