The latest health care reform proposal in Washington D.C. may be harmful to the health of the economy in Warsaw.

The warning was issued at a news conference Friday.

The health care reform proposal offered by the Chairman of the Senate Finance Committee would call upon the makers of medical devices and equipment to pay $40-billion in fees over a ten year period ($4-billion per year).

“The industry fully supports providing its fair share, we just think the $40-billion tax that’s in the Baucus proposal is not the right way to go,” said Robert Durgin, Senior Vice President of Biomet Inc.

Some fear the proposal could be the ‘end of the world’ for Warsaw’s status as the world capital of orthopedic device manufacturing.

“This is probably the single biggest cluster where we dominate the world market that exists in Indiana,” said U.S. Rep. Mark Souder, a Republican representing Indiana’s Third District.

In Warsaw, they make things like artificial hips and knees—using real jobs.

Warsaw is home to three of the largest manufacturers of orthopedic devices in the world.

The industry accounts for some $11-billion in annual revenues.

“These aren’t entry level jobs, these aren’t jobs people working minimum wage or $10 or $12 an hour, these jobs are our best jobs,” said Congressman Souder.

Nonetheless, the jobs could be threatened by the imposition of the fees, according to Durgin. “

It essentially is a tax on innovation. It would significantly affect the ability of our companies to fund R and D (research and development) and it does put pressure on the industry in terms of its manufacturing presence here.”

Congressman Souder believes that Warsaw has a good thing going, that might be gone if the proposed fees are imposed. “I believe you wouldn’t see a giant sudden abandonment, the question is, can they survive in competition? Where will R and D move? Will it move to Zurich? Will the headquarters gradually go out? Most of these companies were already quite honestly looking at the Chinese market, it’s not like they don’t have facilities overseas.”

Congressman Souder concluded, “If we don’t understand what clusters we have here and fight for those clusters—all of the sudden we wake up one day and all we have left is a mall, a hospital, and a school.”

The fight against the fee has attracted the likes of Indiana senators Lugar and Bayh. Both signed a letter in opposition to the proposal earlier this week.

Today’s edition of the Wall Street Journal also included an editorial that was critical of the fee on medical device makers.