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Thread: Baucus Dems plan to pay for it

  1. #1
    Senior Member TXduckdog's Avatar
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    Oct 2007
    Republic of Texas

    Default Baucus Dems plan to pay for it

    This just pisses me off.

    The vaudeville logic of the plan is that Congress will tax health care to subsidize people to buy health care that new taxes and regulation make more expensive.

    Look no further than the $40 billion "fee" that Mr. Baucus wants to impose on medical devices and diagnostic equipment. Device manufacturers would pay $4 billion a year in excise taxes, divvied up among them based on U.S. sales. This translates to an annual income tax surcharge anywhere from 10% to 30%, depending on the corporation.

    Why $40 billion? No reason in particular, except that Mr. Baucus needs to finance nearly $900 billion in new spending and so he'll grab anything within arm's reach. While there are some exemptions, such as tongue depressors and eyeglasses, most of the devices tax will fall on hundreds of thousands of products that are basic components of modern medicine. Some are routine—surgical equipment, diabetes testing supplies—while others are cutting-edge technologies, like replacement joints, pacemakers, stents, and MRI and CT scanners.

    This new tax will eventually be passed through to patients, increasing health-care costs. It will also harm innovation, taking a big bite out of the research and development that leads to medical advancements. The core of the industry (excluding a few conglomerates like Johnson & Johnson) spent about $9.6 billion on product development in 2007, according to Ernst and Young. The Baucus tax is nearly half that, and also exceeds $3.7 billion, the total venture capital invested in device makers that same year.

    Sure enough, the device maker lobby, AdvaMed, was among the "stakeholders" that joined with Mr. Obama in a Rose Garden ceremony in May and pledged to "save" $2 trillion over 10 years to fund his program.

    AdvaMed was nothing if not a team player. It endorsed Democratic inspirations like comparative-effectiveness research and value-based purchasing, despite the danger that under such centralized decision-making the government will decide that the most effective and valuable treatments also happen to be the cheapest—rather than those that are best for patients. It also suggested a variety of other taxes that would have resulted in a lower bottom line, much as Big Pharma promised $80 billion in drug discounts and the American Hospital Association agreed to $155 billion in Medicare and Medicaid reimbursement cuts.

    But the word on Capitol Hill is that AdvaMed's tribute wasn't handsome enough for Mr. Baucus's tastes. The massive new tax—which wasn't a part of any of his policy blueprints released earlier this year—is in part retaliation. Partly, too, the device makers simply don't have same political clout as the other big players, making them an easier mark. Old Washington hands are saying the device lobby made a "strategic mistake" by not offering Mr. Baucus more protection money, but the real mistake was trying to buy into the ObamaCare process, instead of trying to defeat its worst ideas outright.

    And now it may be too late. As we've argued, liberal Democrats think that merely allowing an industry to continue to exist is a concession, and they're already taking the pharma and hospital concessions and running them higher. In the case of devices, patients will be left with higher costs for fewer life-saving technologies.
    Train the dog, the ribbons will take care of themselves.

  2. #2
    Senior Member Gerry Clinchy's Avatar
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    Aug 2007


    The vaudeville logic of the plan is that Congress will tax health care to subsidize people to buy health care that new taxes and regulation make more expensive.
    This is so simple it hurts. If you want to provide more product/service to a large group who are not able to purchase that product/service now, you must still pay for it in some way.

    Even if the product/service comes from a govt source, labor & supplies for administration & delivery of the product/service have a cost. Even if the govt could reduce the inherent costs of the product/service (which I'm not sure they've proven they can do), if you provide a LOT more product/service than before, the gross cost is going to be more than providing less product/service previously.

    Either you must have an unlimited source to fund the costs, or you must somehow reduce the amount of product/service delivered. (Or you have to encourage the development of how to deliver the product/service more economically! while maintaining quality).

    I think I read somewhere that if we took all the wealth in the U.S. (including the fortunes of people like Gates, Trump, etc) and divided it up among all citizens, we'd all end up with about $9000. The key is that "new" wealth must continue to be generated if everyone is to have a better life.

    Having a better life may not mean that everyone gets everything they need or want. It can mean that everyone can be better off than they would otherwise have been.

    When it comes to health care, the track record seems to be that you can give everyone a certain level of care, but eventually you run out of having enough money needed to give everyone the very highest level of care/treatment.

    So far, all the plans proposed for health care focus primarily on giving everyone care. Except for the "results driven" theme, not much attention is paid to innovative concepts of delivering quality service more economically. And, it sometimes seems, that the least amount of attention is paid to the reality that funding for the basic focus is not unlimited.

    Sorry, I don't have a miracle answer to that dilemma.
    "Know in your heart that all things are possible. We couldn't conceive of a miracle if none ever happened." -Libby Fudim

    ​I don't use the PM feature, so just email me direct at the address shown above.

  3. #3
    Senior Member Goose's Avatar
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    Oct 2003
    McKinney, Texas


    Dear Leader's Administration and the democrats in Congress (in six months) have done more damage to our country than the combined efforts of the taliban, al-qaeda, hamas, islamic jihab and osama bin laden.

    We live in Cuba now.

  4. #4
    Member txbadger's Avatar
    Join Date
    Jan 2008


    The HC is simple to me: open enrollment if federal employees plan (FEP)

    It removes the problem of intrastate trade, portability & pre-x.

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