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Cook Group Inc. owner says health reform's tax on medical devices could kill jobs

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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.

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  1. These liberals are out of control. They want to drive our economy into the ground and double and triple our electric bills. Sierra Club, stay out of Indy!

  2. These activist liberal judges have gotten out of control. Thankfully we have a sensible supreme court that overturns their absurd rulings!

  3. Maybe they shouldn't be throwing money at the IRL or whatever they call it now. Probably should save that money for actual operations.

  4. For you central Indiana folks that don't know what a good pizza is, Aurelio's will take care of that. There are some good pizza places in central Indiana but nothing like this!!!

  5. I am troubled with this whole string of comments as I am not sure anyone pointed out that many of the "high paying" positions have been eliminated identified by asterisks as of fiscal year 2012. That indicates to me that the hospitals are making responsible yet difficult decisions and eliminating heavy paying positions. To make this more problematic, we have created a society of "entitlement" where individuals believe they should receive free services at no cost to them. I have yet to get a house repair done at no cost nor have I taken my car that is out of warranty for repair for free repair expecting the government to pay for it even though it is the second largest investment one makes in their life besides purchasing a home. Yet, we continue to hear verbal and aggressive abuse from the consumer who expects free services and have to reward them as a result of HCAHPS surveys which we have no influence over as it is 3rd party required by CMS. Peel the onion and get to the root of the problem...you will find that society has created the problem and our current political landscape and not the people who were fortunate to lead healthcare in the right direction before becoming distorted. As a side note, I had a friend sit in an ED in Canada for nearly two days prior to being evaluated and then finally...3 months later got a CT of the head. You pay for what you get...

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