Jeff Herman
Feb 8, 2012

Medical device tax not a well-thought-out plan

I am a proponent for change.  By constantly fighting to retain the status quo, as a society, we run the risk of stagnation.  With stagnation, growth cannot be sustained and without growth, we die.  When President Obama first stepped into office, he fought hard for change; some might say too hard, particularly with regards to the reformation of health care.  In 2010 HR3590, the Patient Protection and Affordable Care Act was passed.

The bill promises us everything under the sun; children will no longer be denied insurance,  health care companies will no longer be able to deny you coverage for ridiculous reasons and over 80 million people that cannot presently afford it, will finally be able to get health insurance.

Do you know what makes this law even cooler?  It won’t cost us a thing! Okay I can’t even keep a straight face while writing that last sentence.  Nothing in life is free and it is true naivety to believe otherwise; however, after working in top research hospitals and having a wife in the health care field, I have seen the sheer amount of men, women and children who suffer as they fall through the cracks, unable to get insurance.  I am a firm believer that health care is a human right, especially in this country, which was built on the ideal for the right to pursue happiness.  How can someone truly pursue happiness if they are sick and stuck fighting a corrupt system rather than having the chance to heal?

However, this bill is not perfect, not by a long shot, but then again, how many people in their own life get something right on the first try, let alone a group of politicians, who notoriously attempt to pass extreme laws to solve the most basic problems? It’s a feat of amazement that this bill even made it to the Senate floor in the first place.

One potential problem with the Patient Protection and Affordable Care Act is the presence of a provision that requires a 2.3 percent increase in sales tax of all medical devices beginning on January 1, 2013; another sign that our politicians do not always think of the long or short-term consequences of their choices.  This provision was created as an attempt to help pay for this health care plan, while minimizing tax increases to the public; however, increasing the cost of important medical tools used in research and hospitals will simply increase the overall cost of health care.  By increasing health care costs, this will likely cause an unwanted price hike in the cost of health insurance, which in turn could lead to a large group of people still unable to afford insurance. Excess sales tax on medical devices could also lead to lower-funded hospitals unable to buy necessary equipment, forcing the hospitals to cut corners and provide inferior care.

Health care reform is necessary, however. Perhaps the government should have asked the important question, why are medical devices, doctor/hospital fees, pharmaceutical drugs and health insurance so expensive in the first place? Although some complexities exist, as it does cost money to develop new innovative technology and medicine, decades of extremely inflated prices have created an atmosphere of greed and unethical business practices.  Fixing the underlying foundation of health care will greatly help when trying to develop a radical new system.

Of course, change is inevitable, and if a sales tax is on the horizon, it is possible, although probably not initially, that it could have positive effect on the medical device industry.  It may force entrepreneurs and inventors to think creatively and laterally, to develop medical technology of the future for a much lower cost, like the researchers from Davis that turned an iPhone® into a medical imaging device.  As long as these companies don’t attempt too much of a markup, perhaps health care costs will go down too.

It could happen.