Posted on 04/09/2013 10:37:27 AM PDT by null and void
A number of medical device companies are planning to pass the cost of the 2.3% medical device excise tax onto healthcare providers. 30% of medtech startups plan on passing most or all of the tax onto customers, according to a recent survey from Silicon Valley Bank. The survey report that 75% of the executives had calculated the impact of the device tax on their business. Only 2% of those polled had never heard of the medical device tax. 21% of those polled reported that they would either planned on freezing hiring or laying off employees in response to the tax. More than one third of the executives, 34%, found that the tax would impact when their firm achieves profitability.
An article published earlier this year in Modern Healthcare titled “Passing it Down” reports that group purchasing organizations have observed a number of device makers directly charging hospitals for the tax.
The Healthcare Supply Chain Association (HSCA) has created a website listing 43 medical device suppliers it alleged were planning shifting the burden of the tax onto American hospitals. Titled “Medical Device Watch,” the website argues that companies attempting to push the cost of the tax onto hospitals are, in fact, “double taxing” them, as they are already helping to pay for healthcare reform. In a statement, said that “National healthcare reform is a shared financial responsibility, and hospitals have already paid their fair share.”
An article in General Surgery News suggests that while some device companies plan on offsetting the tax onto hospitals, they are mostly limited to relatively small firms.
I was under the impression that Congress killed this “device tax”.
This tax makes no sense. They want to offsest some of the costs of Obamacare by imposing a tax on medical devices which will increase the costs of Obamacare the exact same amount as the tax.
and soon it will be...
"To Offset Device Tax, Some All Medtech Firms Boosting Prices"
Of course it will. Did everyone think the med device makers were just going to absorb this additional hit to their bttom line? Wake up America!
“I was under the impression that Congress killed this “device tax”.”
So was I.
“Because the tax repeal amendment – which was introduced by Senators Orrin Hatch (R-UT) and Amy Klobuchar (D-MN) – is attached to a nonbinding resolution, the vote is more symbolic than legally effective.”
This way they can say they voted for it while accomplishing nothing.
Damn it, it is not, not just 2.3% tax, it is 2.3% on sales. So, if they sell a billion dollars of equipment it is 230,000 dollar tax. If they had a 20% margin and made 200 million and this 2.3% on profits, it would be 46,000, a huge burden to a compange.
Thanks for clearing that up Ingy!
“This tax makes no sense. They want to offsest some of the costs of Obamacare by imposing a tax on medical devices which will increase the costs of Obamacare the exact same amount as the tax.”
Actually, it will increase the costs of obamacare exponentially. With the increased cost input, the mark ups (% increases for SGA, Profit, etc.) are increased at a higher rate. For example, if you have a $100 device the pass through cost to the customer would be $110 (ish), however if the tax makes it $102.30, then it is now a $112.53.
My example above is meant for illustrative purposes only. I am not in the medical industry and I don’t know their cost structure, however every product has mark ups of varying kinds.
doesn't matter with regard to the point I was making. Whatever the amount of the tax it will be passed on to consumers in the form of highter prices, thus increasing the cost of Obamacare in a commensurate amount. There is no net benefit to the government and the costs of administrating the tax are born by the taxpayers.
Saint Peter doncha call me cause I can’t go,
I owe my soul to the government store.
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