Medical device tax could crimp long-term care supplies, hike cost, dampen innovation, expert says

Share this article:
John McLean
John McLean
A medical device excise tax scheduled to hit Jan. 1 is causing uncertainty among manufacturers and providers, a healthcare expert said Monday.

The 2.3% tax will be on sales of FDA-approved devices that are used by a physician or in a physician's office. It's intended to generate $20 billion over the next several years, which is expected to offset some healthcare reform costs.

While types of devices affected by the tax include pacemakers and stents, it also can include surgical gloves or wheelchairs, which could mean complications for long-term care providers purchasing those items. It also could cause some companies making devices for the post-acute and acute sectors to slow down on their innovation, believes John McLean, the vice president and co-leader of the Life Sciences Practice at the executive search firm Witt/Kieffer.

“Many of the most exciting innovations in medical device technology come from new, struggling companies that will now be slammed under the weight of this excise tax,” he told McKnight's. “It creates an atmosphere for less innovation and less choice for patients.”

Some medical device manufacturers, such as Medtronic and Boston Scientific, have said that they will be forced to lay off workers.

“It's affecting jobs and operating costs immediately,” McLean said. “Long term, it will probably mean increased costs for the consumer or the provider.”

As negotiations continue between Congressional lawmakers to avoid the “fiscal cliff,” one option on the table is to postpone the tax for another year, McLean noted.

Share this article:

More in News

Bulk of Medicaid to be managed care in two years: Avalere

Bulk of Medicaid to be managed care in ...

More than three-quarters of Medicaid beneficiaries will be enrolled in a managed care plan as of 2016, according to an Avalere Health analysis released Thursday. The numbers reveal that managed ...

Nursing home asked for employee's personal information too often, jury rules

The human resources department of a Maine nursing home did not properly protect a former employee's personal identification information, a jury recently ruled.

Test could confirm sepsis within an hour

Nursing home residents might benefit from a new way of diagnosing and treating sepsis made possible by discoveries out of the University of British Columbia.