I wrote previously that contemplated health care reforms could discourage health care technology innovation. I didn't know how right I was.
The proposed health care reform legislation being considered by the Senate would impose a $40 billion tax on medical devices and diagnostics. According to AdvaMed (the Advanced Medical Technology Association), an industry group that otherwise supports health care reform, the tax will raise health care costs and amounts to a double tax hit on the industry.
From AdvaMed's September 8, 2009 press release:
“While AdvaMed supports broad-based health care reform and has been working to achieve that important goal, we cannot support a proposal that unfairly singles out the medical technology industry for a tax on innovation on top of the billions in cuts that the industry would already have to absorb within the health care reform proposal. We will continue to work with Congressional leaders and the White House to further real health reform and to eliminate this counterproductive proposal from any reform package considered by the Congress.”
UPDATE Sept. 15, 2009 12:00pm:
According to an article in the Wall Street Journal, earlier this year AdvaMed lobbied to have taxes imposed on hospital purchasing groups. Therefore, according to the article, they are only getting what they deserve.
On the contrary, what this proves is that when government meddles in markets such as health care, it's only natural that the participants respond by jockeying for position. To wit, "Give me the stimulus funds and make my adversaries and competitors pay." The top priority of most businesses is to play ball with whoever controls the White House and Congress.