A recent survey by The Medical Imaging and Technology Alliance (MITA) finds that 4 out of every 10 respondents anticipate reducing their workforce to offset costs of the medical device excise tax set to go into effect next year.

MITA's survey findings were taken from 26 percent of its membership of medical technology executives. Of the respondents who anticipate layoffs, the majority indicated that manufacturing, sales, management, and service positions would see the heaviest job cuts. Twenty-nine percent of respondents also expect to see a reduction in research and development, according to the survey.

Starting 2013, the excise tax will apply to the sale of medical devices by manufacturers and importers. Hearing devices, contact lens, and other goods typically purchased through retail stores are exempt. The tax, projected to add up to nearly $30 billion in revenue, is meant to help pay for other parts of the new health care law. It has been met by heavy criticism by industry leaders, who allege that the tax will stifle innovation and kill jobs.
"This burdensome tax is bad policy, and it has left manufacturers with little choice but to reduce their workforce and cut research and development — none of which creates economic value or enhances patient care," said Gail Rodriguez, Executive Director of MITA, in an official statement. "Such a large new tax jeopardizes thousands of American jobs in a difficult economic climate and poses a serious threat to innovation of new life-saving imaging technologies."

She said that the tax creates enormous obstacles for an industry that supports more than 400,000 American jobs, drives innovation and saves lives.

"MITA urges Congress to take action immediately to prevent this tax from taking effect on January 1 and, ultimately, to repeal it," said Rodriguez.

A day later, AdvaMed, an industry lobby, came out with a similar survey, which found that the out of 81 respondents, 62 percent said they are planning layoffs or reduced hiring to help offset the tax. In addition, the survey found that the cost to the medical technology industry will be as much as $667 million just to implement the medical device tax.

Last week, Senator Klobuchar (D-MN) and Senator Hagan (D-NC) sent a letter to Senate Majority Leader Harry Reid seeking to delay the tax. The House has already approved a bill that would repeal it. However, President Obama has already threatened to veto any repeal of the new tax, and it's unlikely that the tax will be repealed before it takes effect next year.

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