Senate Introduces Healthcare Reform Plan, Including Fees for Devicemakers
BY LAUREN UZDIENSKI, SEPTEMBER 16, 2009
Today Senator Max Baucus formally introduced the Senate Finance Committee's long-awaited healthcare reform proposal, which would cost $856 billion and does not include a public option, would not require employers to purchase insurance for employees and would bar certain payer practices, like denying coverage based on pre-existing conditions. All in all, it's a more conservative plan than the one purportedly being developed in the House. However, the bill does include a much-contested $4 billion in annual fees to the medical device industry, which would raise $40 billion over 10 years to support the overhaul and would be apportioned to companies by market share. Pharma and insurers will also be paying, to the tune of $2.3 billion $6 billion, respectively, annually.
AdvaMed, the Massachusetts Medical Device Industry Council and Ray Elliott, now the CEO of Boston Scientific, all came out in opposition to the fees, arguing that they would suppress innovation and result in a sort of "double taxation" for the device industry, since as hospital budgets are squeezed, those pressures get passed onto devices.
Monday the WSJ offered some interesting backstory on what instigated those fees. The Journal says the device industry made a "strategic error" earlier this year when a number of healthcare industries were asked to offer a dollar figure their industry could potentially save over ten years, the origin of the $80 billion in savings suggested by pharma and the $155 billion from hospitals. The device industry declined to provide a savings amount, saying instead that the government should tax GPOs. This seems to have engendered some bad blood in peer industries and on the Hill.
It should be noted that the Senate's bill has a long way to go before it becomes law. While Baucus confidently announced at a press conference this afternoon that this is a bill that can pass the Senate, that remains to be seen, and even more challenging will be reconciling the final bill with the House's version of a reform bill.
