Dim Bulbs

And the bright ideas emanating from the domed confines of Capitol Hill on how to fix healthcare and fuel reform just keep coming.

To wit, the federal government wants to impose a medical device excise tax on manufacturers to help finance the Patient Protection and Affordable Care Act of 2009. Surprisingly, this isn’t a shock because Sen. Max Baucus (D-MT) proposed it several years ago. Specifically, the ACA seeks to levy a tax “equal to 2.3 percent of the price for which a ‘taxable medical device’ is sold by a manufacturer, producer or importer.” This tax would apply to products made in 2013 and forward.

This has all the earmarkings and underpinnings of the government’s favored primary financing/fundraising mechanism, what we mere mortals among the unwashed masses would label a glorified legalized Ponzi scheme.

Like many disruptive pieces of legislation (Rep. Paul Ryan’s proposed Medicare and Medicaid reforms, anyone?) this one incites raucous debate and raises more questions than it answers.
Aside from whether it truly protects the patient or someone else in the chain and whether it really makes healthcare more affordable and for whom, the proposal’s language can be sliced and spread on wheat crackers. Yet more doctors than lawyers in Congress may not make a difference.

The proposal’s bubbly effervescence leaves the definition of manufacturer fuzzy and nebulous, but tries to persuade them and close the sale with good citizen talk about “shared responsibility” and dangling the prospect of income tax deductions.

Naturally, the providers are concerned that manufacturers merely would pass those additional costs to the hospitals that would then pass them on to the insurance companies and ultimately the patients themselves.

Save for explicitly interfering in capitalistic free enterprise by enacting rules that expressly and specifically prohibit such a shell game, taxpayers unfortunately will pay. While the government’s bailout of the banking and automotive industries may have established a precedent for the former, long-standing business and government history trumps it with latter. Good luck trying to change it.
Nevertheless, if everyone wants to benefit and prosper from a solid healthcare program that supposedly covers at least the basics for everyone then everyone should feel the growing and development pains as the fruit ripens.

Rather than belabor the foolhardiness and lambaste the silliness of this proposal any further, let’s make lemonade from this bushel of lemons with an alternatively bright idea.

Because nothing seems to please government bureaucrats more than to divert and shuffle funds from myriad projects and programs to keep all the bobbing buoys afloat, they simply should use the funds collected from healthcare providers and suppliers that run afoul of the law due to accounting improprieties, reimbursement tricks and product recalls. Within the last five years that amounts to hundreds of millions of dollars. And it’s all in the name of patient protection and safety anyway, right?

But if the government must tax (just like Tigger must bounce!), then let the government spin the tax closer to its intended message to the masses. The overarching theme interwoven throughout all healthcare reform measures is patient protection and safety to create and operate a system that delivers high quality service free of error. Although they stop short of calling it the silver bullet (count those denials among media reports since 2007) the primary weapon they promote as the saving grace is information technology.

So starting in 2013, impose a 2.3 percent income fee on every healthcare organization – provider, supplier (including manufacturer, distributor and service company) and payer that does not use IT for all healthcare financial transactions (that also would include patient records because they are tied to payments).

An 18-month lead time for adoption and implementation should be plenty even as the Food and Drug Administration mulls the eventual imposition of its Unique Device Identification (UDI) system. The feds could add a six-month grace period if it felt generosity or pity for procrastinators.
To operate as a taxpayer-funded, patient-focused accountable care organization you have to make meaningful use of rhetoric that reflects reality.

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