Circular Reasoning

Here's a dumb thought: If you want to save costs on medical devices to the federal government, require a tax fee concessions of $4 billion dollars from the medical device companies to fund a health care overhaul.

Now either that $4 billion will get added to the cost of devices (and the patient/insurer's tab) or the device companies will decide that they must pay the fee to maintain their current pricing.

Government pressures hospitals and doctors by paying less, so hospitals keep the heat on medical device makers to lower costs so they can make their margins.

It all sounds good, right?

But according to one analyst, it seems device makers would rather pay the fee than make their prices transparent:

But the mechanism for how devices companies might pay matters more than what they pay, according to Morgan Stanley analyst David Lewis. "A 'flat tax' is preferable, in our view, to targeted industry fees as our larger concern is the creation of more infrastructure intended to catalyze pricing transparency," he said.

And so, with the fee, the government pays itself while the medical device prices continue to remain inflated.

Why do the patients always seem to lose with these government-mandated scenarios?

-Wes