Bad to the Bone

I see the Feds bagged some more bad dudes relating to the machining world. Zimmer, DePuy, Smith & Nephew, and Biomet owe $311 million in fines to the Federal Government to settle criminal and civil penalties stemming from kickbacks paid to surgeons doing orthopedic implant procedures. That’s a lot of bone screws.

Zimmer Holdings alone is taking a $169 million write-off in the coming financial quarter. Stryker of Kalamazoo flipped for the prosecution to seal the deal in this case.

Ex-Attorney General John Ashcroft will get in on the gravy train by being appointed the governance monitor for Zimmer.

I find this case particularly seamy after doing a big cover piece on squeaky clean Warsaw, Indiana, in Today’s Machining World last year. I know that doctors routinely take freebies from drug companies and do cheesy speaking engagements for juicy fees, but it appears that the bone cutters had graft down to a science. We all end up paying inflated insurance fees to cover the insider’s chicanery.

We all know that waste is rampant in hospitals. One little tidbit related to the orthopedic racket is the bone screw packaging. Bone screws come in packages of six, which are opened in the operating room. Once the package is opened, any unused bone screws are discarded. The screws sell for $50 to $500 each. I would guess an enterprising scrap dealer might resell them to Russia or Serbia for a tidy profit. With our cockeyed medical payment system we invite this kind of waste.

But now we can all breathe easier, with Ashcroft nosing around the surgeons’ scrubs.

Hopefully with this messy case out of the way the corporate warriors of Warsaw can get back into buying more Citizens, Stars and Tsugamis and build their brands with product quality, not bribes.

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