The medical device tax: Let’s be honest about it
To the editor:
The medical device industry needs to be more transparent in its actions and its voice. The ongoing debate about the 2.3 percent medical device tax offers the perfect opportunity to do so.
The tax has been written and talked about over the last five years, much as vendor credentialing was in the past. It’s as if we’ve beaten credentialing to death, so now it’s time for a new villain. At least that’s the way it appears to a skeptical public.
Vilifying the device tax has become a cottage industry in itself, with seminars, television interviews, podcasts, articles, meetings with legislators, and on and on. Honest policy discussions have been outflanked by slogans. Facts with practical and sustainable solutions are not discussed. It has become a zero-sum discussion.
The tax has been blamed for everything from higher manufacturing costs to job elimination. Along with the threat of repositioning manufacturing to outsourced locations, the population hears about further cuts in product development cycles and everything in between. And they have their doubts.
I’m raising the issue to highlight how many industry colleagues present confusing and often frustrating comments with their constant chatter on the subject.
Often, I hear non-industry individuals and some clinicians ask, “What are they talking about?” They can’t believe a 2.3 percent tax increase could be a problem for an industry that appears to be making so much money. They question whether it’s a smokescreen to rationalize raising prices. Others view it as a ploy to reduce or move jobs, thus generating more profits for the companies and their leaders.
I know for sure that this issue, like most others in healthcare, has many complex angles and certainly many perspectives. I’m also a committed capitalist. I just want the industry to become more transparent in its actions and voice.
Generalized charts and studies shouldn’t be the response. There’s enough of that garble coming out of our nation’s capital. For the benefit of patients, our industry needs to do better. The industry has to describe in detail exactly what happens when a tax such as this gets applied to each manufacturer. Honest dialogue – not just sound bites – has to take place so that the public and those actually paying the bill can see for themselves the true impact of the tax. (Who knows, maybe we’ll find out the tax should be higher?)
There needs to be an unemotional discussion on the historical information: How did we get here? Why does the industry feel it was singled out? How would ongoing efforts to change the law affect healthcare dynamics? If jobs were to be lost, how many are we talking about? Where did they go? How much research was curtailed? What were the actual revenues and profitability of these organizations? Would medical device companies reduce their prices if the tax were permanently dropped?
As with many issues, our industry has spent too much time, money and resources on a subject that has become highly charged and emotional. Instead, we should focus our energies on creating new cures and treating patients more effectively. The rest is industry noise.
Bruce J Stanley
The Stanley East Consulting Group
Ipswich, Massachusetts
brucejstanley@gmail.com