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View Diary: Device manufacturer lays off 100, blames Obamacare (125 comments)

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  •  It is more complicated than that. (2+ / 0-)
    Recommended by:
    stunzeed, musiccitymollie

    I heard about this device tax thing and was completely confused about what it is meant to do.

    Medical devices include things like pacemakers and I wondered if this was some sort of wonky idea thought up to deter "too many" device implants or something like that.

    S&N makes joint replacement devices mostly.  

    Anyway, I would like to understand why the devices are being taxed and also have a look at what's going on at S&N overall before judging whether or not the claims have any merit.  I'd also like to understand how the tax works and again why it was included in ACA in the first place.

    •  The medical device industry is part of (2+ / 0-)
      Recommended by:
      LilithGardener, tb mare

      what is driving medical costs through the roof. And medical devices are still early in their evolution. In the next twenty years you'll be amazed at what they'll come up with.

      You'll be even more amazed at the cost.

      The tax is a matter of basic fairness; if you are producing a product that puts a particular burden on the health care system, you should contribute more to the system. In the future medical devices will more and more extend the lives of those who would have died, which is great, but which also costs a lot more money.

      In the end, more insured people means more customers for medical devices, too. So their whining is not particularly convincing.

      •  I am fine with the concept of the tax that (2+ / 0-)
        Recommended by:
        stunzeed, bleeding blue

        helps build and maintain the road to your store.

        I just didn't understand the tax rationale on this one because there were so many taxes and other tricks in this bill that were engineered to reduce medical procedures and tests.  I wanted to know whether this tax was a part of that class of line items in the bill.

        As for med tech, I've actually worked on a number of products that fall into that category and know a fair amount about what they cost as well as what the costs of maintenance can be, etc.  It is an interesting area of the healthcare world for a whole host of reasons.

        On the front of "basic fairness", though, this law leaves a lot to be desired.  It is inherently unfair and that really comes from the fact that there is not a standard premium pricing structure that would be applicable to all regardless of your employer or employment status.  There really isn't any better competition under this model than there was before and while insurers can't deny coverage on the basis of a preexisting condition, that doesn't mean that coverage is going to actually be affordable.  

        Anyway, here we go...

        •  there are major subsidies (2+ / 0-)
          Recommended by:
          phrogge prince, LilithGardener

          and for those who are very poor (150% of poverty level), medicaid expansion.

          The people who may be screwed are the poor who live in places like Texas where their governors are willfully refusing the medicaid expansion.

          There's been hundreds of diaries here on the benefits of obamacare. From everythign I've read here and elsewhere I am 100% confident this country is better off with it than without it.

          as for the devices, my understanding is the tax is specifically included because of the skyrocketing costs of medical devices and the fact that medical devices are likely to proliferate in the future. The tax isn't in there to deter people from using them.

          To reiterate, Obamacare will allow more people to have medical devices who might otherwise have just died of a heart attack because they never went to the doctor and found out about their problem. And that's just one example.

          •  I know that there are subsidies - (0+ / 0-)

            I have heard all of the advertised benefits.

            Your understanding of the device tax makes zero sense as you wrote it above - unless you meant it to say that the tax would allow government to cover the expensive devices that they end up having to pay for with this tax money - which might make sense.

            However, nothing about sticking with the private insurance model really makes any sense at all.

            •  I would like to medicare for all (1+ / 0-)
              Recommended by:
              Sixty Something

              but I live in the real world, where that had zero chance of happening. We do not have a parliamentary system.

              That obamacare passed at all is a bloody miracle. It makes me sad that so many here can't see that, and spend time spinning their wheels about  how terrible it all is. This represents a huge expansion of health insurance coverage to people who are in very precarious positions. It's a massive expansion of medicaid - a single payer program. It shores up medicare, another single payer program. It pushes some landmark regulations onto insurance companies, including a ban on discriminating based on preexisting conditions. It expands community health clinics. etc. etc. etc.

              And yes, it grabs some profits from medical device companies before the next wave of technological advancements.

              Too many people are looking down at these accomplishments. I just don't get it.

              •  I hate to tell you that it has already (1+ / 0-)
                Recommended by:
                musiccitymollie

                resulted in a contraction in access for my elderly mother, but that's a whole other story - except to say that the home healthcare program that was cut in the deal on the fiscal cliff was something that I had been hoping would help offset the other cuts she's now going to have to deal with.

                •  There are literally millions of people (1+ / 0-)
                  Recommended by:
                  phrogge prince

                  that will directly benefit from obamacare. People whose mothers are also elderly or sick. The most conservative estimates I've seen put tens of millions of additional people into health insurance. That's in addition to the young people that are now able to be on their parents plans.

                  Should we throw them under the bus because you believe - and I don't know if your belief is correct, because obamacare is not yet implemented and I haven't examined your situation - that it won't benefit your family right away? Do you understand the legislation doesn't take full effect until 2014?

                  I can go up to Canada right now and show you ten examples of people who have been screwed by Canadian health care. Should they abandon their system?

                  The fiscal cliff deal was not related to obamacare, so I don't know why you are bringing it up. But home health assisstance is going to come roaring back in the next five or six years. The crisis is too big, and HH saves too much money.  

                  •  I am bringing up the fiscal cliff deal (1+ / 0-)
                    Recommended by:
                    musiccitymollie

                    because one of the brightest moments and best cost-saving programs in the ACA was a program to expand Medicare to people for home healthcare who really do not need to (or can afford to) stay in their homes as opposed to going into nursing homes.

                    You seem to hold yourself out as some sort of expert on the ACA and the healthcare problems we face in this country so I am really, really surprised that you aren't aware of the nursing home lobby's very successful (decades now) efforts to prevent people from staying in their homes by allowing Medicare to cover and assist in home healthcare delivery services.

                    And you are being kind of jerky to accuse me of thinking that my Mother's situation merits denying all kinds of other people help and relief on the healthcare front.  My Mother would NEVER want that and neither would I.  So please set that silliness aside.

                    Our story is anecdotal, but unfortunately I know of ten such "anecdotes" in and around the small town in which my parents live and they all have to do with new rules having to do with qualifying for Hospice care.  My Mother's nurse has nine other patients in our situation and this is a sparsely populated area.  None of the people being cycled out of that care system are any less terminal than they were when they were put into the system.  They aren't failing the stricter qualifying tests at a rapid enough rate.  In my Mother's case this has to do with the fact that she has a really rare affliction - if she had CHF, diabetes, kidney disease or a whole host of other common terminal diseases then she would be failing the tests she needs to fail - but her affliction doesn't qualify.

                    Now here's my weekend and Monday morning fun.  First I drive to Alabama to help prepare my Mother for a 50 mile trip to go see an internist.  My mother has a blood clot in her brain which brought on the stroke that originally started all of this and has minor, mild and severe seizures when we move her just out of her hospital bed and into a wheelchair one foot away.  Over the past year, no one would move her from the medical staff because the seizures were bad enough, but the risk of another severe or deadly stroke was too great - she has been out of bed exactly twice in twelve months.  Now we are going on Monday's adventure because Medicare doesn't support in home care and certainly doesn't support house calls (a trend that might have come back had the ACA program been started); we will have no medical supervisions for this transfer other than EMTs who are great, but can only be so helpful; and her clot could explode anywhere during the process.  I am looking forward to that - wouldn't you?  And all of this life risking trip is being done to shift to a doc outside of the Hospice system so that she can continue to get her prescriptions for important things like anti-convulsants.  

                    Now, I am trying to keep a positive attitude and hope that she will make it there and back without incident - that the internist who graduated from med school 18 months ago will be eager to give her the best care possible and will make sure that he engages and consults with a neurologist - and that this might be an opportunity to improve her anti-convulsant so that maybe we aren't dealing with seizure activity when she is rolled over in the bed to have her diaper changed.  BUT the possibility that everything could go terribly wrong is real and we have to prepare ourselves for that, too.

                    And even with all of this that we face in my family, I still can't get over the story about the couple my Mother's nurse told me about a couple who receive $50 too much a month in Social Security to qualify for coverages they will lose when that woman is cycled out of Hospice care and back to Medicare.  For the moment, we have money and we will spend it as necessary, but it sounded like that couple were facing having her go into a home and him ending up homeless.  In short, if it is hard for my family, it is really fucking hard for other families who are not as fortunate as ours is.  That is the main reason my anecdote and theirs is important.

                    Purely from the political standpoint, the conversations that I have had about these changes and "cost savings measures" in the Medicare system - well let's just say that the politics on the Hospice care "clamp down" aren't good for the authors of the ACA.

                    In any case, I hope you will wish my mother well.  She is credited with saving NPR, helping to start MALDEF and has helped countless people over the course of her career.  She worked hard.  She saved.  She paid her Medicare insurance premiums and she deserves respect - but she'd tell you that any deadbeat on the street deserves as much or more than she does if she was lucid enough to talk with you now.  She believed in more and better and always acted on that premise in her life and her career.  

                    •  the ACA isn't even implemented yet (1+ / 0-)
                      Recommended by:
                      True North

                      and you're already predicting it's failure, not based on facts around the ACA, but based on your own personal situation which is occurring before the ACA takes effect.

                      The entire health insurance system is collapsing. Of course your situation is terrible. Most people are in a terrible situation right now.

                      The ACA is the only chance we have in the next decade of making this the slightest bit better, and it provides a framework that could easily morph into something far more progressive long term. Get on board, or let the republicans rip it to pieces and throw it in the trash and turn the US officially into a 3rd world country. Your choice.

                      •  This is the most obvious fact to anyone who (0+ / 0-)

                        has actually navigated their employer-sponsored health plan for anything beyond the most routine preventive care.

                        The entire health insurance system is collapsing.
                        18% of GDP - we've been paying through the nose forever, and now the US economy can no longer sustain the effective "private sector tax" that derives from the fragmentation and discriminatory policies.

                        In my view the device excise tax is merely one way for those unearned profits to come back to the government, so that effective regulation and support can be supplied elsewhere.

                        Devices, even more than drugs, are in need of effectiveness based priority systems for coverage and compensation.

                    •  Best of luck to you and your Mom, IH. Of course (1+ / 0-)
                      Recommended by:
                      inclusiveheart

                      she doesn't deserve to have hospice care denied her (if I understood what you were saying about a recent "Medicare reform."  

                      I'm posting a comment in a minute that's about the "dual eligible" demonstrations that are going to deny "Hospice Care."

                      That must be 'the new rage' in healthcare cost savings.  As I said in that comment--"Unconscionable."

                      Mollie

                      "Only he who can see the invisible, can do the impossible." --Frank L. Gaines

                      "If a dog won’t come to you after having looked you in the face, you should go home and examine your conscience.” -- Woodrow Wilson

                      by musiccitymollie on Fri Feb 01, 2013 at 07:32:49 PM PST

                      [ Parent ]

                      •  Guess I "lost" that post, and don't have time to (1+ / 0-)
                        Recommended by:
                        inclusiveheart

                        rewrite it.

                        Bottom line:  Here's a link to Kaiser Health News and a brief about a couple of "demonstration projects" which are for "capitated managed care" for the sickest and most frail of all, Medicare/Medicaid "dual eligibles."  Bad news for those folks!>

                        And even worse, neither demonstration project will allow these beneficiaries the traditional Medicare benefit or service of "hospice care," which IH has already referenced above.

                        "Unconscionable."

                        Mollie

                        "Only he who can see the invisible, can do the impossible." --Frank L. Gaines

                        "If a dog won’t come to you after having looked you in the face, you should go home and examine your conscience.” -- Woodrow Wilson

                        by musiccitymollie on Fri Feb 01, 2013 at 07:43:41 PM PST

                        [ Parent ]

                      •  Thank you. (1+ / 0-)
                        Recommended by:
                        musiccitymollie

                        We will prevail, but other people with fewer resources will be very negatively affected.

                    •  Prayers & best wishes for you and your mom. (0+ / 0-)

                      I'm so sorry you're going through this. Medicare has been the topic around my neighborhood lately in San Diego with blame being ascribed to ACA, right or wrong. I know the WH cut the CLAS Act provisions by exec order after it was passed in ACA because HHS determined that there was not enough money for long term care and somehow Hospice and Home Health were very significantly cut as was Medicare's coverage of "rehab". All DME from children's braces to sleep apnea machines have price increases for the customer and blamed on ACA. Home health nurses are being cut here and blamed on ACA. ??? There's no admin communication to explain or counter the claims which are pretty predictable.

                      Health care access, affordability, and long term care sucks for all but the well off paying huge prices out of pocket and the very poor since Medicaid is pretty good, around here at least. The people in the middle are seeing the same annual double digit price increases suffered for over a decade now and ACA will have no impact on them. People at my HMO in senior mgmt have hinted that exchange premiums are going to be shockingly high.

                      I wish you and your mother health, strength, stamina, and peace.

                •  As opposed to the contraction that was (0+ / 0-)

                  happening anyway, for millions of people, with claims denied and caps, and being bumped off plans, graduating from college and unable to find a job, ANY job, let alone a job with benefits.

                  A provision that would truly make health insurance better is if your employer-sponsored plan was truly portable, such that when you started a new job you could choose to stick with your old plan or sign up with the new plan.  

                  If that were the law, companies would have to actually DO THE WORK of negotiating a good deal.  As it currently stands, people have no choice when they start a new job, but to take what the company offers and find out later how badly it sucks, despite what is promised.

          •  A minor point, but I've always seen the FPL (1+ / 0-)
            Recommended by:
            inclusiveheart

            percentage of 133% or at Kaiser Health News, 138%.  Here's the link.

            Here's the excerpt:

            Who Benefits from the ACA Medicaid Expansion?

            A key element of the Affordable Care Act (ACA) is the expansion of Medicaid to nearly all individuals with incomes up to 138 percent of the federal poverty level (FPL) ($15,415 for an individual; $26,344 for a family of three in 2012) in 2014.


            Just clarified this discrepancy that I've observed:
            Is Medicaid eligibility expanding to 133 or 138 percent FPL, and what is MAGI?

            Some sources state that the new minimum Medicaid eligibility threshold is 133 percent FPL; other sources state it will be 138 percent. Both are correct. The text of the ACA says 133 percent, but the law also calls for a new methodology of calculating income, which will make the effective minimum threshold 138 percent. (Either way, remember that these are minimum thresholds; states can set eligibility thresholds higher, and many already have for certain populations, which means that more people qualify.)

            And, unfortunately, over twenty states are not opting to cover this additional [or expanded] group of Medicaid-qualified folks.  

            Well, that's interesting.  Learned something that I didn't know.  :-)

            Mollie

            "Only he who can see the invisible, can do the impossible." --Frank L. Gaines

            "If a dog won’t come to you after having looked you in the face, you should go home and examine your conscience.” -- Woodrow Wilson

            by musiccitymollie on Fri Feb 01, 2013 at 02:43:08 PM PST

            [ Parent ]

        •  You must be kidding - about basic fairness (2+ / 0-)
          Recommended by:
          kck, freesia

          Medical devices and apparatus are a HUGELY profitable industry.

          The top 50 companies have gross profit margins in the 40-90% range.  

          The top 50 companies in the Healthcare Sector have gross profit margins in the 80 - 99.95% range.

          The US pays 18% of GDP for healthcare, the extra 10% of GDP over other nations' high quality fully-regulated healthcare is like a tax on the country, because we all pay for it, even if we die before we ever need any expensive device or treatment.

          http://ycharts.com/...

      •  Their whining may not be "convincing," but (0+ / 0-)

        that doesn't mean that they can't pass on the costs to their clients (providers such as doctors and hospitals), and down the line.

        But my intention was to pass along the information that I received in a "Tweet."  I follow a healthcare economist, Aaron Carrol, which is why I received the article about the letters being issued from a medical device company.  BTW, he's an Obama supporter.  But that doesn't' change the fact that some companies will pass on the costs as predicted.  And in some instances, we will pay for it, in the end.

        Heck, I'm tired of hearing "business" whine, too.  LOL!  You'll have no argument with me on that.  :-)

        Mollie

        "Only he who can see the invisible, can do the impossible." --Frank L. Gaines

        "If a dog won’t come to you after having looked you in the face, you should go home and examine your conscience.” -- Woodrow Wilson

        by musiccitymollie on Fri Feb 01, 2013 at 01:41:02 PM PST

        [ Parent ]

      •  Yes, but (1+ / 0-)
        Recommended by:
        orlbucfan
        The tax is a matter of basic fairness; if you are producing a product that puts a particular burden on the health care system, you should contribute more to the system.
        Agreed. Let me ask, won't the increase in number of people covered under the ACA increase the usage of medical devices, more than 2.3%?

        Then again, if this outfit makes hip replacements, and they have been sued for defective products, then this complaint is intended as a distraction.

        Don't Senators Franken and Warren know this?

        "We will find fulfillment not in the goods that we have, but in the good we can do for each other." ~ RFK

        by paz3 on Sat Feb 02, 2013 at 01:00:09 PM PST

        [ Parent ]

      •  Except if they don't extend lives - go check our (1+ / 0-)
        Recommended by:
        freesia

        average life expectancy and its recent trend line.

        That, in its essence, is fascism--ownership of government by an individual, by a group, or by any other controlling private power. -- Franklin D. Roosevelt --

        by enhydra lutris on Sat Feb 02, 2013 at 02:31:38 PM PST

        [ Parent ]

    •  There is a universal answer as to why (2+ / 0-)
      Recommended by:
      stunzeed, LilithGardener

      anything gets taxed; Congress decided to tax it. In the committee reports they sometimes state the reasons that they want you to believe motivated them. You are free to believe those or not as you see fit.

      That, in its essence, is fascism--ownership of government by an individual, by a group, or by any other controlling private power. -- Franklin D. Roosevelt --

      by enhydra lutris on Fri Feb 01, 2013 at 12:48:52 PM PST

      [ Parent ]

    •  Very good points, IH. I'm always wondering if (2+ / 0-)
      Recommended by:
      inclusiveheart, LilithGardener

      "behavorial economics" (which Dems are very much into) is a part of various policy decisions.

      I read Kaiser Health News fairly regularly, and "follow" the left-leaning economist Aaron Carroll on Twitter.  [I also read the business pages of Bloomberg News, etc.  There is a wealth of information about these kinds of topics in the business pages of all the major newspapers.]

      Mollie

      "Only he who can see the invisible, can do the impossible." --Frank L. Gaines

      "If a dog won’t come to you after having looked you in the face, you should go home and examine your conscience.” -- Woodrow Wilson

      by musiccitymollie on Fri Feb 01, 2013 at 01:51:48 PM PST

      [ Parent ]

    •  A quick Google reveals that "motorized (2+ / 0-)
      Recommended by:
      inclusiveheart, LilithGardener

      wheelchairs" are considered Medical Devices (as are insulin pumps, pacemakers, artificial joints, and of all things, extended contact lenses and hearing aids--those two surprise me a bit.

      I have heard in Congressional hearings (on C-Span) a lot of griping about the "overuse" of motorized wheelchairs, though.  So this tax may be intended to curb the "overuse" of that medical device.  Who knows?

      Mollie

      "Only he who can see the invisible, can do the impossible." --Frank L. Gaines

      "If a dog won’t come to you after having looked you in the face, you should go home and examine your conscience.” -- Woodrow Wilson

      by musiccitymollie on Fri Feb 01, 2013 at 02:26:25 PM PST

      [ Parent ]

      •  The motorized wheelchair griping is (1+ / 0-)
        Recommended by:
        Mike Taylor

        a perfect example of subjective healthcare legislative thinking done by people who have never had the misfortune to be wheelchair bound.

        There have been a lot of 20-something wonks crunching numbers without a clue about where these costs and prices come from.

        Here's an outrage inducing example for you:  my mother is very ill and her ambulance trips to the hospital that is five minutes from her house cost somewhere around $650 billed to Medicare - and she pays a portion of that $650.  

        Outrage moment, right?

        Well, some of that incredibly high price probably should incite outrage, but it is a small town and there are only so many ambulance emergencies per capita anywhere - and this ambulance still has to be equipped as well as any ambulance that might be able to service 50 people per day as opposed to maybe five people per day.  The people working the ambulance still have to be trained and keep up their certification - the insurance still needs to be paid, etc.

        So what do we do about that situation?  Stop having ambulances service low density population areas?  A lot of the problems we are seeing have to do with the move away from publicly funded services - like when the local fire department also had ambulance service.  Privatization of what used to be government services is one of the big problems we are facing as a nation on multiple fronts.

        It is so funny because the Republicans keep insisting that we can't afford government services, but I contend that the question we all should be asking is whether or not we really can afford privatized services and all of the additional surcharges that come along with that model.

        •  $650 for an ambulance visit sounds kind of cheap (0+ / 0-)

          to me.

          There clearly is a need for an urgent care medical delivery service in your area, that could take someone who is in urgent need to the hospital in the next 2-4 hours, but who is not likely to die in the next few minutes.

          Best wishes for your mom to remain in her home as long as possible, and hopefully recover.

    •  The tax is the beginning of better regulation on (0+ / 0-)

      a very thinly regulated (and thus HIGHLY profitable) industry in the healthcare sector.

      My hope is the tax will help pay for effectiveness and comparative testing, by the NIH and NSF, for example, so that consumers can distinguish truly effective devices, from the hype and marketing.

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