Physicians’ Ownership in Other Medical Companies

Like lawyers, physicians sometimes have side businesses.  For instance, I have encountered chiropractors who also have ownership interests in medical factoring companies that buy or finance medical treatment for personal injury cases.  Other physicians may have ownership interests in medical device companies or surgery centers.  If it turns out that the physician is recommending treatment and then sending the plaintiff to a company in which he has an ownership interest and receives a benefit from that referral, it not only has ethical implications if not disclosed, but it could go to bias.

A reader sent in a deposition transcript where this topic was raised. I removed the names of the lawyers because their identities are irrelevant. I thought a lot about including the witnesses’ name, but decided against it. Some of my comments are below in black, others follow the blockquote.

20 Q. Are you a shareholder in any medical
21 companies that supply medical item supplies,
22 prosthetics?
23 [Plaintiff]: Object to form.
24 THE WITNESS: I don’t see any medical
25 supplies were supplied in this case. Can you give
1 me an example.
Personally, my response to that answer may have been “Doctor, how long have you been practicing? Are you telling me after X years of practice that you don’t know what medical supplies are?” Don’t get cute with lawyers.
2 BY [Defendant]:
3 Q. Do you own another company that
4 specializes in providing medical supplies?
5 [Plaintiff]: I’m going to object to the
6 question. I think we can call the discovery
7 commissioner. I don’t think it’s relevant to the
8 facts at hand here.
Speaking objection
9 [Defendant]: I think if a doctor is a
10 shareholder in another company that does medical
11 supplies, that’s definitely relevant.
12 [Plaintiff]: In what way?
13 [Defendant]:· It can go to bias.
Yes it can, with proper foundation.
14 [Plaintiff]: Are there any medical
15 supplies that were issued here?
16 [Defendant]: It doesn’t matter. I’m
17 allowed to explore those issues.
If there is foundation for it, yes.
18 [Plaintiff]: So, Doctor, I can’t tell
19 you what you can and cannot do because I’m not your
20 counsel. I will state for the record I don’t think
21 this is likely to lead to the discovery of
22 admissible evidence. If counsel wants to continue
23 down this road, we can call the discovery
24 commissioner and see if this is something she would
25 allow. But based on my past experience, I don’t
1 believe she’ll allow the question.
Way to blatantly coach the witness.
2 [Defendant]: Based on my past
3 experience, she will allow the question.
I love it when attorneys argue based upon unstated “past experience.” The argument is worthless.
4 [Plaintiff]: It’s up to you, Doctor.
& the coaching continues
5 THE WITNESS:· Can you repeat the
6 question.
7 [Defendant]:
8 Q. Do you own or are you a shareholder in
9 any medical companies that supply medical items,
10 supplies or prosthetics?
11 A. I prepared myself for the medical facts
12 of this case. I’m unaware of any of those being
13 related to a prosthetic or orthotic.
14 Q. But do you own any companies or are you a
15 shareholder in any of those companies?
16 A. I’m prepared for the medical facts of
17 this case.
18 [Plaintiff]: I’m going to just renew my
19 objection. I don’t think there’s anything to do
20 with that in this case. We can call the discovery
21 commissioner.

4 COMMISSIONER BULLA:· Good afternoon,
5 Counsel, this is Bonnie Bulla. How can I help you?
6 [Plaintiff]: Good afternoon,
7 Commissioner. This is [Plaintiff] and
8 [Defendant] present. We had a dispute. We’re
9 sitting in the room and you are on speaker phone
10 with Dr. [orthopedist]. We had a question that was asked of
11 Dr. [orthopedist]. I did object to it. I’ll let counsel go
12 ahead and state his question, and then I’ll go
13 ahead and respond with my objection to it.
14 [Defendant]: Your Honor, my question is
15 “do you own or are you a shareholder in any medical
16 companies that supply medical items, supplies or
17 prosthetics.”
18 [Plaintiff]: So in this case, obviously,
19 I’m not here representing Dr. [orthopedist]. I’m here on
20 behalf of my clients. I did advise Dr. [orthopedist] I
21 can’t instruct him what to do. He has at this time
22 requested not to answer the question. My specific
23 objection is there’s nothing in this case. There’s
24 been no medical supplies that have been issued.
25 There’s been no prosthetics issued. This is a
1 simple case where Dr. [orthopedist] has seen a patient who
2 has been recommended for a lumbar fusion. He’s
3 seen the patient one time as a second opinion, and
4 that’s it. Dr. [orthopedist] has not performed any
5 surgeries. There’s been no medical devices that
6 have been recommended by Dr. [orthopedist]. I don’t see the
7 relevance. And I don’t think it’s likely to lead
8 to the discovery of admissible evidence. We
9 elected to call you rather than argue about it any
10 further just to get your insight on the matter.
11 [Defendant]:· Your Honor, I feel we’re
12 allowed to inquire about the information, as it can
13 potentially go to bias. There’s an argument that
14 there are no prosthetics or medical supplies in
15 this case. It may not always be that way.
16 Dr. [orthopedist] is here to testify as an expert treating
17 physician that [Plaintiff] is a future surgical
18 candidate, which is something we dispute. So I
19 believe we’re entitled to this information through
20 the discovery process.
22 [Defendant]. Not on my watch. I’m protecting the
23 question. Not calculated to lead to the discovery
24 of admissible evidence, and it infringes on an area
25 that this doctor should not have to answer. He can
1 talk about the treatment and care he provided, the
2 second opinion, and it can be limited to that.
3 There might be circumstances where your
4 question would be calculated to lead to admissible
5 evidence. Not under the facts and circumstances of
6 this case. So I’m going to protect the doctor from
7 having to answer the question.

First, my usual disclaimers. I know nothing about this case other than this section of the transcript, This deposition happened awhile ago, I do not know what happened to the case after it was taken.

My read is the problem with the question was a lack of foundation. The orthopedist apparently provided a second opinion, nothing more. If he had been the treating physician who recommended the surgery, I believe the question is proper. If there is a recommendation for surgery and the doctor owns the surgery center, I think that is relevant.  If there is a recommendation for a fusion and the doctor has an ownership interest in the medical device company potentially providing the hardware, that certainly seems relevant.  If there is a recommendation for physical therapy and the treater has an ownership interest in that practice, I think that is relevant. I also think the question is proper if the treating physician is deposed after the recommended treatment or surgery occurs because then the defendant can specifically ask if the treater has an ownership interest in the actual entities involved.

Another approach is through opposition research. Filings with the Nevada Secretary of State listed this orthopedist as affiliated with a variety of entities, only one of which I recognized as his medical practice. Especially in the contest of past medical damages, if the treater recommended a treatment that was then provided by a practice in which the treater has an ownership interest, I think that is relevant. Secretary of State filings could be used to at least lay the foundation for this questioning. If this type of research is done before the deposition and used to then lay the foundation, perhaps the questioning would have be allowed.