A Good Vote and a Flawed Argument

June 08, 2012
9:18 am

The U.S. House of Representatives did the right thing yesterday in voting to repeal the excise tax on medical devices that is part of the Patient Protection and Affordable Care Act.  The vote came in solid bipartisan fashion, not a common occurrence on Capitol Hill these days.  The vote was 270-146 with 37 Democrats joining the majority.

It’s a sound move to kill a tax that will, according to studies, eliminate jobs in the United States.  (In fact, it’s already forced some medical device companies to begin laying off employees.) It will also undermine medical innovation.  Because it’s a tax on revenues, not profits, it will be particularly damaging for the many start-up companies that drive much of the innovation in this country.

Of course, it’s already been made clear by the U.S. Senate leadership that there are no plans to give the legislation a vote in that body.  As one Senator told Politico yesterday, “I hear from the medical device companies in my state and I tell them, ‘I don’t think this is a bad bargain for you.’  It will be more than offset by increased demand for your product.”

The Senator’s reference is to the greater number of people who will have health insurance under PPACA and, ostensibly, be purchasing more medical devices.  That argument, however, isn’t grounded in real-world circumstances.  In terms of volume, the most significant purchasers of medical devices are senior citizens, who are already covered by Medicare.  And many other medical devices are currently implanted by surgeons in the operating room, whether the patient has insurance or not.  The medical device field is not one brimming with elective purchases.

This vote takes place against a backdrop of declining public support for health reform.  A CBS News-New York Times poll this week showed that two-thirds of Americans want the Supreme Court to overturn all or part of PPACA.  Even if the law survives the Court challenge, implementation will be more successful if the public is accepting of health system changes.  A good start in building that public support would be rejecting the law’s most objectionable provisions.

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