14 min reading time

Hopefully nothing. It faces stiff opposition in the Senate.

But I chose the American Health Care Act (AHCA) as this week’s topic because nearly every major constituency affected by the bill opposes it.

A concise writeup at http://medcitynews.com/2017/05/what-will-the-senate-do-with-ahca

• The AARP called the health bill “deeply flawed” because it would weaken Medicare and lead to higher insurance premiums for older Americans.

• The American Medical Ass’n said it would undo health insurance coverage gains, hurt public health efforts to fight disease, and destroy Medicaid.

• The American College of Cardiology said the AHCA would allow states to bypass existing federal protections for sick and elderly people, and potentially undermine coverage for critical services for patients with heart disease.

• Drug, medical device, and hospital industries played no part in shaping the AHCA.

• The Congressional Budget Office (CBO) did not perform an updated analysis of costs and benefits. But it found the Medicaid provisions in the March bill would reduce the number of covered people by 14 million by 2026 and slash costs by 25%. See .

If, as the MedCity article suggests, bill passage was about giving Republicans a much-needed win toward their “repeal-and-replace Obamacare” pledge – and not about lowering costs and widening healthcare coverage – how can we (American device companies, employees, and other citizens) persuade our lawmakers to honor their other pledge: To make healthcare affordable to all citizens?

My question for the group: If the Obamacare repeal goes through in the form of this AHCA bill, will the economics of healthcare resemble a pre-Obama scenario?

What impact will it have on our industry?

+++++++

Stratos Product Development quietly and abruptly shutters doors

See

What happened(?) and how we can help their 64 employees find work?

+++++++

Make it a great week.

Joe Hage
Medical Devices Group Leader

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Joe Hage
🔥 Find me at MedicalDevicesGroup.net 🔥
Thank you, James. I’ve accommodated your request.

Joe Hage
🔥 Find me at MedicalDevicesGroup.net 🔥
Joseph Giordano, fair enough. It’s just that the “people [who] oppose the new bill” are relevant to the medical device industry and therefore worth amplifying to my readership.

Julie Omohundro
Principal Consultant at Class Three, LLC
James, as long as humans are involved, there will be no refuge from politics, nor from bias, political or otherwise, as both are hard-wired in. The best that you can hope for is discussions are focused on the aspects of politics that have the potential to impact our industry. I think the discussions in this Group mostly meet that criteria.

Julie Omohundro
Principal Consultant at Class Three, LLC
John, we didn’t forget that, because it was never true:

“…as Free and Independent States, they have full Power to levy War, conclude Peace, contract Alliances, establish Commerce, and to do all other Acts and Things which Independent States may of right do.”
–Declaration of Independence

“….to form a more perfect Union, establish Justice, insure domestic Tranquility, provide for the common defense, promote the general Welfare, and secure the Blessings of Liberty to ourselves and our Posterity…”
–US Constitution

Julie Omohundro
Principal Consultant at Class Three, LLC
Pete, Obamacare didn’t create an expectation of free healthcare, it responded to it. Governments are inherently reactive.

I know many people from countries with socialized medicine who think it is just great. I even know people who are citizens of some of those countries, who live in the US, have US healthcare insurance, and yet are willing to pay the cost to travel back to their countries for their healthcare, because they think it is better than the healthcare here.

I hope to retire to one of these countries myself, not for the socialized medicine, but because these countries usually have a complementary private-pay system. Then I can pay for my actual healthcare (not insurance) out of my own pocket, a privilege I have been repeatedly denied in the US. Then I can have some reasonable hope that it will serve my needs instead of those of third-party payers and industry.

Julie Omohundro
Principal Consultant at Class Three, LLC
Roger, it seems to me that tort reform is over, and now the government gets the big money awards instead, by way of DOJ actions.

The rationales for large punitive awards are the same as those for the death penalty: retribution and deterrence.

Peg Graham
Improving the Caregiving Experience, Chair of the YANA Health Forum
Consider the effect of pulling $800 BILLION (right?, please correct if I am wrong) from the sector via Medicaid cut. Anne Montgomery if Medicaring.org compares that to ripping I-95 off the map and expecting the traffic to continue to flow along the Northeast from Maine to Fl. To believe that such a dissection will not be disruptive, causing ripple effects throughout the sector, is wishful thinking. I hope Med Device sector understands that they too will take a hit, especially those moving to innovation and embedding remote patient monitoring solutions. Strategic thinking vs

Roger Cepeda
Medical Device and Biotech Attorney
Pete- I agree with you that quality healthcare has to be paid for and also that tort reform would help (at least to reduce irrational punitive damages), but I think we have a big defect for a capitalist system. That defect is when the biggest customer (e.g., Medicare) pays the highest prices, especially for branded pharmaceuticals. There is no industry in the US, except healthcare, where you can find the largest volume buyer paying the highest prices for anything. If that value could be reallocated, that would help fund benefits and answer the question of how to make sure we don’t just add to the deficit. Like corporate taxes, this is a bit of a prisoner’s dilemma when other countries have price controls that mean a manufacturer’s fixed costs are covered by customers like Canada, while profit come from the US.

Hugh F. McCann, Jr
CEO/Co-Owner at Identification Products Corporation
Both Ocare and Tcare convoluted .
A Rube Goldberg approach to a complicated business problem.
Demand for healthcare will explode as the population ages and grows.
Embrace this reality and create jobs!
Tax consumption
Everyone must have skin in the game.

Nick Cucci
Business of Innovation 📈
It’s unfortunate to see another leader in our industry close shop like this. In our 22+ years, we’ve had to learn how to proactively manage these same ups and downs of medical device development consulting… Not an easy task. Our team is planning to hire if any of these talented designers and engineers are looking for a spot to land. Please don’t hesitate to message me directly. (cc: Joe, Mark)

Rick Stockton
Product Designer (Medical, Scientific, Consumer)
The healthcare argument is suffering from two rather large problems:
(1.) The distinction between healthcare and access to insurance is becoming more and more murky.
(2.) Not even the GOP is willing to say that free healthcare (or at whatever you feel like paying) is not a civil right.
This confusion cannot possibly help the medical device industry, since the doctors services that are now being put forth as a civil right would soon be joined by medical devices, also put forth as a civil right, consumed by some and paid for by others.

Laurie Crozier
Senior Director Surgical Services at Premier Inc.
We should all be reading the bill making our concerns known to the legislature and holding them accountable for revision. One of the biggest drivers is the profit margins demanded by the insurance industry. While I’m certainly a proponent of free enterprise, when it comes to health and well being of the people then I have to agree with Ben Carson he once told me he felt that health insurance must be based on risk when assessing projected costs and needs, but they should not be publicly traded nor for profit which takes some of that out of the picture. Competition is good and we need that ! My goal is to be informed and participatory!

Mark C Adams, MBA
Medical Device Leader/Executive
ANYTHING associated with Paul Ryan is flawed. Let’s not forget it was Ryan, along with a Dem counterpart, that ended the first sequester by taking SIX BILLION DOLLARS from Disabled Veterans. See any mention of the VA being fixed, veterans money being returned? If Trump continues to allow Ryan to lead the healthcare charge they can kiss the GOP goodbye in 2018 elections.

Roger Cepeda
Medical Device and Biotech Attorney
One issue I haven’t heard discussed is that, should some version of AHCA pass, there will be a series of battles at the state level that didn’t really happen before. For example, of the 30 or so states that said “yes” to the Medicare expansion, many are led by Repub governors whose constituents were happy to see Trump elected. But the loss of Medicare/Medicaid funding and the potential for waivers on pre-existing conditions and “essential” services is already creating a lot of debate at the state level. My contacts are primarily concerned that hospital finances are about to get much worse and no one can name any successful “risk pool” models in any state.

Eri Hirumi
Regulatory Affairs Specialist at MicroVention-Terumo
I appreciate the information. I do think we all need to get the word out. We have seen that the politicians do respond to pressure, but we the public must be vigilant and keep applying the pressure. Also as a note, the republicans and supporters of the bill are only looking at the front end short term cost saving to health care. They seem to conveniently forget that we have regulations in place where health care institutions cannot turn away people in dire care. Removing high risk critical/chronic patients from medical insurance has put extreme burdens onto the healthcare institutions and ultimately will exponential increase to cost of care for all. Can we get this message out to the public? We must.

Michelle Bonn
President, Guideline Medical
In response to Jeffrey Stewart: Here is the direct link to the text of the house bill, Medicare For All . Thanks for sharing Jeff. https://www.congress.gov/bill/115th-congress/house-bill/676/text

Roger Cepeda
Medical Device and Biotech Attorney
Andrew & Les- I think the med device tax moratorium would become moot, as the tax is simply repealed.

Jack Bantley
Eastern Regional Sales Manager at RS Medical
Great points Joe. I think any bill that lacks transparency in its development, as was this bill, no citizen will benefit, but the politicians. (who BTW, exempted themselves from this coverage) Republicans complained for 7 years about Obamacare yet never put forward an alternative. Now in a position to do something good for the country, no one has/had a solid plan prepared! The proposed changes in healthcare legislation seems more about who’s name is attached rather than solving the healthcare issues. The rose garden party was simply a sound bite, now more important than substance.
Obamacare has issues, like any other complex bill, but is a huge step forward in getting uninsured coverage, as well as, holding payors accountable regardless of their individual health history. Congress would be wise to stop wasting time and taxpayer money on repealing and replacing and simply modify existing legislation to make healthcare coverage better for all citizens.

Ray Pellerin
Agent with New York Life helping families and business owners develop a sound financial strategy
Like most news in the media today as well as our elected officials wanting to make us believe, we must be very cautious and vigilant to discern the truth from what is someone’s opinion designed to mislead the general public for their own benefit. There is a source that I have come to rely on when I want to know what is really going on and that is the ACLJ “American Center for Law and Justice”, very opposite to the ACLU.
The ACLJ is an organization with a presence in DC as well as other areas around the world. They are continually on the battle front fighting for our freedoms and constitutional rights. They know exactly what is going on in our government and in our courts. They are non-biased and only present the facts, most of which never make it into the mainstream media.
Lets give this new administration a chance to make improvements for the majority of the people in this country, not just for the few. ObamaCare has been a disaster from day one.

Rick Stockton
Product Designer (Medical, Scientific, Consumer)
I think I would feel better about the current plan in place if *every* American had to pay the same $100 that I pay every time I walk into the doctor’s office. (And, for my healthcare overall, that is the *cheapest* of all of the alternatives available to me, thanks to the ACA.) If everyone had to do this, and felt just fine about it, then I might not feel so inclined to speak out against the current system.

Robyn Barnes
Business & Real Estate Writer, Regulated Industry Business Development, GxP Lifeline Media Professional
Hi, Joe! My comment concerns Stratus Product Development. I looked at their LinkedIn company page and you can view all 61 of their employees. This means that anyone with an open position, particularly in engineering, can see who is now looking for a job. You started the ball rolling with your announcement about the company closing; now it’s up to companies with open positions to see the talent available and contact these folks. Thank you for letting us know about their plight.

Mark Proulx, CQA, cSSBB, MS-GSD
Quality and Remediation Rock Star
Joe Hage Seems like the Republicans like to celebrate early over nothing final, then end up with egg on their faces when something they wanted doesn’t come to fruition. I view the House as nothing more than a posturing platform to make constituent “feel” like they are actually doing something constructive. Take this same situation 7 years ago and, with no help from the Republicans, the Democrats actually got a (flawed) healthcare program through to law. Republicans would be FAR better served to take this flawed system and actually shore it up so that it work BETTER. Unfortunately, partisan politics gets in the way of constructivism. None of them actually WANT what’s best for the country, just for their flawed philosophy – Democrat or Republican. We simply work with whatever they allow the country to have. And as a businessman, I’d say we do a pretty damned good job of working with whatever crappy program they throw us IMHO.

Freddy Altomari, MBA
Solution Sales Business Development Manager at Philips
Great topic at hand which unfortunately impacts all of us and should be considered a necessity opposed to a privilege. I feel we dance around the 800 pound gorilla in the room which is actual industry cost on the healthcare system, i.e. a federal law that prohibits government from negotiating drug prices or lengthy patents on drugs or profit margins on devices or payor charges etc. Current topics today are moot when we stop for a moment and look at whats driving these issues. My question/concern is, what/or how will parties address the causes of costs on healthcare? It’s just very alarming when Healthcare Expenditures increase and GDP decreases and therefore becomes 17% of GDP. Are lobbyist groups too strong? How long is the current system sustainable?

Joseph Giordano
Financial Speaker/Trainer
LinkedIn is becoming a Democrat Party opinion outlet. This article is entitled “What Will the New Bill Mean for our Industry,” cites those who criticize it, and concludes with the line “What impact will it have on our industry? The article should have been titled: “These People Oppose the New Bill.”

Pete Chambers
Government Consultant at Marketing Assessment Inc.
Any Government service is never free. Why are we even discussing the issue? Obamacare did what it was supposed to do and create the expectation that everyone is entitled to free healthcare. This has not worked in any Country anywhere. Those who expound on Countries where Socialized medicine exists have never been in those systems. Our system has always been based on excellence and everyone had access to the system but, those who didn’t pay were paid for by those who had insurance and thus the high costs. Now everyone is expecting the same excellence but, with the Government footing the bill. WE are the Government so we will pay for increased bureaucracy and to contain costs most likely mediocre health care as exist in the Countries we are trying to emulate. This issue is HUGE and has many moving pieces with many unintended consequences but, a start would be with the legal system and tort reform. Then patient outcome based heath care our industry can innovate.

Peter Caplan
Telemedicine Consultant & Strategic Health Planner
Hard to know as most of the big insurers have or are planning to leave the exchanges and it is unclear if they will move back into these markets

John Stiles
Mortgage Banker & Owner at USA Mortgage
We are missing one big point… When the United States won its independence, the new government’s ONLY role was to protect the American citizens. It was never designed to provide medical coverage, or any other social program.

Maybe we should be more grateful that there are programs in place. Even though taxation was the very reason we fought for independence.

On another note, if you have insurance under and employers plan, the AHCA does not impact you. It covers such a small population of the United States but the media would have us believe otherwise.

Hey, at least the legislators were able to read this bill before they voted on it.

Randy Miskimon
Results oriented executive leader with YOY records of sales and profit growth.
Senate Majority Leader McConnell has said within past 48 hours he is going to revoke Senate Filibuster rule to allow simple majority vote on a completely re-written Senate bill. This allows Senate to abandon budget reconciliation strategy that House bill encompasses. House Bill had the affect of watered down legislation that had minimal affect on premium costs, deductibles & coverages until after completions of Phase 1, 2 & 3 were implemented over a 3 yr period..

Let’s see if McConnell stays firm. If so Senate version will be an immediate and complete repeal/replace rather than a House phase 1, 2 & 3 over 3 years. The House version would not have any significant impact on rising premiums and deductibles until after year 3.

Christopher Smith
Engineering Group Lead I at Instrumentation Laboratory, A Werfen Company
It’s not just this bill, although it is disastrous in its own right. As the GOP keeps saying, this is just the beginning. It looks as though they don’t just want to return to the pre-ACA world of health care but to make it even more lucrative for insurance companies at the expense of millions of Americans.

Raj Mani
Independent Consultant. Formerly at University Hospital Southampton NHS Foundation Trust
I have devoted most of 4 decades through socialised medicine (UK NHS) which gets criticised mostly from those who have little to do with its delivery. In recent years, during visits to China I often hear the saying “What is the value of a service that does not cost you?” By the way, our taxation works very differently and well from their system (which also works efficiently).

Bryan Wallace
President/Sales Engineer at PowerRep
Joe Hage your dissertation gave no information as to how this phased “repeal” affects the Medical Device Industry. You criticize it as flawed but do not theorize as to how do these purported flaws affect this industry.

Mick Hannan
Managing Partner, Cliste Life Sciences Group
While there certainly are some illogical things that happen with drug pricing, it’s seems to be everyone’s favorite whipping boy with a high degree of irrationality. 1. When drugs represent 10% of healthcare spending, I am not sure how the prices paid by Medicare (only a portion of the 10%) is some how is driving medical costs. 2. While Medicare as a government finance entity doesn’t negotiate, the PBMs that administer the drug benefit for Medicare do leverage that buying power when they negotiate. 3. Drugs eventually go off patent, losing 90%+ of price power, does the same thing happen for doctor services ever? While the whole healthcare system has a role in our high cost, it is by design because we Americans always want choice. That, and the ramifications of our wealth induced, unhealthy lifestyle are the real cost drivers. I have received care in socialized medicine countries, is doesn’t compare to US as a service even for the minor issues I had. The U.K. limits care to clearly terminal patients, not the US. If there is a chance of success, treatment in the US is tried. If we really want to contain HC dollars, pass tort reform, and limit spending in last six months of life. But, that is now known as “death panels”.

Jeffrey Stewart
Innovative Medical Product Design & Fulfillment
There is a rational, well thought out solution to the issue of healthcare in the U.S. and reducing costs: House bill H.R. 676, Medicare for All, which is already in committee and has 108 sponsors. Not only would it provide real healthcare to every U.S. resident, but it would immediately save $600 billion/yr, with the potential to save over $1 Trillion/yr as the system gets more efficient. Read it and spread the word.

Terry Hudson
Business Development Manager Northeast at Saint-Gobain Performance Plastics
Regardless of what happens, I hope that the preventative mindset stays. Pre – ACA, the US healthcare system was reactionary and you didnt use your health care unless you had to. I know this is anecdotal, but I didnt have an annual physical and lab work until it was free (ACA did this). I had crazy high cholesterol and had no idea. I also have thyroid disease that wouldnt have been caught as early. If this changes and preventative medicine declines, then I expect those markets should decline instead of growing like they are now.

Andrew Mork
Medical Device R&D Engineer
@Les – the excise tax was suspended in 2016. Care to comment on the effect of the moratorium? https://www.irs.gov/uac/medical-device-excise-tax-frequently-asked-questions

Aaron Liang
Watson Health Quality Analyst at IBM
From a purely economic perspective, I wonder if the math could work out negatively for the suppliers of healthcare provisions like medical devices, biotech, pharma and health IT. Obamacare and its coverage provisions (Medicaid, exchanges) created new customers whos care would generate business for the suppliers of health care services and their downstream supply chain. I am not sure how much of a tangible increase can be attributed to Obamacare, but if the repeal goes through and there is less insurance coverage would that not mean loss of demand throughout the supply chain which would have repercussions?

Gregory Dennis
Journalist & Consultant
Trumpcare will make healthcare much worse for many Americans, and for people and organizations in the business of healthcare. You can’t take insurance coverage away from millions of people without economic impacts, not to mention the toll it will take on poor people, women who want family planning services, those with expensive pre-existing conditions, etc. From an economic and humanitarian perspective, the AHCA is a disaster. And it came from a president who said he would not cut Medicaid.

Les Horn
President At Self
Definitely repeal the medical device tax!

Bob Hallock
Serving Medical Device R & D , Inventors and Consumer Product Development / Prototyping, and CNC Machining
Looking forward to innovation coming back to the US instead of doing it NOT in the US…. this with new tax laws should bring more R&D prototyping back to my economy… too many mfg & R&D jobs have left this country – time to bring it all back !

David Bowman
Vice President at BB&T Insurance Services of CA
Recent numbers I have seen from AHIP show that drug spend is 20-22% of the total medical spend nationwide. This is up dramatically within the last 10 years. This is a cause for concern.

James V. Rohde
Currently writing a book on Management Discipline.
Joe…I have a great idea. Let’s turn LinkedIn into Facebook, where we can all start spouting our political preferences and biases. If I’m part of your group, please delete me from your membership. I’m so tired and disgusted with politics, and I thought LinkedIn was a refuge from all that crap.