Obamacare grinds on

Obamacare grinds on

October 7th, 2012 in Opinion Free Press

Is there one simple way to discourage invention and innovation, drive up costs, eliminate jobs, help foreign competitors at the expense of American businesses, and generally make this weak economic recovery even weaker?

Sure there is, and you can count on this administration to find it. This time it's a 2.3 percent tax on every sale made by American manufacturers of modern medical devices-like pacemakers, defibrillators, artificial joints, heart stents, chemotherapy delivery systems ... you name it.

The new tax is due to take effect after the first of the year as one of the endless provisions of the ironically titled Patient Protection and Affordable Care Act, aka Obamacare. And like so many of other taxes, regulations and/or restrictions, this one isn't likely to protect patients or make medical care any more affordable.

Quite the contrary. It's a sure way to drive up the cost of everything in health care from artificial joints to kits that test blood-sugar: Just raise the tax on any and all medical devices. Specifically, by 2.3 percent -- even more, when you take into account the cost of paying, collecting, enforcing and administering the new tax.

The only discernible effect of this new tax on medical devices, as with so many new taxes, will be to increase their price and decrease their availability.

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Where, you have to wonder, do these people come up with their exact, to the decimal point, percentages that lend all their operations an air of blissful certitude without having any actual basis in reality?

Something tells us this 2.3 percent figure is going to prove as reliable as the 5.4 percent unemployment rate the country was going to achieve once this crew got through stimulating the economy. (Unemployment remains above 8 percent after almost four years of the Obama administration.)

Then there's the 90 percent of the federal deficit that our president said his predecessor in the White House is responsible for -- a figure that seems to have been plucked from thin air. He also complained about having inherited the biggest deficit in American history, which will come as news to historians.

There's nothing wrong with this president's imagination; it's his connection to economic reality that seems tenuous at best. Even if he recites these "facts" with an air of knowing authority.

It's enough to make a body wonder if the people who dreamed up this tax on medical devices have ever practiced medicine themselves, or started a company, or thought through these crazy ideas before enacting them into law. The one law sure to apply in the case of this new tax is the law of unintended consequences.

The first effects of just this one new tax are now rippling through the health-care system, and they're not assuring, For example:

• Welch Allyn, an American manufacturer of stethoscopes and bloodpressure cuffs, is cutting its worldwide payroll by 10 percent -- and all the jobs being lost are in this country.

• The Stryker Corp., which makes joint replacements, has announced that it plans to eliminate about a thousand jobs because of the new tax, which will raise the price of its products and cut the demand for them.

• Hundreds of small companies that make software applications for medical procedures, like diabetes tests, could be crippled if the IRS decides that these apps are medical devices. And so subject to the new tax.

As usual, the latest development in the administration's tax policies comes shrouded in uncertainty, and there's nothing like uncertainty to discourage investment.

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Not a day seems to go by without another hidden cost of Obamacare coming to light. As of last week, hospitals that re-admit more Medicare patients within 30 days than some bureaucrat decides are justified are to be fined. The fines average $125,000 a hospital, and apply to about two-thirds of the hospitals in the country that accept Medicare patients, or some 2,200 in all. If they exceed their quota of re-admissions, they may have to fork over a hefty fine. Even if the patients, and their doctors, say they need to be re-admitted.

That's just one more way Obamacare restricts a physicians' ability to follow his best judgment when treating patients. And this penalty is likely to be hardest on those hospitals that have the largest percentage of poor patients, like teaching hospitals, because they also have the largest percentage of Medicare patients.

As with so many other aspects of Obamacare, this new fine has little to do with improving the actual quality of medical care for patients. It just restricts hospitals' choices, and their doctors' best judgment, in the name of cutting costs -- when the actual effect may be to increase those costs.

Every day seems to bring a new wrinkle in this president's "signature accomplishment," the vast maze of taxes and regulations known as Obamacare, until it becomes more wrinkles than plan. And ever more costly. If you thought health insurance was expensive before now, just wait till it's free.