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Medical monitoring device.
Smith & Nephew, a global manufacturer of medical devices, announced it will lay off 100 workers in plants in Massachusetts and Tennessee. The reason, the company says, is Obamacare and the 2.3 percent excise tax on medical device companies.
Joe Metzger, senior vice president of corporate communications for Smith & Nephew, said the tax is impacting “a number of companies across the U.S.”

“Smith & Nephew is not immune from this added expense burden,” Metzger said in a statement. “Unfortunately, and in order to absorb this cost burden into our business, this has meant less than 100 positions have been made redundant across various departmental functions in our Tennessee and Massachusetts sites.

It's a convenient reason, and right-wing media is all over it. But what much of the right-wing media is not reporting, and the Memphis Business Journal is reporting, is that beginning-of-the-year layoffs have lately been a habit of Smith & Nephew.
The company said in February 2012 it would lay off 7 percent of its global employees. It laid off 80 Memphis workers in December 2011 as part of a company restructuring.
The company's third quarter profits were up overall, but below the previous year's third quarter performance. The company's announcement of its 2012 performance is scheduled for Feb. 7, which may or may not have anything to do with these layoffs, but recent history might be a guide, and Obamacare a highly politicized excuse.

Originally posted to Joan McCarter on Fri Feb 01, 2013 at 10:25 AM PST.

Also republished by In Support of Labor and Unions and Daily Kos.

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Comment Preferences

  •  This shit will continue (7+ / 0-)

    until people demand that corporations be stripped of personhood status. "Blame Obamacare" is just the latest meme used to divide us all.

    Make no mistake, People Demanding anything of this government at this time is going to take a whole lot more doing than "online petitions" or "blogging" or "showing up at the ballot box every two years".

    Or waiting on Mr. Obama. Or Hillary. Or even waiting on Anonymous.

    Nobody is gonna help us but US.

    It is time to #Occupy Media.

    by lunachickie on Fri Feb 01, 2013 at 10:34:06 AM PST

  •  God forbid that any of these bllodsucking ops (4+ / 0-)

    should shave their profit margin by a hair. Better to throw out employees trying to make a living wage and find a handy excuse.

  •  Smith & Nephew? (12+ / 0-)

    The device manufacturer which has had lawsuits re: hip replacement stuff?  Smith & Nephew subject to an FDA warning?

    Assholes

    " My faith in the Constitution is whole; it is complete; it is total." Barbara Jordan, 1974

    by gchaucer2 on Fri Feb 01, 2013 at 10:46:06 AM PST

  •  We just have to ask a simple question (4+ / 0-)
    Recommended by:
    a2nite, hnichols, ardyess, Kickemout

    If S & N would save more than they lose by cutting these employees, why would they keep them?  Forget the tax issue - it adds no additional incentive to make a good business decision.

    It's like the argument that higher tax rates, when still well below 50%, reduce the incentive to make more money.

    West. No further west. All sea. --Robert Grenier

    by Nicolas Fouquet on Fri Feb 01, 2013 at 10:49:51 AM PST

    •  Why don't they just raise the price of their (0+ / 0-)

      product by 2.3% to cover the tax? Taxes are just an expense item like rent and electricity.  Since all manufactures are paying the same tax you lose no competetive advantage by raising your price and keeping your employees, if they are needed.

      •  They will, that's the point. And healthcare (0+ / 0-)

        consumers (you and me) will wind up paying for it.  

        [That was the argument that Repubs and Corporatist Dems had against this surcharge on Medical Device manufacturers in the first place.  Looks like they may be right, on this one.  :-)

        P.S.  Just made a post two days ago about this topic.  Al Franken and Elizabeth Warren have both signed a letter to the President, to oppose the Medical Device surtax.  So it's really not just "Repubs" trying to foul things up (in this case).

        Mollie

        "Only he who can see the invisible, can do the impossible." --Frank L. Gaines

        "If a dog won’t come to you after having looked you in the face, you should go home and examine your conscience.” -- Woodrow Wilson

        by musiccitymollie on Fri Feb 01, 2013 at 01:46:06 PM PST

        [ Parent ]

        •  MN and MA are home to big device Co's. (2+ / 0-)
          Recommended by:
          LilithGardener, tb mare

          The problem is it's a tax on revenue, not profits.  But, I get why - companies work hard to shield taxable income.

          West. No further west. All sea. --Robert Grenier

          by Nicolas Fouquet on Fri Feb 01, 2013 at 01:56:29 PM PST

          [ Parent ]

          •  You're correct. That was in the article that I (1+ / 0-)
            Recommended by:
            tb mare

            posted (about Franken and Warren).

            Again, just stating the fact that some Dems are in favor of the repeal of this surcharge.  

            Some of the Dem leadership also signed the letter--Schumer and Durbin (no surprise, really).

            Mollie

            "Only he who can see the invisible, can do the impossible." --Frank L. Gaines

            "If a dog won’t come to you after having looked you in the face, you should go home and examine your conscience.” -- Woodrow Wilson

            by musiccitymollie on Fri Feb 01, 2013 at 02:21:33 PM PST

            [ Parent ]

  •  The medical device excise tax (3+ / 0-)
    Recommended by:
    VClib, BlackSheep1, MWV

    is actually quite a pain in the ass.  The additional tax expense doesn't justify firing 100 workers, but the extra work involved to calculate it falls on those who remain.  Also complicated by lack of guidance by the IRS and FDA.

    •  Indeed, I mean 2.3% of sales price is like, hmm (1+ / 0-)
      Recommended by:
      Pluto

      maybe sales price  times .023.

      The easy way to do it, and retain prior profit margins is to divide  the old sales price by .977 (100% - 2.3%) and make that the new sales price. Then the net sales price is the old sales price and the tax is what's left.

      old SP = 100
      New SP = 100/.977 = 102.354145343
      less old SP                    100
      Send to uncle                   2.354

      pocket the rest.

      That, in its essence, is fascism--ownership of government by an individual, by a group, or by any other controlling private power. -- Franklin D. Roosevelt --

      by enhydra lutris on Fri Feb 01, 2013 at 11:18:39 AM PST

      [ Parent ]

      •  It is more complicated than that. (2+ / 0-)
        Recommended by:
        stunzeed, musiccitymollie

        I heard about this device tax thing and was completely confused about what it is meant to do.

        Medical devices include things like pacemakers and I wondered if this was some sort of wonky idea thought up to deter "too many" device implants or something like that.

        S&N makes joint replacement devices mostly.  

        Anyway, I would like to understand why the devices are being taxed and also have a look at what's going on at S&N overall before judging whether or not the claims have any merit.  I'd also like to understand how the tax works and again why it was included in ACA in the first place.

        •  The medical device industry is part of (2+ / 0-)
          Recommended by:
          LilithGardener, tb mare

          what is driving medical costs through the roof. And medical devices are still early in their evolution. In the next twenty years you'll be amazed at what they'll come up with.

          You'll be even more amazed at the cost.

          The tax is a matter of basic fairness; if you are producing a product that puts a particular burden on the health care system, you should contribute more to the system. In the future medical devices will more and more extend the lives of those who would have died, which is great, but which also costs a lot more money.

          In the end, more insured people means more customers for medical devices, too. So their whining is not particularly convincing.

          •  I am fine with the concept of the tax that (2+ / 0-)
            Recommended by:
            stunzeed, bleeding blue

            helps build and maintain the road to your store.

            I just didn't understand the tax rationale on this one because there were so many taxes and other tricks in this bill that were engineered to reduce medical procedures and tests.  I wanted to know whether this tax was a part of that class of line items in the bill.

            As for med tech, I've actually worked on a number of products that fall into that category and know a fair amount about what they cost as well as what the costs of maintenance can be, etc.  It is an interesting area of the healthcare world for a whole host of reasons.

            On the front of "basic fairness", though, this law leaves a lot to be desired.  It is inherently unfair and that really comes from the fact that there is not a standard premium pricing structure that would be applicable to all regardless of your employer or employment status.  There really isn't any better competition under this model than there was before and while insurers can't deny coverage on the basis of a preexisting condition, that doesn't mean that coverage is going to actually be affordable.  

            Anyway, here we go...

            •  there are major subsidies (2+ / 0-)
              Recommended by:
              phrogge prince, LilithGardener

              and for those who are very poor (150% of poverty level), medicaid expansion.

              The people who may be screwed are the poor who live in places like Texas where their governors are willfully refusing the medicaid expansion.

              There's been hundreds of diaries here on the benefits of obamacare. From everythign I've read here and elsewhere I am 100% confident this country is better off with it than without it.

              as for the devices, my understanding is the tax is specifically included because of the skyrocketing costs of medical devices and the fact that medical devices are likely to proliferate in the future. The tax isn't in there to deter people from using them.

              To reiterate, Obamacare will allow more people to have medical devices who might otherwise have just died of a heart attack because they never went to the doctor and found out about their problem. And that's just one example.

              •  I know that there are subsidies - (0+ / 0-)

                I have heard all of the advertised benefits.

                Your understanding of the device tax makes zero sense as you wrote it above - unless you meant it to say that the tax would allow government to cover the expensive devices that they end up having to pay for with this tax money - which might make sense.

                However, nothing about sticking with the private insurance model really makes any sense at all.

                •  I would like to medicare for all (1+ / 0-)
                  Recommended by:
                  Sixty Something

                  but I live in the real world, where that had zero chance of happening. We do not have a parliamentary system.

                  That obamacare passed at all is a bloody miracle. It makes me sad that so many here can't see that, and spend time spinning their wheels about  how terrible it all is. This represents a huge expansion of health insurance coverage to people who are in very precarious positions. It's a massive expansion of medicaid - a single payer program. It shores up medicare, another single payer program. It pushes some landmark regulations onto insurance companies, including a ban on discriminating based on preexisting conditions. It expands community health clinics. etc. etc. etc.

                  And yes, it grabs some profits from medical device companies before the next wave of technological advancements.

                  Too many people are looking down at these accomplishments. I just don't get it.

                  •  I hate to tell you that it has already (1+ / 0-)
                    Recommended by:
                    musiccitymollie

                    resulted in a contraction in access for my elderly mother, but that's a whole other story - except to say that the home healthcare program that was cut in the deal on the fiscal cliff was something that I had been hoping would help offset the other cuts she's now going to have to deal with.

                    •  There are literally millions of people (1+ / 0-)
                      Recommended by:
                      phrogge prince

                      that will directly benefit from obamacare. People whose mothers are also elderly or sick. The most conservative estimates I've seen put tens of millions of additional people into health insurance. That's in addition to the young people that are now able to be on their parents plans.

                      Should we throw them under the bus because you believe - and I don't know if your belief is correct, because obamacare is not yet implemented and I haven't examined your situation - that it won't benefit your family right away? Do you understand the legislation doesn't take full effect until 2014?

                      I can go up to Canada right now and show you ten examples of people who have been screwed by Canadian health care. Should they abandon their system?

                      The fiscal cliff deal was not related to obamacare, so I don't know why you are bringing it up. But home health assisstance is going to come roaring back in the next five or six years. The crisis is too big, and HH saves too much money.  

                      •  I am bringing up the fiscal cliff deal (1+ / 0-)
                        Recommended by:
                        musiccitymollie

                        because one of the brightest moments and best cost-saving programs in the ACA was a program to expand Medicare to people for home healthcare who really do not need to (or can afford to) stay in their homes as opposed to going into nursing homes.

                        You seem to hold yourself out as some sort of expert on the ACA and the healthcare problems we face in this country so I am really, really surprised that you aren't aware of the nursing home lobby's very successful (decades now) efforts to prevent people from staying in their homes by allowing Medicare to cover and assist in home healthcare delivery services.

                        And you are being kind of jerky to accuse me of thinking that my Mother's situation merits denying all kinds of other people help and relief on the healthcare front.  My Mother would NEVER want that and neither would I.  So please set that silliness aside.

                        Our story is anecdotal, but unfortunately I know of ten such "anecdotes" in and around the small town in which my parents live and they all have to do with new rules having to do with qualifying for Hospice care.  My Mother's nurse has nine other patients in our situation and this is a sparsely populated area.  None of the people being cycled out of that care system are any less terminal than they were when they were put into the system.  They aren't failing the stricter qualifying tests at a rapid enough rate.  In my Mother's case this has to do with the fact that she has a really rare affliction - if she had CHF, diabetes, kidney disease or a whole host of other common terminal diseases then she would be failing the tests she needs to fail - but her affliction doesn't qualify.

                        Now here's my weekend and Monday morning fun.  First I drive to Alabama to help prepare my Mother for a 50 mile trip to go see an internist.  My mother has a blood clot in her brain which brought on the stroke that originally started all of this and has minor, mild and severe seizures when we move her just out of her hospital bed and into a wheelchair one foot away.  Over the past year, no one would move her from the medical staff because the seizures were bad enough, but the risk of another severe or deadly stroke was too great - she has been out of bed exactly twice in twelve months.  Now we are going on Monday's adventure because Medicare doesn't support in home care and certainly doesn't support house calls (a trend that might have come back had the ACA program been started); we will have no medical supervisions for this transfer other than EMTs who are great, but can only be so helpful; and her clot could explode anywhere during the process.  I am looking forward to that - wouldn't you?  And all of this life risking trip is being done to shift to a doc outside of the Hospice system so that she can continue to get her prescriptions for important things like anti-convulsants.  

                        Now, I am trying to keep a positive attitude and hope that she will make it there and back without incident - that the internist who graduated from med school 18 months ago will be eager to give her the best care possible and will make sure that he engages and consults with a neurologist - and that this might be an opportunity to improve her anti-convulsant so that maybe we aren't dealing with seizure activity when she is rolled over in the bed to have her diaper changed.  BUT the possibility that everything could go terribly wrong is real and we have to prepare ourselves for that, too.

                        And even with all of this that we face in my family, I still can't get over the story about the couple my Mother's nurse told me about a couple who receive $50 too much a month in Social Security to qualify for coverages they will lose when that woman is cycled out of Hospice care and back to Medicare.  For the moment, we have money and we will spend it as necessary, but it sounded like that couple were facing having her go into a home and him ending up homeless.  In short, if it is hard for my family, it is really fucking hard for other families who are not as fortunate as ours is.  That is the main reason my anecdote and theirs is important.

                        Purely from the political standpoint, the conversations that I have had about these changes and "cost savings measures" in the Medicare system - well let's just say that the politics on the Hospice care "clamp down" aren't good for the authors of the ACA.

                        In any case, I hope you will wish my mother well.  She is credited with saving NPR, helping to start MALDEF and has helped countless people over the course of her career.  She worked hard.  She saved.  She paid her Medicare insurance premiums and she deserves respect - but she'd tell you that any deadbeat on the street deserves as much or more than she does if she was lucid enough to talk with you now.  She believed in more and better and always acted on that premise in her life and her career.  

                        •  the ACA isn't even implemented yet (1+ / 0-)
                          Recommended by:
                          True North

                          and you're already predicting it's failure, not based on facts around the ACA, but based on your own personal situation which is occurring before the ACA takes effect.

                          The entire health insurance system is collapsing. Of course your situation is terrible. Most people are in a terrible situation right now.

                          The ACA is the only chance we have in the next decade of making this the slightest bit better, and it provides a framework that could easily morph into something far more progressive long term. Get on board, or let the republicans rip it to pieces and throw it in the trash and turn the US officially into a 3rd world country. Your choice.

                          •  This is the most obvious fact to anyone who (0+ / 0-)

                            has actually navigated their employer-sponsored health plan for anything beyond the most routine preventive care.

                            The entire health insurance system is collapsing.
                            18% of GDP - we've been paying through the nose forever, and now the US economy can no longer sustain the effective "private sector tax" that derives from the fragmentation and discriminatory policies.

                            In my view the device excise tax is merely one way for those unearned profits to come back to the government, so that effective regulation and support can be supplied elsewhere.

                            Devices, even more than drugs, are in need of effectiveness based priority systems for coverage and compensation.

                        •  Best of luck to you and your Mom, IH. Of course (1+ / 0-)
                          Recommended by:
                          inclusiveheart

                          she doesn't deserve to have hospice care denied her (if I understood what you were saying about a recent "Medicare reform."  

                          I'm posting a comment in a minute that's about the "dual eligible" demonstrations that are going to deny "Hospice Care."

                          That must be 'the new rage' in healthcare cost savings.  As I said in that comment--"Unconscionable."

                          Mollie

                          "Only he who can see the invisible, can do the impossible." --Frank L. Gaines

                          "If a dog won’t come to you after having looked you in the face, you should go home and examine your conscience.” -- Woodrow Wilson

                          by musiccitymollie on Fri Feb 01, 2013 at 07:32:49 PM PST

                          [ Parent ]

                          •  Guess I "lost" that post, and don't have time to (1+ / 0-)
                            Recommended by:
                            inclusiveheart

                            rewrite it.

                            Bottom line:  Here's a link to Kaiser Health News and a brief about a couple of "demonstration projects" which are for "capitated managed care" for the sickest and most frail of all, Medicare/Medicaid "dual eligibles."  Bad news for those folks!>

                            And even worse, neither demonstration project will allow these beneficiaries the traditional Medicare benefit or service of "hospice care," which IH has already referenced above.

                            "Unconscionable."

                            Mollie

                            "Only he who can see the invisible, can do the impossible." --Frank L. Gaines

                            "If a dog won’t come to you after having looked you in the face, you should go home and examine your conscience.” -- Woodrow Wilson

                            by musiccitymollie on Fri Feb 01, 2013 at 07:43:41 PM PST

                            [ Parent ]

                          •  Thank you. (1+ / 0-)
                            Recommended by:
                            musiccitymollie

                            We will prevail, but other people with fewer resources will be very negatively affected.

                        •  Prayers & best wishes for you and your mom. (0+ / 0-)

                          I'm so sorry you're going through this. Medicare has been the topic around my neighborhood lately in San Diego with blame being ascribed to ACA, right or wrong. I know the WH cut the CLAS Act provisions by exec order after it was passed in ACA because HHS determined that there was not enough money for long term care and somehow Hospice and Home Health were very significantly cut as was Medicare's coverage of "rehab". All DME from children's braces to sleep apnea machines have price increases for the customer and blamed on ACA. Home health nurses are being cut here and blamed on ACA. ??? There's no admin communication to explain or counter the claims which are pretty predictable.

                          Health care access, affordability, and long term care sucks for all but the well off paying huge prices out of pocket and the very poor since Medicaid is pretty good, around here at least. The people in the middle are seeing the same annual double digit price increases suffered for over a decade now and ACA will have no impact on them. People at my HMO in senior mgmt have hinted that exchange premiums are going to be shockingly high.

                          I wish you and your mother health, strength, stamina, and peace.

                    •  As opposed to the contraction that was (0+ / 0-)

                      happening anyway, for millions of people, with claims denied and caps, and being bumped off plans, graduating from college and unable to find a job, ANY job, let alone a job with benefits.

                      A provision that would truly make health insurance better is if your employer-sponsored plan was truly portable, such that when you started a new job you could choose to stick with your old plan or sign up with the new plan.  

                      If that were the law, companies would have to actually DO THE WORK of negotiating a good deal.  As it currently stands, people have no choice when they start a new job, but to take what the company offers and find out later how badly it sucks, despite what is promised.

              •  A minor point, but I've always seen the FPL (1+ / 0-)
                Recommended by:
                inclusiveheart

                percentage of 133% or at Kaiser Health News, 138%.  Here's the link.

                Here's the excerpt:

                Who Benefits from the ACA Medicaid Expansion?

                A key element of the Affordable Care Act (ACA) is the expansion of Medicaid to nearly all individuals with incomes up to 138 percent of the federal poverty level (FPL) ($15,415 for an individual; $26,344 for a family of three in 2012) in 2014.


                Just clarified this discrepancy that I've observed:
                Is Medicaid eligibility expanding to 133 or 138 percent FPL, and what is MAGI?

                Some sources state that the new minimum Medicaid eligibility threshold is 133 percent FPL; other sources state it will be 138 percent. Both are correct. The text of the ACA says 133 percent, but the law also calls for a new methodology of calculating income, which will make the effective minimum threshold 138 percent. (Either way, remember that these are minimum thresholds; states can set eligibility thresholds higher, and many already have for certain populations, which means that more people qualify.)

                And, unfortunately, over twenty states are not opting to cover this additional [or expanded] group of Medicaid-qualified folks.  

                Well, that's interesting.  Learned something that I didn't know.  :-)

                Mollie

                "Only he who can see the invisible, can do the impossible." --Frank L. Gaines

                "If a dog won’t come to you after having looked you in the face, you should go home and examine your conscience.” -- Woodrow Wilson

                by musiccitymollie on Fri Feb 01, 2013 at 02:43:08 PM PST

                [ Parent ]

            •  You must be kidding - about basic fairness (2+ / 0-)
              Recommended by:
              kck, freesia

              Medical devices and apparatus are a HUGELY profitable industry.

              The top 50 companies have gross profit margins in the 40-90% range.  

              The top 50 companies in the Healthcare Sector have gross profit margins in the 80 - 99.95% range.

              The US pays 18% of GDP for healthcare, the extra 10% of GDP over other nations' high quality fully-regulated healthcare is like a tax on the country, because we all pay for it, even if we die before we ever need any expensive device or treatment.

              http://ycharts.com/...

          •  Their whining may not be "convincing," but (0+ / 0-)

            that doesn't mean that they can't pass on the costs to their clients (providers such as doctors and hospitals), and down the line.

            But my intention was to pass along the information that I received in a "Tweet."  I follow a healthcare economist, Aaron Carrol, which is why I received the article about the letters being issued from a medical device company.  BTW, he's an Obama supporter.  But that doesn't' change the fact that some companies will pass on the costs as predicted.  And in some instances, we will pay for it, in the end.

            Heck, I'm tired of hearing "business" whine, too.  LOL!  You'll have no argument with me on that.  :-)

            Mollie

            "Only he who can see the invisible, can do the impossible." --Frank L. Gaines

            "If a dog won’t come to you after having looked you in the face, you should go home and examine your conscience.” -- Woodrow Wilson

            by musiccitymollie on Fri Feb 01, 2013 at 01:41:02 PM PST

            [ Parent ]

          •  Yes, but (1+ / 0-)
            Recommended by:
            orlbucfan
            The tax is a matter of basic fairness; if you are producing a product that puts a particular burden on the health care system, you should contribute more to the system.
            Agreed. Let me ask, won't the increase in number of people covered under the ACA increase the usage of medical devices, more than 2.3%?

            Then again, if this outfit makes hip replacements, and they have been sued for defective products, then this complaint is intended as a distraction.

            Don't Senators Franken and Warren know this?

            "We will find fulfillment not in the goods that we have, but in the good we can do for each other." ~ RFK

            by paz3 on Sat Feb 02, 2013 at 01:00:09 PM PST

            [ Parent ]

          •  Except if they don't extend lives - go check our (1+ / 0-)
            Recommended by:
            freesia

            average life expectancy and its recent trend line.

            That, in its essence, is fascism--ownership of government by an individual, by a group, or by any other controlling private power. -- Franklin D. Roosevelt --

            by enhydra lutris on Sat Feb 02, 2013 at 02:31:38 PM PST

            [ Parent ]

        •  There is a universal answer as to why (2+ / 0-)
          Recommended by:
          stunzeed, LilithGardener

          anything gets taxed; Congress decided to tax it. In the committee reports they sometimes state the reasons that they want you to believe motivated them. You are free to believe those or not as you see fit.

          That, in its essence, is fascism--ownership of government by an individual, by a group, or by any other controlling private power. -- Franklin D. Roosevelt --

          by enhydra lutris on Fri Feb 01, 2013 at 12:48:52 PM PST

          [ Parent ]

        •  Very good points, IH. I'm always wondering if (2+ / 0-)
          Recommended by:
          inclusiveheart, LilithGardener

          "behavorial economics" (which Dems are very much into) is a part of various policy decisions.

          I read Kaiser Health News fairly regularly, and "follow" the left-leaning economist Aaron Carroll on Twitter.  [I also read the business pages of Bloomberg News, etc.  There is a wealth of information about these kinds of topics in the business pages of all the major newspapers.]

          Mollie

          "Only he who can see the invisible, can do the impossible." --Frank L. Gaines

          "If a dog won’t come to you after having looked you in the face, you should go home and examine your conscience.” -- Woodrow Wilson

          by musiccitymollie on Fri Feb 01, 2013 at 01:51:48 PM PST

          [ Parent ]

        •  A quick Google reveals that "motorized (2+ / 0-)
          Recommended by:
          inclusiveheart, LilithGardener

          wheelchairs" are considered Medical Devices (as are insulin pumps, pacemakers, artificial joints, and of all things, extended contact lenses and hearing aids--those two surprise me a bit.

          I have heard in Congressional hearings (on C-Span) a lot of griping about the "overuse" of motorized wheelchairs, though.  So this tax may be intended to curb the "overuse" of that medical device.  Who knows?

          Mollie

          "Only he who can see the invisible, can do the impossible." --Frank L. Gaines

          "If a dog won’t come to you after having looked you in the face, you should go home and examine your conscience.” -- Woodrow Wilson

          by musiccitymollie on Fri Feb 01, 2013 at 02:26:25 PM PST

          [ Parent ]

          •  The motorized wheelchair griping is (1+ / 0-)
            Recommended by:
            Mike Taylor

            a perfect example of subjective healthcare legislative thinking done by people who have never had the misfortune to be wheelchair bound.

            There have been a lot of 20-something wonks crunching numbers without a clue about where these costs and prices come from.

            Here's an outrage inducing example for you:  my mother is very ill and her ambulance trips to the hospital that is five minutes from her house cost somewhere around $650 billed to Medicare - and she pays a portion of that $650.  

            Outrage moment, right?

            Well, some of that incredibly high price probably should incite outrage, but it is a small town and there are only so many ambulance emergencies per capita anywhere - and this ambulance still has to be equipped as well as any ambulance that might be able to service 50 people per day as opposed to maybe five people per day.  The people working the ambulance still have to be trained and keep up their certification - the insurance still needs to be paid, etc.

            So what do we do about that situation?  Stop having ambulances service low density population areas?  A lot of the problems we are seeing have to do with the move away from publicly funded services - like when the local fire department also had ambulance service.  Privatization of what used to be government services is one of the big problems we are facing as a nation on multiple fronts.

            It is so funny because the Republicans keep insisting that we can't afford government services, but I contend that the question we all should be asking is whether or not we really can afford privatized services and all of the additional surcharges that come along with that model.

            •  $650 for an ambulance visit sounds kind of cheap (0+ / 0-)

              to me.

              There clearly is a need for an urgent care medical delivery service in your area, that could take someone who is in urgent need to the hospital in the next 2-4 hours, but who is not likely to die in the next few minutes.

              Best wishes for your mom to remain in her home as long as possible, and hopefully recover.

        •  The tax is the beginning of better regulation on (0+ / 0-)

          a very thinly regulated (and thus HIGHLY profitable) industry in the healthcare sector.

          My hope is the tax will help pay for effectiveness and comparative testing, by the NIH and NSF, for example, so that consumers can distinguish truly effective devices, from the hype and marketing.

      •  Wow, you've got it all figured out. (2+ / 0-)
        Recommended by:
        johnny wurster, inclusiveheart

        Now go find the IRS definitions of "medical device", "retail exemption", and "constructive price", and get back to me.  I'll wait.

        •  Why was this tax imposed? (0+ / 0-)

          Seems like you might know the background.

          •  It's a revenue balancer for Obamacare. (2+ / 0-)
            Recommended by:
            inclusiveheart, nextstep

            The branded prescription drug fee didn't completely plug the gap. I don't have a problem with the tax itself - it's just a half-baked law.

            •  Robbing Peter to pay Paul (0+ / 0-)

              How does this tax balance revenue?  This tax will simply be passed on to the consumer, all of us buying insurance. Our rates will go up to cover the higher costs. Then, subsidies will have to rise, and taxes will have to go up more to again "balance" revenue.

              And don't think prices will only rise 2.3%. They'll rise 3%. Then insurance rates will rise 4-5%. At each step the corps will squeeze out more profit and we get fleeced. The goal is to take out the price gouging, not to bake it in.

              The tax is a horrible idea. It isn't possible to pay for something by making that thing more expensive.

          •  Non-specifically, this has been imposed on (2+ / 0-)
            Recommended by:
            inclusiveheart, stunzeed

            Medical Device companies as a "revenue stream for some of the healthcare reforms" (honestly, don't remember if this was part of various Medicare reform bills, or part of the ACA--but, that is the general reason for the surcharge.)

            Just last week, a Medical Device company (don't remember which one) made public that they had sent letters to their clients (presumably hospitals and various other providers) that they would be passing the surcharge on to them, in their future pricing.  

            Many experts predict that, in turn, the tax will be passed on to the patient/healthcare consumer.  Which was one of the Republicans', and corporatist Dems' arguments against this surcharge.

            I'm afraid that this may be just 'the tip of the iceberg.'

            I'd said that folks need to expect much more fingerpointing in the months (and years) to come, as the ACA is being implemented, and many folks who've been in group health insurance plans, lose their coverage.  [Not to mention the backlash the Dems may experience if major austerity measures are imposed.]

            Like "moi."  [In my case, through Mr. Mollie's employer.]

            Mr. Mollie's employer told us, in a couple of conference calls, during the company's November 2012 health insurance "Open Season," to put the blame squarely on Obamacare, in regard to them dropping all insurance plans beginning in 2014.  They are self-insured, BTW.  

            To be precise, we've been "warned" that is this bill is not appealed, this is likely.  The final word will come down this year, sometime.  We just hope it won't be at the last minute--meaning November of this year, if we're left to fend for ourselves.

            And good luck trying to find out anything about the Health Exchange any time soon.  I spent over three hours a couple of days ago (internet and calling), and got nowhere, finding out any of the details on the Federal Health Insurance Exchange.  Everyone said to call back in the Fall.

            Naturally, as our luck would have it, we're in a state that refused to have any part of a State Exchange.  (Last I heard, they also refused to raise the Medicaid eligibility--which wouldn't help us any, but is clearly very important for many folks--to 138%.

            So, we'll see. But I fear that progressives may be in for a really rough ride, and possibly a miserable midterm election cycle.

            I just hope and pray that the Administration doesn't make it worse by striking a Grand Bargain which includes deep cuts to Social Security and Medicare.  

            Surely, their expert advisors realize that they'll experience some amount of "blowback" because of folks being thrown off their group plans (fairly or not).  The Democratic Party needs to take heed, and refrain from doing anything more to aggravate the situation.  (And yes, I understand that they would want to get cuts out-of-the-way as soon as possible, due to electoral politics.)

            Mollie

            "Only he who can see the invisible, can do the impossible." --Frank L. Gaines

            "If a dog won’t come to you after having looked you in the face, you should go home and examine your conscience.” -- Woodrow Wilson

            by musiccitymollie on Fri Feb 01, 2013 at 12:24:51 PM PST

            [ Parent ]

            •  asdf (1+ / 0-)
              Recommended by:
              stunzeed

              If that tax was supposed to help with coverage in other areas like say the expansion of home healthcare initiative that was cut from Medicare in the fiscal cliff deal and that sort of stuff keeps happening, then the politics of the situation is going to get very ugly for the Dems.

              I've always thought that the failure to inextricably link the mandate to the government subsidies along with the failure to regulate premium prices was going to end up totally killing this law.  Given the fact that the subsidies being provided are in the hands of a rogue House GOP, I am betting that's going to happen faster than even I had imagined it might.

              In any case, thanks for the thoughtful response.

            •  asdf (3+ / 0-)
              Recommended by:
              stunzeed, nextstep, LilithGardener
              Many experts predict that, in turn, the tax will be passed on to the patient/healthcare consumer.
              Within reason, that is the rule with excise taxes. Generally, since mmany of our markets are oligopoly markets, prices are set to what the market will bear. If they can sell the increase to the consumers as a business necessity, then it will be passed through.

              That, in its essence, is fascism--ownership of government by an individual, by a group, or by any other controlling private power. -- Franklin D. Roosevelt --

              by enhydra lutris on Fri Feb 01, 2013 at 01:06:37 PM PST

              [ Parent ]

              •  Specifically, in the healthcare arena, (2+ / 0-)
                Recommended by:
                enhydra lutris, LilithGardener

                though, the definition of "consumers" is not as straightforward as it is when I go buy a new TV.  The insurance companies and Medicare are the "consumers" who decide what they will pay for in any given category including services, testing and devices.  I'm not trying to defend S&N from criticism here, but the matrix of commerce/expense in healthcare is much more complicated than people understand - and if insurers decline to absorb the tax then a company has to lower their price to cover it or find a way to get the insurer to make the patient pay out of pocket.  

                S&N has several issues at the moment, the tax is just one on a list and the extent to which the tax really is a key problem for them is and probably will remain unclear for a whole host of reasons.  Med tech companies are really complicated entities in part because they combine so many different disciplines in creating their products.

                In any case whatever their specific deal is at S&N at the moment - sales tax in healthcare is not as simple as it is in the consumer retail arena.

                The last price quote I heard for an ICD was about $14,000 - so that tax would be about $350 on top of the cost - does the manufacturer stick at $14,000 and eat the cost through other cuts; or does the insurance company allow them to charge more; or do they find a way to have the patient pay the tax out of pocket?  Those are the options.

                •  Under the ACA, it behooves the Insurance (1+ / 0-)
                  Recommended by:
                  inclusiveheart

                  Company to allow the price increase. Insurers now get to keep premiums equal to a fixed percentage of "medical costs", so the greater the medical costs they allow, the greater the amount of premiums they get to keep. 20% of 14,350 is greater than 20% of 14,000, and the actuarially imputed increase in average cost per patient justifies a premium increase.

                  During the ACA debates, many seemingly did not get it that the cost ratio was simply an incentive to increase allowable costs, and not a limit on premiums in any way.

                  That, in its essence, is fascism--ownership of government by an individual, by a group, or by any other controlling private power. -- Franklin D. Roosevelt --

                  by enhydra lutris on Fri Feb 01, 2013 at 01:44:48 PM PST

                  [ Parent ]

                  •  Actually, that was a big point of (2+ / 0-)
                    Recommended by:
                    enhydra lutris, Norm in Chicago

                    confusion for me because the claim was made that premium prices would moderate or decrease because of the cost ratio which never made sense to me.

                    Honestly, many factors including but not limited to the government subsidies seemed to have the potential to drive costs up.

                    Anyway, it is the law now and I am told I should be grateful and super happy about it so we'll see how it all plays out and in ten or twenty years the volcano will probably erupt again - or the Republicans will defund the subsidies - or make sure that they don't keep pace with premium price inflation - and the public will demand that government get out of their healthcare - and then the Republicans will either force an end to the bill or figure out a way to keep the private insurers funded by continuing to enforce the mandate, but make sure that the private insurers aren't forced to spend as much.

                    It's all good!

                  •  I wrote almost the exact same post (1+ / 0-)
                    Recommended by:
                    enhydra lutris

                    Back during the debates on the ACA, that the game is rigged to increase costs to increase profit. They tried to take care of the cost plus games that defense contractors used to play. But when that was stopped, all that happened was that a $2 million fighter jet turned into a $10 million fighter, and then to $20 million. I really fear that there is little that will control costs except that people can't pay. And raising subsidies will only make it worse.

                    •  Yeah, several of us tried to raise that point and (2+ / 0-)
                      Recommended by:
                      Norm in Chicago, LilithGardener

                      we all got ignored or shouted down as I recall.

                      That, in its essence, is fascism--ownership of government by an individual, by a group, or by any other controlling private power. -- Franklin D. Roosevelt --

                      by enhydra lutris on Fri Feb 01, 2013 at 06:58:05 PM PST

                      [ Parent ]

                    •  You might be right (0+ / 0-)
                      I really fear that there is little that will control costs except that people can't pay.
                      And that pain will trickle up until those with good access and coverage refuse to pay the increase.

                      The fact is we are ALL paying now for a badly organized, fragmented healthcare delivery system that imposes BARRIERS to improving efficiency. Most healthcare "consumers" don't have much choice about who to see, or where to go, when they need health services.

                      The opaqueness of pricing is currently necessary to (partially) conceal the cost of providing care to the uninsured and under-insured.

                •  Perhaps one outcome of the tax will be better (0+ / 0-)

                  price transparency in this opaque market.

                  What do you think?

                  •  We should be so lucky (1+ / 0-)
                    Recommended by:
                    LilithGardener

                    Even consultants for very large companies have problems with transparency on pricing.

                    See PBGH.org

                    The Pacific Business Group on Health (PBGH) has helped purchasers nationwide improve the quality of health care and moderate health care cost increases. PBGH serves as a voice for purchasers, leveraging the strength of its 60 member companies, who provide health care coverage to 10 million Americans and their dependents.
              •  Exactly. Look, it became a topic because the Dems (1+ / 0-)
                Recommended by:
                enhydra lutris

                declared they werern't making reforms that would cost Medicare or ACA recipients or beneficiaries--remember that conversation?  The Dems said that they were only taxing "business?"

                And Repubs and corporatist Dems argued that indeed business would pass the tax on.  Clearly, they (as you've also stated) were correct about the end result of this surcharge.

                That's it.  Not that major a problem, in my book.  Just an observation, since I posted an article the other day about Franken and Warren now strongly opposing this tax.

                Mollie

                "Only he who can see the invisible, can do the impossible." --Frank L. Gaines

                "If a dog won’t come to you after having looked you in the face, you should go home and examine your conscience.” -- Woodrow Wilson

                by musiccitymollie on Fri Feb 01, 2013 at 02:51:16 PM PST

                [ Parent ]

            •  Any change to the healthcare system (0+ / 0-)

              is going to be "rough". The thing to remember is that the status quo is an utter disaster, for millions of innocent people, right now, this second. Don't believe me? Hang out in a big city emergency room.

              People who are thrown off of group plans by petulant employers will be able to get into the exchanges. Their employers will pay a fine. The exchanges are not up and running yet, which is why you can't see them.

              It's more likely, though, that your employer will get into a private exchange. Those are popping up everywhere right now, and I read one article recently that posited private exchanges would take over the employer group market within 5 years. They offer more options, though there are some flaws.

              There will be blowback on ANY option. What if we'd gone to medicare for all? Here in MN, where a huge number of high paying jobs are tied to the insurance industry, that would probably send the state into a recession. People who work for insurance companies, and there are a lot, would howl. Republicans would have a field day putting them on television.

              Does that mean that I, as a minnesota resident, should oppose medicare for all? Of course not.

              •  I understand your point. But whereas some folks (0+ / 0-)

                will be helped greatly, others may make out worse.

                And some fortunate ones, may be unaffected by the ACA altogether.  I'm referring to those who are in a decent group healthcare plan, and don't get dumped.  [Which we are now, but chances look doubtful that we will remain in a decent group plan, as of last November.]

                The problem is that my husband's employer "paying a fine" will not remediate our circumstances or medical needs, if we've thrown out of our group policy.

                Look, my husband's employer is a large multinational corporation.  They are self-insured.  

                If you're familiar with group insurance, you know that a company is often in a much more advantageous position "self-insuring," and would have no incentive to join an exchange that's "popping up."  [If I didn't clarify that, I apologize.  But that is out of the question.]

                I appreciate your comment about the insurance industry, but IMO that should never have been a consideration.  

                [And as I've stated on numerous posts here, I'm from a family 'chock full of both insurance and securities brokers,' so I'm well aware of how much the insurance industry profits from Obamacare.]

                I'll keep folks posted on our situation, for sure.  (Hopefully his company will reconsider, but we have serious reasons to doubt.  For instance, this is the third year that they have excluded "spouse" from coverage IF they were offered it on their own job.  I'm not.  So I was "allowed" to stay on his group plan.  They have signaled for some time, IOW, that they want out of the health benefits business, so to speak.)

                And, our income is too high to qualify for subsidies, even though our costs could be much greater [than they are under his group plan].

                But truthfully, from what I've read, this bill is basically designed to help small businesses reduce their health insurance premiums.  That's sort of obvious by the "plan design."  [And it's done wonders for some of my own relatives.]

                This group, and the 'young folks' who have been added to their parents' plans, benefit the most.

                The much touted ending of "pre-existing illnesses" clause only pertains to the approximately 8% of folks who insure under private individual health insurance plans, or non-group plans.

                Group health insurance plans usually only have a brief (30-, 60-, or 90-day) exclusionary periods for pre-existing conditions, which are not necessarily even that costly.  So, again, that perk primarily benefited a relatively small segment of the populace.

                I do understand that the exchange is not up and running, but for Pete's Sake, are folks expected 'to be in the dark' until a month or two before their insurance runs out on them?

                Look, I appreciate your reply, and know that you are trying to be helpful and encouraging.  Thank you.

                Mollie

                "Only he who can see the invisible, can do the impossible." --Frank L. Gaines

                "If a dog won’t come to you after having looked you in the face, you should go home and examine your conscience.” -- Woodrow Wilson

                by musiccitymollie on Fri Feb 01, 2013 at 03:31:44 PM PST

                [ Parent ]

            •  Is Mr. Mollie's company - that is self-insured (0+ / 0-)

              subject to state insurance regulations?

              If they're exempt, they've been getting a free pass.

              E.g. are 80% of premiums used to pay for healthcare, and anything left over returned to the employees?

              •  Asked Mr. Mollie, and he figures that the (0+ / 0-)

                insurance company that his company has hired to administer their self-insured plan, would be subject to the state insurance regulations.

                But, whether that doesn't apply to the administrator (which is a health insurance company) of the plan, since it is ONLY administering the plan--we really have no way of knowing.

                We didn't get that memo, LOL!  Only the one that says that his company may be "scr*wing us over" next year!  :-)

                Mollie

                "Only he who can see the invisible, can do the impossible." --Frank L. Gaines

                "If a dog won’t come to you after having looked you in the face, you should go home and examine your conscience.” -- Woodrow Wilson

                by musiccitymollie on Sun Feb 03, 2013 at 07:52:59 PM PST

                [ Parent ]

            •  Acceptable responses to Obamacare (0+ / 0-)

              If folks have been keeping track, there are only a few US Chamber of Commerce approved acceptable corporate responses to the ACA:

              (1) This will require me to lay people off (above story)

              (2) This will require me to raise prices (like the extra 17 cents or so for Papa John's "pizza" (I mean really, what is that stuff really?)

              (3) This will put us out of business.

              Unacceptable responses include:

              (1) We will hold the line on prices and payroll by finding efficiencies elsewhere (you know, what the Norquistians expect that government can ALWAYS do)

              (2) We will have to cut our obscenely-high executive compensation and perks

              (3) We will be forced to reduce dividends

              In other words, Obamacare/taxes/health care mandates/anything is only an excuse for doing what we wanted to do anyway.  Blaming the party who won't automatically give us triple what we want is just gravy.

              Seriously -- if every medical device company is facing an across-the-board tax increase, I would expect under the free market system that meidcal device prices would rise 2.3% and the rest of the drama would be superfluous.  Except...socialism!  

              When the people are being beaten with a stick, they are not much happier if it is called "the People's Stick." ~ Mikhail Bakunin

              by Sick Semper on Sat Feb 02, 2013 at 04:38:20 PM PST

              [ Parent ]

        •  They are all written in English. There are a (0+ / 0-)

          lot of different rules to cover a lot of different situations. If you sell both to related parties and to wholesellers, apply the rule for that situation. If you sell only to unrelated resellers, apply the rule for that situation. If you license medical software, apply that rule. If you do some of each, group yhour sales by type and apply the appropriate rule to the appropriate group.

          Yes, you do have to know what you (or the client) do/does, and possibly break your sales out into multiple streams, but for larger companies, that info is very likely buried in their management accounting and cost accounting systems.

          That, in its essence, is fascism--ownership of government by an individual, by a group, or by any other controlling private power. -- Franklin D. Roosevelt --

          by enhydra lutris on Fri Feb 01, 2013 at 12:58:17 PM PST

          [ Parent ]

        •  OK stunzeed, I took the bait (0+ / 0-)

          Thanks for the helpful search terms!

          A Google search with: IRS medical device retail exemption gave me this: http://www.irs.gov/...

          A Google search with: IRS medical device retail exemption constructive price gave me this: http://www.mondaq.com/...

          Constructive price

          The manufacturers excise tax regulations prescribe various constructive price rules for determining price when manufacturers and importers do not sell to independent wholesalers, but instead sell directly at retail, directly to retailers or to related parties. The regulations generally set a constructive price based on the highest price for which such devices are sold by others to independent wholesalers.

          The IRS acknowledges that the medical device industry faces difficult implementation issues regarding these rules and has provided interim guidance with the following safe harbors when there are no sales to independent wholesalers:

              Sales at retail: 75% of price after exclusions for transportation, delivery, installation and insurance
              Sales to retailers: 90% of price without exclusions for transportation, delivery, installation and insurance
              Sales to related retailer: 75% of 95% of the selling price (or 71.25%) without exclusions for transportation, delivery, installation and insurance

          The interim guidance provides that sales to medical institutions and offices such as hospitals and doctors are considered sales "at retail."

          Taxpayers who do not apply the rules in the interim guidance or use the actual selling price bear the burden of demonstrating that they used the fair market price to calculate liability. The IRS rejected a request to apply transfer pricing under Section 482 to arrive at a constructive price, although it said that certain facts and circumstances relevant to Section 482 transfer pricing may also be relevant for constructive price.

      •  Your analysis is a gem of logic and simplicity! nt (1+ / 0-)
        Recommended by:
        enhydra lutris
    •  It's a tax that never made any sense (4+ / 0-)
      Recommended by:
      inclusiveheart, stunzeed, MWV, coffeetalk

      "let's talk about that"

      by VClib on Fri Feb 01, 2013 at 11:20:30 AM PST

      [ Parent ]

    •  then obviously these companies (2+ / 0-)
      Recommended by:
      Pluto, decembersue

      couldn't pay sales tax either.      And if we went to a national sales tax, there'd be hell to pay in corporate america because it would take thousands of extra hours to figure out their taxes.  Or a value added tax, way too challenging,  have to figure out the % increase in value and the tax in percent too.

      Any company and country too dumb to deal with the math deserves to fail.  That include the US.

    •  The company's statement said that (1+ / 0-)
      Recommended by:
      drsampson
      Unfortunately, and in order to absorb this cost burden into our business, this has meant less than 100 positions have been made redundant across various departmental functions in our Tennessee and Massachusetts sites.
      These liars can't even keep their story straight.

      If workers are "redundant", then there are too many people doing the work than necessary.  This has nothing to do with taxes or a surcharge.

      These guys are just cutting costs by firing workers, as they apparently do at this time every year.

      The medical device industry is doing very well and is widely known to have avoided most new regulation under the ACA.    

      How is this company's whining different than the pizza place's nonsense a few weeks ago?

    •  This is partially meant as user tax for companies (1+ / 0-)
      Recommended by:
      pravin

      FDA is under-funded, particularly in medical device enforcement.  Devices have been sources of a number of unfortunate events wherein patients have been killed and injured, events such as overdosing medications, short-circuits in pacemakers, hemolysis during hemodialysis, eroded bone structure with various joint replacement products, and so on.

      FDA have been attempting to elevate standards in such ways as increased requirements for clinical studies, more evidence-based performance demonstrations, better software and safety validations, and method validations.

      The FDA Center for Devices and Radiological Health (CDRH) has long operated with high levels of trust in "predicate devices", much differently from the Center for Biologics Evaluation and Research (CBER) and the Center for Drug Evaluation and Research (CDER) which have both required very high levels of scrutiny of both clinical trial conduct and data, and post-marketed pharmacovigilance with epidemiological assessments.  CDRH lacks all of these capabilities and needs them to protect public health.  Poor outcomes occur at a much higher incidence and severity with devices than with fundamentally more dangerous biologics and devices.

      This tax is a means to increase funds available to CDRH to improve medical device design and performance through the regulatory process, carrying out the intent of the Food,
      Drug and Cosmetic Act to protect public health.

      You don't need a quadrophonic Blaupunkt, you hayseed. You need a curveball!

      by GoBlue08 on Sat Feb 02, 2013 at 02:30:12 PM PST

      [ Parent ]

  •  This meme will be just like the one (2+ / 0-)
    Recommended by:
    ardyess, 1BQ

    where the unions put Hostess out of business and taken as gospel by every wingnut on the planet.

  •  Corporations such as this are the worst (1+ / 0-)
    Recommended by:
    musiccitymollie

    they just want free reign to screw people out of as much money as they can, and if they do damage to some along the way, well..... start screaming about how capitalism is in danger.......

  •  Don't let surgeon use S&N in the first place (3+ / 0-)
    Recommended by:
    Roadbed Guy, Pluto, Losty

    All the more reason that when Old Folks Like Me need total knee replacements to get Stryker implants.  I have both new knees replaced with Strykers and pain-free for the first time in 20 years.  Only drawback is getting groped and molested when I fly.  for both replacements was in hospital 23 and 26 hrs 13 months apart,  threw away crutches at 2 weeks, back to work in 3.  If any aging baby boomers out there contemplating total knees, you'll be glad you did it.  Just get a great surgeon that uses Stryker knees and fuck S&N

    Like Joe Biden - just another scrappy kid from Scranton

    by anthracite on Fri Feb 01, 2013 at 12:06:58 PM PST

    •  S&N has had a lot of knee and hip recalls. (0+ / 0-)

      I'll bet that's why they're laying people off.

      "Michael Moore, who was filming a movie about corporate welfare called 'Capitalism: A Love Story,' sought and received incentives."

      by Bush Bites on Sat Feb 02, 2013 at 12:54:10 PM PST

      [ Parent ]

    •  You are right -- Smith and Nephew is a lousy (0+ / 0-)

      company with a long track record of quality issues.

      The medical device industry in general is not very highly skilled -- lots of long-timers, very little influx of high-level engineering talent.  The quality of engineering in medical devices is very poor when compared, say, to aircraft, building, structural engineering, and other life-critical industries.

      You don't need a quadrophonic Blaupunkt, you hayseed. You need a curveball!

      by GoBlue08 on Sat Feb 02, 2013 at 02:36:08 PM PST

      [ Parent ]

  •  If Obamacare is the reason for these layoffs.... (0+ / 0-)

    ...then Metzger is the same guy who started the White Aryan Resistance.

    Same logic.

    Buy Aldus Shrugged : The Antidote to Ayn Rand, and tear Ayn and the GOP new orifices. ALL ROYALTIES BETWEEN NOW AND MARCH 1, DONATED TO THIS SITE, DAILYKOS!! @floydbluealdus1

    by Floyd Blue on Fri Feb 01, 2013 at 12:08:05 PM PST

  •  Well, a stated purpose of ObamaCare (1+ / 0-)
    Recommended by:
    Pluto

    is to reduce the cost of health care.

    Exactly what do people think that meant?

  •  Stupid tax (0+ / 0-)

    Doesn't fix anything. Simply there to raise money unfairly

    setting the stage for the modern conservative

    by MWV on Fri Feb 01, 2013 at 01:25:28 PM PST

  •  Google Smith & Nephew Recalls. (1+ / 0-)
    Recommended by:
    jan4insight

    And you'll see why they're laying people off.

    "Michael Moore, who was filming a movie about corporate welfare called 'Capitalism: A Love Story,' sought and received incentives."

    by Bush Bites on Sat Feb 02, 2013 at 12:52:17 PM PST

  •  I am laying off my employees too (1+ / 0-)
    Recommended by:
    Jack Hare

    because people DO NOT BELIEVE IN THE HEALING POWER OF JESUS if they DID and they PRAYED WE woiuld have better PROFITS read JOHN 3:4!!!!!!!! So WAKE UP america before it is TOO LATE.

  •  Some companies are better managed and some (0+ / 0-)

    worse.  It seems right wing businesses try to blame the government for their bad management practices and greed.

  •  Why is it always the "workers"? (0+ / 0-)

    Why why why? A few adjustments to executive pay and bonuses would allow these folks to keep their jobs. But it never plays out that way. Always the working stiffs who actually produce the product getting the shaft...

    Men with religious beliefs have killed more people than any god that they have created...

    by Mislead on Sat Feb 02, 2013 at 12:58:05 PM PST

  •  This 10 billion dollar company has a profit (2+ / 0-)
    Recommended by:
    Dingodude, IdaMena2

    margin (trailing 12 months) of 17.9%, but that's not good enough for them to cope with.

    From their website, their profit outlook is impacted by the European double-dip or triple-dip recession, where their growth is contracting slightly, while in the US they had 2% growth in 2011. This is under Obama's so-called failed economic policies, but they have to find someway to complain about Obama, anyway, when really they already know that it's European austerity that's killing them abroad.

    European growth: -1%
    US growth: +2%
    Emerging market growth: +6%

    http://www.smith-nephew.com/...

    Third Quarter Results

    Our revenue was $952 million in the quarter, up 1% on an underlying basis year-on-year.  On a reported basis revenue was down -8%, reflecting a -4% negative currency impact and a -5% effect from the loss of revenues from the old Biologics and Clinical Therapies business following the Bioventus transaction.

    Trading profit in the quarter was $207 million, up 10% underlying on last year (2011: $205 million).  This resulted in a Group trading profit margin of 21.7%, a strong performance, and 190 basis points ahead of 2011.  This margin improvement demonstrates the positive impact of the restructuring of Advanced Surgical Devices against the weak comparable last year.

    Conditions across our Established Markets remained challenging, particularly in Europe which has further deteriorated from the previous quarter.  We delivered 2% growth in the US, in our other Established Markets we saw a -1% decline and in the Emerging and International Markets, 6% growth.

    •  We're not allowed to read the 10Q (1+ / 0-)
      Recommended by:
      LilithGardener

      and comment on their financials.  That's like cheating by following the rules.

      Most of these corp execs assume that we liberals and progressives aren't business owners and financially savvy. They seem to fall for the FauxNoise line that we're welfare queens.

      In a previous career I helped Silicon Valley tech firms go public or raise additional capital. I was very young at the time, and naive at first. i quickly discovered the Wall Street operators made my Mafia family former landlord look honest.

      •  And complaints like this CEO reveal to their (0+ / 0-)

        competitors just how stupid they think people are, inadvertently tipping EVERYONE to their own intolerance, political extremism, and downright pettiness in their management style and incompetence when communicating results to the press.

        I can't imagine that the majority of shareholders are going to be happy about such embarrassingly stupid public comments.

  •  The usual bullshit from the corporo-fascists (0+ / 0-)

    continues. Until We The People take this country back from the Rayguns' mindset, it will keep on keepin' on. The New Serfdom via the 21st century..

    Inner and Outer Space: the Final Frontiers.

    by orlbucfan on Sat Feb 02, 2013 at 01:06:47 PM PST

  •  This is total BS (0+ / 0-)

    Pay no mind.  The company is simply throwing a stone at the Obama Administration because they had to pay some tax.  If you have ever worked for a large corporation, you would know they are always involved in cost cutting to make the bottom line look as good as it can.  They would have cut the workers if it was a good business decision, tax or no tax.  Don't fall for the BS.

    •  EF, we can't exactly "pay no mind," when we're (0+ / 0-)

      getting thrown off (possibly) my husband's group health care plan, LOL!  And I don't believe that their intent is to insult the Administration.  They could care less about them.

      They are angry because the ACA might take a cent away from their bottom line!  Their problem is "greed," pure and simple.  

      We've both worked for large multinationals and the federal government, and in our experience, rank and file workers always suffer the most from budget cuts, not the top executives or administrators/CEO's.  We get that.

      His company is is great financial shape.  And one reason that they are has been that their "self-insured" status greatly benefits them.

      They simply want nothing to do with health insurance if it doesn't benefit them someway, financially.

      It should be of concern to all of us when the really large corporations start backing out of providing employer-based health insurance.

      [I won't give the multinational corporation's name, only because Mr. Mollie says to keep any specifics regarding him and his business out of discussion at DKos.  Folks may notice that I'm careful to not even say his "first name."  :-)  But, I assure you, there's not a reader here that wouldn't know his employer by name--they are huge.]

      What's going to happen if many other multinationals (like Proctor & Gamble, Kimberly Clark, etc.) decide to no longer insure their employees.  It was just a bit earlier this evening that I saw that a commenter thought that the health exchange policies would be rather expensive.

      We are very concerned.

      [Apologize, if I've gotten a bit redundant.  :-)]

      Mollie

      "Only he who can see the invisible, can do the impossible." --Frank L. Gaines

      "If a dog won’t come to you after having looked you in the face, you should go home and examine your conscience.” -- Woodrow Wilson

      by musiccitymollie on Sat Feb 02, 2013 at 08:06:02 PM PST

      [ Parent ]

  •  Well those workers in MA have had RomneyCare (0+ / 0-)

    Requirements for several years.
    RomneyCare  is grandfather of Obamacare.

    My point may not even be relevant, just that sounds like it's an excuse.

    Government of, for, and by the wealthy corporate political ruling class elites. We are the 99%-OWS.

    by emal on Sat Feb 02, 2013 at 01:21:34 PM PST

  •  Bull Shit (0+ / 0-)

    Stocks are up past 2004 levels.

    'Wingers are just looking for excuses to fuck over their workers. Same thing different day.

  •  Racket (0+ / 0-)

    The price structure of the medical device and Rx drug  business is a racket, with billings to insurance companies and Medicare outrageous thievery.

    I have personal experience with colostomy bags that are little more than a heavy duty freezer bag, costing a dollar or two to manufacture being billed at $15 each to my insurance company.  I have seen drugs being sold for $48,000 per gram (2.5 mg of a popular allergy spray for $120).  Anyone can look on Craig's list and find dozens of little used power wheelchairs for sale at a small fraction of the original price.

    The medical supply business is a big time con job on all of us.  Every other rich country recognizes that these businesses function as monopolies and determines prices through regulation and required disclosure of true manufacturing cost.

    Labor was the first price paid for all things. It was not by money, but by labour, that all wealth of the world was originally purchased. - Adam Smith

    by boatwright on Sat Feb 02, 2013 at 01:27:34 PM PST

    •  I fractured my wrist last year, badly (0+ / 0-)

      After all the pre-surgery tests I had to go through (asthma, lung issues) because of my age (57) and as an uninsured cash paying patient getting substantial discounts, I can add this;

      What you see billed to your insurance company is not what is paid to your healthcare provider.

      More to the point;

      My brother's stepson is in sales of joints, and hardware to Orthopedic centers, and as my profession is engineering and by business is machining, I find that the billing of $275 dollars for a 3mm diameter x 15mm long screw seems high.

      Hospitals typically mark up the metal components in my wrist 4 times their cost. So I paid 75% of $7000 for a plate with discount, consisting of some screws , a plate, and some cadaver bone fragments, a price that the insurance company would almost certainly have paid less to the hospital than I had in cash.

      Turns out that I have to have a screw removed because of protrusion into the joint, and I'm guessing that will be near $10k out of pocket as I have to have a full anesthesia surgical room procedure, even if it will be near a 20 minute procedure.

      I would have and will benefit from Obamacare, but I can speculate that the public option would be much more efficient with overhead at cost rather than the insurance company with the allowed profit.

      •  For clarification, may I ask what is meant by "a (0+ / 0-)

        full anesthesia surgical room procedure."

        Are you just saying that you can't have this surgery with local anesthesia alone?

        Thanks.  [I have very little knowledge of medical venacular.  :-)]

        Mollie

        "Only he who can see the invisible, can do the impossible." --Frank L. Gaines

        "If a dog won’t come to you after having looked you in the face, you should go home and examine your conscience.” -- Woodrow Wilson

        by musiccitymollie on Sat Feb 02, 2013 at 08:09:55 PM PST

        [ Parent ]

  •  More customers will equal more sales (0+ / 0-)

    So when the ACA kicks in fully next year and there are millions more with coverage which will mean more sales of medical devices like the ones this company makes, they will be turning the new sales down, right, because you know - socialism?  

    Providers of products like these should be jumping up and down at the prospect of the ACA and a 2.3% tax should be a cost that they can pass on since it applies to their competitors as well.    Anyway I thought that sales taxes were the mantra of the right (Fair Tax, etc.).   Total BS, that is all this is, just political whining.    They are welcome to take their product to a country that doesn't have universal coverage and see how that works out.  I hear Somalia is really nice this time of year.

    The difficulty lies not so much in developing new ideas as in escaping from old ones! - John Maynard Keynes

    by Do Something on Sat Feb 02, 2013 at 01:30:31 PM PST

  •  You have to ignore what corporations say. (0+ / 0-)

    I worked for a large corporation for 26 years and reached the level of Director in one of their divisions.  Lets have a dose of reality folks.  Corporations do and say whatever they can get away with legally, and they have lots of lawyers always checking about that.  They have no moral compass like a real person, and any such ethical stuff they mention in their mission statements is simply window dressing.  The higher ups would do anything they could get away with to protect their bloated salaries.  They don't really care about their employees except what they can get out of them.  In fact, when you distill all the BS, the only thing they really care about is, as most of us already know, is the bottom line.

  •  Hogwash! (0+ / 0-)

    The media need not - and should not - swallow whole Smith & Nephew's press releases. After all, the financial community typically does not. It engages in analysis before it buys the company line. So for starters, here are some questions ...

    -  Are the profit margins of Smith & Nephew (a UK corporation) consistent with the rest of its industry?
    -  Is the 2.3% ObamaCare tax also on Smith & Nephew's main competitors?
    -  Is that tax the only pressure point on S&N's costs, or are other things influencing the company?
    -  What's the real reason behind the layoffs? If employees or their particular skills aren't needed at particular locations, layoffs make sense.  But a profitable company (S&N says it has almost 11,000 employees in 90 locations world wide) would not lay people off to cut costs if it needed those people in those jobs in its Tennessee and Mississippi operations. As a matter of fact, the company is advertising on its web site for jobs in 34 countries, including many in the United States and some at the two locations covered in its announcement.

    This is a surface that begs to be scratched by people who know business.

    2014 IS COMING. Build up the Senate. Win back the House : 17 seats. Plus!

    by TRPChicago on Sat Feb 02, 2013 at 01:52:05 PM PST

  •  The term "redundant positions" is artful (1+ / 0-)
    Recommended by:
    drsampson

    This probably means that unfilled positions have been eliminated, not that people were let go.

    This was mostly a political statement meant to alarm more than inform.

    Sound familiar?

    You don't need a quadrophonic Blaupunkt, you hayseed. You need a curveball!

    by GoBlue08 on Sat Feb 02, 2013 at 02:16:11 PM PST

  •  Welch Allyn did the same thing before the election (0+ / 0-)

    Said they supported Ann Marie Buerkle and the teahadists.

    In the beginning, the universe was created. This has made a lot of people very angry, and is generally considered to have been a bad move. -- Douglas Adams, The Hitch Hiker's Guide to the Galaxy

    by boriscleto on Sat Feb 02, 2013 at 02:16:28 PM PST

  •  I spent six years at a huge international that (0+ / 0-)

    regularly laid off twice a year, end of January and end of June.  Bet they still do.  Right before the semi-annual Street talks.

    Acceleration is a thrill, but velocity gets you there

    by CarolinNJ on Sat Feb 02, 2013 at 02:38:04 PM PST

  •  Nothing says laying of the hired help (0+ / 0-)

    like Q3 revenues of 952 million, trading profit of $207 million up 10%, a profit margin on those trades of 19.2%, and an EM/IM profit margin increase of 6%.

    Those are number that would strike fear into the greediest of CEOs hearts.

    Losers.

    "There is nothing more exhilarating than to be shot at without result." - Winston Churchill

    by Dingodude on Sat Feb 02, 2013 at 03:01:07 PM PST

  •  Remember those ads offering free 4 wheeled scooter (0+ / 0-)

    The company constantly advertised that they virtually guaranteed a scooter if on SS.  They have cut back about 2000 employees.  

    They blame ACA but they don't tell us that they ordered the scooter chairs even without SS approval.  Now SS must approve the scooter before delivery.

    I guess when SS turned down the orders the consumer had to find other payment.  

    Now I seldom see the ads.  

    Psst!!!......Mittens you are more of a poor loser than I thought.

    by wbishop3 on Sat Feb 02, 2013 at 03:10:07 PM PST

  •  It's interesting that they blame ObamaCare... (0+ / 0-)

    For the Layoffs in their Massachusetts Location...

    Tell me the difference between RomneyCare and ObamaCare again...

    They have had RomneyCare since 2006 in effect at their Massachusetts Location...

    "Do you realize the responsibility I carry?
    I'm the only person standing between Richard Nixon and the White House."
    ~John F. Kennedy~

    -7.5,-5.8

    by Oldestsonofasailor on Sat Feb 02, 2013 at 04:07:43 PM PST

  •  So how does that refute their reason? (0+ / 0-)

    The medical device tax has been known for how long?

  •  Bovine Fecal Matter! (0+ / 0-)

    The company exec is spouting bovine fecal matter.

    I'm a cofounder of a medical device startup. While the 2.3% tax is annoying in comparison to the sweet deal that PhRMA worked out for their better-heeled drug makers (who pay nothing and also avoid price negotiation), it's not enough to cause layoffs.

    I agree with others upthread that the joint failure litigation is a bigger problem for them than ACA.

    When companies complain about torts they ignore that less than 1.5% (closer to 1%) of our healthcare cost is for litigation. Tort reform in California has shown that torts are not the driver of costs, private insurers are the drivers/

    BTW: I've also been a litigation consultant for medical devices (mostly cardiac), bit not medical malpractice (the doctor makes a mistake). I've seen a number of terrible products and one drug finally brought to justice, but most that end up in litigation are promising but rushed to market before all risk factors are worked out, or overeager sales VPs push the product beyond the medical indication.

    •  I also have some experience... (0+ / 0-)

      In the field of medical/biological devices.

      What I can say, is that most people don't realize the enormity and complexity of bringing a product to market.

      That said, all developers play by essentially the same rules and under the same regulations (With exception to a few small Somali players).

      I will emphasize what an amazing accomplishment it was, to have signed the ACA into law.  The real problem will be how we deal with the disparity of implementation.

      Once the rubber hits the road in 2014, red state intransigence will contrast sharply with the Vermonts/Californias/New Yorks implementation.

      And quality of life metrics will bear that out.  It will be very Darwinian.  

      And BTW-Perry will most likely concede to the medicaid expansion.  Jindal won't, as he'll be better off making hay of it for his GOP primary bid.

      Think about that for a moment, how these red state Governors can sleep at night knowingly and willingly denying their constituency health care, when it is now readily available.

      They should be brought up on homicide charges.

      Where is Anarchy, when you need it?

      by Boberto on Sat Feb 02, 2013 at 11:54:33 PM PST

      [ Parent ]

  •  A high breast implant tax would be preferable (0+ / 0-)

    Instinctively, I am against such a device tax. Realistically, I am having hard time processing the info on this in a thorough enough fashion to comment in detail about it.

    However, I would tax breast implants at 100%. It makes more sense than even the tanning tax.  It is one of the most unnecessary forms of surgery. I have no doubt it adds to our healthcare burden.  I have known a couple of middle aged women, who are financially reeling, needing to go in and fix their implants. One of them had it gifted to her by her stupid mother when she was 20.

    You tax it at 100%, you will have women wait a 2-3 years, at the very least, before opting for such a surgery.

  •  MSNBC needs a liberal business talk show (0+ / 0-)

    At least to counter the nonsense that is on  thier sister channel CNBC and FOX Business.

    I neither support nor oppose the device tax though I am one of the liberals that do NOT instinctively embrace new taxes such as this.

    Having said that, it would be nice if MSNBC devoted a slot to a host who is a liberal business guy. He can counter all the myths that float around in right wing outlets such as the basic misinterpretation of stuff like MARGINAL tax rates.

    Or even a case like this. They say profits went down. What about sales?  Did sales go down to justify the layoffs? And why did the sales go down? Due to higher prices? Does the marginal cost in hiring those laidoff employees compute to the device tax factor?

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