A study conducted by Masimo (NSDQ:MASI) evaluating its business in Massachusetts since the Bay State’s healthcare reform law went into effect shows that pulse oximetry sensor sales slipped despite a 7% influx of newly insured patients.

Masimo CEO Joe Kiani, a vocal backer of President Barack Obama and his landmark Affordable Care Act, told MassDevice.com that the study suggests that the bump used as the rationale for the medical device tax is illusory.

The ACA contains a provision for a 2.3% excise tax on all U.S. sales of medical devices, predicated on the assumption that the millions of Americans with new access to the healthcare system would drive an increase in business for medtech makers.

“I am a proponent of the Affordable Care Act. There are a lot of good things in it, but just like any other important contract or bill – such as as our Constitution, which now has 27 amendments – nothing precludes us from making the Affordable Care Act better,” Kiani told us yesterday. “Having said that, I have to say that if the medical device tax was justified by an increase in business for medical device companies, then our study shows that that is a flawed assumption. Unfortunately, it shows that in Massachusetts, when we compared to 5 similar states, our revenue growth was ¹⁄₁₆ of the similar states, which is the opposite of what you’d expect. You’d expect it to increase, but it actually went backward.”

Masimo compared sales of its single-use pulse oximetry sensors in Massachusetts with its sales in Pennsylvania, Ohio, North Carolina, New York and New Jersey from 2006 to 2011. Massachusetts enacted its healthcare reform measure in 2007. The data shows that sales scarcely grew in the Bay State over that period, but surged in the 5 other, similar markets (and in the U.S. overall):

“Even though there was a 7% increase in insured patients in Massachusetts, we didn’t get a 7% increase in our revenues compared to the 5 similar states. In fact it was the opposite: Our revenues went down compared to the 5 similar states,” according to Kiani.

Kiani said he’d like to see an independent government agency run a similar study on a wider array of medical devices to see if Masimo’s results can be duplicated as the ACA provisions begin to go into effect next year.

“We’re asking the government to do their own study and not just include pulse oximetry sensors, but maybe 49 other products, a comprehensive basket of products, to see if overall their numbers are any different than ours, whether it’s positive, negative or flat,” he explained. “Even if it doesn’t benefit Masimo – well, if it’s the right thing to do, it’s the right thing to do. As long as it doesn’t hurt the industry, that’s OK.”

“The industry, government, Democrats, Republicans – all of us should work together to figure this out, to make sure we come up with the right solution,” Kiani told us. “Here we have an amazing, robust industry that’s the envy of the world. Let’s not damage it accidentally.”