Here we go again, taxing and spending, but now the theme is healthcare reform. We see this trend every eight to 10 years, so it’s really more of a cycle. It usually comes in lock-step with more regulation, because there are more funds to pay for the increased regulation. This “reform” is not shaping up to be all that different from the last attempt. If the Senate has its way, more fees and taxes will result to cover the $900 billion working price tag. The infamous Max Baucus Senate reform package will require more fees and taxes to be paid into the system to help pay the bill for this reform.
But if we are going to cover the previously uninsured, industry will pay along with those individuals who refuse to get insurance. Employers and employees will pay, along with medical technology and drug manufacturers. Right now, there are fees paid when companies file 501(k) or PMA applications, structured so that start-ups have a less onerous burden. That approach must be maintained. Start-ups are the backbone of the industry — without them, there will be limited innovation for larger companies. There won’t be later-stage deals to invest in unless early-stage technologies can make it out of the universities and the laboratories and be commercialized.
Congress needs to pay attention to the difference between a start-up and an established company and distinguish between drug and device manufacturers. Congress and other legislative bodies such as the Massachusetts Legislature, despite effective lobbying by MassMEDIC, appear unable to distinguish between the two.
Massachusetts is home to both industries, but the medical device industry is larger than biotech/pharma. When the gift ban law passed here, we saw that many legislators did not know the difference between the sectors — yet they passed a law with serious, but different, impacts in both industries.
The Commonwealth is a microcosm of the United States. Just as state legislators failed to take the time to learn the differences between the Bay State’s medical device and biotech/pharma industries, the “town hall” meetings held earlier this year on healthcare reform pointed out that national legislators were not talking to physicians, nurses or patients in developing these so-called reforms.
It is likely that rationing will be in the cards. Expensive medical technologies will have to prove their value to be covered. These bills will not popular, and the insurance companies already do this now. It will not be direct rationing, but based on factors that the insurance companies will apply — or perhaps they will penalize physicians for using a certain procedure or device.
There is talk of a National Medical Device Registry to track Class II implantable devices or Class III devices post-market. This aspect of the bill requires that the FDA and CMS work with other agencies to determine what the registry looks like, how it will function and how access will be provided. The medical device community should take the opportunity to weigh in early on that.
So far, the rhetoric involves “transparency” and “accountability,” but for whom? Will Congress be able to understand the industry well enough to facilitate new technologies coming to market that will actually help reduce costs and improve outcomes?
I am disappointed tort reform is not part of this effort, although President Barack Obama pledged to allow states to experiment with mediation alternatives to litigation. The practice of defensive medicine leading to too many tests, the wrong tests or too many expensive tests does contribute to the problem. I submit that it is NOT the primary driver of healthcare costs, but it is a factor. Congress is turning over other leaves about physician behavior and is taking on the AMA and drug and device makers. It’s not clear why they are afraid to tackle the plaintiffs’ lawyers. Could it be that we need a bit more transparency and accountability over the relationships with that lobby?
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