6 min reading time

Our #MedDevice guest publisher Brian Johnson has been doing an awesome job covering the medical device tax and Medical Devices Group members frequently send me his links.

Recent coverage includes:

• Medical device tax tab now at $30.5B
• Medical Device Tax: Ten companies in line for a whack
• Analysis: Medical device tax revenues could top $2B next year
• Who’s paying the medical device tax?

I knew I needed to book Brian as a guest and I got an extra treat when the good folks from AdvaMed stopped by.

MassDevice: Thanks for having me Joe. Glad to discuss such a critical issue.

Joe Hage: In the spirit of your no-holds-barred reporting style, you told me offline, “This issue is a tricky one. There’s a lot of things you can’t say.”

Which, of course, begs the question, “What can’t you say, Brian?”

MassDevice: Well, in the course of reporting the story we’ve heard a lot of things off the record, which of course we won’t discuss. But a lot of the issues come down to basically “who did what” two years ago when the bill was taking shape.

Joe Hage: I know this is a little off-topic, but I’m really intrigued. I curate content. You cover news.

Who do you talk with? The Senators themselves? And do they say (just like in the movies), “Now, this is off the record?”

MassDevice: We talk to everyone we can. Of course, we talk to the elected officials but we also talk to their aides. (And, yes, they do say “off the record” or “on background.”)

Really, most people mean “on background” because “off the record” means you can never talk about it.

“On background” means they don’t want it attributed but wouldn’t mind if you write it. I like to discuss “on background” because it helps me to understand what’s really going on.

MassDevice: “On background” is mostly done to convey the sources opinions without saying it directly. Big in pols and sports, not so much biz.

[caption id=”attachment_1336″ align=”alignleft” width=”200″ caption=”Don't miss Brian's coverage of this important issue. Subscribe!”][/caption]Joe Hage: OK, thanks for that digression. Here is your soapbox. Instead of objective reporting, go for it. What is YOUR opinion of the Medical Device Tax?

MassDevice: I think it’s a little nuanced. On the surface I don’t like that it’s a top line tax because it hurts small companies.

I think it was misguided in some ways. The Senate wanted to pay for healthcare reform by taxing the industries which would benefit. There were other ways to pay for it that they didn’t explore because of political expediency.

Still, doing HC reform without a “pay for” is a mistake too. But I think in the end this is too expensive and too broad.

The industry needs to make sure its voice is heard over and over until they find the politicians to carry the message.

Joe Hage: You say “the right candidate.” Assuming a Romney-Obama matchup, aren’t their HC ideologies similar?

MassDevice: I don’t think there are radical differences in their positions on healthcare in general. Romney has discussed tax at Nuvasive.

I think this is a Congressional issue mostly. Getting the votes is critical.

I know GOP candidates are well aware of tax but have been reluctant to talk about it. I thought in Michigan it would be an issue. Mainly because of Stryker layoffs have become rallying cry for industry.

Joe Hage: And I saw your coverage, Hill-Rom lay off 200 earlier this week.

MassDevice: Yes, I hate seeing layoffs over this. I really think it’s a shame that people will lose their jobs.

Joe Hage: I know you are not a politician but you are as close to one as you can get, right? What’s the roadmap for repeal?

MassDevice: I’m not a politician but I do like the game. Road to appeal starts in the House, where they have the votes already.

There is no set road to repeal right now just because the Supreme Court of the United States will have a big impact on what happens next.

Joe Hage: So you’re saying if SCOTUS scuttles mandatory HC, the entire law get repealed?

MassDevice: No, that comes down to an issue called severability. Essentially, the court will decide if you can repeal just the insurance mandate.

Basically lawyers have to prove the mandate going down invalidates entire law. Not a given.

Federal judges have ruled both ways on this issue. Would be a very conservative judgment to invalidate entire HCR law. The Obama administration will argue the insurance mandate going down doesn’t negate the entire law, just three provisions.

None of those have to do with device tax.

Joe Hage: Educate me: The House repeal is just for the medical device tax, right?

MassDevice: Yes, the original House repeal vote lost in the Senate. This device tax repeal is Rep. Paulsen’s (R-Min.) bill and that has more than 220 co-sponsors.

I don’t think that repeal bill, even if it passes the House, has the votes in the Senate.

Joe Hage: What can industry do to push the Senate to pass the bill?

MassDevice: First, get the Senators (Dems) in device heavy states to take a stand by sending letters and emails.

I’m told a letter-writing campaign can actually backfire, it’s so aggravating for them.

MassDevice: Well, showing up at town hall meetings seems to work wonders as the #Teaparty shows.

Joe Hage: Hah!

MassDevice: Some senators who were instrumental in writing the bill ran away from it after town hall meetings in summer of 2009.

Joe Hage: Ok: Contacting your Senator, showing up at Town Hall meetings. What about #MedDevice CEOs? What is practical for them?

400 of them co-signed a letter to the House and Senate back in July 2011. I wonder what impact it had. What else can they do?

MassDevice: I think the small companies should call their Senators. The Big companies have gov’t affairs people in D.C. already.

Joe Hage: You give me an idea. I think it could be big. Watch this space!

MassDevice: Excellent. Keep me posted. I would say it’s incumbent on industry to discuss industry positives, because there is a risk simply complaining about taxes.

Joe Hage: @AdvaMedUpdate, tell us about http://lifechanginginnovation.org. How does it work to change votes?

AdvaMed: LifeChangingInnovation.org discusses the value of medical technology – for patients and the economy. Important not just for votes!

Joe Hage: What behavior changes do you expect from the campaign? Who visits the site and what should they do?

AdvaMed: Short answer: Wide variety of visitors, expect to raise knowledge of #MedDevice impact, follow us in social media, amplify messages.

MassDevice: Playing devil’s advocate only, you could say some large companies might see an advantage to smaller competitors struggling.

However, I wouldn’t venture a guess on which companies would benefit or not. I just see that you could make that argument.

MassDevice: This would go for any industry though. Not indigenous to med-tech by any stretch. Business is business.

In general, I think most companies and people in the industry hate it with a passion.

MassDevice: Yes. For sure. However, I think the industry has done a good job of getting this issue some daylight.

Trust in democracy!

Joe Hage: I’m really grateful for your time, Brian. Let me give you a quick plug. You have this Big 100 book? Who should get it?

[caption id=”attachment_1358″ align=”alignright” width=”300″ caption=”Click to enlarge The Big 100″][/caption]MassDevice: We have the Big 100, which is a list of the top 100 companies in the industry – it’s a desktop business intel reference.

If you are a consultant, contract manufacturer, recruiter, or really anyone who does biz in industry it’s a great tool; we all have copies on our desks at MassDevice. (Click here for your copy.)

Joe Hage: I like to conclude with the question, “What would you like to share with our 100,000 members?” What can we do for you?

MassDevice: Well, make sure we’re a daily stop for all your medical device news. Sign up for our e-newsletters and keep asking good questions.

See: Frost & Sullivan: PPACA negatively impacts “anyone in the business of healthcare.”