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Medical device technology is “likely to fortify future GDP growth, job creation, incomes, and government revenue,” concludes a new report on medical technology and the economic burden of disease.
The Milken Institute report looked at four major diseases: diabetes; heart disease; musculoskeletal disease; and colorectal cancer. Medical devices used to screen and treat these diseases improve “patients’ ability to work and labor market outcomes overall.” Also, “fewer workdays are lost and productivity is enhanced.”
These factors raised GDP by $106.2 billion annually from 2008 to 2010. After the costs of screening and treatment were considered, the total net annual gain was $23.6 billion. In addition, federal tax revenue rose by $7.2 billion annually.
While these medical technologies are a net plus to the economy, they and other medical devices have been targets of Obamacare. In 2013, a 2.3% excise tax on medical devices went into effect and resulted in as many as 165,000 direct and indirect jobs lost, a report from the Advanced Medical Technology Association said. Because of money lost to the tax, companies had to lay off workers and were discouraged from hiring new ones. In addition, many medical device manufacturers are thinking twice about spending more on research and development.
The Institute report says “there is a worthy economic rationale for investing in medical technology, if strengthening our arsenal against chronic disease is not compelling enough.”
Yet we have an onerous tax on medical device makers.
See how other Obamacare taxes will affect the economy here.