Medical device makers mull layoffs after ObamaCare

Earlier today, we discovered that companies offering employees health insurance might just be able to do math and discover that they can save money by dumping their benefit plans.  In yet another entry in the Quelle Surprise Department, medical device manufacturers now facing massive taxes and fees from ObamaCare have to start looking for places to save money.  And guess where that will be?

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Massachusetts medical-device companies say they’ll cut back on operational costs – and jobs – after a planned 2.3 percent tax on their products is implemented in 2013, according to a new survey.

The Massachusetts Medical Device Industry Council, which held its annual meeting yesterday in Boston, said about 90 percent of the 100 medical-device firms said they would reduce costs due to the new tax tucked into the recently passed health-care reform bill.

But what about all of that new business they’ll get from recently-insured consumers looking to get treatment?  They’re not holding their breath:

About 41 percent of the council’s members said the new health-care bill will help the industry by expanding the number of people getting health-care insurance.

But 42 percent said the new health-care reform bill won’t increase their business, the survey found.

Taxes on companies aren’t ultimately paid by business entities.  They get paid by the consumer in the long run.  In order to save costs, these device manufacturers will either have to lay off employees or cut back on innovative research — and likely both.  The end result will be higher prices, lower support, and less innovation to meet medical needs of consumers.

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That’s not the only problem facing the industry, either.  They now have to provide an accounting for their marketing efforts among physicians, thanks to a new “sunshine bill” that requires full disclosure of any marketing directed at physicians.  That will escalate internal costs, putting even more pressure on device makers to cut elsewhere or raise prices, or both.

As we repeatedly warned during the ObamaCare debate, taxes act as a disincentive as well as an inflationary pressure.  What gets taxed becomes less accessible.  Democrats in Congress and the Obama administration apparently felt that we needed less innovation in American medical care, and the whole world will have to pay for it.

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