Minutes before AdvaMed president Scott Whitaker took the stage at MassMEDIC’s annual conference last week, he got word from a Washington colleague that Reps. Fred Upton (R-Mich.) and Billy Long (R-Mo.) said they would vote for the Republican’s healthcare bill, the American Health Care Act.
Both lawmakers had opposed the legislation, citing concerns that it wouldn’t protect people with pre-existing conditions. After an amendment was added to create an $8 billion pool for states to use to support people with pre-existing conditions, Upton and Long got on board. The last-minute conversion proved crucial to the bill’s success, as it passed in the House a day later by a margin of only a few votes.
MassDevice.com co-founder & publisher Brian Johnson spoke with Whitaker about the future of “Trumpcare” and the industry’s efforts to repeal the medical device tax:
Brian Johnson: So [the Affordable Healthcare Act] looks good in the House. The assumption has been it’s dead on arrival in the Senate, but unpack for me just a little bit. You’re very focused on repealing the medical device tax permanently. What else in the AHCA bill is of interest to the medtech space?
Scott Whitaker:Our focus has been almost exclusively on the device tax. The good news is that in this bill, whether you like the insurance reforms or dislike the insurance reforms, from a medtech perspective there’s almost unanimity that the device tax should be repealed. Bipartisan support for that, you don’t have any Democrats who are opposed to it, based on what I can tell, and all Republicans are lined up in support of it as well. That appears to be the case in the Senate as well as the House. So I feel we’re positioned very well for industry to get this fully repealed assuming the Senate takes up this bill. And that in and of itself is a problem.
The issue for the Senate is more than just policy, unfortunately. It’s about the margins that they have. In the House you have a much bigger margin for people to vote against a legislation for a variety of reasons. Essentially in the Senate you have two votes to play with, and that’s not much of a margin. So 52 Republicans. I have a hard time seeing how the Senate would pass the bill that comes to the House in its current form, which means it stretches out for a period of time before they can get consensus. Probably ends up back in conference. The good news is, under either scenario, if this bill goes to conference, I think device tax gets fully repealed. We’re really pleased about that.
Brian Johnson: This is being done through the reconciliation process, right? So there’s a time limit on this, to the end of the month?
Scott Whitaker:Essentially to the end of the month. Congress has an amazing way of getting out of time limits. We’ve seen this happen before. It can stretch out, but I would say that it’s not going to be able to stretch out any longer than September. I think at that point is when they have to really rework it and go through a different process. But I think the focus is on trying to get it done this month.
It feels really unlikely. I worked in the Senate for about 10 years, 11 years, and moving anything through the Senate is cumbersome, even a reconciliation process that only requires 50 votes. So it’s going to be a challenge. I find it hard to believe they can get it done in May, but you never know.
Brian Johnson: With this bill, the AARP, the American Medical Assn., the hospital associations, they all came out against it. AdvaMed at least gave its support based on the medical device tax. Why wouldn’t you get out in front of the other organizations, the patient-centered ones?
Scott Whitaker:We were really careful about what we said. We are not an industry that is, I think, positioned or prepared to speak to the question of insurance reforms. That’s not our expertise. That’s not what we do. That’s other people’s responsibility, members of Congress, to talk about what insurance reforms mean to patients. What we’re focused on is making sure that as many people as possible are covered under any scenario. And that the provisions that directly impact the businesses that we run are taken care of in this bill.
So when they put the device tax in the bill, it was really hard for me to come out and say we opposed it. So what I essentially said was we support the process and moving the House bill to the Senate, so we can get on with the business of creating jobs, creating cures for patients and saving people’s lives. That’s what we’re saying about the bill. Bit of a nuanced statement, but I don’t feel like I’m going to affect the passage of this one way or another if I get engaged in the insurance reforms conversation.
Brian Johnson: All right. But to articulate AdvaMed’s official stance on the ethos behind healthcare reform in general, it’s what? That we need as many patients as possible…
Scott Whitaker:As many patients covered as low a cost as possible and a process that supports the entire ethos-system of the medical technology community. If you do, healthcare policy matters. People talk about it in arcane forms, but policy really matters to our companies. From the FDA regulatory side, through the payment process side to the coverage side as well. All of that matters to us and any legislation that comes forward needs to make sure it doesn’t undermine the regulatory process or the payment process per medtech. At the end of the day, if our companies are hurt by legislation, it’s the patients that are hurt by it the most, because the new innovative product is not going to get to them. That’s what our focus is on.
Brian Johnson: Just one last thought on the device tax. We’re 7 years into the conversation on this and a year into the delay. We’ve seen 40-plus votes to repeal the entire ACA in the House. You just said it’s highly unlikely this current iteration gets past the Senate. At the end of the day, beside all the drama, the palace intrigue, where does this leave us in terms of this tax and is there a path for it after this?
Scott Whitaker:There’s a path for it. If the healthcare bill falls apart, we’ve already been communicating with members of Congress and leadership that we need to take that [medtech tax repeal] provision, pull it out of that bill and pin it to the next moving vehicle. Essentially that means any legislation that’s moving on a bi-partisan basis to the House or the Senate, we would ask them to attach that.
There are two immediate bills that are likely to be targets for that. One would be the children’s health insurance program which needs to be re-authorized by September. If healthcare falls apart we’ll push for a device tax in that. If it doesn’t get in that then we’ll push for the medical device user fee legislation which is coming over the course of the summer as well, to try to get it attached to that.
The fact that we have such broad bi-partisan support increases the likelihood that, regardless of the vehicle that Congress moves, it will get this repeal. I think it will be done on a permanent basis. I’ve been told by everybody, including leadership in the House and the Senate, one way or the other we’ll get it done this year.
Brian Johnson: How do you think that plays out for the folks that are exhibiting in this room, our service providers? A lot of these folks sell into the medical device industry. What are they telling you about how much they care about issues such as the device tax?
Scott Whitaker:The biggest thing for most people, our companies, people that work with our companies, is our companies need certainty. With the uncertainty of whether device tax is going to come back on your books or go off the books, it’s hard to make investment decisions both in the short term and in the long term.
That’s why a two year’s suspension is better than it going back on the books. But a permanent repeal is really important. Everybody in this building needs a healthy medtech ecosystem. The device tax is an important component of that. Regulatory is important, payment’s important, but taxes are as well.
This conversion was edited and condensed for clarity.