Bloomington-based Cook Group Inc. might have to cut as many as 1,000 local jobs if Congress enacts a tax on medical devices
to pay for health care reform, company founder Bill Cook said in an interview.
Cook, who also proposed his own plan for health reform recently, didn’t say his medical-device company would cut those jobs for sure. But he said automating Cook Group’s plant in Bloomington would be one of the company’s first responses and that the medical-device maker could easily cut out 1,000 jobs.
He said the company also might have to scale back on its clinical trials of new products, an effort that employs about 325 people in West Lafayette and Bloomington.
“It would force us to the end of creativity,” Cook said, adding, “There are so many things we couldn’t do in the style that we do them today.”
The tax that drew Cook’s ire is part of the Senate version of health care reform. It would assess the medical-device industry $4 billion a year, divvying up the fees based on each company’s market share of certain classes of devices.
Cook said his company sells $600 million of those devices. The tax, which would deduct 4 percent from top-line revenue, would cost Cook $30 million a year, boosting its tax rate from about 38 percent to 68 percent.
The company is the largest maker of aortic and lower-body stents—small metal tubes that prop open arteries. It also makes a variety of other grafts, catheters and other products implanted through minimally invasive procedures. The company has annual sales of $1.5 billion.
Cook noted that Congress’ proposed expansion of health insurance coverage won’t really help medical-device companies because they aren’t paid by health insurers, but by hospitals, who are on the hook whether the patients they serve have insurance or not.
Cook said Congress is on the wrong track with health care reform. Instead of focusing on expanding health insurance, he called for Congress to immediately fund a network of community clinics that would provide free or low-cost care.
“Access, access and more access is the name of the game,” he said.