This is a fine example of what’s wrong with politics and the idea that a free market system is an ideal situation for business.
Lobbyists for the medical device industry and their conservative stooges would have us believe that a tax on medical devices is unfair and would inhibit innovation. They spent a lot of money getting their political henchmen to bring our government to a standstill over what is nothing but an attempt to legislate a business advantage for them. An advantage which is particularly anticompetitive.
Not only can the medical-device industry easily afford the tax without compromising innovation, but the industry’s enormous profits are a result of anticompetitive practices that themselves drive up medical-device costs unnecessarily. The tax is a distraction from reforms to the industry that are urgently needed to lower health care costs.
The medical-device industry faces virtually no price competition. Because of confidentiality agreements that manufacturers require hospitals to sign, the prices of the devices are cloaked in secrecy.
Competitive pressures from public and private payers would provide incentives for the industry to become more innovative, producing technologies that actually lowered costs and offered truly advanced breakthroughs.