Letters: Free marketplace?
February 04, 2013
I read the article "Medical Device Excise Tax Prompts Questions" with great interest. This is in effect an indirect tax to hide the charge from the final consumer.
We are being led to a more European Union model so you could expect it to go as high as 19 percent like in France. They are always just temporary taxes. Like when they first came out with sales tax at 1 percent; now it's nearly 10 percent.
Realize that while some of your suppliers have said that they will not pass this cost on to you, they will have to do so at a later time when your mind is not on this subject of the tax.
But, in the long term they can do nothing else but raise the price as this cuts into their bottom line. No one can fault your suppliers for that as that is just the reality of a free market. They are free to charge enough to make a profit. No organizations stand in their way to dictate what they can charge.
But what of the dental profession? Are we really in a free marketplace? If we are free then the cost can be summarily taken care of by a fee increase. However, that is not the case for dentistry (although some geographic areas are freer than others). Most of dentistry has been impacted by the dental insurance market. That is, most have PPO contracts that stipulate the fee of each procedure. There is no latitude to increase fees when costs go up. So if the government decides this tax should be 23 percent instead of 2.3 percent, you still have to eat your costs. Contemplate for a moment this jury-rigged marketplace. You sign a contract that reduces your fees 30-45 percent. Your patients like to pay with credit cards that you pay 1-3 percent for utilizing. Now you pay the extra tax. When will it end? Never, is what insurance hopes for.
Soon we will have to face up to this insurance debacle. Your patients love their insurance. You love keeping your patients.
The patient's employer is happy. The insurance company is happy. Some, but some like Delta just reduced their contract fees. So when do you get your reward? "Doctor, you should be happy just practicing," is what I hear from the powers that be, after all the times are hard. This is all said while their employees get raises and their CEOs get raises and bonuses. You on the other hand have to eat it.
We cannot control the marketplace. Then when we get a value-added tax of 12 percent, you can roll with it. Otherwise you are owned by other entities.
So if you want to pay the price continue as you are. Otherwise realize that your value should be set by you and not a remote entity.
Leo Weinstein, D.D.S.