Health Care Reform: The Excise Tax Was Only the Beginning
The excise tax has been the medical device industry's main concern about pending health care reform, but other changes are taking place that will alter the market and potentially have a greater impact on sales and profits than the 2.3% tax. Specifically, device manufacturers' customers are at the beginning of changes that will alter reimbursement from the CMS to reflect adherence to standards of "best medical practices" tied to quality patient outcomes.
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A new health-care delivery mode that could drastically alter how the industry is run took another significant step forward at the end of March, when the US Department of Health and Human Services issued proposed rules to govern Accountable Care Organizations. ACOs are designed to create strong networks of physicians and hospitals with aligned incentives focused on patient quality of care and costs. To gain some insight on possible future implications of ACOs for the medical device industry, Medtech Insight recently spoke with Ron Wince, president and CEO of the consulting firm Guidon Performance Solutions.
The tax on medical devices was a late addition to the health reform legislation but it quickly became the industry's focal point over concerns that, in an already difficult environment, this added burden could threaten to disrupt the traditional device innovation model.
Changes in health care's regulatory landscape could have a negative effect on device innovation. In the following exclusive interview, James Mazzo, newly appointed chairman of the Advanced Medical Technology Association, along with AdvaMed president and CEO Stephen J. Ubl, discuss with Medtech Insight the hurdles facing the medical device industry today.