GREGORY SORENSEN M.D.: NEW OBAMACARE TAX MAKES THE PRESIDENT’S NEUROLOGICAL INITIATIVE A NO-BRAINER
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The White House Brain Initiative Hits a Tax Hurdle
While the president launches an exciting initiative to map the brain, a new tax hurts the very innovation it seeks.
Step into any operating room where neurosurgery is being performed, and there is a good chance that the surgeon is viewing the brain through a camera. Technology today is saving lives by enabling surgeons to see what the naked eye cannot. As archeologists use advanced radar technology to examine sensitive sites before excavating, neurosurgeons use advanced imaging technology to get a clear picture of the brain before operating. The data are then loaded into microscopes that guide surgery, providing a safer path through the brain’s intricate wiring, where one wrong cut risks paralyzing the patient.
Over the past two decades, these breakthroughs in scanning technology have led to dramatic improvements in the rates of survival and recovery from brain surgery. The next generation of imaging technology—being developed in labs from Massachusetts to California to the National Institutes of Health—promises to create an even more profound window into the human brain.
These efforts could be greatly accelerated by President Obama’s recent announcement of a new initiative to map the brain’s activity in unprecedented detail. Aiming to “do for the human brain what the Human Genome did for genetics,” the $3 billion “Brain Research through Advancing Innovative Neurotechnologies Initiative” gives hope to those suffering from conditions like Alzheimer’s, autism, stroke and traumatic brain injury.
But here’s the bad news: The brain initiative is already being undermined by a new Washington policy that went into effect on Jan. 1. Under regulations passed as part of the Affordable Care Act of 2010, the medical-technology industry is now subject to a $30 billion annual tax on medical devices.
Since Jan. 1, manufacturers have already paid an estimated $450 million in new taxes, redirecting funds that could otherwise support innovation and invention. The Pacific Research Institute estimates that the health law’s medical-device tax will reduce American medical research and development by $2 billion a year, while the Manhattan Institute says the tax will cost 146,000 American jobs.
I was never taught the medical term for cutting off your nose to spite your face, but this is an example. The medical-device tax decelerates and devalues innovation at the very moment when medicine is on the verge of historic breakthroughs. It is foolhardy to believe that the medical-technology community can spark new innovation while the government is overtaxing it.
It isn’t hard to understand the impulse behind the new tax: Recent years have seen many exposés arguing that imaging technology often leads to tests that are unnecessary and wasteful. Yes, we should remove improper incentives that might drive overtesting. But the pendulum has swung too far if policy makers only focus on the cost of imaging technology and fail to recognize its value.
One in three American seniors dies with Alzheimer’s or another dementia, according to a new study by the Alzheimer’s Association. With 10,000 baby boomers reaching the age of 65 every day until 2030, Alzheimer’s diagnoses are expected to triple to 13.8 million by 2050, according to a study published this year in the journal Neurology, driving Medicare costs three times higher and Medicaid costs 19 times higher.
Since Dr. Alois Alzheimer first discovered abnormal clumps of proteins (known as amyloid plaque) in the autopsied brains of diseased patients a century ago, researchers have focused on this plaque as a potential means for preventing and curing disease. But there have never been routinely available imaging tools sophisticated enough to track these plaque deposits—until now.
Used in combination with trace amounts of a specially designed radioactive drug, a PET (positron emission tomography) scanner can pinpoint the presence and location of amyloid in the brain. While not every person with these proteins has Alzheimer’s, the absence of plaque can help physicians essentially rule out the disease—and possibly discover other causes that are treatable.
A recent Harvard study found that if an early diagnostic test were available for Alzheimer’s, 65% of Americans would take it, even before they exhibited any symptoms. Having an early diagnosis means that mom or dad can better participate in decision-making, financial planning and other end-of-life planning, while reducing stress on caregivers. In addition, people who know that they have Alzheimer’s have fewer falls and accidents than those who don’t, and their doctors are less likely to mix drugs in accidentally harmful ways (some antidepressants, for example, shouldn’t be taken by elderly patients with dementia).
Within a decade, surgeons will likely be able to move beyond the brain’s major highways to see small side roads where disease pathways really intersect with human health. But we’ll never achieve the potential of this moment if America’s leading medical innovators are forced to divert billions of research dollars into tax payments.
The House of Representatives voted last year to overturn the medical-device tax. In March, the Senate did the same (by a vote of 79-20), but the resolution was nonbinding. Congress still hasn’t passed real legislation to overturn this tax once and for all.
Robert Frost once wrote that “The brain is a wonderful organ; it starts working the moment you get up in the morning and does not stop until you get into the office.” It is time to put the right scientific and regulatory incentives in place to truly make the next 10 years the decade of the brain.
Dr. Sorensen, a former professor of radiology at Harvard Medical School, is U.S. CEO of Siemens Healthcare.
A version of this article appeared April 15, 2013, on page A17 in the U.S. edition of The Wall Street Journal, with the headline: The White House Brain Initiative Hits a Tax Hurdle.
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