Medical Device Tax may have cost 100,000 jobs

By Nat Hentoffhetnoff-nat
Reporters Committee for Freedom of the Press and Cato Institute

When I first became a reporter in 1945 for a Boston radio station, a veteran journalist commanded me: “Kid, when you’re on a good developing story, stay on it. Keep digging and updating.”  But now the majority of the media, from print to digital, increasingly do not follow that essential advice on crucial issues, except for a small number of reporters.  Last summer, I reported on physicians Fred Burbank and Thomas J. Fogarty, who had written an op-ed for The Wall Street Journal about a tax to pay for Obamacare that was imposed on U.S. manufacturers of medical devices, which, I wrote, “could potentially short-circuit the lives of the elderly. But what medical device inventors have created is not limited to the aged.”   What might this mean for you?

There is an answer in a short article that ran last month in the New York Post by Henry I. Miller, a physician and Robert Wesson fellow in scientific philosophy and public policy at Stanford’s Hoover Institution.

Miller wrote about “how an obscure tax that helps pay for the program is hammering the U.S. medical-device industry, killing jobs and threatening lifesaving advances.

“These devices include some of the genuine miracles of modern medicine: pacemakers, artificial joints, replacement heart valves, arterial stents, scanners and radiotherapy machines” (“The industry Obamacare is killing,” Henry I. Miller, New York Post, Feb. 21).

To insert a personal note: Last year, after an examination, my cardiologist urgently instructed me to have surgery to provide a pacemaker for my heart. With further research, I found that my life would be considerably shortened otherwise.

And when I was near 69, 20 years ago, I was told, “Your life is hanging by a thread,” and my surgeon went on to perform open-heart surgery.

“You’re lucky,” he later told me. “Only in recent years did we know how to do what I just did.”

Henry I. Miller of Stanford continued: “Our country has been the global leader in medical devices … and the industry is not composed of behemoths; 80 percent of its companies have 50 or fewer employees …

“After just 13 months, the tax has already cost on the order of 33,000 jobs in the industry itself and more than 100,000 more jobs due to the ripple effects … Countless other firms have frozen hiring and stopped matching contributions to retirement plans.”

How many Americans, whose lives may depend on discoveries by medical device manufacturers, know this?

According to the Tax Foundation, a nonpartisan Washington, D.C.-based think tank that studies tax policy, “the tax, like any excise tax, will increase the cost of the product on which it is levied. This calls into question the logic of the excise tax and its purpose in the Affordable Care Act. If it does in fact raise consumer prices, which seems likely, it contradicts the original purpose of the ACA, which was to lower healthcare prices” (“The ACA Medical Device Tax: Bad Policy in Need of Repeal,” Kyle Pomerleau,, April 9, 2013).

The organization added that “the tax will adversely affect innovation, employment and competition.”

Did you hear that, President Obama?

More specifically, the Advanced Medical Technology Association, or AdvaMed, a group that advocates for the medical device industry, recently took a survey of its members, asking them how the tax was affecting their businesses. The findings, released last month, showed “a significant reduction in jobs, R&D (research and development) and U.S. investment” (“New Survey Reveals Real World Impact of Medical Device Tax,”, Feb. 18).

Furthermore, in addition to the loss of thousands of jobs, “the report also found that almost one-third of respondents said they had reduced R&D as a result of the tax. Almost 10 percent of respondents said they had relocated manufacturing outside of the U.S. or expanded manufacturing abroad because of the tax.”

And dig this news from The Washington Times: “Senate Democrats (yes, Democrats!), from states like Minnesota and Indiana, have been particularly vocal about their opposition (to the tax), due to the large number of affected manufacturers in their states …

“Congress has not found the roughly $30 billion … needed to repeal the tax over the next 10 years. Lawmakers came close to scrapping the tax during the debate over federal spending and debt reduction in October, but those talks ultimately stalled” (“Obamacare medical device tax led to loss of 33,000 jobs, report says,” Tom Howell Jr., The Washington Times, Feb. 23).

Does Hillary Clinton have anything to say about the Obamacare tax on medical device manufacturers? Have the potential 2016 Republican presidential candidates said anything? What about the current congressional, state and local candidates around the country?

How many political candidates and current officeholders have heard from constituents who are concerned about the growing absence of discoveries in medical advancements that might, sooner or later, save their very lives?

Please let me know if there has been a single street demonstration calling for a reversal of this ever-larger decline in medical innovations that any of us might one day need.

References to impeaching Obama have nearly expired in the media and, as far as I can tell, among the populace at large. But shouldn’t the frightful possibility of needless deaths of Americans of all backgrounds, including our loved ones, move us to protest the source of this life-shortening law?

A March on Washington by truly and deeply united Americans is in order, isn’t it? And maybe even a large, integrated, protesting delegation joining the president’s next vacation.

Stanford’s Henry I. Miller has assured us that “there is strong bipartisan sentiment in Congress for repealing the tax.”

So why not conduct face-to-face visits with your representatives in Congress? Bring the kids along. I think they’d be interested in their futures.

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