Demographics are our destiny, so they say. In Orange County, there’s some good news: OC enjoys the lowest unemployment rate of any major metropolitan area in California, at 6.8%, signaling the slow recovery to a new economic prosperity is underway. Orange County is the medical device capital of the world–from heart valves to stints to tubing to hip replacement parts to nanotechnology–the county is a medical innovation hub of distinction. Orange County is home to state-of-the-art research development firms like Allergan and AMO, preparing for the next generation of health technology. OC residents’ sense of well-being is strong and, excluding obesity, there is a general decline in the leading causes of death.
There is some bad news, however. By 2050, about one-third of the county will be 55 years or older-the graying of Orange County-and this demographic cohort will be living longer, demanding the best in health care. Three billion dollars in new taxes this year alone just hit the medical device industry! Medical devices and supplies will cost more at a time when health care reform and a “growing-graying” population needs them most.
Under ObamaCare, Congress and the President imposed a new Medical Device Tax that hits entrepreneurial firms making medical equipment such as heart valves and hip replacement parts. These firms now face a tax based upon 2.3% profit on gross sales-a tax they must pay even if they have no profit at all! Many firms report that this tax-projected to be $29 billion over 10 years-will soak up virtually all of their research budgets.
The medical device industry employs more than 400,000 people in 12,000 factories across the country, often small, entrepreneurial firms with a small product line. To survive, they will have no choice but to relocate abroad to avoid this tax and continue their work in research and development of new products-taking much-needed, high-tech jobs with them. The result? Lost jobs, medical device costs increase, higher health care costs, and an economy not as strong as it should be.
With so much at stake, thoughtful ObamaCare reforms today will save jobs-and lives-in the future.