When do medical costs get too expensive to save a life ?

If you are concerned about heart arrhythmias, what would you pay to provide an instant, portable screening opportunity that evaluates your heart rate and rhythm anytime and virtually anywhere ?

Is $102.30 too much to pay for a single-channel electrocardiogram (ECG) recorder that fits in your pocket and goes wherever you go ?

Would it make a difference if the price was only $99 ?

Medical science is advancing everyday … with wonderful new innovations such as AliveCor’s Heart Monitor. The clinical-quality, single-channel ECG recorder leverages the power, display, and communication capabilities of the iPhone 4 and 4S to those doctors take an electrocardiogram just about anywhere. Other Smartphone apps help radiologists read medical images and allow patients to track moles for signs of skin cancer.

“I see the Smartphone as one piece of how we’re going to try to get health costs under control,” says David Albert, the Oklahoma City-based inventor of the just-approved AliveCor electrocardiogram application.

At $199, AliveCor consists of a case that snaps onto the iPhone, with electrodes on the back. It reads heart rhythms and relays the recording to an iPhone app, allowing physicians to read the data. Dr. Albert says a $99 version should be available soon that will let patients capture their own heart data, documenting sometimes-fleeting arrhythmias when they feel symptoms or tracking the success of lifestyle changes at curbing heart troubles.

That’s just one of the many developing medical innovations that are poised to transform the way we fight disease … but paying for them is always the question.

The Affordable Care Act in 2010 includes provisions to tax medical devices with a 2.3% excise tax … thus an eligible medical device with a cost of $100 would have a price of $102.30.

During the debate over health care reform, device makers, like their counterparts in the pharmaceutical industry, had agreed with reform proponents’ arguments that 30 million new paying customers would more than offset any tax losses or fees contained in the bill.
Wanda Moebius, vice president of policy communications for the Advanced Medical Technology Assn. (AdvaMed), said. “While no tax is ideal, as passed in the House reconciliation legislation the device tax is now estimated at $20 billion, begins in 2013, is deductible from corporate taxes and is structured as a predictable excise tax.”
Oh, and that $20 billion dollars is over ten years … or essentially about $2 billion a year.
Mike Frazzette, president of Smith & Nephew Endoscopy in Andover, Mass offered his own assessment “The reality is that we run a global business, and while the United States is our largest market, more than 60 percent of our business is outside of the U.S.” Mr. Frassette continued “The tax will certainly have a big impact, but it doesn’t stop the wheels of progress.”

But now with the 2.3% excise tax about to accessed, businesses that make everything from tiny syringes to giant CT scanning machines are pressing politicians to repeal the excise tax. Regardless that the device industry is one of the most profitable in America, racking up an estimated $40 billion in earnings on $130 billion in sales last year, the “taxes are job-killers” mantra must be promoted. And Minnesota politicians echoing that line … as Representative Erik Paulsen (R-MN-03) is touting the efforts of Senators Amy Klobuchar and Al Franken (D-MN).

The Senator’s efforts are outlined in a letter that reads in part :
In an environment focused on increasing exports, promoting small businesses, and growing high-tech manufacturing jobs for the future, we must do all we can to ensure that our country maintains its global leadership position in the medical technology industry and keeps good jobs here at home.

However, reading the IRS regulations it clearly provides that exports can be exempt … WHILE applying the tax to imports …
So there is NO incentive for any company to export jobs overseas if they plan on selling within the US.

Consumers are exempt … as are over-the-counter purchases … as well as number of devices that qualify as durable medical equipment, prosthetics, orthotics or supplies purchased under the Medicare Part B.

With a tax going into effect in January, if this tax was a real problem, businesses would be cutting jobs already as the first tax payment is due January 29th … I am unaware of any massive layoffs. Yes, there have been some but probably relate to other factors …. medical device manufacturers are blaming the tax for problems of their own making. Both Zimmer and Stryker already face decreased revenue in 2013 because of the many lawsuits over defective products. Ironically, Zimmer started paying its first-ever cash dividends AFTER it announced layoffs … so if they had concerns, wouldn’t they delay paying dividends until this issue was resolved … they know that business will increase under the Affordable Care Act – if it is not gutted.

After the Supreme Court ruling on ObamaCare, Lisa Suennen of Psilos, a healthcare investment firm, said “It is a good outcome for the investment industry, no doubt, as it relieves some uncertainty that has held back the flow of funds. But fundamentally, law or no law, we need to figure out how to care for our citizens, get them to care for themselves, and do so cost effectively or the economy is permanently imperiled.”

Ms. Suennen is correct … how do we do it cost effectively ?

Repealing the tax will create a big hole in funding healthcare.
Representative Paulsen’s offset is based on clawing back reform’s health insurance subsidies to low-income people if their incomes rise during the first year they have subsidized coverage. Democrats estimated about 350,000 people would not buy coverage because of the clawback.
Senator Franken proposed a plan that lets Medicare negotiate drug prices with private pharmaceutical companies. The savings achieved by such bulk pricing could offset most of the device tax.

Representative Paulsen’s solution will cut the number of potential customers and Senator Franken’s proposal could be done separately to bring down the cost of Medicare (and don‘t you think the pharmaceutical industry will launch its own “job-killing” campaign?) … so let’s just keep the 2.3% excise tax … after all it is ultimately user tax, is relatively affordable and there appears to be a number of innovative companies willing to advance medical science.
Don’t kill ObamaCare through funding cuts … we, the consumers, can afford the 2.3% excise tax.