Medical firm with history of settlements has close ties with hospitals
Medtronic says its consulting practice helps improve care
Inside the New Brunswick Heart Centre, workers toil away in the surgery department and special examination rooms, assigned to cut costly bottlenecks so more patients can be seen more quickly.
These workers are not hospital employees, however.
They’re from a branch of Medtronic, a medical device giant that makes lifechanging products from insulin pumps to pacemakers.
Medtronic doesn’t just sell medical devices. The company’s burgeoning Integrated Health Solutions (IHS) business has consulted and partnered with more than 100 hospitals around the world, often with units that specialize in health conditions for which Medtronic makes devices. Under the deals, Medtronic does everything from managing cardiac catheterization labs to overseeing inventory to consulting services.
This is a new frontier of public health care, where cash-strapped hospitals open their operations to a private company — a multinational that has paid the U.S. government millions to settle claims that it defrauded federal health programs and gave kickbacks to doctors to implant its devices.
An investigation by the International Consortium of Investigative Journalists and its 58 media partners, including the Star/CBC/Radio-Canada, has found some of these international partnerships include incentives for the hospitals, such as staff donated by Medtronic. In return, the company would benefit from increased sales a hospital generated as a result of more efficient management. Neither Medtronic nor Horizon Health Network agreed to interviews about the partnership involving the New Brunswick Heart Centre.
In statements, Medtronic said it has an unwavering commitment to ethical business practices, and its Integrated Health Solutions branch operates behind a firewall that separates it from the company’s device-selling operations.
“We believe that integrated health care is the future of health-care delivery and that IHS and value-based initiatives will be instrumental in reducing health-care costs and improving quality of care,” a Medtronic spokesperson said. “This leads to better patient outcomes at lower costs.”
The motive behind the partnerships, according to a former U.S. Medtronic director who oversaw contracts the company had with hospitals, is simple: to entrench Medtronic in the inner-workings of the hospital.
“We’ll help you be better and more efficient. But we need to get more business out of it,” the former director told the Star. He asked not to be named because he still interacts with the medical device industry in his new job.
“Medtronic wants to get you to the point where you can’t live without them.”
By tying perks like free staff or better pricing to hospital revenue growth, these partnerships “will turn these health-care systems into cash cows rather than service professions,” said Dr. Nortin Hadler, emeritus professor of medicine at the University of North Carolina at Chapel Hill.
“I can envision a marketing slogan for my hospital along the lines of ‘What’s good for Medtronic is good for the patient.’ ”
Medtronic began in a Minneapolis garage in 1949, where Earl Bakken, an electrical engineer, fixed lab equipment with his brother-in-law. In the late 1950s, Bakken created the first wearable, battery-powered pacemaker, an innovation that would help save millions of lives and set the small company on its way to become a global behemoth.
In a July speech to the Manitoba Chambers of Commerce, Medtronic’s CEO Omar Ishrak boasted that the company has excelled in not only developing innovative technologies, but “inventing new markets” through which Medtronic helps more than 70 million patients a year, or two people every second.
In its meteoric ascension, the company has repeatedly landed in court. Medtronic has agreed to pay at least $115 million to the U.S. government over the last decade to settle claims that it broke the law. In paying the settlements, Medtronic denied any wrongdoing. The settlements all stemmed from lawsuits filed by whistleblowers, mostly former company insiders. Under U.S. law, the government can pursue lawsuits filed by whistleblowers against companies that allegedly defrauded the government. The whistleblowers receive a portion of the proceeds if the case is successful.
Medtronic has also been ensnared in thousands of lawsuits from patients around the world — and at least one Toronto hospital — seeking money for alleged damages caused by Medtronic devices. Chief among those devices are the Sprint Fidelis leads, insulated wires connecting implanted defibrillators to patients’ hearts that were prone to fracture, causing unnecessary shocks.
The first-ever Sprint Fidelis lead was implanted inside a London, Ont., operating room in early 2004. By late 2007, more than 268,000 Sprint Fidelis leads were implanted worldwide, including into chests of some 5,900 Canadians. One of them was Sherry Robinson of Sechelt, a coastal community northwest of Vancouver.
Robinson, then 32, was given an implantable cardioverter-defibrillator (ICD) with a Sprint Fidelis lead after she suffered cardiac arrest. It was a “life saver.” She finally felt comfortable doing something as simple as vacuuming while she was home alone, no longer afraid she would over-exert and suffer a “passout” as she had so many times since she was a kid.
One night in January 2007, just before going to sleep, a jolt thrust her forward in bed. “I saw this white light through my eyes. It hurt like hell. I thought, ‘I’ve been hit by lightning,’ ” she said. “It took me a couple of seconds to catch my breath and realize: ‘Oh my God, that’s my defibrillator.’ ”
She was rushed to hospital and, after tests showed her heart was fine, she was sent home. The following two nights, she again received shocks. Then, while hooked up to a monitor at the hospital, her defibrillator rattled off “a firing storm” — six consecutive shocks.
By the time her ICD was deactivated, she had received 18 shocks.
Doctors determined the lead had fractured, causing it to shoot false signals to the defibrillator. On Jan. 24, 2007, she had the lead removed and replaced with a new one. Again, it was a Sprint Fidelis.
Around that time, a U.S. doctor was flagging problems with the thin wires and approached Medtronic. The company sent a notice to surgeons, attributing the fractures to improper handling by physicians.
By October 2007, Medtronic’s message changed.
Stop implanting the leads, the company warned, as the wires had a risk of fracturing that could cause an implanted defibrillator to fire inappropriate shocks or stop working completely. Medtronic halted sales of the leads across the world. The fractured leads may have been a contributing factor in 13 deaths, the company later announced.
Medtronic has said the leads had met rigorous “safety, effectiveness and quality standards” before being approved in Canada, and the company closely monitored how the products performed in patients.
“Safety is our first priority, and we categorically reject any suggestion that Medtronic puts ‘innovation and profits’ over patient safety,” the company said in a statement.
“Safety is our first priority, and we categorically reject any suggestion that Medtronic puts ‘innovation and profits’ over patient safety.” MEDTRONIC STATEMENT
For four more years, Robinson lived in fear her second Sprint Fidelis lead would cause her defibrillator to misfire again. In 2011, she underwent a risky procedure to have the lead removed.
Robinson is the lead plaintiff in an ongoing Canadian classaction lawsuit against Medtronic over the leads. And it’s not just patients suing.
In a separate lawsuit, Toronto’s Health Network demanded $750,000 from Medtronic for “the recovery of costs, expenses and damages … incurred as a result of purchase and implantation of Sprint Fidelis leads.” The two sides settled, a hospital spokesperson said, adding that the terms are confidential.
Current health-care systems are wasteful, unsustainable and in need of fixing, Medtronic has said time and again.
Think of the health-care system itself as a sick patient, Neil Fraser, president of Medtronic Canada, said on the company’s website about the company’s partnerships with hospitals. “What we’re trying to do is address an illness that can be helped through technology, innovation and collaboration.”
A partnership would be a “win-win,” the company described in a 2014 presentation to investors. A hospital would save by reducing the cost of providing care, and Medtronic would make tens of millions of dollars in “incremental device and service sales.”
It was part of how, as enthusiastic analysts at PriceWaterhouseCoopers put it, Medtronic would “own the disease.” The company would earn money “not for selling pacemakers, but for preserving heartbeats.”
By January 2014, Medtronic was ready to push its blossoming health solutions business into Canada. The company had handpicked the Brampton Civic Hospital’s Diabetes Education Centre as a pilot project to prove its “optimization” services would work here.
For 12 months, Medtronic reps hosted workshops and trained clinic staff to identify and correct bottlenecks and gaps in the system. The goal, the company said, was to cut down on “administrative burden” to give the health-care providers “more time to spend with their patients.” Medtronic did it all for free. In the end, the number of new patients visiting the clinic increased by 33 per cent.
In February 2014, one month after putting together the deal with the Brampton hospital, Medtronic partnered with a newly formed neuroscience department at the University of Alberta hospital. The contract outlined how Medtronic would review the program’s “patient experience map” from referral to surgeries to out-patient care.
The hospital signed a fivemonth contract and renewed it twice. As in Brampton, Medtronic offered its services for free. Its reward, the contract notes, would include expanding Medtronic’s “network within the field of neurosciences.”
The former U.S. Medtronic director said the company is deliberate in what hospitals it approaches for prospective partnerships. “These things don’t necessarily get pitched to customers who don’t have Medtronic business,” he said. “You only bring it up to a customer when it’s going to benefit you.”
He said the company sometimes laces “incentives” into the agreement, such as free training or consulting services, “some on paper, some not.”
In the United Kingdom, Medtronic secured contracts to manage two health-care centres’ catheterization labs, which produce diagnostic images of patients’ hearts and arteries. A 2013 Financial Times article quoted a Medtronic official saying the agreement would include a negotiated minimum quota of purchases of Medtron- ic equipment. Doctors would ultimately choose what medical devices to use on patients, the official said. The agreement saved Imperial College in London nearly $2.6 million each year, according to a presentation by the health centre’s head of cardiology.
Spokespeople from both the Brampton and Alberta hospitals say there were no procurement quotas built into their agreements with Medtronic.
“All of (Alberta Health Services’) procurement decisions as it relates to Medtronic were, and are, made independent of this arrangement,” a spokesperson said.
The alleged incentives Medtronic’s offers to drive sales of its devices have been the subject of lawsuits in the U.S. The company paid the U.S. government $23.5 million in 2011 to settle claims that Medtronic gave kickbacks to induce doctors to implant its pacemakers and defibrillators. Medtronic denies the allegations and said the settlement was not an admission of liability.
Medtronic solicited physicians to run studies and device registries, paying them as much as $2,000 per enrolled patient, the U.S. Department of Justice alleged. But the payments for the research were a guise to sway physicians away from using competitors’ products or to reward doctors for continuing to use Medtronic devices, the government alleged.
In one of the whistleblower complaints that led to the settlement, a former Medtronic employee alleged many of the studies were “bogus” and had “no utility to the medical field whatsoever.”
One of those alleged kickback schemes named in the 2011 settlement was the TRENDS study, whose lead investigators included Canadian doctor D. George Wyse, who is internationally recognized for his work in heart rhythm management. In an interview, Wyse said he never received any kickbacks and wasn’t aware of the allegations by the U.S. Department of Justice.
The only payments he would have received from Medtronic would have been honoraria for participating in the study’s advisory committee or for presenting the research findings, Wyse said, which are common for professionals conducting industry-funded research.
The focus of the study was novel and important, Wyse said. Researchers used heart monitoring capabilities in already-implanted Medtronic ICDs to see the relationship be- tween atrial fibrillation — an abnormal heartbeat that can lead to blood clots — and the risk of stroke. Its findings, published in 2009, have been cited at least 359 times, and Wyse said the topic continues to be pursued by researchers.
“I definitely would say TRENDS was not a bogus study by any stretch of the imagination,” Wyse said. “I’m pretty sure (kickbacks from industry) happen, but I don’t have any personal knowledge of that.”
In a statement, Medtronic said it has “long been a leader in promoting ethical practices in collaboration between industry and the medical community.”
“We stand behind the integrity of our corporate governance systems and our unwavering commitment to ethical business practices.”
In 2016, Medtronic signed a five-year partnership with the New Brunswick Heart Centre.
No stone would be unturned in the quest for efficiencies at the heart centre, the main provider of adult cardiac care for New Brunswick and the surrounding areas. Medtronic representatives began in the heart surgery department, and then moved to advising the cath lab.
Within six months, they increased operating room capacity by 14 per cent and reduced the average wait times by nearly half, according to a Medtronic press release.
But little is known about the partnership beyond the company’s promotional material. A copy of the nine-page contract, released under freedom of information legislation, is marked “confidential.”
The hospital said it contains Medtronic’s trade secrets. And so, page after page, are big black boxes, blocking out any detail of what the public hospital is getting from the services and what it’s giving Medtronic.