The Medical Device Tax and Cynical Assumptions

March 27, 2013
1:13 pm

When the U.S. Senate, in the course of adopting a budget resolution, overwhelmingly passed an amendment to repeal the Affordable Care Act’s medical device tax, Washington did what it does so well.  It reacted with cynicism.

As David Weigel wrote in his Slate post, “Why Did Liberals Kill the Medical Device Tax?” the repeal vote could be considered a freebie.  It was attached to a non-binding budget resolution and will not actually repeal the tax.  That would have to be done in separate legislation.  As Weigel and other skeptics portray it, this was a way for lawmakers to toss a bone to the medical device industry without actually doing anything of real consequence.

I think, though, that there’s another way to look at this vote.  Let’s recall how the Affordable Care Act was created in the first place.  It didn’t go through normal legislative channels.  The Senate passed its version of the bill, and many Senators admitted it contained provisions they didn’t like, but they assumed it would be fixed in a Senate-House conference committee.  That conference committee didn’t happen, though.  Rather than risk another Senate vote, which would have been problematic after Senator Ted Kennedy’s seat was taken by Republican Scott Brown, the House simply passed the flawed Senate bill and sent it to the President, warts and all.

With full implementation growing closer, let’s give Congress the benefit of the doubt and say it is now trying to fix some of the law’s more egregious problems, the medical device tax being one of them.  The Senate budget amendment may not have been binding, but it could also be the precursor to an actual measure getting rid of a provision that is already killing jobs in a medical innovation sector that has heretofore been creating them.

Sunshine Through an Undefined Prism

March 12, 2013
10:43 am

It’s widely accepted that the Physician Payment Sunshine rules, the final version of which was recently released by the Administration, are a good thing.  When physicians have working agreements with pharmaceutical or medical device companies, patients and consumers should know that these collaborations are taking place.

But will they know enough about what these agreements entail or, asked more specifically, will citizens simply see columns full of dollar figures when the Sunshine website goes live in 2014 or will they be given an understanding of what these collaborations mean for quality health care, medical research and the improvement of our healthcare system?

Two highly-respected physicians, Dr. David Barrett, former CEO of the Lahey Clinic, and Dr. Harry Jacobson, vice chancellor emeritus of the Vanderbilt University Medical Center, addressed this issue in an op-ed last week in The Hill newspaper.  They wrote, “The working relationships between doctors and healthcare companies have come under fire, and these frequently-unfounded criticisms may deter many of our country’s finest medical minds from participating in the innovation process. This would be a catastrophic trend for current and future patients.”

Drs. Barrett and Jacobson are exactly right.  Many of the most significant medical innovations of the last several decades – from penicillin to pacemakers to cervical discs – have come as a result of collaboration between physicians and innovative companies.  If these collaborations become increasingly rare because physicians and researchers don’t want the negative implications that accompany reports of contractual agreements, then patients and our healthcare system pay the price.

Everyone has a responsibility to make sure this is done right.  Leading healthcare providers, health industry companies and associations, academic health centers and patient groups are doing their share by endorsing a set of principles – initiated by the Healthcare Leadership Council’s National Dialogue for Healthcare Innovation – calling for transparency, researcher independence and accountability in all collaborative ventures.

And, at the same time, policymakers and the news media need to avoid giving the impression that exchanges of value between physicians and industry are, by definition, nefarious in nature.  As Drs. Barrett and Jacobson wrote, “We have seldom, if ever, read a news story in which it was fully explained how physician-industry collaboration led to a new medical breakthrough.  The focus is almost exclusively on the money.”

The public deserves better.  Yes, it’s essential to let the sunshine in, but it’s equally critical that the whole picture of physician-industry collaboration be illuminated so the public understands its value.