Jobs Endangered By Healthcare Bill

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Today at the Washington Examiner, Byron York posted a story about a Chelmsford Massachusetts company named Zoll Medical Corporation.  The company manufactures heart defibrillators, which are used throughout our nation to save thousands of heart attack victims every year.  The healthcare bill passed in the House of Representatives Sunday levies a tax on the makers of medical devices in order to pay for the new healthcare program.

The tax will cost Zoll Medical Corporation somewhere between $5 million and $10 million a year according to Richard Packer, the company's chairman and chief executive officer.  He adds that the company profit in 2009 was $ 9.5 million.

The article points out that the company has a few options in handling this increased expense.  It can raise the price of its product, not really a good idea as they are coming under pressure to cut their price.  The company could shift jobs overseas in order to lower production costs.  This would not help the unemployment rate nationally or in Massachusetts.  Also, the company can also cut back on research and development. 

Cutting back on research and development is a choice many medical device companies will be forced to make.  It will hurt them down the road in terms of competition, but there is also another aspect to this.  America has (up until now) led the world in developing medical technology.  We can expect to see innovation in medicine decline sharply as the companies that manufacture medical devices are more heavily taxed.

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This page contains a single entry by Granny G published on March 23, 2010 9:56 AM.

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