As many of you know I work for a medical device company - BBraun Medical. As congressional leaders continue to reach for anything that might gain traction in the health care debate - they are now considering a tax on medical manufacturing companies to the tune of $40 Billion. OK this makes a lot of sense...lets tax the evil capitalist medical device companies because they are rich and can afford it. Guess what folks, even if this is the case(and it's NOT), what do we all know will happen when companies are faced with increased cost? They raise their prices! This idiotic idea that taxing health care companies will somehow reduce the cost of medicine is classic liberal mentality to "tax the rich" and "spread the wealth". Ultimately it leads to higher costs and a system more broken than before. Yesterday the CEO of BBraun USA sent out this message to all employees. I encourage you all to check this out and feel free to reach out to your congressional leaders to let them know how much you disagree with this kind of tax.
Dear Fellow Employees:
We need your help because B. Braun needs your help.
The U.S. Senate Finance Committee is currently considering a new $40 billion tax ($4 billion during each of the next ten years) on medical device manufacturers, including B. Braun.
If this new tax becomes law, B. Braun will not have the profits to make the critical future investments that B. Braun needs to stay competitive. In our opinion this tax needs to be stopped! It’s critical to the future of B. Braun.
If you would like to help, we urge you to act immediately by sending a letter to your Senator:
Click on this link to AdvaMed’s Website
www.capwiz.com/advamed/issues/alert/?alertid=14011871&type=CO to read the information
Under Issue Area--select "tax"
Under Editable Text--Type in "B. Braun" and "your facility's location" (within first line; and you may also edit the letter as you like)
Under Sender Information complete all asterisked (*) information (NOTE: if you do not have an email address use notax.us@bbraun.com)
Click "preview letter"
Click "send email"
But, don’t stop there...
Share this with your customers, vendors, family and friends and ask them to join you in this effort to stop a public policy that would stunt the growth of the very companies that hold the keys to better quality and more affordable healthcare. Have them follow the above steps.
And, if you feel as strongly about it as we do, call your U.S. Senators’ offices today. (A list is attached.) Tell them an excise tax on medical device manufacturers would be a huge mistake. Tell them your future and the future of your family depends on their vote against it.
We will keep you updated on our progress in stopping this tax.
We urge you to take a stand by calling or sending an e-mail letter today. B. Braun's future depends on our collective voice.
Regards,
Caroll H. Neubauer
B.Braun Medical Inc.
EB-US-US02
Phone: 610-997-4000
Fax: 610-849-5400
Email: Caroll.Neubauer@bbraun.com
Post from Advamed's Website:
Medical Device and Diagnostics Value Added TaxThe Senate Finance Committee is contemplating a
$40 billion excise tax on medical device and diagnostics products. AdvaMed strongly supports the Committee's health care reform efforts and has worked cooperatively with Congressional leaders to advance the goals of health care reform; however this medical device tax is bad policy that AdvaMed opposes.
It is our understanding that the proposed tax would be levied upon all manufacturers of medical device and diagnostics products as defined by the Food Drug and Cosmetic Act. Under that definition, as many as 80,000 products currently sold in the US would be taxed ranging from toothbrushes to eyeglasses to condoms to stethoscopes to syringes to blood pressure monitors to hospital beds to artificial heart valves to pacemakers to advanced diagnostic equipment. The tax would apply regardless of the size of the company or their profitability. Recent independent estimates indicate annual domestic sales of these products at approximately $131 Billion. A domestic market of that size would require a tax rate of roughly 3.1%, which, depending on the company, would be roughly the equivalent of a 10-30% income tax surcharge. Such a rate would dramatically increase the overall effective rate of manufacturers, and, in turn, constrain resources used for research and development, investment in physical manufacturing capacity, and jobs.
The excise tax on medical products is bad policy.
* The tax will raise health care costs. It would be assessed against thousands of products ranging from eyeglasses to stethoscopes to a hospital beds to artificial heart valves to advanced diagnostic equipment. Such a tax would in turn increase costs for consumers, physician practices, hospitals, and patients.. While on paper it may help balance a Congressional Budget Office scorecard, the real effect will be to raise health care costs-exactly the opposite of a key goal of health reform.
* This tax is counterproductive and burdensome for patients. Much of this $40 billion tax will end up being passed on to patients, especially patients who are the sickest and need complex, high cost technology. It does not make sense to finance health reform by taxing the countless products necessary to treat every patient who walks through the doors of a physician's office, hospital, or nursing home. Bearing the burden of illness is tough enough on patients and their families; but to financially penalize patients for their efforts to get better seems particularly wrong.
* Medical device and diagnostics companies will be contributing as a result of other parts of the health care reform bill, and this tax amounts to a double hit for one industry. The device and diagnostic industries are not generally paid directly by the government, insurers or patients. Instead, we are suppliers to providers who are paid for services. The hundreds of billions of dollars in cuts in the bill for device and diagnostic industry customers like hospitals, nursing homes, clinical laboratories and home health agencies will be passed on to our industry roughly in proportion to our share of their costs. Loading a special device and diagnostic tax on top of the cuts that will already hit our industry is unfair.
* There is no device and diagnostics industry windfall from healthcare reform. Proponents of the tax argue that the device industry will benefit from expanded coverage by gaining additional customers, and the excise tax is a fair way for the industry to repay some of this windfall. This argument doesn't hold water. The device industry benefits less from expanded coverage than most other segments of the health care industry, since the newly insured are, on average, younger, healthier, and relatively low users of devices relative to other types of medical care. Companies making products used for the Medicare population will see reduced revenue growth as hospitals react to the substantial Medicare cuts in the bill. On the flip side, these same companies will see only limited volume increases because their patients are mostly over 65 and already insured through Medicare.
* The medical products tax places an unfair burden on small businesses. Small businesses are the backbone of the device industry and the source of many of the most novel, cutting edge new treatments and cures. There are more than 6,000 medical device companies in the U.S. Less than 5 percent have sales of over $100 million annually. The tax will hit these small companies especially hard, since some have no profits and almost all rely entirely on domestic sales for their revenues.
* The medical products tax ignores the impact of health system reform on the device industry. The device industry is highly competitive and has kept prices quite low. Overall, prices for devices and diagnostics have increased at one-quarter the rate of other medical prices and one-half the rate of the consumer price index. The device industry supports reforms that will have a substantial impact on utilization of its products and on its contribution to health costs, including value-based purchasing, pay for performance, comparative effectiveness research, preventive health and other measures to change the incentives in the system toward quality and efficiency. In addition, devices have high costs of production. A gain in volume adds up to a much smaller gain in profits. A $4 billion a year excise tax may account for as much as one-sixth of total industry profits, which will have a significant dampening affect on funding available for future research and development.