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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. The east side does have potential...and I have always thought Washington Scare should become an outlet mall. Anyone remember how popular Eastgate was? Well, Indy has no outlet malls, we have to go to Edinburgh for the deep discounts and I don't understand why. Jim is right. We need a few good eastsiders interested in actually making some noise and trying to change the commerce, culture and stereotypes of the East side. Irvington is very progressive and making great strides, why can't the far east side ride on their coat tails to make some changes?

  2. Boston.com has an article from 2010 where they talk about how Interactions moved to Massachusetts in the year prior. http://www.boston.com/business/technology/innoeco/2010/07/interactions_banks_63_million.html The article includes a link back to that Inside Indiana Business press release I linked to earlier, snarkily noting, "Guess this 2006 plan to create 200-plus new jobs in Indiana didn't exactly work out."

  3. I live on the east side and I have read all your comments. a local paper just did an article on Washington square mall with just as many comments and concerns. I am not sure if they are still around, but there was an east side coalition with good intentions to do good things on the east side. And there is a facebook post that called my eastside indy with many old members of the eastside who voice concerns about the east side of the city. We need to come together and not just complain and moan, but come up with actual concrete solutions, because what Dal said is very very true- the eastside could be a goldmine in the right hands. But if anyone is going damn, and change things, it is us eastside residents

  4. Please go back re-read your economics text book and the fine print on the February 2014 CBO report. A minimum wage increase has never resulted in a net job loss...

  5. The GOP at the Statehouse is more interested in PR to keep their majority, than using it to get anything good actually done. The State continues its downward spiral.

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