One proposal to change the Affordable Care Act would repeal the law’s 2.3 percent tax on sales of medical devices. On June 2, the Ways and Means Committee of the House of Representatives voted, once again, to rescind the tax and a vote in the full House is expected soon. Even progressive Democrats such as Sens. Elizabeth Warren (D-MA) and Al Franken (D-MN), who hail from states where the medical device industry is strong, support repeal. But repeal is a bad idea on principle and impact. If Congress insists on repeal, they should at least demand something in return for the public, namely, an end to the medical device industry’s secrecy clauses and gag rules.
The medical device tax is one of many revenue increases included in the ACA so that the law does not increase the federal deficit. Pegged at $29 billion in new revenues over ten years, it embodies a principle called “shared responsibility.” To achieve comprehensive health reform, every system stakeholder contributes something to make reform succeed, and nobody gets off the hook. Who else pays? Insurance companies, hospitals, home health agencies, drug companies, businesses, labor unions, hospices, consumers, tanning salons(!) – just about every constituency connected to health care pays something to achieve the coverage and system improvements in the law.
The medical device tax has been in effect since January 2013 with no disastrous effects. More than 75 percent of it is paid by the largest 1 percent of firms such as Johnson & Johnson and Medtronic. (J&J actually opposes repeal.) But the medical device lobby has focused on repeal like a laser beam gaining support among Members of Congress to accompany their tens of millions of dollars in campaign donations.
If Congress is determined repeal this tax, Members should demand something from the medical device industry to improve the health care system as an alternative form of shared responsibility. It’s this – Congress should ban the practice common among medical device makers requiring that hospitals never disclose to anyone how much they pay for the devices they purchase, especially implantable medical devices such as hip and knee implants, coronary drug eluting stents, and pacemakers. The price secrecy clauses written into contracts forbid hospitals even telling their own surgeons the costs they incur and pass onto patients. Continue reading “Of Secrets and Share Responsibility”