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How will tariffs impact healthcare?

by Philip F. Jacobus, CEO | May 15, 2019
This week I was in Denver and I saw a news story about a company that assembles electric bicycles for use in and around Denver and how their prices are going to increase dramatically because many of the components that they use to assemble their bicycles originate in China.

It occurred to me that a number of components used in medical equipment sold in the U.S. are also manufactured in China and I wondered what the impact of these tariffs would be on healthcare.

Gregg, my next door neighbor, has a favorite expression: "Google it." So that is what I did. And sure enough, there were a number of stories on the internet describing how the tariffs are going to impact healthcare supply chain and hospital costs. It seems that it will be harder to buy components, so costs will increase.

The reports I read were not only from left wing liberals. According to AHA, not exactly a left wing organization, tariffs will increase hospital supply chain costs by $160 million over the next 12 months.

Last September we wrote that the most recent round of China-imposed tariffs added $3.5 billion in impacted medical devices, affecting “almost all remaining U.S. MedTech exports to China in 2017."

That was half a year ago, and the tariff situation (or "trade war") is only escalating.

You can do exactly what Gregg suggests and "Google it" yourself and you'll see what I mean.

I know there are people who feel that this short-term pain is worth the long-term benefit. I'm not so sure that's correct but I hope that our healthcare delivery network doesn't suffer too much as a result of these tariffs in the short run.

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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.


Wayne Moore


May 17, 2019 08:59

Phil, you may want to "Goggle" how many medical imaging parts/components are sole-sourced from China; from my MITA experience the number is tiny, and that is a better measure of any potential tariff impact; at least relative to medical imaging. Wayne

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Michael Wray


May 20, 2019 09:28

Tarriffs are taxes, They are designed to modify behavior. China's behavior has been very bad unfair and they have been getting away with it for years. The business lobby in this country has been in control of the policy regarding trade for years. Free trade was code language for
US corporations making extreme amounts of profit at the expense of US taxpayers all under the guise of saving people money. China with the help of large US companies and their K street lobby controlled the conversation on trade.
The president is now righting the wrongs and bringing Fair trade to the US. Its time to look out for our interest instead of the K street lobby's interest. I applaude the tarriffs and hopefully the US can get a deal that works out for all of our best interests.

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