Former Medtronic CEO says health reform will hinge on 'low-tech' solutions
Bill George was head of Medtronic for 10 years, ending in 2001. He's now a professor of management practice at the Harvard Business School and on the boards of Exxon Mobil and Goldman Sachs.
He spoke in Minneapolis Tuesday to a group of business and civic leaders at the Cuningham Group, an architectural firm.
George said he thinks that government at some level will have to raise more money to pay for future health care in the U.S.
But he said taxing treatments such as pacemakers, stents and other medical devices would be counter productive.
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"Basically what happened here is the medical device manufacturers did not go in early to negotiate or lobby for a deal like the pharmaceutical manufacturers did, and there was some resentment on the part of key Senators that they didn't do that, so there was a decision basically to tax medical innovation," George said.
George is referring to an agreement last summer between the White House and drug makers for an $80 billion contribution to Medicare prescriptions through 2020. Hospitals also struck a deal in Washington last summer, agreeing to $155 billion in cuts if health coverage is extended to millions of the uninsured.
George credited DFL U.S. Sen. Amy Klobuchar for getting $18 million of the original $38 million tax repealed. Third District Republican Congressman Erik Paulsen has also proposed changes, including sun setting the tax and exempting small businesses to help encourage new entrants to the industry.
George said health reform will ultimately hinge on local and low-tech solutions -- such as changing American's diet and exercise habits -- not high tech innovation.
But he said the nation's and Minnesota's economy would be better served by encouraging research and development, like that at his former company and other device makers.
"I watched Medtronic, since I went there 20 years ago -- not because of me -- it's gone from 4,000 employees to over 40,000 employees. Lots of those employees out of the U.S., but guess what, the ratio is still 75 percent Americans, 25 percent non-Americans, and very heavily in Minnesota," he said. "And those are good jobs. Those are very good jobs. They are sustainable jobs. They're not jobs that go away when there's snow on the ground."
George said Congress would be better off doubling research and development tax credits and making the tax breaks permanent.