Stryker Corp. wasn’t bluffing. The medical device manufacturer laid off 1,000 employees citing Obamacare’s Medical Device Tax, one of the law’s 20 new or higher taxes. Stryker owes the government upwards of $100 million dollars this year alone and projects that Obamacare will cost them 20 percent of their research and development funds.
Back in November of 2011, the company first announced that it would have to lay off 5% of its 20,000 employees in response to the new 2.3% medical device tax. This isn’t at all surprising. The Centers for Medicare and Medicaid Services projected that the tax would be passed on to consumers, and what Stryker couldn’t compensate for by raising prices, they made up for in layoffs.
Medical device manufacturers employ 360,000 people nationwide. Like Stryker, these companies will be forced to make tough decisions to stay afloat. One study estimates that up to 10% of the medical device industry workforce—or 47,100 individuals— could be laid off due to the new tax.
Not only does the medical device tax affect employees of these plants, but patients as well. Rising medical device costs will make necessities like pacemakers less affordable for those who rely on them. A decrease in research investments will prevent expensive medical products from ever becoming affordable, and will cheat patients out of newer, more effective technologies.
Stryker exemplifies everything that is wrong with the medical device tax. It kills jobs and stifles innovation at the expense of employees, patients, and taxpayers.