Medical device tax: kick the can down the road
by
Philip F. Jacobus, CEO | December 23, 2015
First of all Merry Christmas!
Thank God Congress gave us a Christmas present and passed a budget that the president signed.
As part of the budget a two-year moratorium has been placed on the medical device tax. So in two years we're going to be talking about all of this again.
I'm so confused by what's going on in Washington. To me it seems crazy to tax medical device manufacturers and not use the funds generated to provide better health care.
The health care manufacturers have made a big deal about the 2.3 percent tax, but in the end it probably only costs them 1.5 percent because they deduct the tax payment anyway.
There was some industry group that claims that the medical device tax will cost jobs, but I suspect that's baloney. I can't imagine that any health care provider is going to purchase significantly less product because the product cost 2.3 percent more.
The Medtronic website says the company generated sales of almost $4 billion — that's billion with a "B" — and according to another story I read, Medtronic planned to pay $210 million in medical device taxes. It's not a huge amount of money and in my opinion the real "sin" is that this money is not being used to provide better health care.
All of this is part of the Affordable Care Act. There have been over 50 attempts in Congress to repeal the ACA. It seems as though it's never going to happen and I wish Congress would focus on something else.
My wife Barbara, who is no economist or politician, has a theory that the first step to getting our country headed in the right direction would be better quality roads. She thinks that dodging potholes and bumpy roads give people an opinion that they're living in a Third World country. I agree... I always agree with what Barbara says by the way....
I don't know about you but every time I see our congressional leaders fighting the same fight over and over again it makes me understand why so many people are supporting Mr. Trump.
Anyway, from all of us at DOTmed to all of you who celebrate Christmas have a very Merry Christmas. Thank God for everything you have.
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About Phil Jacobus
Phil Jacobus has been involved in health care since 1977, when he visited China to sell equipment. He has done business in 35 countries and still travels extensively. Phil is active in charity, helps rural clinics and always tries to help DOTmed users when he can.
Phil is a member of AHRA, HFMA, AAMI and the Cryogenic Society of America. He has contributed to a number of magazines and journals and has addressed trade groups.
Phil's proudest achievement is that he has been happily married to his wife Barbara since 1989, who helped him found DOTmed in 1998.
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Garret Purrington
Great writeup Phil
December 24, 2015 07:39
Great writeup on your analyses. I don't think more taxes in general as a principle solution (not to say that's what you are saying) is the correct strategy right now but certainly, if the medical mfg companies (if a particular industry is pinpointed and targeted for tax) are to be taxed additional, that should certainly be used for the same end purpose; to better the industry for the people.
Merry Christmas,
Garret
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