Device Tax? Readers Weigh In on the Tax and Healthcare Reform

As the year comes to a close, the topic at hand has been healthcare reform and, for us, the proposed tax on the device industry. In recent weeks the topic has gained some steam, and readers have weighed in on the debate on MD&DI’s blog, DeviceTalk.

Sherrie Conroy

December 1, 2009

3 Min Read
Device Tax? Readers Weigh In on the Tax and Healthcare Reform

The opinions came in response to a posting titled, “AdvaMed Chairman Says a Device Tax Is Necessary.” The blog pointed to a Reuters quote from AdvaMed chairman Michael Mussallem saying, “We’re not huge fans of [the tax], but I think at this point we very much believe that this is something that we need to do....” The blog also noted that Mussallem hopes the tax will be less than the $40 billion that the Senate is proposing. Here are a few reader comments on the topic:

  • Now I understand why St. Jude [Medical] pulled out of the group. And other device makers would be well advised to do the same! What kind of CEO would advocate the partners pay for this healthcare “reform?” It’s going to go down as costly for the Democratic Congress in terms of the next election and bad for the AdvaMed leader who recommended payment.

  • Are not all taxes paid in a product’s supply chain eventually paid by the end-user? So, in order to make healthcare more affordable, we need to make it more costly? Heck, why not just create a special sales tax for healthcare in order to pay for it?.

  • Any tax on a manufacturer is ultimately a tax on the consumer. Does anyone think that a tax is going to stop at this percentage rate? At what point is the cost going to be passed on to the consumer? What will be the cost of reduced finances available for developing innovative devices that ultimately advance quality and quantity of life? Reducing costs by limiting usage and limiting reimbursement puts pricing pressure on manufacturers and taxing the supply of devices pushes the cost of making the devices higher. This is a no win for us evil profit-making manufacturers.

  • The medical device industry already contributes more than anyone else. How about not socializing the medical system. The next steps are everyone’s salaries in the industry, especially the direct care givers.

  • Labeling the healthcare reform bill as socialism misses the point. The way we pay for healthcare in this country is not sustainable and is yeilding substandard outcomes. The vast majority of Americans want the system to change. If we in the industry resort to outdated stereotypes, we will be seen (rightly) as part of the problem. Accepting a reasonable tax of some sort will keep keep our voices at the table.

  • It seems that little attention is given to reducing healthcare costs. All this reform is doing is deciding who will pay for it and how much. The tax discussed here is evidence of that, and it is a sad display of service by our Congress to its people, and by an industry advocate (AdvaMed) to its members. The elephant in the room is the money being made within the healthcare industry. Reduce, remove, and restructure and we will all benefit.

  • This is not really healthcare reform, it is health insurance reform. If medical device companies think they can just add a tax onto their devices to pay for this, and everything will continue on as normal, I think they are looking through rose-colored glasses. One of our countries biggest strengths has been our medical R&D. We do not want to lose this edge, and we will if this legislation passes.

These represent just a sampling of the thoughts swirling around healthcare reform and its effect on the industry, particularly in light of this looming tax. Decide for yourself and let us know what you think is right.

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