Op Ed: Complaining Not Enough to Get Device Tax Repealed

Posted by Brian Buntz on July 27, 2012

First of all, I don’t think the medical device tax is a good idea. I tend to think that one of the biggest problems with our healthcare system is its high cost and that adding more taxes to the system is counterproductive. Second, taxing medical device companies’ revenues, rather than profits, doesn’t make much sense. Another sticking point: the tax will be tougher on smaller firms, which develop much of the novel medical technology, than it will be on the big medtech players.

But you’ve heard these arguments before; they’ve been endlessly repeated but don’t seem to be getting through to the folks that matter. In June, soon before Paulsen’s repeal of the 2.3% excise tax cleared the House, the White House threatened to veto that attempt to repeal the tax. But a presidential veto likely won’t be necessary, as the tax repeal faces an uphill battle in the Senate.

In any case, it seems that a more coherent strategy is needed than simply complaining about the tax. It seems that every week, there are at least a handful of articles published in newspapers or industry publications (including this one) complaining about the tax. And while acknowledging that the problem exists may be the first step towards solving it, what is the second?

To take a cue from a certain South Park episode, the current strategy to get the device tax seems to be missing a Phase 2, as shown in this image.

In November of last year, I attended a session at TCT in which James M. Palazzo, president of Paragon Health, told an audience of interventional cardiologists that, when it comes to healthcare reform, "the victim approach isn’t going to be a winning strategy in the long term.” While identifying such a strategy might not be easy, it seems like good advice to me.

Brian Buntz is the editor-at-large at UBM Canon's medical group. Follow him on Twitter at @brian_buntz.

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