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Current & Critical

StelKast on PODs

StelKast has been a vocal proponent of physician-owned distributors. ORTHOKNOW® asked John Reyher, Senior Vice President and General Manager of StelKast, how the company works with PODs and what their effect may be upon the orthopaedic industry. 
 
ORTHOKNOW: Upon what factors have you based your decision to work with PODs?
 
JOHN REYHER: StelKast is very selective in reviewing each situation and evaluates each on its own merit. To consider a physician-owned distribution entity, the entity must be qualified with a solid legal opinion and a well-defined operational structure. In addition, the distribution organization must include continual oversight to ensure that it remains in compliance with the current regulations and operational agreements.
 
ORTHOKNOW: In your opinion, what direct effect could PODs have on the orthopaedic device industry?
 
REYHER: When structured properly, physician-owned distribution entities by their nature should align incentives to provide increased efficiencies that allow for a lower cost structure to the healthcare system. Proper physician-owned distribution structures are operationally complex, requiring substantial investment, continual oversight and a business risk, therefore their adoption in the market will be limited.
 
ORTHOKNOW: In your opinion, what does the latest Office of Inspector General’s Special Fraud Alert suggest for the future of PODs?
 
REYHER: The OIG's Special Fraud Alert helps to further define the components that are required to operate a legally structured physician-owned distribution entity. Although it provides limited guidance, the alert does present clarification on the areas of concern for surgeons developing these structures. The opinion conveys that PODs can be structured legally, provided that they fall within the narrow guidelines of the law.