There has been some mention in the news recently of a “medical device tax.” This tax is said to be unpopular despite its inclusion in the Affordable Care Act (Obamacare.) Nonetheless, it has survived a government shutdown and near-default.
In fact, while the Act was being discussed in Congress, the medical device companies favored it, or at least didn’t make any objections. After it was enacted, however, the companies began to lobby against it. Since enactment, there has been massive lobbying against all aspects of the ACA. This lobbying occurred only after the Act had been passed and vetted by the Supreme Court. Conservative groups have been working overtime in an attempt to get the Act stopped or at least hobbled. It is odd that these groups didn’t complain before. It seems that they have been spending money primarily in an effort to make the President look bad, rather than to actually affect legislation.
The New York Times has an op-ed today about medical device manufacturers and how they control the government which is supposed to be regulating them. Two examples will show how the companies have distorted the market with “anticompetitive” practices. These apply to implanted devices such as artificial hips and knees. First, the companies force the hospitals that buy their devices to keep their prices secret, so that no-one can make cost comparisons. Second, they have prevented the establishment of a device registry that would show relative failure rates for the different brands and types of devices. The companies themselves have data on failure rates, but they keep this information secret.
As a result, Johnson and Johnson’s medical device division had an operating profit of $7.2 billion in 2012. The device tax would cost them at most $300 million. For comparison, they spent only $1.7 billion on research and development. It seems only logical that they should plow much more of their profits into R+D if they wish to remain competitive. However, they really don’t have to compete because of the way they have distorted the market; instead, they cooperate with the other device companies to divide up the market and share the riches.
Many observers complain that there isn’t enough competition in the medical business. Medicine does not lend itself to competition, and introducing it might have unexpectedly negative effects on quality of medical care. Instead, intensive regulation to control costs and allow doctors and hospitals to make well-informed comparisons between devices and drugs would be the most beneficial change. The problem of competition– a race to the bottom– was not addressed in the NYT op-ed and is not well recognized by most “experts.”
The NYT op-ed can be found at: http://www.nytimes.com/2013/10/17/opinion/the-myth-of-the-medical-device-tax.html?src=un&feedurl=http%3A%2F%2Fjson8.nytimes.com%2Fpages%2Fopinion%2Findex.jsonp
Abandoned Cabin, South Dakota
Green River Vista
Three Deer, Not Seen
A Hole in a Wall, Canyonlands Utah
Plane Towing Glider to Altitude
The colors were obtained with Photoshop.
Kitten Drinking Water
This kitten happened to be drinking in front of two cans that used to hold stale popcorn; we used them to hold dry cat food. I thought the juxtaposition of the cat and the photo were worth a picture.
Here’s a very sad comment from an article in the New York Times Online:
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It is far too late, Prof. Stiglitz. That 30 year shift you reference is indeed not a coincidence, but a stealthy, carefully considered, one-step-at-a-time campaign to erect the post-modern, post-industrial version of feudal serfdom in the United States. The planks in the campaign have included back-room tax deals, keeping polarizing political wedge issues like abortion and gun control to the fore to keep the middle-class in Texas and the middle-class in Brooklyn hating each other instead of focusing their collective gaze on who is bringing about their economic downfall, and, of course, money in politics.
The more visible issues – tax loopholes, cust to Social Security instead of raising the income cap on contributions that would render the program completely solvent, the repeal of Glass-Steagall , the shameful bailout of the criminals on Wall Street . . . these were all tactical rather than strategic.
The real strategy, along with deliberately fueled ideological polarization, has been the massive failure to bring about truly effective campaign finance reform that would get the money out of politics – this would have placed limits on the access and effectiveness of the efforts of the 1%, particularly the corporate 1%.
Congress was too weak and too indebted to the moneychangers, and Americans failed to see from which direction the tree was really going to fall on their houses. Meek, frightened, and passive, we failed to fight back.
And now the battle is lost.”
The article is by a famous economist, Joseph E. Stiglitz, who must be about a hundred years old by now, because he was famous when I was in college. The article can be found at: http://opinionator.blogs.nytimes.com/2013/10/13/inequality-is-a-choice/?ref=global-home
Your daily pictures will follow shortly. First I need to update my survival plan, in view of that comment.
There’s a story in the Sunday New York Times about drug prices that exposes a conspiracy among companies to charge patients in the United States more every year, with the help of the US government. The drug industry spends $250 million a year on lobbying, more than any other industry. The benefits from this lobbying are huge: most government agencies are completely blind to prices. Even the agency that studies drug effectiveness doesn’t consider cost as a part of the equation. The “Affordable Care Act” doesn’t do anything to control drug costs, although 10 percent of medical expenses are for drugs. That’s $270 billion a year, out of $2.7 trillion total. Last year, costs went up 25% overall.
The worst shame of the medical industry is that the drug companies are only doing what every other profit-making entity in medicine is doing: fleecing the public for all that they will bear, and more. This is reflected in the fact that the majority of personal bankruptcies mention medical debt as an important, or the most important, cause of the bankruptcy petition. Fifteen percent of the American public lives dangerously, without insurance of any kind. For these people, the primary resort to treatment is the emergency room, barred by law from turning patients away, but more expensive than any other form of medicine.
Other countries have stringent controls on drug prices. Of course, other countries have national health care plans as well. Only the United States forces its citizens to pay inflated prices, even if they are insured. The reason for for this cost is simple: through lobbying, the drug companies have established close connections with our lawmakers that allow them to dictate policy and charge whatever the market will bear.
Here is a link to the NYT article, if you would like to read more: http://www.nytimes.com/2013/10/13/us/the-soaring-cost-of-a-simple-breath.html?hpw
I’m not going to bore you with tedious reflections upon the government shutdown and potential default on the public debt. The only thing I have to say is that this is the most obvious example yet of the Republican tendency towards anti-reality orientation. They believe, despite public opinion polls, that they are doing the will of the public, when in fact they are doing something the vast majority of Americans don’t want them to do. Being against evolution and against government stimulus to revive the economy, it is only consistent that they should be against paying for programs that they have already voted into law ( the debt limit debate) or honoring the securities that America sold to finance the wars in Afghanistan and Iraq and the bank bailout (the primary components of our currently 17 trillion dollar total debt, to which service ten percent of the yearly budget of the federal government is devoted.) (I’m quoting the debt numbers because, in fact, the debt is manageable at only ten percent of the budget, and to point out that the yearly shortfall has been dropping every year that Obama has been president, and that over half of our total debt is related to things that were ordered by our previous President, George W. Bush, the wars in Afghanistan and Iraq and the bank bailout.)
Conrad Theodore Seitz 