June 13,2012

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Julia Lawless, Antonia Ferrier, 202.224.4515

Hatch Says New GAO Analysis Confirms Medical Devices Improve Patient Lives

WASHINGTON – U.S. Senator Orrin Hatch (R-Utah), Ranking Member of the Senate Finance Committee, today said a new Government Accountability Office (GAO) report confirms that medical devices improve patient lives and further demonstrates the need for Congress to repeal the job-killing medical device tax that was included in the $2.6 trillion health spending law enacted last year. 

“When you have data like this that shows medical devices are improving Americans’ lives for the better, it’s baffling why the White House chose to tax the medical device industry to fund the President’s health law,” said Hatch. “This report makes it clear that medical devices are a cornerstone to quality health care in our nation and we shouldn’t implement policies to stifle its growth. It’s past time Congress act to do away with the onerous, job-killing medical device tax.”

The use of implantable medical devices (IMD) is widely viewed as improving and prolonging the lives of Medicare beneficiaries. The GAO report, Medicare: Trends in Beneficiaries Served and Hospital Resources Used in Implantable Medical Device Procedures, found that in 2009 alone, almost 1.6 million IMD procedures were performed in the Medicare program.

Key findings from the GAO report follow and a full copy of the report can be found HERE:

Innovations in IMD have reduced the length of stay for patients allowing them to return to their lives faster and in turn lower costs for those episodes of care.

Improvements in technology allow for greater less invasive procedures in outpatient settings, which allow patients to recover more quickly, often in a home-based setting.

Even with an increase in admission of IMD beneficiaries in poorer health, overall lengths of stay generally did not rise. 

Under the new health law, medical device makers will face a 2.3 percent excise tax which translates into more than $29 billion over the next ten years alone. The medical device industry is one of the most productive job-creating engines of our economy. Fueled by constant innovation, it contributes nearly $382 billion in economic output to the U.S. economy every year. It pays its employees on average $84,156 – 1.85 times the national average and more than 80 percent of medical device companies are small businesses employing 50 people or less.

Last week, the U.S. House of Representatives passed the Health Care Cost Reduction Act of 2012 which would repeal the 2.3 percent excise tax on medical device makers. Hatch has led the fight to repeal the tax in the Senate. The Hatch bill, S. 17 would immediately repeal the job-killing medical device tax which is set to take place in January 2013.