The medical device tax: Good intent with grievous consequences?

Editor’s note: The opinions expressed in the following blog post are the author’s own and do not reflect the views of Baylor College of Medicine.

A bill repealing an Affordable Care Act (ACA) provision known as the medical device tax has recently passed the U.S. House of Representatives and awaits an uncertain fate in the Senate.

The tax impacts the sale of medical devices like internal defibrillators, artificial joints, and even items as basic to medical care as surgical gloves. Initially in effect for three years, the 2.3 percent tax was put on hold in 2015 and has been postponed again until the end of 2019.

Disliked by many Republicans and Democrats, especially those that live in states with medical device manufacturers, repeal of the tax is a rare area of potential bipartisanship in an otherwise vicious battle over healthcare. The Senate bill currently has 18 cosponsors from both parties; however, neither Texas senator has signed on.

From my experience, while most clinicians aren’t interested in the medical device tax, we ought to take a greater interest in its repeal on behalf of our patients. Realistically, who is paying this tax? Is it the manufacturers, or will they just pass this cost along to hospitals?

Is it the hospitals, or will they find a way to pass the cost along to the patient? According to a 2015 report from the Congressional Research Service, most of the tax will actually fall on consumers and not on the profits of the medical device industry.

Considering that this tax (and other ACA taxes like it on healthcare industries such as insurance and pharmaceutical companies) would only be passed on to patients in the form of higher premiums, we as clinicians should have no problem joining the argument that repeal is in our patients’ best interest.

In an era where clinicians ought to consider the potential financial toxicity of our treatment recommendations, we should also engage in broader conversations about the financial effects of health policy decisions on the health and well-being of our patients. The medical device tax is simply a poor policy which, although well-intentioned, ultimately harms patients by making the cost of care increase.

-By Cedric Dark, M.D., M.P.H., assistant professor of emergency medicine and health policy scholar with the Center for Medical Ethics and Health Policy at Baylor College of Medicine



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