On March 1, 2019, the Laser Spine Institute (LSI) closed abruptly. Creditors of the company seized all the assets of the company and turned them over to an “assignee,” who will determine the value of the assets and try to sell them for the benefit of the creditors.
LSI CEO Jake Brace issued a press release saying the company’s banks “precipitously and surprisingly made the decision to freeze the company’s accounts and strip the cash out of these accounts.”
In addition to its Tampa, Florida, headquarters, the institute also closed its locations in Ohio, Arizona and Missouri.
So comes the end for one of the most iconic symbols of the modern business of spine surgery. Anyone who flew in an airplane over the past 10 years saw the image in the LSI ad of a young woman in a bikini standing on the beach with a small Band-Aid on her lower back in the airline’s magazines.
The Dismemberment of Laserscopic Spinal Centers
Why the sudden collapse? Brace didn’t say, but a recently concluded lawsuit between the four individuals who came up with the original idea for an endoscopic spinal surgery center certainly contributed to the demise.
According to findings by a Florida trial court, the idea for a business that would provide endoscopic minimally invasive spine surgery started around 2004 when Joe Bailey, Ted Suhl and orthopedic surgeons, James St. Louis, D.O, and Michael Perry, M.D., formed Laserscopic Spinal Centers of America, Inc.
The partnership quickly fell apart as the two surgeons saw greener pastures and joined new investors who copied the Laserscopic business model and formed the Laser Spine Institute. LSI opened in 2005 with Drs. St. Louis, Perry and another surgeon, Glenn Hamburg, M.D.
$264 Million Bite
Bailey and Suhl sued in 2006 and won. A trial court awarded them $1.6 million in damages, but no punitive damages. On December 28, 2019, an appeals court in Florida said, nope, Bailey and Suhl are entitled to punitive damages and the trial court upped the award to $264 million.
That bite was too big for LSI creditors and they moved to salvage what they could.
The trial court determined the business model was unique, and St. Louis was one of between four and ten surgeons in the country who specialized in endoscopic minimally invasive spine surgery.
Laserscopic began providing services to patients in August 2004.
By October 2004, the company showed significant growth results and the number of surgical procedures performed increased in each of the three months. Revenue went from $75,000 to $650,000 in those three months.
Grammen, Esping and EFO Holdings
The four owners went looking for a loan and found William Esping, the managing director of EFO Holdings L.P., and Robert Grammen, a partner with EFO.
To get the loan, the partners provided a copy of its business plan to Esping and Grammen. Esping and Grammen agreed to keep the business plan confidential. Laserscopic Spinal’s financial information was provided to EFO to allow EFO to conduct a due diligence investigation on site.
Instead of offering a loan, EFO offered to invest $3 million in Laserscopic in exchange for a 55% interest in the company, permanent control of the board, and a preferential 7% return on its invested capital with the agreement that no distributions could be made to other investors until EFO’s invested capital was repaid.
According to the trial court, this caught the four partners by surprise. When Bailey called Grammen to discuss these “unexpected” terms, Grammen told Bailey that “you’re going to accept this offer or we’re going to take your doctors and we’re going to take your company. And we’re going to go up the street, and we’re going to do it ourselves.”
CRAZY story! Thank you for sharing this and exposing this company for the ruthless cutthroats the two original founders were. Ironically I contacted LSI to have a spinal procedure done and they did not accept my insurance – forcing me to pay out of pocket. Of course I could not afford $30K+ Upfront and turned them down. Clearly I was not alone in something that turned out to be their achilles heal. Good for you Dr. Bailey! Im so glad that you were apple to prevail
After 14 yrs of success after having cervical neck laparoscopic surgery in May 2006, I am in need of another spine procedure on my lumbar back. The first place I turned was to LSI website this morning 12/01/20. I am truly saddened and shocked to hear the news of their closure and angry after reading several articles on why. Yes the founding drs and EFO were part of a ruthless business endeavor and should be punished via the court system but to award such huge punitive damages thus resulting in the liquidation of LSI is more shameful. LSI helped so many people return to a pain free and normal life without the risk, pain, failure, and long recovery of standard spinal surgery. What a loss for Americans who suffer from spinal complications.
I could have been the woman on the beach in the LSI commercials. After my procedure I went out to dinner! On my 4th post op day and discharge I went to Marco Island for a week then to Sanibel Is for a week. My recovery was no comparison to the recovery after a spinal fusion which is what was recommended for me. Yes I had to pay $30,000 up front which was a PIA but my insurance fully reimbursed me for my cost. It was a deal for them as spinal fusions cost around $90,000.
Mr. Bailey deserved justice and financial reward for what happened to him but $264 million dollars for a company he was involved in less than 2 years in the beginning…please.
I must close now as I must find a dr who will perform invasive surgery which will result in my hopeful recovery lasting weeks to months, may fail or even make my condition worse. This really sucks!
The Laser Spine center saved my life 2 times when they came to Dayton, Ohio & Cincinnati, Ohio. The first was 20 yrs. ago then went to Cincinnati LSI. Because of arthritis setting in my spine. A back specialist in Dayton, very highly recommended, left me in excruciating pain pain, told me you will have pain the rest of your life that’s why I went the first time I was ready to commit suicide! Anything that helps people never lasts especially in the medical field. Let me tell you the great surgeons make mistakes too and in Ohio there is not a damn thing you can do about it!!! I’m screwed for life thanks to one!! My only relief was LSI
February 14th 2014 or 2016.(Forget which one) I had surgery in Tampa, Fl. I had been having numbing and tingling in my left arm. I had gone to therapy, massage therapist, and different doctors. I woke up one morning and was in such pain I could hardly move. I was having muscle spasms all over my back. Felt like I couldn’t breathe, I couldn’t move, and I was in tears. A friend brought me to my massage therapist. She started work on me and finally I started getting a little relief. As soon as she would stop working on me, here it came again. Knots all over my back. She told me I need to get some muscle relaxer and make an appointment to find out exactly the problem. She knew but not being a doctor could not tell me. Long story short. I would not let any Doctor around here cut on me. From 2 disc, C6 and C7 bulging and pinching a nerve I was going through all the pain. I wanted a Doctor that did spinal surgery day in and day out. Not some one that acts like they know everything. When I was growing up you avoid back surgery at all cost. I am soooooo thankful for Laser Spine Institute. Yes, mine was a simple surgery. The pain prior to surgery was VERY REAL. It is NO more. I have a little tiny indent where the cut was on my neck just like they said. It’s a shame that something good could be destroyed by greed from someone else. For one man’s pockets to be filled while others are suffering (when they wouldn’t have to). Shame on them all. Laser Spine told me exactly what they could do, what would happen and I did what I thought was right for me. Glad I did. Wish other could get the same benefits as I did. Happy and Pain Free. My husband and I saw others bent over one day and walking almost perfect the next. One that couldn’t move one day to wishing he could jump back in the pool. Something he hadn’t done in years. Yes, it worked for me and I’m sure a lot of others. I’m sure a FEW may have had some kind of a problem. As many people that went through there in a day much less a year, there can’t be all 100% perfect. Nothing is. Mine is good and I wish other could benefit too. Costly? A little. When you are in actual pain, it for sure is better than drugs. In the end cost a lot less, and you won’t need to go to rehab. Once and done. Thank You Laser Spine Institute.
In 2010, after putting off for a couple of years the fact that I needed to have extensive cervical spine surgery and fusion at c2345 and 6. I also needed lumbar surgery at L5 S1 for a degenerated/bulging disc and severe sciatica. I had spinal stenosis and during my fusion my condition was much worse than what had shown on the MRI. 6 weeks after cervical repair and fusion, I had my lumbar repaired but on day 3 I developed a very bad spinal fluid leak, a very rare thing and the first attempt to correct it failed, I laid for 2 weeks with spinal fluid leaking from my incision and had another surgery which failed to stop the leak, and at that point it had been 10 months and I was ready to just die. My third spinal fluid repair was successful thank God and I left Arizona to go to Florida to start to mend my body after 5 surgeries over a 9 month period. I saw an ad for the Laser Spine Institute in Tampa Florida. At the time my cervical healing was terrible, and I had almost no use of my arms with severe pain tingling burning and it was recommended I see someone at the laser spine institute. I went for an evaluation and it was an amazing experience with a wonderful team of doctors, they were shocked at the extent of the surgeries I had but they told me in no uncertain terms that they could correct where a plate had collapsed the disc at C5 and 6 and would then laser open the nerve path so that I would regain the feeling in my arms and reduce the burning numbing pain that developed at c56. When they reviewed my spinal fluid leak issue they were fascinated because it’s not something that is well documented to repair and mine was caused by an onion skin type layer on my disc caused by a vitamin B12 deficiency. If I had had laser surgery to repair the sciatica I would probably never have had a leak but traditional surgery left it vulnerable and it was actually poked by the end of a screw on the zoom glasses of the orthopedic surgeon who did my lumbar surgery. Finally I went in the Laser Spine Institute one morning and had a small incision in my upper shoulder and laparoscopically they removed bone spur, bone graft that supported a plate and then lazered up the nerve path to my arms. The whole procedure took less than an hour and a half, I had very little pain and went home in the afternoon. The next day I had fairly severe pain like when your arms been asleep and wakes up times 100 and was a little concerned but they assured me that that would pass and then the burning and the tingling pain in my arms that I’d had would go away and I could start working on therapy to start using my arms, my fingers my hands again. On the third day I woke up and I had no pain and I could move my fingers and all go I could do was cry tears of joy because I finally was happy and hopeful that my life can move forward. I referred many people over the next several years to the laser institute and saw so many who had such great success stories also. Now 10 years later I have the need for some reconstructive surgery on my cervical fusion and I am so disinhearted and sad to find out that the laser institute is no longer in business, I am totally shocked. And now, even though I’m not on private insurance but Medicare and I know they didn’t take Medicare, I was willing to pay whatever the cost was to avoid invasive surgical correction. I agree with many other commenters here that the award for damages was much too expensive, and if the court who awarded that damage had thought about it they would have thought of all the people that could have been helped by keeping the business open and still satisfying the damage done by the horrendous behavior of unethical businessmen. It does always seem to boil down in our capitalistic country that it’s not what’s best for the people it’s what’s best for the capitalists who only care about profits. I will now take the journey to research who is doing laser surgery and what are my options because I will do everything to avoid any invasive or surgical repair.
Does anyone by chance know how I would be able to get my imaging from LSI from a few years ago? No luck tracking anyone down so far?
LSI is advertising on TV, this is the number, 800-583-5439. I haven’t contacted them yet but plan too. I’m hoping things are better at this point.
I was a patient at Laser spine Institute in Tampa. They literally gave me back…my back, that was 12 years ago. My wife had back surgery I am trying to find where the doctor who was at LSI went. He is a brilliant Surgeon. He is the only Dr. I would want to do the surgery (after she had a bad fall) again, Different disc. It worked amazingly the first time I’m sure it would again . The Lord Willing. He was a believer too. The nutshell version I called the 800# Vicki McCowan mentioned. it was not anything to do with Medical surgery. But i appreciated the help. Maybe someone else would know where to find or call for Dr. Z. from LSI. I’m sure he is still helping others. He was to good to quit. Please give him my email address!
I’m wondering if the tangled web of greed has been left behind and LSI is now working as an ethical medical office. I know the power of Lazer and would love to have my spinal problems resolved. Information on the LSI that is advertising this number( 800-583-5439) would be helpful. I live in the Puget Sound area of Washington State. I would appreciate any helpful responses.
Had a discotemy in 2012 with LSI center in Philadelphia. Went into surgery in pain and walked out of the center that afternoon with absolutely NO pain. A 1″ incision was worth it all to me. Saved me and to this day have had no problems. Too bad this minimally invasive procedure no longer is available. Worked great for 1000’s of patients. Hope the patent runs out on the procedure and all orthopedic surgeons can use it for anyone anywhere.
Hello sorry to hear about the closure of laser Spine, I had a lumbar procedure done where my L5 was removed and replaced with 4 Titanium bolts, back in September of 2014, the first 6months was ruthless trying to walk normal,here now its 2024 and I haven’t had not one issue with my back since the Surgery, thanks to Dr.Schall for giving me part of my life back, Tampa Institute