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3/26/2010
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$1.50/MARCH 29 - APRIL 4, 2010
Vol. 31, No. 13
HEALTH CARE REFORM AND ITS EFFECTS IN NORTHEAST OHIO
Uncertainty surrounds bill’s passage
Tax on medical device makers could be taxing
Immediate changes likely to result in premium increase; large, midsize employers brace for additional costs
By CHUCK SODER csoder@crain.com
Assessment may stifle growth field
By SHANNON MORTLAND smortland@crain.com
The ink was barely dry on the health care bill when local businesses began asking professional organizations: How does this affect me? The answers aren’t completely clear yet, but what is certain is that everyone will be affected somehow, so businesses soon should begin working with outside profes“The biggest sionals to figure out how they fear and conwill address the health care cern is we don’t bill, said Pat Perry, president of ERC, an organization whose see (the bill) as members deal with human really helping resource issues. out businesses “No one should be panicking too much.” right now, (but) we will be suggesting that every organiza– Pat Perry, tion pause and have an president, ERC in-depth conversation with their consultants and brokers,” Mr. Perry said. “There is the opportunity to plan accordingly.” The Patient Protection and Affordable Care Act, as the bill formally is called, was signed into law last Tuesday, March 23, and is expected to provide coverage for 32 million Americans who aren’t covered by health insurance now. Various parts of the bill will be phased in through 2018, but businesses can expect to begin feeling See BILL Page 4
FILE PHOTO/MARC GOLUB
Hiroyuki Fujita, CEO of Quality Electrodynamics LLC, says the company — which makes coils for magnetic resonance imaging machines — could see a sales uptick with more insured people in the market. But, the company also could be hurt by its customers demanding price cuts when their contracts expire.
Some of Northeast Ohio’s medical device companies think all the surgery Congress just did on the nation’s health care system will help them grow bigger and stronger, but others believe it has left them with an infection in the form of a tax that could kill innovation and jobs. Dennis Stripe, CEO of OrthoHelix Surgical Designs Inc., can understand why they don’t all think alike. By increasing the “Taxing those number of people with health insurance, the growing health care bill that companies is President Barack Obama like taking signed into law last away food from Tuesday, March 23, could end up helping a teenager.” the Medina company – Bob Schmidt, sell more of the surgical CEO, Cleveland implants its makes for Medical Devices Inc. people with hand and foot problems. Mr. Stripe figures people with insurance are more likely to get that “hammer toe” fixed with OrthoHelix’s help. However, he knows those gains, if they materialize, won’t come free. The law includes a 2.3% excise tax on the sale of all medical devices except for consumer goods, such as contact lenses and hearing aids. The provision survived another trial last week, when Congress approved a follow-up bill to amend the first one. “We’re in a position to absorb it if we have to,” See DEVICES Page 5
Potential Huntington Building buyer already has interests here Miami outfit recently added two downtown sites By STAN BULLARD sbullard@crain.com
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FILE PHOTO/RUGGERO FATICA
The landmark Huntington Building — viewed by some as the grand dame of Cleveland office buildings and by others as a prehistoric monster threatening the well-being of the city’s office market — may be in line for a new owner that already has displayed an appetite for Cleveland skyscrapers.
Tenants in Cleveland’s secondlargest office building recently received a memo from Hines, its property manager, saying that the building’s owner has signed a purchase agreement with Optima Ventures LLC. Hines manages the property on behalf of Huntington National Bank, which controls the building at 916 Euclid Ave. under a 100-year master lease that expires next year. Optima Ventures LLC is a name
similar to Optima International LLC, a Miami-based conglomerate that recently acquired One Cleveland Center, 1375 E. Ninth St., and the 55 Public Square office building downtown. Optima International spokesman Chaim Schochet did not return three calls from Crain’s by Wednesday, March 24. A copy of the letter to tenants dated Monday, March 22, and obtained by Crain’s, advised them that Optima has “indicated their interest in speaking with existing tenants in lease renewal discussions and may
be contacting you in the near future.” Retaining tenants would be crucial for the building’s next owner during the recession. Cleveland financier and real estate investor Carl Glickman owns the building and a land lease for the ground underneath it. Mr. Glickman holds the property through Chester Union Associates, a joint venture with a New York-based investor group, according to land records. The expiration of Huntington’s master lease means Mr. Glickman’s See HUNTINGTON Page 9
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