Starkman: Beaumont Executive Paid $932,000 by Hospital Vendor Whose Implants Were Pushed on Surgeons

August 02, 2020, 9:14 PM

The writer, a Los Angeles freelancer, is a former Detroit News business reporter who blogs aStarkman Approved.

By Eric Starkman

Dr. Jeffrey Fischgrund

Dr. Jeffrey S. Fischgrund, M.D., is a man of many titles. He’s chief of clinical care programs at Beaumont Health. He’s associate chief medical officer at Beaumont’s flagship Royal Oak hospital. He’s chairman of orthopedic surgery at Beaumont Royal Oak. And he’s professor and chairman of orthopedic surgery at the Oakland University William Beaumont School of Medicine.

Fischgrund obviously is a very big kahuna at Michigan’s biggest hospital network. With so many job responsibilities, one might expect he wouldn’t have time to tend to a lucrative side business.

But he does.

Since 2013, Fischgrund has received $931,549.46 for consulting and other services from Stryker Corp., a Kalamazoo-based medical technologies firm. And wouldn’t you know it, Beaumont in 2019 signed a contract with Stryker committing to use the company’s medical implants for 75 percent of its orthopedic trauma procedures. In 2019 Fischgrund’s payments from Stryker totaled $193,956.08, the most he received in a single year from the company. 

Fischgrund in 2019 also received $156,000 in payments from Relievant Medsystems, a privately held company in Minneapolis that pioneered a minimally invasive procedure to treat lower back pain. The company’s website features a product endorsement from Fischgrund, who served as principal investigator of its product trials. 

Doctors serving as consultants to drug and medical device companies is common, particularly in orthopedics. But the moonlighting isn’t without controversy. That’s why the government mandated that consulting fees paid to doctors be disclosed, so the public can see the financial relationships between manufacturers and hospitals and doctors. Fischgrund’s Stryker and Relievant largesse is disclosed on

Beaumont’s Stryker contract, which I understand would result in millions in rebates if Beaumont reaches the mandated 75-percent threshold, is controversial with the hospital’s orthopedic trauma surgeons. Most of them prefer to use a rival product which they feel is far superior. Orthopods must get Fischgrund’s permission to use non-Stryker products, and he asked that the requests be made on the phone, not in writing.

Fischgrund is a spine surgeon, a specialty using medical devices different than those used by orthopedic trauma surgeons. Stryker also has a comprehensive portfolio of spine products, which presumably Fischgrund’s consulting work relates to. 

Physicians as Consultants

Beaumont spokesman Mark Geary typically ignores my requests for comment or sends links to rival publications citing Beaumont statements. But when asked about Fischgrund’s Stryker payments, Geary had something to say:

“Almost all medical supply, device and pharmaceutical companies use physicians as consultants to help develop their products and advance their technology. This is particularly true in large academic medical centers.

“These types of consulting arrangements allow physicians to provide valuable feedback about new technology and developments that could improve a patient’s experience. These arrangements are appropriate and legal as long as the consulting relationship does not result in an inducement to use a particular product. As you noted, there is quite a bit of transparency around these kinds of relationships that is publicly accessible.

“Beaumont requires all physicians and key leaders to disclose any and all financial relationships or other potential conflicts they have with other organizations. These reports are reviewed by our compliance and research teams.”

After issuing the statement, Geary sent a follow-up email saying the “majority” of approvals are done in writing, not orally. 

Beaumont’s orthopedic surgeons, ranked as the 11th best in the country in a closely followed U.S. News & World Report “Best Hospitals” issue released last week, are not alone in being pressured to use products not of their choosing. Beaumont surgeons specializing on the intestinal system are required to use a stapler manufactured by a Johnson & Johnson subsidiary rather than one made by Medtronic, which many believe is far superior. 

Beaumont about a year ago signed a contract with the Johnson & Johnson subsidiary to use its Ethicon stapler. Surgeons wanting to use the Medtronic stapler must get Fischgrund’s approval.

According to his Beaumont profile, Fischgrund graduated from George Washington University medical school in 1987 and interned and did his residency at the University of Maryland. He did his fellowship in spine orthopedics at Beaumont.

Fischgrund succeeded Harry Herkowitz as chairman of Beaumont’s orthopedic surgery in 2013 after Herkowitz died of a massive heart attack while waiting in line at the Starbuck’s in Beaumont’s Royal Oak hospital. Underscoring how beloved and respected Herkowitz was among Beaumont’s employees, the hospitals’ flags were flown at half-staff after his passing. 

Exodus of Doctors

Beaumont workers wear pins to support MDAs (Medical Doctors Anesthesiologists)

Beaumont, with 19 adult specialties ranked among the top 50 in the recent U.S. News “Best Hospitals” issue, is experiencing an acceleration of top surgeons and specialists leaving for other hospitals. The exodus began last fall when Marc Sakwa, chief of cardiac surgery at Royal Oak, and Jeffrey Altshuler, another prominent cardiac surgeon, resigned to join a hospital in Southern California.

In another major blow to Beaumont’s highly lucrative and nationally ranked cardiology group, Michael Faulkner, chief of cardiac and critical care anesthesia at Royal Oak, is understood to have resigned. According to Faulkner’s Beaumont profile, he attended medical school at University of Michigan and did his residency and fellowship at Johns Hopkins, widely regarded as one of the most prestigious medical centers in the world.

Also departing is George Hanzel, who specializes in transcatheter aortic valve replacement, which involves replacing heart valves without open heart surgery. Hanzel is said to be joining Emory Healthcare in Atlanta.

Alan Koffron, Beaumont Royal Oak’s chief of transplant, liver, and pancreatic surgery, and his spouse Julie, also a very accomplished liver and pancreatic surgeon, have let colleagues know they’ve accepted positions elsewhere. More than 20 cardiology specialists at Beaumont Royal Oak and Troy are known to be actively negotiating to join rival Detroit-area hospitals.

Word of widespread dissatisfaction among Beaumont’s elite specialists has spread nationally and leading hospitals are aggressively trying to poach them. Insiders say that Beaumont is in danger of losing internationally renowned plastic surgeon Kongkrit Chaiyasate, who was featured in an Detroit Free Press profile three years ago. 

John Fox and Carolyn Wilson

Beaumont’s doctors, nurses, and other health care specialists are fed up with Beaumont CEO John Fox and COO Carolyn Wilson, who they insist are more focused on boosting profits at the expense of patient care. The final straw was Wilson’s recent decision to give a contract to a low-cost outsourcing firm to oversee and manage anesthesiology services at most of Beaumont’s hospitals, including Royal Oak and Troy. The contract is going to lead to the replacement of more than 100 anesthesiologists currently working at Beaumont hospitals, the majority of whom have advanced residency training.

Beaumont employees also are angered about Fox’s plans to merge Beaumont into Advocate Aurora, a giant hospital network with dual headquarters in Illinois and Wisconsin. Few, if anyone, believes the merger will lead to improved patient care. None of Advocate Aurora’s more than 20 hospitals remotely have Beaumont’s national prestige or are teaching centers.  

The merger is expected to lead to a generous payday for Fox, who was earning close to $6 million in compensation annually prior to the pandemic. 

A petition has been circulating among Beaumont doctors for weeks declaring “no confidence” in Fox and David Wood Jr., Beaumont’s chief medical officer.  Beaumont’s board held an emergency meeting last Monday and doctors on Wednesday were asked to anonymously fill out a questionnaire about their confidence in management, their feelings about the proposed Advocate Aurora merger, and other questions.

Cardiology, surgical, and other specialty representatives are soon expected to make a presentation to the board. It’s been communicated to the representatives the board has 100 percent confidence in Fox.

Indeed, despite Michigan Attorney General Dana Nessel recently saying it would take her office six to nine months to “closely scrutinize” the Advocate Aurora merger, the union already seems likes its moving forward.

Advocate Aurora has posted an ad for a supervisor of surgical services in Detroit. The company doesn’t have any publicly known facilities in the metro Detroit area. Fox has repeatedly maintained that Beaumont would retain its own name after it merges with Advocate Aurora.

Beaumont spokesman Geary said, "We are not working with Advocate Aurora in any capacity on these searches."  

Reach Eric Starkman at Beaumont employees and vendors are encouraged to reach out, with confidentiality assured. 

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